U.S. Stocks, Oil, Gold Drop; Fed on Hold

123jump.com Staff
23 Sep, 2009
New York City

U.S. stocks and commodities declined after Fed left its key lending rate range unchanged and searched for wider set of tools to sustain the economy. Real estate companies in UK, India, Australia and Hong Kong raise multi-million dollars to strengthen capital base.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. stocks and commodities declined after Fed left its key lending rate range unchanged and searched for wider set of tools to sustain the economy. Real estate companies in UK, India, Australia and Hong Kong raise multi-million dollars to strengthen capital base.[/R]

Federal Reserve after deliberating for two days left its target interest rate unchanged between zero and 0.25% and looked for more tools to sustain economic recovery. In an accompanying statement Fed acknowledged while the economy is on the mend the recovery is uneven and labor markets are not expected to recover in the near term.

Federal Reserve also said that the interest rates for an “extended period” will remain “exceptionally low.”

Moody’s Corp fell more than 8% after U.S. insurance regulators approved fourth rating agency to rank and rate insurance related bonds. McGraw Hill Companies, Inc, the parent of S&P declined 1.7%.

Private education providers and student loans lenders decreased for the second day in a row after lawmakers tighten student loans from banks. ATP Oil & Gas fell after it proposed convertible offering of $125 million. Goodrich Petroleum completed $190 million. AutoZone fell after reporting flat quarterly sales.

UK stocks traded lackluster and closed lower as crude oil prices declined. Burberry led gainers after positive comments from its chief. Home builders and real estate investment trusts were in focus after several companies including Barratt, Redrow and Liberty International raise £1.15 billion.

World Bank provided $10 billion in loans to India to support its infrastructure driven stimulus program and recapitalize public sector banks. Jaiprakash Associates, Suzlon, Cipla and others sell stocks to raise more than $400 million. ONGC plans to spend $10 billion to expand energy exploration.

New Zealand second quarter GDP expanded after shrinking for six quarters in a row. Australian and New Zealand dollar gained on the GDP report. Retailers, banks and resource stocks increased in Sydney after ADB revised higher developing Asia growth rate.

New Zealand emerges from recession as housing market and consumer confidence strengthens in the second quarter. The six quarter long recession was the longest in thirty years as the nation joins Germany, France and Singapore to rebound with anemic growth rate.

North American Markets

Dow Jones Industrial Average decreased 81.32 or 0.8% to a close of 9,748.55, S&P 500 Index fell 10.79 or 1% to 1,060.87, and Nasdaq Composite Index declined 14.88 or 0.7% to close at 2,131.42. Toronto TSX Composite Index dropped 68.19 or 0.6% to 11,517.54.

Of the stocks in S&P 500 index, 320 increased, 175 declined and 5 were unchanged.

Tellabs, Inc led the decliners in the S&P 500 index with a loss of 4.6% followed by losses in Cintas Corporation of 4.5%, in Massey Energy Company of 4.4%, in AutoZone, Inc of 4.0% and in Moody’s Corporation of 3.9%.

Xilinx, Inc led gainers in the S&P 500 index with a rise of 6.0% followed by gains in General Mills, Inc 5.3%, in Jabil Circuit, Inc of 5.1% and in American International Group, Inc of 4.5%.

South American Markets Indexes

Mexico Bolsa Index decreased 554.01 or 1.9% to 28,959.67 and Brazil Bovespa Stock Index declined 997.20 or 1.6% to 60,496.19.

Argentina Merval Index closed down 1.7% and Chile Stock Market Select index added 0.7%, Peru Lima General Index edged down 0.2% and Colombia IGBC General Index increased 0.7%.

Europe Markets Review

In London FTSE 100 Index closed higher 1.53 or 0.03% to 5,144.13 in Paris CAC 40 Index decreased 17.84 or 0.51% to close at 3,458.53 and in Frankfurt DAX index lower 64.01 or 1.18% to close at 5,353.01. In Zurich trading SMI decreased 27.87 or 0.47% to close at 5,911.91.

Asian Markets Review

Hang Seng index in Hong Kong decreased 105.62 or 0.49% to 21,595.52 and CSI 300 index in China closed lower 70.96 or 2.27% to 3,060.07. ASX 200 index in Australia increased 70.40 or 1.51% to 4,734.10. The FTSE Bursa KL Composite index in Malaysia was lower 2.13 or 0.17% to 1219.07. Tokyo markets were closed today and will reopen tomorrow.

The Kospi Index in South Korea decreased 7.41 or 0.43% to close at 1,711.47. SET index in Thailand closed higher 6.15 or 0.85% to 730.52. The Sensex index in India decreased 166.93 or 0.99% to 16,719.50. Markets in Indonesia were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $3.41 to $68.35 a barrel for a front month contract, natural gas edged up 23 cents to $3.84 per mBtu and gasoline decreased 9.66 cents to 168.50 cents.

Wheat futures closed up 4.25 cents in Chicago trading to $4.60 a bushel. Sugar edged down 0.53 cents a pound to 23.08 cents. Soybean future closed down 1.50 cents to $9.20 a bushel.

Gold decreased $5.70 in New York trading to close at $1,009.80 per ounce, silver closed down $0.23 to $16.88 per ounce and copper for the front month delivery decreased 9.5 cent to $2.76 per pound.

Dollar edged higher against euro to $1.473 and closed higher against the Japanese yen to 91.35.

Yield on 10-year U.S. bonds increased to 3.41% and with 30-year maturities was unchanged at 4.19%.