Dow slumps for second day
January 21, 2010
Wall Street tumbled Thursday on concerns regarding the Obama administration’s proposal to increase regulations on financial firms. The changes include limiting the size and the amount of risk they can take on.
In economic news, new unemployment claims rose from 446,000 the previous week to 482,000 last week. Forecasts were for a decline to 440,000.
Continuing claims dropped from 4,617,000 to 4,599,000 in the same period.
Meanwhile, a regional reading on manufacturing fell from 22.5 in December to 15.2 in January. Forecasts for the Philadelphia Fed Index were for a reading of 18.
An index of leading economic indicators rose a better than expected 1.1% in December. Forecasts were for a rise of 0.7%.
The Dow Jones lost 213.27 points, or 2.01%, to 10,389.88, the S&P's 500 fell 21.56 points, or 1.89%, to 1,116.48 and the NASDAQ dipped 25.55 points, or 1.12%, to 2,265.70.
JPMorgan Chase, Bank of America and Goldman Sachs dropped 6.6%, 6.2% and 4.1% as they appear among those most heavily impacted by the reforms.
Goldman Sachs reported fourth quarter earnings per share that considerably beat estimates. Revenue for the full-year was double what it was a year earlier.
Citigroup and Morgan Stanley fell 5.5% and 4.2%.
Microsoft, Apple and Yahoo! shed between 1.1% and 1.9% ahead of the release of their results Friday.
Google advanced 0.4% prior to releasing quarterly results after the close. The search engine beat analysts’ estimates having posted a net income of US$2 billion, well up on the US$382 million reported a year earlier.
Starbucks put on 1.7% after quarterly sales and earnings beat estimates.
Dow components Alcoa and Caterpillar sank 6.4% and 4.9%.
NYMEX light crude oil for February delivery dropped US$1.66 to US$76.08 a barrel on evidence of weakening demand.
Chevron and Exxon Mobil lost 2.4% and 2%.
COMEX gold for February delivery fell US$9.40 to US$1,103.20 an ounce as the greenback jumped to a five-month high against the euro.
European Markets
European stocks fell on speculation the Obama administration was set to increase regulation on the larger financial institutions. Miners weakened on lower metals prices and reports of a potential rise in taxes.
The UK benchmark FTSE 100 dropped 85.70, or 1.58% to 5,335.10 while the German DAX slumped 104.56, or 1.79% to 5,746.97. The French CAC40 lost 66.79, or 1.70% to 3,862.16.
Among the miners Anglo American sank 6.2%, while Antofagasta and Xstrata shed 2.9% and 3.8%.
Aussie peers Rio Tinto and BHP Billiton fell 5% and 3.1%.
Energy shares faired slightly better, with majors BP, BG Group and Total down between 1.2% and 1.5%.
Financials weakened on the possibility of further regulation to the US system. Royal Bank of Scotland, Lloyds and Barclays slumped 7.1%, 5.7% and 5.9% respectively.
Commerzbank and Deutsche Bank slid 3.8% and 2.5%, while in France Societe Generale and BNP Paribas lost 4.7% and 2.6%.
Pharmaceutical stocks bucked the trend, with AstraZeneca gaining 1% on a broker upgrade from Morgan Stanley.
Japanese Markets
Japan’s Nikkei defied global equity market weakness to close 1.2% higher. Exporters rose as the yen weakened against the greenback to its lowest level in a week.
The Nikkei 225 rallied 130.89, or 1.22% to 10,868.41.
Sony climbed 4.1% after South Korea’s LG Display beat earnings estimates. Panasonic added 3.4%.
Computer-memory chipmaker Elpida Memory and Advantest Corp rose 4.6% and 3.6%.
Mitsui Sumitomo Insurance Group Holdings gained 2.5% on reports the nation’s insurers will expand into neighbouring China.
Rival Tokio Marine advanced 2.6%.
Sumitomo Mitsui Financial Group jumped 4.5% as it looks to sell shares in an effort to raise capital. Mitsubishi UFJ Financial Group and Mizuho Financial added 2.1% and 2.2%.
Hong Kong Market
The Hang Seng tumbled to three-month lows Thursday as restrictions on Chinese lenders rattled investors. Lending focused stocks, such as property, were also in the red while asset-price inflation warnings also weighed.
The Hang Seng has fallen by 4.6% this year, despite China’s growth in the last quarter coming in at 10.7%.
The Hang Seng fell 423.50, or 1.99% to 20,862.67.
Bank of China dropped 2%, while ICBC sank 2.9% after reports the Chinese Central bank order it to raise its reserve ratio.
HSBC, which makes up around one-sixth of the Hang Seng index, fell 0.9%.
Henderson Land Development and Country Garden Holdings Co lost 4.1% and 2.7%.
Aluminium Corp of China slumped 3.9%. Copper producing peer Jiangxi Copper retreated 3.3%.
The airlines capped losses on the market with China Southern Airlines said it would swing to a profit for 2009, against a loss the year before. Its stock added 2.5%.
