Bernanke Defends AIG Bailout; Stocks Fall

Mukesh Buch
03 Dec, 2009
New York City

U.S. stocks traded mixed as commodities declined. Fed Chairman Bernanke faced tough questions from lawmakers and questioned Fed

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – U.S. stocks traded mixed as commodities declined. Fed Chairman Bernanke faced tough questions from lawmakers and questioned Fed’s role in bailing out AIG and allowing mortgage crisis to develop. Weekly jobless claims declined. The dollar, crude oil and gold closed lower.[/R]

U.S. stocks traded sideways. General Electric and Comcast agreed to form a venture that will transfer the majority stake in NBC Universal to cable company. The service industry index in November fell and weekly claims in the last week decreased.

The U.S. Senate lawmakers questioned Federal Reserve Chairman Ben S. Bernanke during his nomination hearing for the second term. Senators questioned sharply Fed’s role in AIG bailout and several senators are proposing to change the Fed’s supervisory role in overseeing banks and protecting consumers.

UK stocks traded volatile as commodities edged lower. Resource stocks declined as copper, zinc and precious metals decreased. The pub operator Marston’s full year profit plunged 73%.

North American Markets

Dow Jones Industrial Average decreased 86.53 or 0.8% to a close of 10,366.15, S&P 500 Index edged lower 9.32 or 0.8% to 1,099.92, and Nasdaq Composite Index decreased 11.89 or 0.5% to close at 2,173.14. Toronto TSX Composite Index decreased 143.18 or 1.2% to 11,636.55.

Of the stocks in S&P 500 index, 313 increased, 176 declined and 11 were unchanged.

Family Dollar Stores, Inc led the decliners in the S&P 500 index with a loss of 6.4% followed by losses in Ciena Corporation of 4.6% and in The TJX Companies, Inc of 4.2%, in Abercrombie & Fitch Co of 3.7% and in Macy''s, Inc of 2.9%.

Tenet Healthcare Corporation led gainers in the S&P 500 index with a rise of 6.7% followed by gains in Bank of America Corporation 6.3%, in Comcast Corporation of 5.3% and in MBIA Inc of 5.2%.

South American Markets Indexes

Mexico Bolsa Index decreased 144.36 or 0.5% to 31,967.43 and Brazil Bovespa Stock Index decreased 299.97 or 0.4% to 68,314.82.

Argentina Merval Index increased 0.4% and Chile Stock Market Select index fell 0.4% and Colombia IGBC General Index increased 1.2% and in Peru Lima General Index decreased 1.2%.

Europe Markets Review

In London FTSE 100 Index closed lower 14.39 or 0.27% to 5,313.00, in Paris CAC 40 Index increased 3.19 or 0.08% to close at 3,799.11, in Frankfurt DAX index lower 11.33 or 0.20% to close at 5,770.35. In Zurich trading SMI increased 57.54 or 0.90% to close at 6,444.08.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 368.73 or 3.84% to 9,977.67, and Hang Seng index in Hong Kong increased 264.30 or 1.19% to 22,553.87, and CSI 300 index in China lower 6.45 or 0.18% to 3,590.88. ASX 200 index in Australia increased 12.20 or 0.26% to 4,774.60 The FTSE Bursa KL Composite index in Malaysia was higher 1.20 or 0.09% to 1,272.35.

The Kospi Index in South Korea increased 23.37 or 1.47% to close at 1,615.00. SET index in Thailand closed higher 13.33 or 1.92% to 706.84. JSE Index in Indonesia increased 28.47 or 1.15% to 2,500.04. The Sensex index in India increased 15.77 or 0.09% to 17,185.68.

Commodities, Metals, and Currencies

Crude oil decreased $0.83 to $75.77 a barrel for a front month contract, natural gas edged decreased 8 cents to $4.45 per mBtu and gasoline decreased 0.98 cents to 198.30 cents.

Soybean future closed up 13.50 cents to $10.47 a bushel. Wheat futures closed down 4.50 cents in Chicago trading to $5.71 a bushel. Sugar closed higher 0.07 cent 23.11 cents.

Gold decreased $4.20 in New York trading to close at $1,208.80 per ounce, silver closed down $0.46 to $18.86 per ounce and copper for the front month delivery decreased 2.20 cent to $3.23 per pound.

Dollar closed lower against euro to $1.505 and edged higher against the Japanese yen to 88.27.

Yield on 10-year U.S. bonds increased to 3.38% and with 30-year maturities closed up at 4.33%.