Home Builders, Banks, Publishers Fall

Mukesh Buch
26 Oct, 2009
New York City

Home builders, banks and newspapers publishers closed lower. Banks fell on the worries that more capital may be needed to meet regulatory requirements. Home builders fell before the expiry of first-time home buyer tax incentives. Newspapers circulation decline accelerated in the last six months.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Home builders, banks and newspapers publishers closed lower. Banks fell on the worries that more capital may be needed to meet regulatory requirements. Home builders fell before the expiry of first-time home buyer tax incentives. Newspapers circulation decline accelerated in the last six months to September.[/R]

Stocks in New York traded higher in the early trading after investors focused on earnings but worries related to housing markets dragged stocks lower in the afternoon. Verizon reported higher earnings on cost cuts and net customer additions. Corning Inc net declined on 5% fall in sales.

Home builders declined on the worries that the Congress will phase out the first time home buyers tax incentives. Nearly 1.2 million home buyers have sought $8.5 billion of income tax relief of the $10 billion available. The tax incentive is expected to expire next month.

RadioShack Corporation led gainers in the S&P 500 index with a rise of 12.5%. Alberto Culver Co profits exceed expectations. Bank of Hawaii Corp declares dividend. Lorillard, Inc quarterly net edged lower. China based Sohu.com and Changyou.com declined on earnings outlook.

Newspaper publishers declined after the latest industry statistics showed steeper decline in the six months ending in September. The Audit Bureau of Circulations estimated 11% decline in the period to 30.4 million at 379 largest newspapers in the U.S.

UK stocks tracked the gains in commodities and energy prices. The legal outsourcing services provider CPA Global is likely to be acquired by a private equity firm for £400 million. The pawnbroker H&T Group surged on higher revenues estimate. Churchill Mining estimated one billion tons of coal.

Banks and insurers fell after cautious comments from Deutsche Bank. The nuclear reactor builder Areva SA completed €750 million 10-year bond offering. The Dutch bank ING Groep NV plunged on the plans to raise €7.5 billion in rights offering.

Mumbai stocks closed lower ahead of the Reserve Bank of India rate decision tomorrow. The RBI lowered its economic growth target to 6% from 6.5%. Maruti Suzuki quarterly sales surged 47%. Pantaloon Retail quarterly net increased 21%. Dena Bank, Canara Bank and ING Vysya earnings surge.

North American Markets

Dow Jones Industrial Average decreased 104.22 or 1.1% to a close of 9,867.96, S&P 500 Index fell 12.65 or 1.2% to 1,066.95, and Nasdaq Composite Index declined 12.62 or 0.6% to close at 2,141.85. Toronto TSX Composite Index fell 147.25 to 11,234.88.

Of the stocks in S&P 500 index, 88 increased, 410 declined and 2 were unchanged.

Genworth Financial led the decliners in the S&P 500 index with a loss of 8.1% followed by losses in Fifth Third Bancorp of 7.9%, in Tellabs Inc of 7.5%, in MBIA Inc of 7.5% and in Gannett Company of 7.1%.

RadioShack Corporation led gainers in the S&P 500 index with a rise of 15.9% followed by gains in SanDisk Corp of 8.5%, in Pioneer Natural Resources Company 6.1%, in Amazon.com Inc of 5.2% and in Teradata Corp of 2.4%.

South American Markets Indexes

Mexico Bolsa Index decreased 277.51 or 0.9% to 30,340.17 and Brazil Bovespa Stock Index increased 26.71 or 0.04% to 65,085.55.

Argentina Merval Index decreased 0.7% and Chile Stock Market Select index fell 0.5% and Colombia IGBC General Index decreased 1.03% and Peru Lima General Index decreased 1.2%.

Europe Markets Review

In London FTSE 100 Index closed lower 50.83 or 0.97% to 5,191.74, in Paris CAC 40 Index decreased 63.79 or 1.68% to close at 3,744.45, in Frankfurt DAX index lower 98.09 or 1.71% to close at 5,642.16. In Zurich trading SMI decreased 74.71 or 1.17% to close at 6,303.35.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 79.63 or 0.77% to 10,362.62, and CSI 300 index in China higher 0.99 or 0.03% to 3,414.24. ASX 200 index in Australia decreased 29.10 or 0.60% to 4,830.30. The FTSE Bursa KL Composite index in Malaysia was lower 7.18 or 0.57% to 1,259.92. Markets in Hong Kong were closed today.

The Kospi Index in South Korea increased 16.94 or 1.03% to close at 1,657.11, SET index in Thailand closed higher 3.07 or 0.43% to 711.83. JSE Index in Indonesia decreased 0.23 or 0.01% to 2,467.71. The Sensex index in India decreased 70.31 or 0.42% to 16,740.50.

Commodities, Metals, and Currencies

Crude oil decreased $1.76 to $78.74 a barrel for a front month contract, natural gas edged down 26 cents to $4.53 per mBtu and gasoline decreased 0.33 cents to 203.91 cents.

Soybean future closed down 18.75 cents to $9.88 a bushel. Wheat futures closed down 20.75 cents in Chicago trading to $5.27 a bushel. Sugar closed down 0.18 cent 22.94 cents.

Gold decreased $17.50 in New York trading to close at $1,038.90 per ounce, silver closed down $0.59 to $17.13 per ounce and copper for the front month delivery decreased 5.15 cent to $2.98 per pound.

Dollar edged up against euro to $1.486 and closed up against the Japanese yen to 92.17.

Yield on 10-year U.S. bonds increased to 3.56% and with 30-year maturities advanced to 4.37%.