Fed Ready to Exit Mortgage Bonds Purchase

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

Federal Reserve left rates near zero and restated its plan to exit the supports for $1.25 trillion of mortgage bonds market. U.S. stocks rebounded at close and the dollar advanced. Apple released its electronic book reader iPad. Toyota expands its plan to halt sale of eight models.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – Federal Reserve left rates near zero and restated its plan to exit the supports for $1.25 trillion of mortgage bonds market. U.S. stocks rebounded at close and the dollar advanced. Apple released its electronic book reader iPad. Toyota expands its plan to halt sale of eight models.[/R]

World markets edge lower as investors confront the prospect of rising interest rates and fewer lending supports from the central banks. Federal Reserve reiterated its plan to end $1.25 trillion mortgage bonds markets support and the ECB is preparing to trim stimulus measures. Interest rates in Australia, India and Brazil are expected to rise.

U.S. stocks closed higher and Federal Reserve kept rates near zero and said it plans to keep rates low for “extended period.” Federal Reserve also reiterated its pledge to cease its program to support $1.25 trillion of mortgage bonds in March.

New Home sales in December declined 7.6% and dropped 23% in 2009. Yahoo and McGraw Hill edge higher after earnings

Toyota plunged 7% after expanded the halt of eight model sales that included the U.S. and Canada. Berkshire Hathaway added to the S&P 500 index. Moody’s and S&P win court dismissal of lawsuit seeking damages from mortgage securities rating. Caterpillar guides lower.

European markets declined as the prospect of early stimulus withdrawal worries investors. Greek bonds declined on its first day of trading. Portugal plan to cut the deficit to 8.3% may not be enough to meet the EU requirement. BBVA dropped after reporting earnings that misses estimates

Stocks in London closed lower as commodities declined. Global market worries and the prospect of early stimulus withdrawal affected trading sentiment. Tullow Oil completed £1 billion. WH Smith sees sales drop. International Power completes financing for its power project in Thailand.

North American Markets

Dow Jones Industrial Average increased 23.88 or 0.2% to a close of 10,196.89, S&P 500 Index edged higher 5.02 or 0.5% to 1,096.78, and Nasdaq Composite Index increased 5.51 or 0.3% to close at 2,210.80. Toronto TSX Composite Index increased 11.08 or 0.1% to 11,354.51.

Latin American Markets Indexes

Mexico Bolsa Index decreased 365.85 or 1.2% to 30,465.06 and Brazil Bovespa Stock Index fell 50.10 or 0.08% to 66,220.04 in Friday’s close.

Europe Markets Review

In London FTSE 100 Index closed lower 59.38 or 1.13% to 5,217.47, in Paris CAC 40 Index decreased 47.24 or 1.24% to close at 3,759.80, in Frankfurt DAX index lower 25.73 or 0.45% to close at 5,643.20. In Zurich trading SMI decreased 11.20 or 0.17% to close at 6,473.03.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 73.20 or 0.71% to 10,252.08, and Hang Seng index in Hong Kong decreased 76.26 or 0.38% to 20,033.07, and CSI 300 index in China lower 44.23 or 1.36% to 3,198.57. ASX 200 index in Australia decreased 73.30 or 1.55% to 4,644.60. The FTSE Bursa KL Composite index in Malaysia was lower 17.25 or 1.34% to 1,265.77.

The Kospi Index in South Korea decreased 11.86 or 0.72% to close at 1,625.48. SET index in Thailand closed lower 11.20 or 1.60% to 690.46. JSE Index in Indonesia decreased 13.86 or 0.54% to 2,564.55. The Sensex index in India decreased 490.64 or 2.92% to 16,289.82.

Commodities, Metals, and Currencies

Crude oil decreased $1.03 to $73.68 a barrel for a front month contract, natural gas edged down 19 cent to $5.24 per mBtu and gasoline decreased 2.61 cents to 194.13 cents.

Soybean future closed down 18.50 cents to $9.29 a bushel. Wheat futures closed down 10.25 cents in Chicago trading to $4.83 a bushel. Sugar closed down 0.94 cents at 28.36 cents.

Gold decreased $11.50 in New York trading to close at $1,088.00 per ounce, silver closed down $0.35 to $16.55 per ounce and copper for the front month delivery decreased 14.50 cent to $3.1945 per pound.

Dollar closed higher against euro to $1.4019 and edged lower against the Japanese yen to 89.98.

Yield on 10-year U.S. bonds increased to 3.65% and with 30-year maturities closed higher at 4.56%.