U.S. Home Sales Fall; Microsoft $3.75 B Debt

123jump.com Staff
12 May, 2009
New York City

U.S. existing home sales declined in the first quarter and median home prices fell 14%. Trade deficit in March rose on higher energy cost. Microsoft priced its first ever debt offering of $3.75 billion. Freddie Mac reported first quarter loss of $10 billion and sought $6.1 billion from the U.S.

[R]5:00 PM New York, 10:00 PM London – U.S. stocks closed mixed. Existing home sales declined in the first quarter and median home prices fell 14%. Trade deficit in March rose on higher energy cost. Microsoft priced its first ever debt offering of $3.75 billion. Freddie Mac reported first quarter loss of $10 billion and sought $6.1 billion from the U.S.[/R]

U.S. stocks closed mixed as oil traded near elevated level, gold rebounded and existing home sales declined. Trade deficit in March increased on higher cost of imported energy.

National Association of Realtors said existing home sales in first quarter ending in March declined 6.8% from a year ago and 3.2% from the fourth quarter to 4.59 million units. The median home prices declined 14% to $169,000 and inventory of unsold homes in March decline to 3.7 million from 3.8 million in February.

Freddie Mac, one of the two government controlled agencies for mortgage lending reported first quarter net loss of $9.9 billion and asked $6.1 billion from the U.S. Treasury.

Microsoft in its first debt offering raised $3.75 billion. The $2 billion five-year note expiring in 2014 yielded 2.95% and $1 billion ten-year note expiring in 2019 yielded 4.2%. In addition, software developer also priced $750 million 30-year bond yielding 5.2%.

Two coal miners merge to form the third largest coal company with mines in some of the coal rich areas of the U.S. The deal will strengthen both companies in negotiating with utilities and steel companies. Foundation Coal surges after the Alpha pays 37% premium.

The U.S. trade deficit in March edged up after weakening in February. Rising energy import prices and stubborn deficit with China, EU, OPEC, Japan and Mexico contributed to the persistent deficit.

Exports of goods in March declined more than imports from February month, lifting the trade deficit to $27.6 billion from $26.1 billion in February. Rising petroleum prices in March also contributed to the trade deficit. The deficit in the month and in the first quarter was still cut in half form a year ago periods.

European markets edged lower on a weakness in banks and industrials. Retailers in UK gained. Fraport AG and ThyssenKrupp dropped on weak earnings outlook. ArcelorMittal guided global steel sales to drop as much as 20%.

The UK’s deficit on trade in goods and services was £2.5 billion in March, compared with the revised deficit of £2.8 billion in February from initial estimate of £3.2 billion.

Stocks in Japan declined on the worries that global markets may have advanced too far. Weak outlook from Isuzu and Daiichi Sankyo also affected trading. Autos and financials declined. Hitachi reported higher than expected loss for the current year.

Stocks in Mumbai surged on speculation that BJP led coalition is likely to lead in the parliament election. Investors are looking for a clear majority for one coalition to lead the nation and bring political stability. Banks, realty and capital goods stocks linked to infrastructure led gainers.

North American Markets

Dow Jones Industrial Average gained 50.34 or 0.6% to a close of 8,469.11, S&P 500 Index fell 0.89 or 0.1% to 908.35, and Nasdaq Composite Index decreased 15.32 or 0.9% to close at 1,715.92. In Toronto TSX Composite Index closed down 16.44 or 0.16% to 10,077.70.

Of the stocks in S&P 500 index, 192 increased, 307 declined and 1 was unchanged.

General Motors led decliners in the S&P 500 index with a loss of 20.1% followed by losses in Ford Motor of 17.6%, in SunTrust Banks of 12.4%, in MBIA Inc of 11.8% and in E*Trade Financial of 10.7%.

CME Group led gainers in the S&P 500 index with a surge of 7% followed by gains in Fluor Corp of 5.6%, in CIT Group Inc of 5.6%, in Pfizer Inc of 5.5%, in Monsanto Company of 4.8% and in St Jude Medical of 4.4%.

South American Markets Indexes

Mexico Bolsa Index fell 246.53 or 1.03% to 23,696.49. Brazil Bovespa Stock Index declined 650.61 or 1.3% to 50,325.78.

Argentina Merval Index added 0.9%, Chile Stock Market Select index increased 0.25% and Peru Lima General Index increased 3.8%. Colombia IGBC General Index gained 0.8% and Venezuela Stock Market Index edged up 1%.

Europe Markets Review

In London FTSE 100 Index closed lower 9.96 or 0.22% to 4,425.54, in Paris CAC 40 Index decreased 17.57 or 0.54% to close at 3,231.10 and in Frankfurt DAX index lower 12.80 or 0.26% to close at 4,854.11. In Zurich trading SMI decreased 12.91 or 0.24% to close at 5,346.03.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 153.37 or 1.62% to 9,298.61, Hang Seng index in Hong Kong increased 65.69 or 0.38% closed to 17,153.64, CSI 300 index in China higher 63.25 or 2.32% closed to 2,788.56. ASX 200 index in Australia decreased 48.80 or 1.24% closed to 3,877.20. The KL Composite index in Malaysia lower 2.48 or 0.24% closed to 1,023.02.

The Kospi Index in South Korea decreased 11.65 or 0.82% to close at 1,403.51. SET index in Thailand closed higher 9.36 or 1.75% to 544.54 and JSE Index in Indonesia increased 11.28 or 0.62% closed to 1,842.02. The Sensex index in India increased 475.04 or 4.07% closed to 12,158.03.

Commodities, Metals, and Currencies

Crude oil decreased $0.28 to close at $58.78 a barrel for a front month contract, natural gas increased 20 cent to $4.50 per mBtu and gasoline futures decreased 1.34 cents to close at 166.80 cents per gallon.

Wheat futures closed up 2.00 cents in Chicago trading and closed at $5.9275 a bushel. Sugar increased 0.11 cent in trading at 15.72 cents a pound. Soybean future closed up 1.50 cent to $11.17 a bushel.

Gold increased $10.50 in New York trading to close at $924.00 per ounce, silver closed up $0.32 to $14.23 per ounce and copper for the front month delivery increased 0.25 cents to $2.091 per pound.

Dollar edged lower against euro to $1.3642 and closed down against yen to 96.50.

Yields on 10-year U.S. bonds increased to 3.17% and with 30-year maturities closed down at 4.16%.