U.S. Financials Fall; European Markets Down

123jump.com Staff
13 Oct, 2009
New York City

Stocks lost early momentum after banks and financials declined. Gold reached record high and crude oil edged up. Healthcare stocks declined after the U.S. Senate passed $829 billion plan to overhaul healthcare system.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Stocks lost early momentum after banks and financials declined. Gold reached record high and crude oil edged up. Healthcare stocks declined after the U.S. Senate passed $829 billion plan to overhaul healthcare system.[/R]

In New York trading stocks opened higher but faced headwind as commodities prices stayed firm and weakness in financial stocks. Gold reached a new intra-day high and silver, platinum and palladium advance. Crude oil edged up.

Healthcare stocks declined after the U.S. Senate Finance Committee passed with 14 to 9 vote the healthcare plan to overhaul the healthcare system at a cost of $829 billon. UnitedHealth, Aetna and Cigna closed lower more than 3%.

Cisco Systems agreed to acquire mobile data communication infrastructure provider Starent Networks Corp. Cisco agreed to pay 20.6% to premium to yesterday’s closing price of $35 a share or $2.9 billion. Starent is the second major acquisition for Cisco after the purchase of Norway based Tandberg AS.

The drybulk carrier DryShips advances after it signs loan term waivers with two banks totaling $183 million. CIT Group is teetering towards bankruptcy filing. AIG sells its Taiwan life insurance division. DryShips surges on bank loans covenant renegotiations.

McGraw Hill agreed to sell 80-year old Business Week magazine and the namesake Web site to Bloomberg LP. The terms of the deal were not disclosed. Business Week in the nine months of this year has seen its advertising revenue decline 32% to $112.6 million from $164.4 million a year ago.

New York Times reported that the publication lost $43 million in 2008 and has accumulated debt of $32 million by the end of second quarter this year.

Business Week with circulation of 900,000 reaches professionals and corporate executives that value content that is broader than finance markets.

UK stocks closed lower after the inflation data showed weak consumer demand. September price index fell at a faster pace than in the previous twelve months ending in August. ITV completed its offering of 135 million. Booker plc first half net increased 12.3%.

Marks & Spencer struggled to convince investors as it outlined its growth plan for the next ten years. The company plans to transform to multi-channel retailer and experience faster growth at international locations.

Siemens USA, a subsidiary of German engineering company reported sale of €600 million of wind turbines to utilities companies based in the U.S. and Canada.

The index of German confidence declined in September as unemployment stays above expectations and export sales are still struggling. Alstom is in $809 million talks to for tram services in Dubai. The wind turbine division of Siemens in the U.S. won €600 million orders.

North American Markets

Dow Jones Industrial Average decreased 14.74 or 0.2% to a close of 9,871.06, S&P 500 Index decreased 3.00 or 0.3% to 1,073.19, and Nasdaq Composite Index added 0.75 or 0.04% to close at 2,139.89. Toronto TSX Composite Index decreased 23.38 or 0.2% to 11,413.54.

Of the stocks in S&P 500 index, 194 increased, 297 declined and 9 were unchanged.

Hartford Financial Services led the decliners in the S&P 500 index with a loss of 6.7% followed by losses in Genworth Financial, Inc of 6.2%, in Lincoln MetroPCS Communications of 5.9%, in Sprint Nextel Company of 4.7% and in Memc Electronic Materials Inc of 4.8%.

Zions Bancorporation led gainers in the S&P 500 index with a rise of 6.0% followed by gains in Lennar Corp 5.5%, in AK Steel of 4.1% and in Akamai Technologies, Inc of 3.3%.

South American Markets Indexes

Mexico Bolsa Index increased 135.67 or 0.5% to 30,611.10 and Brazil Bovespa Stock Index added 574.58 or 0.9% to 64,645.59.

Argentina Merval Index closed up 1.2% and Chile Stock Market Select index increased 0.7% and Colombia IGBC General Index decreased 2.1% and Peru Lima General Index decreased 1%.

Europe Markets Review

In London FTSE 100 Index closed lower 56.02 or 1.08% to 5,154.15, in Paris CAC 40 Index decreased 44.41 or 1.15% to close at 3,801.39, in Frankfurt DAX index lower 68.92 or 1.19% to close at 5,714.31. In Zurich trading SMI decreased 56.52 or 0.89% to close at 6,321.26.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 60.17 or 0.60% to 10,076.56, Hang Seng index in Hong Kong increased 168.01 or 0.79% to 21,467.36, and CSI 300 index in China higher 46.88 or 1.49% to 3,198.52. ASX 200 index in Australia increased 45.90 or 0.97% to 4,785.70. The FTSE Bursa KL Composite index in Malaysia was higher 0.18 or 0.01% to 1,233.51.

The Kospi Index in South Korea decreased 10.88 or 0.66% to close at 1,628.93 SET index in Thailand closed lower 5.19 or 0.69% to 746.67. JSE Index in Indonesia increased 15.30 or 0.62% to 2,471.99. The Sensex index in India was closed today.

Commodities, Metals, and Currencies

Crude oil increased $0.55 to $74.70 a barrel for a front month contract, natural gas edged up 4 cents to $4.588 per mBtu and gasoline increased 3.28 cents to 183.18 cents.

Soybean future closed down 6 cents to $9.93 a bushel. Wheat futures closed up 17.00 cents in Chicago trading to $5.11 a bushel. Sugar closed unchanged to 22.79 cents.

Gold increased $7.50 in New York trading to close at $1,065.00 per ounce, silver closed up $0.02 to $17.84 per ounce and copper for the front month delivery decreased 6.25 cent to $2.79 per pound.

Dollar edged lower against euro to $1.4855 and closed up against the Japanese yen to 89.72.

Yield on 10-year U.S. bonds decreased to 3.35% and with 30-year maturities decreased to 4.20%.