Tech stocks lead Wall Street lower
January 28, 2010
Tech stocks led Wall Street lower Thursday following weak outlooks from within the sector. President Obama, in his State of the Union Address, called for a new jobs bill, while the Senate reconfirmed Ben Bernanke as Fed Chairman for a second term.
The Central Bank also decided to keep interest rates steady on Wednesday as the economy recovers slowly.
In employment news, new unemployment claims fell from a revised 478,000 the previous week to 470,000 last week. Continuing claims fell from 4,659,000 to 4,602,000 in the same period. Forecasts were for larger decreases in both cases.
Meanwhile, durable goods orders rose 0.3% in December after falling 0.4% the previous month. Expectations were for an increase of 2%.
The Dow Jones dropped 115.70 points, or 1.13%, to 10,120.46, the S&P’s 500 fell 12.97 points, or 1.18%, to 1,084.53 and the NASDAQ lost 42.41 points, or 1.91%, to 2,179.00.
Talk that investor expectations may have been too high before the unveiling of Apple’s iPad sent the company’s share price tumbling 4.1%.
Hewlett-Packard and Microsoft lost 1.7% and 3.3%.
Qualcomm sank 14.2% after the maker of gear for mobile phones cut back its earnings and revenue outlook for the current quarter.
Motorola slumped 123% after saying it would post a loss in the current quarter due to spending to launch new smartphones.
Both companies posted better than expected fourth quarter profits.
Bank of America, Citigroup and Wells Fargo led financial higher, adding between 1.1% and 1.5%.
3M lost 1.8% despite beating quarterly sales and earnings forecasts and upgrading its earnings forecast for the current year.
AT&T dipped 0.2% after meeting quarterly earnings estimates.
Procter & Gamble added 1.6% as cost cutting resulted in the consumer packaged goods company beating fiscal second quarter forecasts.
Ford weakened 0.8% despite the automaker posting its first annual profit since 2005 and beating expectations. The company also said it expects this to continue in 2010.
NYMEX light crude oil for February delivery fell US23c to US$73.44 a barrel. ConocoPhillips lost 2%, while heavyweight Exxon Mobil slid 0.8%.
COMEX gold for February delivery rose US70c to US$1,085.90 an ounce after receiving a boost from President Obama’s focus on job creation.
European Markets
European stocks weakened for a second day in a bank and resource led slide. Stocks initially rallied after President Obama called for an extension of tax incentives over this year and next.
Concerns over the health of the Greek and Portuguese economies weighed, resulting in the eventual fall in equity markets.
The benchmark UK FTSE 100 shed 71.73, or 1.37% to 5,145.74. Germany’s DAX dropped 102.87, or 1.82% to 5,540.33, while the French CAC40 fell 71.01, or 1.89% to 3,688.79.
After a promising start to the session the banks lost ground after Standard & Poor's issued a report making negative comments on the British banking system. Standard Chartered and Royal Bank of Scotland dipped 2.6% and 1.3%.
Commerzbank shed 1.1% in Germany, while Societe Generale and BNP Paribas lost 2.4% and 1.3%.
Miners struggled amid lower metals prices on the LME. Xstrata, Antofagasta and Anglo American dropped 4.3%, 3.9% and 3.3% respectively.
Aussie peers BHP Billiton and Rio Tinto shed 2.4% and 2.5%.
Royal Dutch Shell and Total were the worst among the energy majors losing 2.1% and 2.6%.
Pharmaceutical AstraZeneca slumped 4.6% after announcing a disappointing sales forecast and missing fourth-quarter profit expectations.
In positive news, Nokia beat fourth quarter earnings and sales forecasts, sending the mobile phone shares soaring over 9.9%.
Japanese Markets
Japan’s Nikkei snapped a four-day losing streak on positive earnings reports. President Obama’s call to pass a package of tax cuts and further stimulus spending played its part in the rally.
The Nikkei 225 put on 162.21, or 1.58% to 10,414.29.
Canon rose 1.8% after forecasting a 52% rise in net income this year.
Sony gained 4.9% on the back of a newspaper article that said the electronics company will report higher earnings.
The article said the same thing about Honda, whose shares went up 3.3%.
Toyota fell 3.9% after extending a sales freeze on several of its models due to a faulty part.
Hitachi Construction Machinery slumped 7.6% after posting a loss.
Nippon Electric Glass climbed 7.1% after forecasting full-year earnings would more than double in the year to the end of March, while it also received a broker upgrade.
Hong Kong
After six days of losses stocks in Hong Kong rebounded as bargain hunters moved in. Banks were returned to favour following China’s recent efforts to cap lending, while investors were also cheered by Barack Obama’s focus on job creation in his inaugural State of the Union address.
The Hang Seng put on 323.30, or 1.61% to 20,356.37.
Bank of China surged 3.5% after several days of similar sized sell-offs. Heavyweight lender Industrial and Commercial Bank of China (ICBC) put on virtually exactly the same amount.
HSBC tacked on 1.2%.
Even though banks on the island performed well banks in Shanghai were heavily sold.
Esprit climbed 5.8%, the largest mover on the Hang Seng index. Generic clothes manufacturer Li & Fung put on 0.9%.
The railway sector was muscular, following the US President’s proposal to create a network of high-speed railway corridors.
China Railway Construction also said profit was expected to climb by 50%, while China Railway Group put on 1.8%.
The automakers returned the black in a big way Thursday. Geely Automobiles, backed by Goldman Sachs spiked 8.2% after losing more than 20% of its value in the last week. BYD, backed by Warren Buffet, rallied 5.4%.
China recently overtook the US as the world’s largest automobile market.
