U.S. Stocks Close Lower; Earnings in Focus

Mukesh Buch
21 Oct, 2009
New York City

U.S. stocks closed lower on the weakness in banks. Analyst downgrade of Wells Fargo dragged the market sentiment lower. Morgan Stanley closed higher on earnings. Allegheny Technologies led the decliners in lower than expected sales and earnings. SanDisk surged on higher sales outlook.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. stocks closed lower on the weakness in banks. Analyst downgrade of Wells Fargo dragged the market sentiment lower. Morgan Stanley closed higher on earnings. Allegheny Technologies led the decliners in lower than expected sales and earnings. SanDisk surged on higher sales outlook.[/R]

U.S. stocks traded higher in the morning but closed lower in the afternoon on the weakness in financial stocks. Wells Fargo dropped 5% after an analyst downgrade but Morgan Stanley closed higher after it reported higher than expected earnings.

Treasury Secretary Geithner indicated that initial TARP programs may be terminated and bank capital purchase program will be permitted to expire at the end of this year. Yahoo, Boeing and Morgan Stanley are in focus.

Sesa Goa fell after earnings but indicated three-fold iron ore production increase to meet China demand. Banks declined after the Reserve Bank of India ruling may force higher competition among lenders and lower rates to borrowers. State Bank of India raised $750 million through the sale of bonds.

BHP Billiton reported higher oil and iron ore production in the third quarter but indicated softer demand from China. Centro Properties was sued by the Australian regulators. A significant number of shareholders registered protest to the remuneration of its former chief executive.

North American Markets

Dow Jones Industrial Average decreased 92.12 or 0.9% to a close of 9,949.36, S&P 500 Index decreased 9.66 or 0.9% to 1,081.40, and Nasdaq Composite Index decreased 12.74 or 0.6% to close at 2,150.73. Toronto TSX Composite Index decreased 96.10 or 0.8% to 11,442.02.

Of the stocks in S&P 500 index, 110 increased, 383 declined and 7 were unchanged.
Allegheny Technologies led the decliners in the S&P 500 index with a loss of 8.4% followed by losses in Marshall & Ilsley Incorporated of 8.2%, in Robert Half International of 6.3%, in Genzyme Corp of 6.2% and in Northern Trust of 5.7%.
SLM Corporation led gainers in the S&P 500 index with a rise of 20.7% followed by gains in SanDisk Corporation 9.5%, in Lexmark International of 6.5% and in Morgan Stanley of 4.8%.

South American Markets Indexes

Mexico Bolsa Index decreased 111.89 or 0.4% to 30,889.05 and Brazil Bovespa Stock Index increased 182.48 or 0.3% to 65,485.59.

Argentina Merval Index increased 0.5% and Chile Stock Market Select index decreased 0.6% and Colombia IGBC General Index increased 0.2% and Peru Lima General Index increased 1.2%.

Europe Markets Review

In London FTSE 100 Index closed higher 14.45 or 0.28% to 5,257.85, in Paris CAC 40 Index increased 1.77 or 0.05% to close at 3,873.22, in Frankfurt DAX index higher 21.72 or 0.37% to close at 5,833.49. In Zurich trading SMI increased 7.37 or 0.11% to close at 6,434.66.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 3.45 or 0.03% to 10,333.39, Hang Seng index in Hong Kong decreased 66.85 or 0.30% to 22,318.11, and CSI 300 index in China lower 8.29 or 0.25% to 3,369.28. ASX 200 index in Australia decreased 7.60 or 0.16% to 4,838.60. The FTSE Bursa KL Composite index in Malaysia was lower 5.68 or 0.45% to 1,260.06.

The Kospi Index in South Korea decreased 5.29 or 0.32% to close at 1,653.86 SET index in Thailand closed lower 9.25 or 1.27% to 716.35. JSE Index in Indonesia decreased 25.42 or 1.02% to 2,476.80. The Sensex index in India decreased 213.84 or 1.24% to 17,009.17.

Commodities, Metals, and Currencies

Crude oil decreased $1.93 to $81.05 a barrel for a front month contract, natural gas edged down 7 cents to $5.09 per mBtu and gasoline increased 5.33 cents to 204.10 cents.

Soybean future closed up 24.50 cents to $10.09 a bushel. Wheat futures closed up 25.00 cents in Chicago trading to $5.4250 a bushel. Sugar closed up 0.45 cent 24.04 cents.

Gold increased $0.60 in New York trading to close at $1,059.20 per ounce, silver closed up $0.13 to $17.68 per ounce and copper for the front month delivery increased 8.35 cent to $3.0155 per pound.

Dollar edged down against euro to $1.5010 and closed up against the Japanese yen to 90.98.

Yield on 10-year U.S. bonds increased to 3.39% and with 30-year maturities increased to 4.21%.