Chrysler Bankruptcy, Exxon Mobil Falls

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

U.S. stocks reversed their early gains after Chrysler debt holders and debt holders could not agree. The failure forced first major automaker in the U.S. into bankruptcy throwing in doubts the future of hundreds auto parts maker. Japan lowered its annual economic outlook.

[R]4:00PM New York, 10:00PM Frankfurt – U.S. stocks reversed their early gains after Chrysler debt holders and debt holders could not agree. The failure forced first major automaker in the U.S. into bankruptcy throwing in doubts the future of hundreds auto parts maker.[/R]

U.S. stocks staged a reversal in the afternoon and closed lower after Chrysler LLC filed bankruptcy protection and Exxon Mobile reported earnings plunge of 58%. On a busy earnings release day, most companies reported better than expected earnings. First Solar, Visa and Akamai are the only of the leading companies that surprised investors.

Exxon Mobil reported 58% decline in earnings in the first quarter as oil prices plunged from a year ago. Earnings in the quarter declined to $4.55 billion from $10.89 and earnings per share declined to 92 cents from $2.02. Oil production increased fractionally to 2.47 million barrels a day and daily natural gas production was 10.2 billion cubic feet.

Earlier in the week Royal Dutch Shell, BP reported earnings decline of 62% and 64% respectively.

Chrysler, the third largest domestic automaker filed bankruptcy protection to restructure and wipe out its liability of $10.6 billion to a pension fund and $6.9 billion in secured debts. The U.S. is likely to provide funding while the company is reorganizing under the court protection.

Bank of America Chief executive lost its title as chairman of the board after large number of shareholders voted at annual general meeting. The heavy voting reflects investor concerns that the bank may have overextended itself in its two latest acquisitions of Countrywide Financial and Merrill Lynch. Even though the vote is symbolic in nature, the chief at the bank may find Ken Lewis may find his authority curtailed as he battles with regulators and the U.S. government to get more aid.

Japan left its key lending rate 0.1% and lowered its outlook for the current and the next fiscal years. The yen declined against the dollar to 97.8445. Exporters gained in trading. Toyota Motor surged 5.2%, Canon increased 6% and Honda surged.

Reliance Communications reported a decline in earnings as revenues increase 15% in the quarter. Reliance Capital net drops 14.3%. Videocon second quarter net plunged 71%. Voters in nine states including Maharashtra, Gujarat and Uttar Pradesh are voting today in India.

North American Markets

Dow Jones Industrial Average decreased 17.61 or 0.22% to a close of 8,168.12, S&P 500 Index lost 0.83 or 0.10% to 872.81, and Nasdaq Composite Index added 5.36 or 0.31% to close at 1,717.30. In Toronto TSX Composite Index declined 91.48 or 1% to 9,324.83.

Of the stocks in S&P 500 index, 256 increased, 243 declined and 1 was unchanged.

JDS Uniphase led decliners in the S&P 500 index with a loss of 17% followed by losses in Eastman Kodak of 16.2%, in Assurant Inc of 11.5%, in E*Trade Financial of 12.3%, in Mylan Inc of 8.9% and in Reynolds America of 8.5%.

Owens Illinois led gainers in the S&P 500 index with a surge of 32.1% followed by gains in Expedia Inc of 28.5%, in Newell Rubbermaid of 20.5%, in Dow Chemical of 18.4%, in International Paper of 16.2% and in CB Richard Ellis of 14.2%.

South American Markets Indexes

Mexico Bolsa Index decreased 180.49 or 0.82% to 21,898.85. Brazil Bovespa Stock Index gained 62.74 or 0.13% to 47,289.53.

Argentina Merval Index increased 0.4%, Chile Stock Market Select index decreased 1.5% and Peru Lima General Index declined 1.3%. Colombia IGBC General Index edged down 0.3% and Venezuela Stock Market Index edged lower 0.3%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 334.49 or 3.94% to 8,828.26, Hang Seng index in Hong Kong increased 564.04 or 3.77% closed to 15,520.99, CSI 300 index in China higher 17.56 or 0.67% closed to 2,622.93. ASX 200 index in Australia increased 85.20 or 2.31% closed to 3,780.50. The KL Composite index in Malaysia higher 23.28 or 2.41% closed to 990.74.

The Kospi Index in South Korea increased 30.94 or 2.31% to close at 1,369.36. SET index in Thailand closed higher 8.19 or 1.69% to 491.69 and JSE Index in Indonesia increased 78.58 or 4.78% closed to 1,722.77. The Markets of India were closed today.

Europe Markets Review

In London FTSE 100 Index closed higher 54.12 or 1.29% to 4,243.71, in Paris CAC 40 Index increased 42.91 or 1.38% to close at 3,159.85 and in Frankfurt DAX index higher 64.89 or 1.38% to close at 4,769.45. In Zurich trading SMI increased 73.20 or 1.42% to close at 5,225.92.

Commodities, Metals, and Currencies

Crude oil increased $0.02 to close at $50.99 a barrel for a front month contract, natural gas decreased 2 cent to $3.38 per mBtu and gasoline futures increased 1.33 cents to close at 145.96 cents per gallon.

Wheat futures closed up 4.50 cents in Chicago trading and closed at $5.36 a bushel. Sugar increased 0.28 cent in trading at 14.36 cents a pound. Soybean future closed up 30 cent to $10.55 a bushel.

Gold decreased $11.00 in New York trading to close at $889.50 per ounce, silver closed down $0.45 to $12.375 per ounce and copper for the front month delivery increased 2.50 cents to $2.03 per pound.

Dollar edged higher against euro to $1.3232 and closed up against yen to 98.62.

Yields on 10-year U.S. bonds increased to 3.12% and with 30-year maturities closed up at 4.04%.