Techs Lead U.S. Indexes Lower; Dollar Gains

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

Stocks in New York and Asia declined but indexes in Europe closed higher. Tech stocks led the decliners on the weaker than expected prospects of earnings growth. U.S. consumer confidence declined and the dollar edged higher.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – Stocks in New York and Asia declined but indexes in Europe closed higher. Tech stocks led the decliners on the weaker than expected prospects of earnings growth. U.S. consumer confidence declined and the dollar edged higher.[/R]

World markets are still holding out for the prospect of global economic recovery. Asian markets indexes closed lower and the indexes in Europe edged higher. Unemployment in the Euro zone increased to 10% in December.

U.S. stocks declined on the worries that chipmakers and software companies may struggle with earnings growth in the current year.

The U.S. economy expanded at 5.7% in the last quarter of 2009 as businesses rebuild inventories. Consumer and business spending remained sluggish and inflation measure was within the target range set by the Fed. Weak job market has curbed the consumer spending.

SanDisk dropped after it estimated lower than expected sales in the current year. Amazon.com Inc earnings surged 71% on 42% higher sales. Chevron Corp profit declined 37%. Microsoft quarterly net surged 60% to $6.6 billion.

European markets indexes closed higher. Greek bonds rebounded. Spain estimated 2009 deficit of 11.4% and said it will be trimmed to 3% by 2013. Spain also increased retirement age to 67 from 65. Bulgari SpA fourth quarter revenue falls 5% to €297 million. Infineon Technologies swings to profit. BMW expects 2009 pre-tax profit despite lower sales.

UK home prices in January edged up 1.2% and are now only 12% lower than their peak in October 2007. Consumer confidence index edged higher in January after dropping for three months in a row. Connaught Plc plunged 11% after its chief executive stepped down.

Stocks in Japan declined on the worries that earnings at chip companies will be lower. Toyota also halted sales in North America of eight models and recalled as many as 1.8 million cars in Europe. Advantest Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 10.2%.

Reserve Bank of India mopped up additional liquidity by increase cash reserve ratios for banks but left rates unchanged. The RBI also raised its outlook for the economic growth in the current fiscal year to 7.5% from 6.9% and indicated the rate can be sustained in the next fiscal year. Central government has completed 98% of its borrowing in the year.

Stocks in Australia closed lower after a weakness in metals prices. Investors also worried that weak job market in the U.S. will forestall global economic recovery. More home owners struggle to pay mortgages as Australian home prices surge. New Zealand budget deficit increases on lower than expected tax receipts.

North American Markets

Dow Jones Industrial Average decreased 53.13 or 0.5% to a close of 10,067.33, S&P 500 Index edged lower 10.66 or 1% to 1,073.87, and Nasdaq Composite Index decreased 31.65 or 1.45% to close at 2,147.35. Toronto TSX Composite Index decreased 179.89 or 1.6% to 11,094.31.

Latin American Markets Indexes

Mexico Bolsa Index decreased 419.74 or 1.4% to 30,391.61 and Brazil Bovespa Stock Index fell 186.04 or 0.3% to 65,401.77.

Europe Markets Review

In London FTSE 100 Index closed higher 42.78 or 0.83% to 5,188.52, in Paris CAC 40 Index increased 50.67 or 1.37% to close at 3,739.46, in Frankfurt DAX index higher 68.46 or 1.24% to close at 5,608.79. In Zurich trading SMI decreased 1.69 or 0.03% to close at 6,440.72.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 216.25 or 2.08% to 10,198.04, and Hang Seng index in Hong Kong decreased 234.38 or 1.15% to 20,121.99, and CSI 300 index in China lower 2.42 or 0.08% to 3,204.16. ASX 200 index in Australia decreased 103.70 or 2.22% to 4,569.60. The FTSE Bursa KL Composite index in Malaysia was lower 5.35 or 0.42% to 1,259.16.

The Kospi Index in South Korea decreased 40.00 or 2.44% to close at 1,602.43. SET index in Thailand closed higher 6.83 or 0.99% to 696.55. JSE Index in Indonesia decreased 8.77 or 0.33% to 2,610.80. The Sensex index in India increased 51.09 or 0.31% to 16,357.96.

Commodities, Metals, and Currencies

Crude oil increased $0.97 to $72.67 a barrel for a front month contract, natural gas edged down 1 cent to $5.17 per mBtu and gasoline decreased 1.54 cents to 191.20 cents.

Soybean future closed down 17.75 cents to $9.145 a bushel. Wheat futures closed up 13.00 cents in Chicago trading to $4.74 a bushel. Sugar closed up 0.90 cents at 29.90 cents.

Gold decreased $2.80 in New York trading to close at $1,082.00 per ounce, silver closed up $0.003 to $16.21 per ounce and copper for the front month delivery decreased 5.65 cent to $3.04 per pound.

Dollar closed higher against euro to $1.386 and edged lower against the Japanese yen to 90.26.

Yield on 10-year U.S. bonds fell to 3.58% and with 30-year maturities closed lower at 4.49%.