Tuesday, 24 July 2012

July 24, 2012 Financial Market Summary

DJIA fell 0.8% to settle at 12,721.5. NASDAQ tumbled 1.2% to close at 2,890.2. S&P 500 shed 0.9% to end at 1,350.5.
Nikkei 225 index is trading 0.4% lower at 8,472.6.
FTSE 100 fell 2.1%, to settle at 5,533.9.
FTSEurofirst 300 index dropped 2.4 % to 1,024.3.
In Asia, crude oil for September delivery is trading marginally higher at $88.18 per barrel.
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5519, slightly higher against the EUR at €1.2802, and marginally lower against the JPY at ¥121.48.
US Market Snapshot
US markets fell yesterday, amid concerns that Spain might need a sovereign bailout after the Spanish region of Murcia looked set to request government bailout funds and after a Chinese central bank adviser opined that China’s economic growth might contract further. McDonald's slid 2.9%, as it second-quarter results trailed market expectation. Exxon Mobil and Chevron fell 0.9% and 1.1%, respectively, tracking a drop in crude oil prices. Financial stocks, Citigroup and PNC Financial Services lost 2.1% and 2.6%, respectively, on Spanish debt concern and on reports that the IMF would halt aid to Greece. Alcoa slid 1.5%, amid concern about a global slowdown. Pharmaceutical company, Akorn slumped 7.9%, after Deutsche Bank reduced its rating on the stock to “Hold” from “Buy” and lowered estimates for 2013 and 2014.
DJIA fell 0.8% to settle at 12,721.5. NASDAQ tumbled 1.2% to close at 2,890.2. S&P 500 shed 0.9% to end at 1,350.5.
Asian Market Snapshot
Asian markets are trading lower this morning, as Moody's Investors Service trimmed its outlook on Germany, the Netherlands and Luxembourg due to mounting uncertainties from the eurozone debt crisis. In Japan, Sharp traded lower, amid news that the firm might suffer a higher-than-expected loss in the April-June quarter as its LCD and solar businesses continue to decline. Toshiba dropped amid concerns about its earnings and after reports stated that the company plans to cut NAND flash memory chip output by 30%. In Hong-Kong, morning trading was suspended due to extreme weather. In South- Korea, Halla Climate Control paced losses, after South Korea's National Pension Service rejected an offer from US-based Visteon’s to acquire 30% of Halla Climate Control.
Nikkei 225 index is trading 0.4% lower at 8,472.6. Kospi index is trading 0.1% lower at 1,787.0. Trading was suspended in Hong-Kong.
UK Market Snapshot
UK markets ended lower yesterday, as renewed concern about Spain and a potential Greek default, spooked market sentiment. Evraz slumped 7.0%, following bearish comments from Morgan Stanley. Aviva slumped 6.6%, amid doubts whether its disposal plan alone would be enough to turnaround the company. African Barrick Gold tumbled 16.0%, after the company reported a drop in first-half profits, on lower production and higher costs. Miners, Vedanta Resources, ENRC, Kazakhmys and Antofagasta declined between 3.5% and 5.2%, as base metal prices slumped, after a Chinese central bank adviser stated that the nation’s economy might cool further in the current quarter. Banking stocks, Barclays, HSBC Holdings, Royal Bank of Scotland and Standard Chartered plunged between 2.4% and 4.2%, spooked by concerns over debt problems in Greece and Spain.
FTSE 100 fell 2.1%, to settle at 5,533.9. FTSE 250 shed 2.4%, to close at 10,896.9.
European Market Snapshot
Other European markets closed lower yesterday, as rising borrowing costs in the euro area renewed concern that Spain would seek a sovereign bailout and amid fears that Greece would default. Banking stocks, Commerzbank, Credit Agricole, BNP Paribas and Deutsche Bank plunged between 4.6% and 6.1%, as risk appetite decreased among investors. Groupe Eurotunnel slumped 5.8%, after the company posted weaker-than-anticipated first-half earnings. Oil producers, Technip and Total fell 3.9% and 1.8% respectively, tracking a drop in crude oil prices. Danone declined 3.2%, after Societe Generale downgraded its rating on the stock to “Hold” from “Buy”. Wereldhave tumbled 13.4%, after the company abandoned its dividend targets for this year and next.
FTSEurofirst 300 index dropped 2.4 % to 1,024.3. German DAX Xetra 30 shed 3.2% to 6,419.3. French CAC-40 closed 2.9% lower at 3,101.5.
Commodities
In Asia, crude oil for September delivery is trading marginally higher at $88.18 per barrel. Yesterday, crude oil for September delivery declined 4.0% or $3.69 to $88.14 per barrel, amid worries over demand outlook, as eurozone debt crisis intensified on fears that Spain would need a major bailout and ahead of the meeting between the European Commission, the European Central Bank (ECB) and the International Monetary Fund to determine the fiscal position of Greece. Oil prices also fell, after a Chinese central bank adviser stated that the nation’s economy might cool further in the current quarter.
Gold for immediate delivery is trading 0.1% lower today, at $1,576.05 per ounce. Gold for August delivery settled down 0.3% or $5.40 at $1,577.40 per ounce yesterday, as the dollar traded higher against the euro, amid increasing worries about finances in Spain and Greece and following a surge in Spanish and Italian bond yields.
Currencies
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5519, slightly higher against the EUR at €1.2802, and marginally lower against the JPY at ¥121.48.
The EUR is trading marginally lower against the USD at $1.2122. However, gains in the USD were limited, before data due to release this week, which might show that US economic growth slowed in the second quarter of 2012, prompting speculation that the US Federal Reserve would ease monetary policy further.
The EUR is trading slightly lower against the JPY at ¥94.88. The JPY is trading higher against its major counterparts, as escalating worries over the European debt turmoil spurred demand for the safe haven currency. The JPY traded higher even after Japan’s Finance Minister Jun Azumi reiterated that he is ready to take decisive action on the local currency if needed.
The EUR is trading lower against its major peers, after Moody's Investors Service lowered its outlook for Germany, the Netherlands and Luxembourg to ‘Negative’ from ‘Stable’, due to mounting uncertainties from the eurozone debt crisis.
The AUD is trading higher against the USD, after a report revealed that Chinese manufacturing PMI rose in July.
Yesterday, the EUR ended lower against its major peers, following a surge in Spanish borrowing costs as Catalonia joined a list of Spanish regions that might request aid from the central government. The EUR also fell, on news that the International Monetary Fund was set to stop aid for Greece and after a report showed that eurozone consumer confidence dropped to a three year low in July.

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