Cautious World Markets On Flu Worries

123jump.com Staff
27 Apr, 2009
New York City

World financial markets retreated on the worries that fragile economies may face additional shocks if the outbreak of swine flu spreads beyond five nations. General Motors launched its $27 billion debt excahnge offer for 10% equity stake in the company. UK pound drops against dollar and yen.

[R]4:00PM New York, 10:00PM Frankfurt – World financial markets retreated on the worries that fragile economies may face additional shocks if the outbreak of swine flu spreads beyond five nations. General Motors launched its exchange offer of 10% in the company for $27 billion of debt. UK pound faces headwinds.[/R]

World markets remained focused on the swine flu outbreak in Mexico and the possible pandemic outbreak. Cases of flu have been reported in the U.S., Canada, Spain and New Zealand. Tour operators and air and cruise transportation companies decline and select drug makers rise. Mexico market index drops 3.3% and peso dropped on the decline in tourism revenues possibilities.

General Motors offered 10% equity stake in the company to bond holders in exchange of $27 billion debt. Most bond holders are likely to holdout for a better deal and may seek majority control of the company. The restructuring calls current shareholders diluting to 1% with the government controlling 50% and union holding 39%. General Motors Corporation led gainers in the S&P 500 index with a rise of as much as 31.9% before settling at 21%.

Alberto Culver Company second quarter profit meets street estimates. Qualcomm Inc reported second quarter net loss. Whirlpool Corporation first quarter profit drops on weakening demand. Air and cruise liners led decliners in trading in Asia, Europe and North America.

UK stocks fell along with a decline in European markets. British Air led decliners in the FTSE 100 index along with a sell-off in transportation related stocks. Aviva Plc jumped 5% after it completed 200 million pounds offering but will not reveal the terms of the offering.

With the first case of swine flu in Spain, investors were cautious. Airlines and hotels declined but pharmaceutical companies gained in trading. Merck KGaA, the drug and chemical maker in Germany first quarter net income plunged to 56.7 million euros. Sperian Protection in Pairs surged 23%.

North American Markets

Dow Jones Industrial Average decreased 51.29 or 0.64% to a close of 8,025.00, S&P 500 Index decreased 8.72 or 1.0% to 857.51, and Nasdaq Composite Index declined 14.88 or 0.9% to close at 1,679.41.

Of the stocks in S&P 500 index, 129 increased, 366 declined and 5 were unchanged.

Host Hotels & Real Estate led decliners in the S&P 500 index with a loss of 15% followed by losses in Carnival Corp of 13.5%, in KeyCorp of 12.0%, in Capital One Finance of 12%, in Regions Financial of 11.7% and in Wyndham Worldwide of 11.4%.

General Motors led gainers in the S&P 500 index with a surge of 20.7% followed by gains in Whirlpool Corp of 7.2%, in Humana Inc of 6.9%, in Autonation Inc of 4.7%, in Titanium Metals of 4.7% and in Qualcomm Inc of 4.4%.

South American Markets Indexes

Mexico Bolsa Index decreased 755.06 or 3.3% to 21,827.11. Brazil Bovespa Stock Index dropped 952.08 or 2% to 45,819.71.

Argentina Merval Index declined 1.2%, Chile Stock Market Select index fell 0.7% and Peru Lima General Index increased 0.7%. Colombia IGBC General Index edged down 0.6% and Venezuela Stock Market Index gained 0.8%.

Europe Markets Review

In London FTSE 100 Index closed higher 11.02 or 0.27% to 4,167.01, in Paris CAC 40 Index decreased 0.42 or 0.01% to close at 3,102.43 and in Frankfurt DAX index higher 19.75 or 0.42% to close at 4,694.07. In Zurich trading SMI increased 62.92 or 1.23% to close at 5,175.95.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 18.35 or 0.21% to 8,726.34, Hang Seng index in Hong Kong decreased 418.43 or 2.74% closed to 14,840.42, CSI 300 index in China lower 59.60 or 2.32% closed to 2,513.29. ASX 200 index in Australia increased 19.30 or 0.52% closed to 3,731.60. The KL Composite index in Malaysia lower 12.56 or 1.27% closed to 980.12.

The Kospi Index in South Korea decreased 14.27 or 1.05% to close at 1,339.83. SET index in Thailand closed higher 0.92 or 0.19% to 474.99 and JSE Index in Indonesia decreased 15.26 or 0.96% closed to 1,576.08. The Sensex index in India increased 42.80 or 0.38% closed to 11,371.85.

Commodities, Metals, and Currencies

Crude oil decreased $1.42 to close at $50.13 a barrel for a front month contract, natural gas decreased 4 cent to $3.26 per mBtu and gasoline futures decreased 3.68 cents to close at 140.52 cents per gallon.

Wheat futures closed down 23.750 cents in Chicago trading and closed at $5.19 a bushel. Sugar decreased 0.29 cent in trading at 13.89 cents a pound. Soybean future closed down 37 cent to $9.97 a bushel.

Gold increased $7.10 in New York trading to close at $913.70 per ounce, silver closed up $0.11 to $12.89 per ounce and copper for the front month delivery increased 5.65 cents to $2.0475 per pound.

Dollar edged higher against euro to $1.304 and closed up against yen to 97.76.

Yields on 10-year U.S. bonds increased to 2.92% and with 30-year maturities closed down at 3.84%.