World Markets Fall; Copper, Gold, Oil Drop

Mukesh Buch
17 Aug, 2009
New York City

World stock markets fell. Commodities linked Brazil, Canada and Australia declined sharply after Shanghai benchmark index plunged more than 5%. In New York tech stocks dropped but healthcare insurance stocks closed higher. Crude oil, copper and gold fell. Yields on Treasuries declined.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – World stock markets fell. Commodities linked Brazil, Canada and Australia declined sharply after Shanghai benchmark index plunged more than 5%. In New York tech stocks dropped but healthcare insurance stocks closed higher.[/R]

Global stocks decline after a sell-off that started in Asia and spreads to Europe and Americas. Resource stocks led the decliners on weak economic reading in Japan and China and worries that economic rebound may be further away than estimated.

In New York trading, commodities linked stocks led the decliners. Tech stocks and industrials fell as well. Healthcare insurance stocks closed higher.

Federal Reserve and the U.S. Treasury extended the emergency lending program known as TALF. The new deadline for the agency backed bonds is extended to the end of March 2010 and new mortgage bonds lending under the program will be extended to the end of June 2010.

Recently prices initial public offering, Rosetta Stone Inc plunges 26% after it canceled secondary offering and lowered quarterly and annual earnings outlook. The company canceled 4.1 million share offering and blamed the latest earnings revision on higher operating expenses.

Marshall & Ilsley declined after it booked a charge related to bad mortgage loans. BB&T filed to raise $750 million after it agreed to acquire Colonial BancGroup. First Solar fell on accounting issues. Global Sources Ltd surged after net fell 39%. Healthcare insurance provider increased.

European markets declined on weak commodities and energy prices and a fall in global markets. Volkswagen fell nearly 10% but Porsche rose after broker recommendation. RWE disposes of more shares in American Water and raises $650 million. Allianz declined 2% after first half net dropped 29.6%.

UK stocks edged lower on global market weakness and a fall in commodities prices. Home sellers also lowered the asking price. Mining companies after commodities declined on weak China demand. The global recruitment agency Michael Page drops 5% after net plunged 52%.

Japan GDP rebounded 0.9% in the second quarter ending in June on a turnaround in exports and a rise in industrial production. Most economists attributed the milder than expected rebound as temporary. Stocks declined sharply on weak commodities prices and U.S. consumer confidence report.

The benchmark index in Mumbai plunged 4% as markets in Asia drop sharply. Companies in India seek capital infusion through public offering and courting international investors. Nearly nine companies are looking to raise a total of $1.5 billion. Rupee declined on monsoon worries.

Australian stocks declined after Asian markets and commodities prices fell. Copper led the decliners in the metals trading. Fortescue Metals offered 35% discount to Chinese steel maker, breaking the long impasse the discussion between Chinese steelmakers and Australian iron ore miners.

North American Markets

Dow Jones Industrial Average decreased 186.06 or 2.0% to a close of 9,135.34, S&P 500 Index decreased 24.36 or 2.4% to 979.73, and Nasdaq Composite Index edged lower 54.68 or 2.8% to close at 1,930.84. Toronto TSX Composite Index decreased 314.75 or 2.90% to 10,533.26.

Of the stocks in S&P 500 index, 41 increased, 458 declined and 1 was unchanged.

Lowe’s Corp led the decliners in the S&P 500 index with a loss of 10.5% followed by losses in Manitowoc Company of 9.4%, in Prologis of 9%, in Genworth Financial of 8.5% and in U.S. Steel Corp of 8.4%.

Aetna Inc led gainers in the S&P 500 index with a rise of 4.6% followed by gains in Coventry Health 4.5%, in IMS Health, Inc of 3.7%, in WellPoint, Inc of 3% and in Humana added 2.85%.

South American Markets Indexes

Mexico Bolsa Index decreased 555.85 or 2.0% to 27,299.58 Brazil Bovespa Stock Index dropped 1,510.29 or 2.7% to 55,127.71.

Argentina Merval Index decreased 1.9%. Chile Stock Market Select index edged lower 1.3%, Peru Lima General Index edged lower 1.7% and Colombia IGBC General Index fell 0.2% in Friday’s trading.

Europe Markets Review

In London FTSE 100 Index closed lower 68.96 or 1.46% to 4,645.01, in Paris CAC 40 Index decreased 75.58 or 2.16% to close at 3,419.69 and in Frankfurt DAX index lower 107.50 or 2.02% to close at 5,201.61. In Zurich trading SMI decreased 101.60 or 1.70% to close at 5,883.70.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 328.72 or 3.10% to 10,268.61, Hang Seng index in Hong Kong decreased 755.68 or 3.62% to 20,137.65 and CSI 300 index in China lower 204.19 or 6.11% to 3,140.27. ASX 200 index in Australia decreased 72.60 or 1.63% to 4,388.40. The FTSE Bursa KL Composite index in Malaysia closed lower 19.52 or 1.64% to 1,169.05.

The Kospi Index in South Korea decreased 44.35 or 2.79% to close at 1,547.06. SET index in Thailand closed lower 22.20 or 3.39% to 632.05. The Sensex index in India decreased 626.71 or 4.07% to 14,784.92. The Indonesian Market was close today.

Commodities, Metals, and Currencies

Crude oil decreased $0.70 to close at $66.81 a barrel for a front month contract, natural gas decreased 5 cents to $3.19 per mBtu and gasoline increased 1.50 cents to 195.30 cents.

Wheat futures closed down 10.00 cents in Chicago trading to $4.99 a bushel. Sugar decreased 0.15 cent in trading at 21.83 cents a pound. Soybean future closed down 27.00 cent to $9.54 a bushel.

Gold decreased $12.70 in New York trading to close at $936.50 per ounce, silver closed down $0.71 to $14.01 per ounce and copper for the front month delivery decreased 7.20 cents to $2.77 per pound.

Dollar edged higher against euro to $1.40 and closed lower against the Japanese yen to 94.45.

Yield on 10-year U.S. bonds declined to 3.47% and with 30-year maturities fell to 4.32%.