U.S. Markets Edge Lower; Greece Downgrade

123jump.com Staff
17 Dec, 2009
New York City

Stocks in New York declined and the dollar advanced. S&P lowered its rating on Greek bonds and investors sought the safety of the dollar and German and Swiss bonds. Unemployment claims increased 7,000 in the previous week and nearly 90% of claimants are on the extended jobless benefits.

[R]11:00 AM New York – Stocks in New York declined and the dollar advanced. S&P lowered its rating on Greek bonds and investors sought the safety of the dollar and German and Swiss bonds. Unemployment claims increased 7,000 in the previous week and nearly 90% of claimants are on the extended jobless benefits.[/R]

Investors focused on European economies after Standard & Poor’s lowered Greek sovereign debt for the second time this year. The Greek bonds fell 16 basis points to 5.68% yield and bonds of Germany and Switzerland gained.

The dollar advanced 1.1% against the euro to $1.43 and gained against the pound 1.3% to $1.63. Gold declined $21.40 to $1,114 per ounce and crude oil decreased 70 cents to $71.96 a barrel.

Seasonally adjusted weekly jobless claims increased 7,000 to 480,000 from the revised previous week claims of 473,000. The preliminary insured unemployment rate in the week ending December 5 was 3.9%, unchanged from the prior week''s unrevised rate of 3.9%.

Nearly 90% of the 5.2 million people collecting unemployment are on extended benefit program spread across 13 states and territories.

European Production Index Declines

Seasonally adjusted production decreased 0.6% both in euro area (EA16) and fell 0.4% in EU27 in October 2009, compared with the previous month. In September, production fell by 0.8% and 0.5% respectively.

Earnings Review

Paychex, Inc, the payroll and personnel services provider said second quarter revenues fell 5% to $496.6 million from $524.2 million a year ago. Net income in the quarter fell 10% to $125.9 million or 35 cents per diluted share compared to net income of $140.2 million or 39 cents per share a year ago.

Hovnanian Enterprises, Inc., a homebuilder said fourth quarter revenues fell 39.4% to $437.4 million from $721.4 million a year ago. Net loss in the quarter was $250.8 million or $3.21 per diluted share compared to net loss of $450.5 million or $5.79 per share a year ago.

Total revenues for the fiscal year 2009 fell 51.5% to $1.6 billion from $3.3 billion a year ago. Net loss for the year was $716.7 million or $9.16 per diluted share compared to net loss of $1.1 billion or $16.04 per share a year ago.

FedEx Corporation, the package-delivery company reported second quarter revenues fell 10% to $8.6 billion from $9.54 billion a year ago. Net income in the quarter fell 30% to $345 million or $1.10 per diluted share compared to net income of $493 million or $1.58 per share a year ago.

General Mills, Inc, the cereal and food maker reported second quarter sales rose 1.7% to $4.08 billion from $4.01 billion a year ago. Net income in the quarter rose 49.5% to $565.5 million or $1.66 per diluted share compared to net income of $378.2 million or $1.09 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 13.61 or 0.13% to 10,163.80, and Hang Seng index in Hong Kong decreased 264.11 or 1.22% to 21,347.63, and CSI 300 index in China lower 80.57 or 2.26% to 3,480.15. ASX 200 index in Australia increased 8.40 or 0.18% to 4,670.30. The FTSE Bursa KL Composite index in Malaysia was lower 2.06 or 0.16% to 1,266.97.

The Kospi Index in South Korea decreased 16.40 or 0.99% to close at 1,647.84. SET index in Thailand closed lower 0.20 or 0.03% to 715.81. JSE Index in Indonesia decreased 12.97 or 0.51% to 2,509.58. The Sensex index in India decreased 18.52 or 0.11% to 16,894.25.

Europe Markets Review

In London FTSE 100 Index traded lower 48.13 or 0.90% to 5,272.13, in Paris CAC 40 Index decreased 28.15 or 0.73% to 3,847.67 and in Frankfurt DAX index traded lower 41.73 or 0.71% to 5,861.70. In Zurich trading SMI decreased 4.64 or 0.07% to 6,527.68.