Among the resource stocks Aluminum Corp. of China rose 2.2%.
Jiangxi Copper Co put on 3.3% following a rating upgrade on the stock from Morgan Stanley.
The Central Bank also decided to keep interest rates steady on Wednesday as the economy recovers slowly.
In employment news, new unemployment claims fell from a revised 478,000 the previous week to 470,000 last week. Continuing claims fell from 4,659,000 to 4,602,000 in the same period. Forecasts were for larger decreases in both cases.
Meanwhile, durable goods orders rose 0.3% in December after falling 0.4% the previous month. Expectations were for an increase of 2%.
The Dow Jones dropped 115.70 points, or 1.13%, to 10,120.46, the S&P’s 500 fell 12.97 points, or 1.18%, to 1,084.53 and the NASDAQ lost 42.41 points, or 1.91%, to 2,179.00.
Talk that investor expectations may have been too high before the unveiling of Apple’s iPad sent the company’s share price tumbling 4.1%.
Hewlett-Packard and Microsoft lost 1.7% and 3.3%.
Qualcomm sank 14.2% after the maker of gear for mobile phones cut back its earnings and revenue outlook for the current quarter.
Motorola slumped 123% after saying it would post a loss in the current quarter due to spending to launch new smartphones.
Both companies posted better than expected fourth quarter profits.
Bank of America, Citigroup and Wells Fargo led financial higher, adding between 1.1% and 1.5%.
3M lost 1.8% despite beating quarterly sales and earnings forecasts and upgrading its earnings forecast for the current year.
AT&T dipped 0.2% after meeting quarterly earnings estimates.
Procter & Gamble added 1.6% as cost cutting resulted in the consumer packaged goods company beating fiscal second quarter forecasts.
Ford weakened 0.8% despite the automaker posting its first annual profit since 2005 and beating expectations. The company also said it expects this to continue in 2010.
NYMEX light crude oil for February delivery fell US23c to US$73.44 a barrel. ConocoPhillips lost 2%, while heavyweight Exxon Mobil slid 0.8%.
COMEX gold for February delivery rose US70c to US$1,085.90 an ounce after receiving a boost from President Obama’s focus on job creation.
European Markets
European stocks weakened for a second day in a bank and resource led slide. Stocks initially rallied after President Obama called for an extension of tax incentives over this year and next.
Concerns over the health of the Greek and Portuguese economies weighed, resulting in the eventual fall in equity markets.
The benchmark UK FTSE 100 shed 71.73, or 1.37% to 5,145.74. Germany’s DAX dropped 102.87, or 1.82% to 5,540.33, while the French CAC40 fell 71.01, or 1.89% to 3,688.79.
After a promising start to the session the banks lost ground after Standard & Poor's issued a report making negative comments on the British banking system. Standard Chartered and Royal Bank of Scotland dipped 2.6% and 1.3%.
Commerzbank shed 1.1% in Germany, while Societe Generale and BNP Paribas lost 2.4% and 1.3%.
Miners struggled amid lower metals prices on the LME. Xstrata, Antofagasta and Anglo American dropped 4.3%, 3.9% and 3.3% respectively.
Aussie peers BHP Billiton and Rio Tinto shed 2.4% and 2.5%.
Royal Dutch Shell and Total were the worst among the energy majors losing 2.1% and 2.6%.
Pharmaceutical AstraZeneca slumped 4.6% after announcing a disappointing sales forecast and missing fourth-quarter profit expectations.
In positive news, Nokia beat fourth quarter earnings and sales forecasts, sending the mobile phone shares soaring over 9.9%.
Japanese Markets
Japan’s Nikkei snapped a four-day losing streak on positive earnings reports. President Obama’s call to pass a package of tax cuts and further stimulus spending played its part in the rally.
The Nikkei 225 put on 162.21, or 1.58% to 10,414.29.
Canon rose 1.8% after forecasting a 52% rise in net income this year.
Sony gained 4.9% on the back of a newspaper article that said the electronics company will report higher earnings.
The article said the same thing about Honda, whose shares went up 3.3%.
Toyota fell 3.9% after extending a sales freeze on several of its models due to a faulty part.
Hitachi Construction Machinery slumped 7.6% after posting a loss.
Nippon Electric Glass climbed 7.1% after forecasting full-year earnings would more than double in the year to the end of March, while it also received a broker upgrade.
Hong Kong
After six days of losses stocks in Hong Kong rebounded as bargain hunters moved in. Banks were returned to favour following China’s recent efforts to cap lending, while investors were also cheered by Barack Obama’s focus on job creation in his inaugural State of the Union address.
The Hang Seng put on 323.30, or 1.61% to 20,356.37.
Bank of China surged 3.5% after several days of similar sized sell-offs. Heavyweight lender Industrial and Commercial Bank of China (ICBC) put on virtually exactly the same amount.
HSBC tacked on 1.2%.
Even though banks on the island performed well banks in Shanghai were heavily sold.
Esprit climbed 5.8%, the largest mover on the Hang Seng index. Generic clothes manufacturer Li & Fung put on 0.9%.
The railway sector was muscular, following the US President’s proposal to create a network of high-speed railway corridors.
China Railway Construction also said profit was expected to climb by 50%, while China Railway Group put on 1.8%.
The automakers returned the black in a big way Thursday. Geely Automobiles, backed by Goldman Sachs spiked 8.2% after losing more than 20% of its value in the last week. BYD, backed by Warren Buffet, rallied 5.4%.
China recently overtook the US as the world’s largest automobile market.
Among the resource stocks Aluminum Corp. of China rose 2.2%.
Jiangxi Copper Co put on 3.3% following a rating upgrade on the stock from Morgan Stanley.
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