Air China, the country’s largest airline, put on 5.6%.
In economic news, new unemployment claims rose from 446,000 the previous week to 482,000 last week. Forecasts were for a decline to 440,000.
Continuing claims dropped from 4,617,000 to 4,599,000 in the same period.
Meanwhile, a regional reading on manufacturing fell from 22.5 in December to 15.2 in January. Forecasts for the Philadelphia Fed Index were for a reading of 18.
An index of leading economic indicators rose a better than expected 1.1% in December. Forecasts were for a rise of 0.7%.
The Dow Jones lost 213.27 points, or 2.01%, to 10,389.88, the S&P's 500 fell 21.56 points, or 1.89%, to 1,116.48 and the NASDAQ dipped 25.55 points, or 1.12%, to 2,265.70.
JPMorgan Chase, Bank of America and Goldman Sachs dropped 6.6%, 6.2% and 4.1% as they appear among those most heavily impacted by the reforms.
Goldman Sachs reported fourth quarter earnings per share that considerably beat estimates. Revenue for the full-year was double what it was a year earlier.
Citigroup and Morgan Stanley fell 5.5% and 4.2%.
Microsoft, Apple and Yahoo! shed between 1.1% and 1.9% ahead of the release of their results Friday.
Google advanced 0.4% prior to releasing quarterly results after the close. The search engine beat analysts’ estimates having posted a net income of US$2 billion, well up on the US$382 million reported a year earlier.
Starbucks put on 1.7% after quarterly sales and earnings beat estimates.
Dow components Alcoa and Caterpillar sank 6.4% and 4.9%.
NYMEX light crude oil for February delivery dropped US$1.66 to US$76.08 a barrel on evidence of weakening demand.
Chevron and Exxon Mobil lost 2.4% and 2%.
COMEX gold for February delivery fell US$9.40 to US$1,103.20 an ounce as the greenback jumped to a five-month high against the euro.
European Markets
European stocks fell on speculation the Obama administration was set to increase regulation on the larger financial institutions. Miners weakened on lower metals prices and reports of a potential rise in taxes.
The UK benchmark FTSE 100 dropped 85.70, or 1.58% to 5,335.10 while the German DAX slumped 104.56, or 1.79% to 5,746.97. The French CAC40 lost 66.79, or 1.70% to 3,862.16.
Among the miners Anglo American sank 6.2%, while Antofagasta and Xstrata shed 2.9% and 3.8%.
Aussie peers Rio Tinto and BHP Billiton fell 5% and 3.1%.
Energy shares faired slightly better, with majors BP, BG Group and Total down between 1.2% and 1.5%.
Financials weakened on the possibility of further regulation to the US system. Royal Bank of Scotland, Lloyds and Barclays slumped 7.1%, 5.7% and 5.9% respectively.
Commerzbank and Deutsche Bank slid 3.8% and 2.5%, while in France Societe Generale and BNP Paribas lost 4.7% and 2.6%.
Pharmaceutical stocks bucked the trend, with AstraZeneca gaining 1% on a broker upgrade from Morgan Stanley.
Japanese Markets
Japan’s Nikkei defied global equity market weakness to close 1.2% higher. Exporters rose as the yen weakened against the greenback to its lowest level in a week.
The Nikkei 225 rallied 130.89, or 1.22% to 10,868.41.
Sony climbed 4.1% after South Korea’s LG Display beat earnings estimates. Panasonic added 3.4%.
Computer-memory chipmaker Elpida Memory and Advantest Corp rose 4.6% and 3.6%.
Mitsui Sumitomo Insurance Group Holdings gained 2.5% on reports the nation’s insurers will expand into neighbouring China.
Rival Tokio Marine advanced 2.6%.
Sumitomo Mitsui Financial Group jumped 4.5% as it looks to sell shares in an effort to raise capital. Mitsubishi UFJ Financial Group and Mizuho Financial added 2.1% and 2.2%.
Hong Kong Market
The Hang Seng tumbled to three-month lows Thursday as restrictions on Chinese lenders rattled investors. Lending focused stocks, such as property, were also in the red while asset-price inflation warnings also weighed.
The Hang Seng has fallen by 4.6% this year, despite China’s growth in the last quarter coming in at 10.7%.
The Hang Seng fell 423.50, or 1.99% to 20,862.67.
Bank of China dropped 2%, while ICBC sank 2.9% after reports the Chinese Central bank order it to raise its reserve ratio.
HSBC, which makes up around one-sixth of the Hang Seng index, fell 0.9%.
Henderson Land Development and Country Garden Holdings Co lost 4.1% and 2.7%.
Aluminium Corp of China slumped 3.9%. Copper producing peer Jiangxi Copper retreated 3.3%.
The airlines capped losses on the market with China Southern Airlines said it would swing to a profit for 2009, against a loss the year before. Its stock added 2.5%.
Air China, the country’s largest airline, put on 5.6%.
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