Global Markets on Hold; Google, Microsoft Fall

Mukesh Buch
07 Jul, 2009
New York City

U.S. markets closed sharply lower ahead of earnings season. Technology, energy and industrial stocks led the decliners. European auto sales declined at a slower pace in June. Australia left its key rate unchanged at 3%.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – U.S. markets closed sharply lower ahead of earnings season. Technology, energy and industrial stocks led the decliners. European auto sales declined at a slower pace in June. Australia left its key rate unchanged at 3%.[/R]

The U.S. stocks closed lower ahead of earnings season as commodities and energy prices fell. The operators of futures exchanges declined on the scheduled hearing on the need to regulate speculative trading in the commodities.

Healthcare insurance stocks rebounded on the hopes that the government operated insurance plan may be delayed. Tech stocks declined on the worries of a decline in industry after a report from researcher Gartner.

The UK stocks edged lower on weak commodities and energy prices. The pound fell declined against dollar after the British Chamber of Commerce said that the Bank of England expands the asset purchase program beyond £150 billion.

European markets closed lower on the worries that recovery will be slower and the global economic conditions are expected to remain weak. The worldwide auto sales of Mercedes Benz and BMW declined at a slower pace in June and PSA Peugeot Citroen sales fell 14% in the first half.

Japan investors stayed on the sidelines as the prospects of a speedy global recovery looks less and less likely. Bank of Japan in its latest regional survey indicated that economic conditions are severe in most regions but they appear to stabilize.

Infrastructure companies rebounded a day after a sharp sell-off in India. Reliance Industries, Reliance Natural and central government are required to respond to the Supreme Court before July 20. Automakers increased after the government increased road construction budget by 23%.

Stocks in Australia traded sideways ahead of earnings season. The Reserve Bank of Australia left its key lending rate at 3% and offered optimistic outlook for the domestic economy. Energy and materials related stocks edged lower.

North American Markets

Dow Jones Industrial Average decreased 161.27 or 1.9% to a close of 8,163.60, S&P 500 Index decreased 17.69 or 2% to 881.03, and Nasdaq Composite Index edged lower 41.23 or 2.3% to close at 1,746.17. Toronto TSX Composite Index decreased 1.8% or 183.08 to 9,844.35.

Of the stocks in S&P 500 index, 42 increased, 455 declined and 3 were unchanged.

AIG led the decliners in the S&P 500 index with a loss of 15.1% followed by losses in Dynegy Inc of 11.6%, in Discover Financial of 10.7%, in E*Trade Financial of 7.8% and in Manitowoc Company of 7.3%.

CIT Group led gainers in the S&P 500 index with a rise of 12.5% followed by gains in Tenet Healthcare 8.8%, in Cigna Corp of 7.5% and Aetna Inc of 6.2%.

South American Markets Indexes

Mexico Bolsa Index decreased 382.55 or 1.6% to 23,359.94. Brazil Bovespa Stock Index decreased 1,165.77 or 2.3% to 49,456.70.

Argentina Merval Index decreased 2.1%. Chile Stock Market Select index edged lower 0.7%, Peru Lima General Index declined 1% and Colombia IGBC General Index increased 0.2%.

Europe Markets Review

In London FTSE 100 Index closed lower 7.91 or 0.19% to 4,187.00, in Paris CAC 40 Index decreased 33.59 or 1.09% to close at 3,048.57 and in Frankfurt DAX index lower 53.63 or 1.15% to close at 4,598.19. In Zurich trading SMI decreased 24.95 or 0.47% to close at 5,329.20.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 33.08 or 0.34% to 9,647.79, Hang Seng index in Hong Kong decreased 117.14 or 0.65% to 17,862.27, CSI 300 index in China lower 34.26 or 1.02% to 3,340.49. ASX 200 index in Australia decreased 16.80 or 0.44% to 3,766.90. The KL Composite index in Malaysia closed higher 0.53 or 0.05% to 1,066.36.

The Kospi Index in South Korea increased 5.26 or 0.37% to close at 1,434.20. JSE Index in Indonesia increased 48.24 or 2.37% to 2,083.25. The Sensex index in India increased 127.05 or 0.90% to 14,170.45. The markets of Thailand were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $1.12 to close at $64.30 a barrel for a front month contract, natural gas decreased 6 cents to $3.43 per mBtu and gasoline decreased 2.16 cents to 171.88 cents.

Wheat futures closed down 6.75 cents in Chicago trading to $5.12 a bushel. Sugar decreased 0.36 cent in trading at 16.96 cents a pound. Soybean future closed down 68.00 cents to $8.95 a bushel.

Gold decreased $0.20 in New York trading to close at $924.10 per ounce, silver closed down $0.018 to $13.22 per ounce and copper for the front month delivery decreased 5.95 cents to $2.20 per pound.

Dollar edged higher against euro to $1.3916 and closed up against the Japanese yen to 94.86.

Yield on 10-year U.S. bond decreased to 3.45% and with 30-year maturities decreased to 4.31%.