Higher Loss at Alcoa; Oil Drops to $60

123jump.com Staff
08 Jul, 2009
New York City

Earnings jitters kept stocks trading sideways. After the close, Data Domain agreed to be acquired by EMC for $2.1 billion. Alcoa reported quarterly loss of 47 cents a share. Chinese government bond offering failed to attract investors as yields are expected to rise.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – Earnings jitters kept stocks trading sideways. After the close, Data Domain agreed to be acquired by EMC for $2.1 billion. Alcoa reported quarterly loss of 47 cents a share. Chinese government bond offering failed to attract investors as yields are expected to rise.[/R]

U.S. stocks traded sideways ahead of earning jitters and falling commodities prices. The earnings in the second quarters are expected to sharpest in the energy and materials sectors and banks are expected reported weaker than consensus estimate. Home builders and financial brokerage services are also expected report lower than expected earnings.

The much maligned lender to nations IMF revised its annual global economic growth forecast for 2010 to 2.5% from its earlier estimate of 1.9% and said that the economic rebound will be “sluggish.”

Alcoa Inc after the close reported loss of $454 million or 47 cents a share compared to income of $546 million or 66 cents a share.

Data Domain Inc agreed to be acquired by EMC for $2.1 billion in cash or $33.50 and paid termination fees of $57 million to end its merger talks to NetApp Inc who was prepared to pay $30 a share in cash and stock.

Amgen Inc led gainers in the S&P 500 index with a rise of 15.5%. A. Schulman third quarter profit rises. Family Dollar Stores third quarter net profit rises. Ruby Tuesday reports strong results. IntercontinentalExchange plunged 10% on a possible rule tightening for energy futures trading.

UK stocks closed lower after June home prices declined 0.5% after increasing 2.6% in May. A shareholder vote supported Marks & Spencer chief the company chairman.

Japan stocks fell sharply as yen strengthened and seasonally adjusted private sector orders in May fell. The current account in the month also declined 34.3% as exports fell 42%. Machinery companies declined after the release of orders data.

China bond sale drew less than expected interest from investors. Investors are worried that rates may be on the rise as China drains liquidity from the markets. Real estate, banks and energy stocks closed lower in Shanghai and Hong Kong.

Mumbai stocks dropped tracking losses in global markets. Worries of rising debt dragged rupee to a 2-month low. Exports in June fell at a slower pace of 29% after falling at 33% in March and April. Educomp Solutions raised $100 million and stocks plunged 10%.

Australian stocks recovered from 1.5% loss after the release of consumer confidence. The home loan approvals increased 2.2% in May as first-time home buyers were encouraged with government grants. CBH Resources announced a recap plan with A$40 million loan from its largest shareholder Toho Zinc.

North American Markets

Dow Jones Industrial Average increased 14.81 or 0.2% to a close of 8,178.41, S&P 500 Index decreased 1.47 or 0.2% to 879.56, and Nasdaq Composite Index edged higher 1.00 or 0.06% to close at 1,747.17. Toronto TSX Composite Index decreased 1.9% or 190.90 to 9,653.45.

Of the stocks in S&P 500 index, 198 increased, 293 declined and 9 were unchanged.

IntercontinentalExchange, Inc led the decliners in the S&P 500 index with a loss of 13.1% followed by losses in Genworth Financial of 12.2%, in CIT Group of 11.1%, in Huntington Bancorp of 9.3% and in AK Steel Holding of 7.3%.

Amgen Inc led gainers in the S&P 500 index with a rise of 13.9% followed by gains in Family Dollar Stores, Inc 12.4%, in Whole Foods Market of 8.9% and in Tiffany & Company of 7.1%.

South American Markets Indexes

Mexico Bolsa Index increased 109.04 or 0.5% to 23,468.98. Brazil Bovespa Stock Index decreased 279.15 or 0.6% to 49,177.55.

Argentina Merval Index decreased 2.8%. Chile Stock Market Select index edged lower 0.8%, Peru Lima General Index declined 2% and Colombia IGBC General Index fell 1.5%.

Europe Markets Review

In London FTSE 100 Index closed lower 46.77 or 1.12% to 4,140.23, in Paris CAC 40 Index decreased 38.86 or 1.27% to close at 3,009.71 and in Frankfurt DAX index lower 25.54 or 0.56% to close at 4,572.65. In Zurich trading SMI decreased 39.81 or 0.75% to close at 5,289.39.

Commodities, Metals, and Currencies

Crude oil decreased $2.43 to close at $60.31 a barrel for a front month contract, natural gas decreased 0.07 cents to $3.36 per mBtu and gasoline decreased 9.28 cents to 164.00 cents.

Wheat futures closed up 2.50 cents in Chicago trading to $5.46 a bushel. Sugar increased 0.25 cent in trading at 17.21 cents a pound. Soybean future closed down 3.00 cents to $8.92 a bushel.

Gold decreased $19.50 in New York trading to close at $909.60 per ounce, silver closed down $0.35 to $12.87 per ounce and copper for the front month delivery decreased 6.25 cents to $2.17 per pound.

Dollar edged higher against euro to $1.3881 and closed down against the Japanese yen to 92.75.

Yield on 10-year U.S. bond decreased to 3.29% and with 30-year maturities decreased to 4.17%.