U.S. Stocks Edge Lower; Oil Drops

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

The U.S. stocks edged lower on a weakness in banks and energy stocks. Crude oil declined and dollar gained against euro. Euro zone recorded deepest economic decline in the first quarter.

[R]5:00 PM New York, 10:00 PM London, 8:00AM Sydney – The U.S. stocks edged lower on a weakness in banks and energy stocks. Crude oil declined and dollar gained against euro. Euro zone recorded deepest economic decline in the first quarter.[/R]

U.S. stocks closed lower after the energy prices fell and euro zone nations reported deepest contraction in more than a decade. The financials also fell on media speculation that some bank chiefs may be replaced after comments from FDIC Chairman Sheila Bair on Bloomberg TV.

Six insurers surged in the morning after they were approved for emergency funding by the U.S. Treasury. Hartford Financial led the surge among six insurers followed by early gains in Prudential, Principal, Ameriprise, All State and Lincoln National.

Net foreign purchases of long term U.S. securities surged to $56 billion with Japan as the largest buyer. U.S. industrial output declined 0.5% in April and consumer price index was flat.

Mining and energy related stocks closed lower in UK on a fall in energy prices. The interbank rate continues to fall. Barclays surged after it confirmed that it has received offers for its investment management unit.

The economy in the euro-zone declined 2.5% in the first quarter ending in March from the fourth quarter of 2008. The decline was same in both sixteen member nations and in the extended 27 countries that includes nations with economies that are linked to the euro. The economies of EU16 zone declined 4.6% from a year ago and fell 4.4% in the EU27 zone.

The euro declined against dollar and yen.

German GDP declined at 3.8% in the first quarter ending in March compared the fourth quarter of 2008. The GDP declined 6.7% from a year ago in the first three months of 2009. The GDP in France in the first quarter declined 1.2% compared to the fourth quarter. Italian GDP declined 2.4% in the first quarter.

Stocks in Tokyo edged up and for the week closed higher. Latest machinery orders indicated a sharp surge in overseas orders but the government forecasted weak sales in the current quarter. Sanyo Electric, Sony and Acom gained after the earnings release.

Stocks in Mumbai gained. Consumer price index declined in March but above 8% on higher food prices. Congress party suggested that it can form the next government without the help of Communist party. Banks surged on the comments from the RBI governor.

Australian stocks rebounded on a rise in commodities and energy prices. Australian dollar declined 1.5% for the week. Rio Tinto surged after it said it is committed to a deal with Aluminum Company of China. For the week, Australian dollar drops 1.5% and the benchmark index declines 4.3%.

North American Markets

Dow Jones Industrial Average decreased 62.68 or 0.8% to a close of 8,268.64, S&P 500 Index declined 10.19 or 1.1% to 882.88, and Nasdaq Composite Index edged lower 9.07 or 0.5% to close at 1,680.14. In Toronto TSX Composite Index closed down 86.35 or 0.9% to 9,762.85.

Of the stocks in S&P 500 index, 113 increased, 381 declined and 6 were unchanged.

Dynegy Inc led decliners in the S&P 500 index with a loss of 10.6% followed by losses in CIT Group Inc of 10.2%, in First Energy Corp of 9.6%, in Office Depot Inc of 9% and in Qwest Communication of 7.1%.

Nordstrom Inc led gainers in the S&P 500 index with a surge of 7.8% followed by gains in Compuware Corp of 7.2%, in Ford Motor Company of 6.4%, in SanDisk Corp of 5.9%, in Electronic Arts of 4.7% and in Stericycle Inc of 4.1%.

South American Markets Indexes

Mexico Bolsa Index decreased 64.21 or 0.3% to 23,341.72. Brazil Bovespa Stock Index declined 438.81 or 0.9% to 49,007.21.

Argentina Merval Index dropped 0.7%, Chile Stock Market Select index increased 1.5% and Peru Lima General Index declined 0.1%. Colombia IGBC General Index edged lower 0.3% and Venezuela Stock Market Index edged down 0.1%.

Europe Markets Review

In London FTSE 100 Index closed lower 14.47 or 0.33% to 4,348.11, in Paris CAC 40 Index increased 12.76 or 0.40% to close at 3,169.05 and in Frankfurt DAX index lower 0.97 or 0.02% to close at 4,737.50. In Zurich trading SMI decreased 9.33 or 0.17% to close at 5,350.67.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 171.29 or 1.88% to 9,265.02, Hang Seng index in Hong Kong increased 249.01 or 1.51% closed to 16,790.70, CSI 300 index in China higher 3.52 or 0.13% closed to 2,796.12. ASX 200 index in Australia increased 49.80 or 1.34% closed to 3,773.20. The KL Composite index in Malaysia higher 2.22 or 0.22% closed to 1,014.21.

The Kospi Index in South Korea increased 10.78 or 0.78% to close at 1,391.73. SET index in Thailand closed higher 7.37 or 1.40% to 533.92 and JSE Index in Indonesia decreased 34.09 or 1.91% closed to 1,750.91. The Sensex index in India increased 300.51 or 2.53% closed to 12,173.42.

Commodities, Metals, and Currencies

Crude oil decreased $2.28 to close at $56.34 a barrel for a front month contract, natural gas decreased 19 cent to $4.10 per mBtu and gasoline futures decreased 4.31 cents to close at 168.06 cents per gallon.

Wheat futures closed down 15.75 cents in Chicago trading and closed at $5.77 a bushel. Sugar decreased 0.52 cent in trading at 14.95 cents a pound. Soybean future closed down 17.00 cent to $11.30 a bushel.

Gold increased $2.90 in New York trading to close at $931.30 per ounce, silver closed down $0.05 to $14.01 per ounce and copper for the front month delivery decreased 0.95 cents to $2.0175 per pound.

Dollar edged higher against euro to $1.3495 and closed down against yen to 95.20.

Yields on 10-year U.S. bonds increased to 3.13% and with 30-year maturities closed up at 4.08%.