Tech Rally Halts in New York; Global Worries

Mukesh Buch
29 Sep, 2009
New York City

World markets decreased as investors worry about the pace of economic recovery. FDIC plans to collect premiums from banks in advance to cover the shortfall. Tech and real estate stocks led the decliners in New York. European markets closed lower on weak steel stocks.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – World markets decreased as investors worry about the pace of economic recovery. FDIC plans to collect premiums from banks in advance to cover the shortfall. Tech and real estate stocks led the decliners in New York. European markets closed lower on weak steel stocks and more banks seek to raise funds.[/R]

World markets edged higher as markets in the developed nations firmed. Asian markets advanced on the expectations of better earnings and European markets gained on rising confidence and merger activities. The U.S. metropolitan home prices decline slowed.

The Conference Board consumer confidence index decreased to 53.1 in September from 54.5 in August. The decline in confidence and more worries related to banking stocks kept market indexes lower at close in New York.

Notably tech stocks and real estate investors trusts the leading decliners. Rating agencies Moody’s and the parent of Standard Poor’s McGraw Hill increased after analysts comments suggested that sustained bond offering will help earnings. Neither rating agency has accepted any responsibility for their role in the current financial crisis.

The financial guarantee provider MBIA Inc led decliners in New York trading. Media companies gained after Gannett estimated higher adjusted earnings. Walgreen Company surged on better than expected earnings. Polo Ralph Lauren gained on a broker recommendation.

The Federal Deposit Insurance Corp, the U.S. government agency that insures consumer bank deposits is expected to run out of money by tomorrow. The insurer that is supposed to provide the guarantee is running empty. FDIC is proposing to collect three year premium in advance when banks pay fourth quarter premium for the year 2010 through 2012. Banks will be asked to pay three-basis points more in premium beginning 2011.

UK second quarter GDP was revised to a decrease of 0.6% from the first quarter or 5.5% annual rate decline. The previous estimate was 0.7% fall. TUI Travel on track and raises £440 million for loan refinancing. Mortgage loans issuance increased to 21-month high.

European stocks traded mixed as investors digested mixed economic reports. TUI AG will offer additional loans to the troubled Hapag-Lloyd AG. Steelmakers declined after Salzgitter launched bond offering. ArcelorMittal made cautions remarks regarding economic recovery.

International investors increased their net exposure to India stocks by $11 billion, surpassing the record increase last year. Tata Consultancy estimated 20% increase in sales. Pantaloon Retail rises on better than expected results. Abbott India and Solvay Pharma surge. Rupee edges lower.

North American Markets

Dow Jones Industrial Average decreased 47.16 or 0.5% to a close of 9,742.20, S&P 500 Index fell 2.37 or 0.2% to 1,060.61, and Nasdaq Composite Index declined 6.70 or 0.3% to close at 2,124.04. Toronto TSX Composite Index added 56.27 or 0.5% to 11,394.99.

Of the stocks in S&P 500 index, 214 increased, 279 declined and 7 were unchanged.

MBIA Inc led the decliners in the S&P 500 index with a loss of 4.7% followed by losses in JDS Uniphase of 4.7%, in Hartford Financial Services of 4.1%, in Capital One Financial of 3.8% and in Vornado Realty Trust of 1.0%.

Gannett Co., Inc led gainers in the S&P 500 index with a rise of 17.6% followed by gains in Moody’s Corp 10.9%, in Walgreen Company of 9.2% and in Harman International of 7.4%.

South American Markets Indexes

Mexico Bolsa Index increased 30.02 or 0.1% to 29,432.01 and Brazil Bovespa Stock Index decreased 81.36 or 0.1% to 61,235.26.

Argentina Merval Index closed down 0.3% and Chile Stock Market Select index increased 0.3%, Peru Lima General Index edged down 0.02% and Colombia IGBC General Index fell 0.7%.

Europe Markets Review

In London FTSE 100 Index closed lower 5.98 or 0.12% to 5,159.72, in Paris CAC 40 Index decreased 10.90 or 0.28% to close at 3,814.10, in Frankfurt DAX index lower 22.79 or 0.40% to close at 5,713.52. In Zurich trading SMI increased 27.45 or 0.44% to close at 6,316.72.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 90.68 or 0.91% to 10,100.20, Hang Seng index in Hong Kong increased 424.76 or 2.06% to 21,013.17 and CSI 300 index in China lower 0.36 or 0.01% to 2,972.29. ASX 200 index in Australia increased 75.70 or 1.62% to 4,753.10. The FTSE Bursa KL Composite index in Malaysia was higher 2.26 or 0.19% to 1208.21.

The Kospi Index in South Korea increased 14.50 or 0.87% to close at 1,690.05. SET index in Thailand closed higher 6.41 or 0.90% to 715.29. JSE Index in Indonesia increased 46.00 or 1.92% to 2,443.83. The Sensex index in India increased 159.91 or 0.96% to 16,852.91.

Commodities, Metals, and Currencies

Crude oil increased $0.19 to $66.65 a barrel for a front month contract, natural gas edged up 4 cents to $4.87 per mBtu and gasoline decreased 0.80 cents to 169.75 cents.

Soybean future closed down 2.50 cents to $9.17 a bushel. Wheat futures closed down 8.25 cents in Chicago trading to $4.47 a bushel. Sugar edged up 0.84 cents a pound to 24.94 cents.

Gold fell $0.80 in New York trading to close at $993.30 per ounce, silver closed down $0.01 to $16.18 per ounce and copper for the front month delivery decreased 1.15 cent to $2.715 per pound.

Dollar edged higher against euro to $1.458 and closed higher against the Japanese yen to 90.14.

Yield on 10-year U.S. bonds increased to 3.29% and with 30-year maturities decreased to 4.02%.