Fed Unwinds Stimulus; World Markets Slip

123jump.com Staff
19 Mar, 2010
New York City

Federal Reserve took another step to unwind emergency steps takes during the late August. The Fed removed the exemption given to six large banks to add liquidity and sustain trading in mortgage and asset backed securities. Investors in Europe await resolution on Greece bailout.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – Federal Reserve took another step to unwind emergency steps takes during the late August. The Fed removed the exemption given to six large banks to add liquidity and sustain trading in mortgage and asset backed securities. Investors in Europe await resolution on Greece bailout.[/R]

U.S. stocks closed as the U.S. lawmakers make a final push for the healthcare reform bill and European leaders struggle to devise a plan for Greek bailout. The euro declines as leaders in Europe divide on the nature and structure of the Greek bailout plan.

Google may pull out of China if two fail to agree on the operations guidelines and the country’s censor guidelines.

SanDisk Corporation led the decliners in the S&P 500 index. Palm reduces net loss after sales surge but the stock drops 14%. SunPower plunges. Boeing accelerates production to meet demands. Sapient Corp reports quarterly net and revenues above expectations.

European leaders divide as Greece races to cut its borrowing costs. Greece Prime Minister has hoped that the support from the EU leaders will be sufficient to trim the borrowing costs but Greek bond yields trade at twice the German bonds yields.

European markets and the euro declined as Greece and European leaders struggle to structure the bailout. Increasingly, the International Monetary Fund is viewed as a lender of last resort. Greek unemployment surged above 10%. Pfleiderer AG 2009 sales dropped 21%.

UK stocks edged up after Lloyds indicated return to profitability this year on lower loan loss charges. CPP Group surged 11% on its first day of trading. African Barrick Gold closed near its spin off price.

Reserve Bank of India raised its key lending rate by 25 basis points to cool the inflation that has been inching close to 18% and hovering near 16-month high. Bajaj Auto revs its plan to launch a small car to meet the growing demand.

North American Markets

Dow Jones Industrial Average decreased 37.19 or 0.4% to close at 10,741.98, S&P 500 Index edged lower 5.93 or 0.6% to 1,159.90 and Nasdaq Composite Index decreased 16.87 or 0.7% to close at 2,374.41. Toronto TSX Composite Index decreased 92.03 or 0.8% to 11,947.98.

Latin American Markets Indexes

Mexico Bolsa Index increased 53.01 or 0.2% to 33,022.84 and today Brazil Bovespa Stock Index decreased 868.35 or 1.25% to 68,828.98.

Europe Markets Review

In London FTSE 100 Index closed higher 7.54 or 0.13% to 5,650.16, in Paris CAC 40 Index decreased 17.19 or 0.44% to close at 3,920.99, in Frankfurt DAX index lower 34.98 or 0.58% to close at 5,977.33. In Zurich trading SMI decreased 8.30 or 0.12% to close at 6,889.44.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 80.69 or 0.75% to 10,824.72, and Hang Seng index in Hong Kong increased 40.15 or 0.19% to 21,370.82, and CSI 300 index in China higher 26.32 or 0.81% to 3,293.87. ASX 200 index in Australia increased 9.10 or 0.19% to 4,872.20. The FTSE Bursa KL Composite index in Malaysia was lower 5.34 or 0.41% to 1,296.60.

The Kospi Index in South Korea increased 10.94 or 0.65% to close at 1,686.11. SET index in Thailand closed higher 15.57 or 2.05% to 774.59. JSE Index in Indonesia increased 5.73 or 0.21% to 2,742.97. The Sensex index in India increased 58.97 or 0.34% to 17,578.23.

Commodities, Metals, and Currencies

Crude oil decreased $1.53 to $80.67 a barrel for a front month contract, natural gas edged up 7 cents to $4.16 per mBtu and gasoline decreased 3.99 cents to 226.10 cents.

Soybean future closed up 2.25 cents to $9.61 a bushel. Wheat futures decreased 5.50 cents in Chicago trading to $4.83 a bushel. Sugar closed down 0.39 cents at 18.64 cents per pound.

Gold decreased $21.40 in New York trading to close at $1,106.10 per ounce, silver closed up $0.42 to $17.00 per ounce and copper for the front month delivery decreased 1.45 cent to $3.38 per pound.

Dollar edged higher against euro to $1.3536 and edged higher against the Japanese yen to 90.54.

Yield on 10-year U.S. bonds closed higher at 3.69% and with 30-year maturities increased at 4.58%.