U.S. and Global Indexes Retreat in Sync

Mukesh Buch
31 Aug, 2009
New York City

Global markets edged lower as investors around the world question the rally of last sixteen weeks. World markets could drop in sync from the recent highs. Gold fell but managed to rebound from the lows of the day. Sugar hovers near recent highs.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Global markets edged lower as investors around the world question the rally of last sixteen weeks. World markets could drop in sync from the recent highs. Gold fell but managed to rebound from the lows of the day. Sugar hovers near recent highs.[/R]

Global stocks edged lower after commodities prices fell on the China worries. The benchmark index in Shanghai plunged 7% after investors worried of stretched valuations. Japan voted out the Liberal Democratic Party after nearly five decades in power. Euro zone consumer prices fell at a slower pace and European stocks declined as the market indexes in the U.S.

Disney Acquires Marvel Entertainment as it expands its portfolio of character library. Disney stock has languished in the last five years and hopes that Marvel characters can help to draw more people to its theme parks and contribute to international sales.

Baker Hughes expands into pressure pumping with the acquisition of BJ Services. Upon the completion of the merger, BJ Services shareholders will control 27.5% of outstanding shares of Baker Hughes. The recent oil and natural gas discoveries in Canada have been in oil shale formation.

Marvel Entertainment surged after Disney offered $50 a share buyout. BJ services gained more than 7% after Baker Hughes agreed to acquire the company for $5.5 billion. E*Trade increased after Citadel canceled its plan to sell shares.

European markets declined after commodities fell on China worries. Banks in Ireland plunged on the worries that the government many pay less for the bad loans. Bertelsmann reported loss in the first half and estimated annual loss. The private equity firm Wendel declared loss in the latest quarter.

Australian companies gross profits dropped 7.8% in second quarter form the first and declined 14.7% from the quarter a year ago. Reserve Bank of Australia reported today business credit fell 0.3% in July after falling 0.6% the previous month. Lending to businesses also slumped 0.7%.

North American Markets

Dow Jones Industrial Average decreased 47.92 or 0.5% to a close of 9,496.28, S&P 500 Index decreased 8.31 or 0.8% to 1,020.62, and Nasdaq Composite Index edged lower 19.71 or 0.97% to close at 2,009.06. Toronto TSX Composite Index decreased 109.76 or 1.64% to 10,868.21.

Of the stocks in S&P 500 index, 93 increased, 404 declined and 3 were unchanged.

American International Group, Inc led the decliners in the S&P 500 index with a loss of 9.8% followed by losses in Baker Hughes Incorporated of 9.6%, in Corning Inc of 5.2%, in Gannett Company of 5.2% and in Allegheny Tech of 5.1%.

E*Trade Financial led gainers in the S&P 500 index with a rise of 7.3% followed by gains in Genworth Financial 6.2%, in Varian Medical System of 5.5% and in BJ Services of 4.1%.

South American Markets Indexes

Mexico Bolsa Index decreased 469.97 or 1.7% to 28129.95 Brazil Bovespa Stock Index decreased 1,211.59 or 2.1% to 56,488.98.

Argentina Merval Index closed down 0.8% and Chile Stock Market Select index edged lower 1.5%, Peru Lima General Index edged lower 1.4% and Colombia IGBC General Index fell 0.4%.

Europe Markets Review

In Paris CAC 40 Index decreased 39.60 or 1.07% to close at 3,653.54, in Frankfurt DAX index lower 52.74 or 0.96% to close at 5,464.61. In Zurich trading SMI increased 5.54 or 0.09% to close at 6,217.12. London exchanges were closed today.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 41.61 or 0.40% to 10,492.53, Hang Seng index in Hong Kong decreased 374.43 or 1.86% to 19,724.19 and CSI 300 index in China lower 216.51 or 7.11% to 2,830.27. ASX 200 index in Australia decreased 10.50 or 0.23% to 4,479.10. The Market of Malaysia was closed today.

The Kospi Index in South Korea decreased 16.09 or 1.00% to close at 1,591.85. SET index in Thailand closed lower 3.73 or 0.57% to 653.25 and JSE Index in Indonesia decreased 35.71 or 1.50% to 2,341.54. The Sensex index in India decreased 255.70 or 1.61% to 15,666.64.

Commodities, Metals, and Currencies

Crude oil decreased $0.16 to close at $69.80 a barrel for a front month contract, natural gas closed unchanged at $2.98 per mBtu and gasoline increased 0.58 cents to 181.57 cents.

Wheat futures closed up 3.50 cents in Chicago trading to $4.99 a bushel. Sugar edged up to 24.39 cents a pound. Soybean future closed down 31.50 cent to $14.08 a bushel.

Gold decreased $1.00 in New York trading to close at $952.50 per ounce, silver closed down $0.03 to $14.88 per ounce and copper for the front month delivery increased 1.35 cent to $2.84 per pound.

Dollar edged higher against euro to $1.43 and closed lower against the Japanese yen to 92.93.

Yield on 10-year U.S. bonds decreased at 3.40% and with 30-year maturities edged lower to 4.17%.