World Stocks, Gold Decline on China Comments

123jump.com Staff
20 Jan, 2010
New York City

U.S. indexes followed lower world markets on weak commodities prices after Chinese regulators look for more ways to arrest rising real estate prices. China is looking to trim lending by 22% as the country prepares to withdraw stimulus and curb a rise in asset prices.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – U.S. indexes followed lower world markets on weak commodities prices after Chinese regulators look for more ways to arrest rising real estate prices. China is looking to trim lending by 22% as the country prepares to withdraw stimulus and curb a rise in asset prices.[/R]

U.S. stocks traded lower after December housing starts declined 4% and completion fell 11.2%. Bank of America quarterly loss widened but loan loss provisions were elevated but stable. Wells Fargo swings to net income.

Commodities declined sharply with gold, silver and copper leading after Chinese banking regulators suggested that lending in the first two weeks of this year are relatively high and for the year China is likely to shrink new loans by 22% to 7.5 trillion yuan or $1.1 trillion.

CSX Corporation led the decliners in the S&P 500 index with a loss of 6.3%. ADTRAN, Inc declares quarterly cash dividend. The Charles Schwab Corp fourth quarter profit declines 47%. Bank of America loss widens to $5.2 billion and Bank of New York Mellon fourth quarter net jumps.

European indexes closed sharply lower on weak euro. Yields on Greek bonds increased and Greece plans to raise €53 billion of debt in the current year. Commodities declined after Chinese regulators look to trim lending by 22% this year. Accor SA quarterly revenues fell 7.2%.

Weak commodities prices sent stocks in London lower. Metals fell after Chinese banking regulator comments suggested a possible lending tightening. Electronics retailer Kesa Electricals declined after it reported weaker than expected holiday sales. William Hill, the second largest bookmaker surged on revenue rise of 6%.

North American Markets

Dow Jones Industrial Average decreased 122.28 or 1.2% to a close of 10,603.15, S&P 500 Index edged lower 12.19 or 1.1% to 1,138.04, and Nasdaq Composite Index decreased 29.15 or 1.3% to close at 2,291.25. Toronto TSX Composite Index decreased 84.10 or 0.7% to 11,679.32.

Latin American Markets Indexes

Mexico Bolsa Index decreased 447.71 or 1.4% to 32,025.34 and Brazil Bovespa Stock Index fell 1,708.52 or 2.4% to 68,200.07.

Europe Markets Review

In London FTSE 100 Index closed lower 92.34 or 1.67% to 5,420.80, in Paris CAC 40 Index decreased 80.72 or 2.01% to close at 3,928.95, in Frankfurt DAX index lower 124.95 or 2.09% to close at 5,851.53. In Zurich trading SMI decreased 47.33 or 0.71% to close at 6,586.53.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 27.38 or 0.25% to 10,737.52, and Hang Seng index in Hong Kong decreased 391.81 or 1.81% to 21,286.17, and CSI 300 index in China lower 113.05 or 3.22% to 3,394.43. ASX 200 index in Australia increased 7.00 or 0.14% to 4,868.20. The FTSE Bursa KL Composite index in Malaysia was higher 6.27 or 0.48% to 1,306.62.

The Kospi Index in South Korea increased 4.16 or 0.24% to close at 1,714.38. SET index in Thailand closed lower 4.68 or 0.64% to 731.80. JSE Index in Indonesia increased 1.20 or 0.04% to 2,667.27. The Sensex index in India decreased 11.57 or 0.07% to 17,474.49.

Commodities, Metals, and Currencies

Crude oil decreased $1.92 to $77.40 a barrel for a front month contract, natural gas edged down 6 cents to $5.50 per mBtu and gasoline decreased 1.97 cents to 203.94 cents.

Soybean future closed down 13.50 cents to $9.50 a bushel. Wheat futures closed down 3.00 cents in Chicago trading to $4.97 a bushel. Sugar closed up 0.13 cents at 29.11 cents.

Gold decreased $28.50 in New York trading to close at $1,111.20 per ounce, silver closed down $0.90 to $17.895 per ounce and copper for the front month delivery decreased 9.2 cent to $3.34 per pound.

Dollar closed higher against euro to $1.4102 and edged higher against the Japanese yen to 91.25.

Yield on 10-year U.S. bonds decreased to 3.65% and with 30-year maturities closed lower at 4.54%.