Wednesday, 25 July 2012

July 25, 2012 Financial Market Summary

DJIA fell 0.8% to settle at 12,617.3. NASDAQ shed 0.9% to close at 2,863.0. S&P 500 slipped 0.9% to end at 1,338.3.
Nikkei 225 index is trading 1.0% lower at 8,402.9.
FTSE 100 shed 0.6% to close at 5,499.2.
FTSEurofirst 300 index eased 0.6% to 1,018.6.
In Asia, crude oil for September delivery is trading 0.2% or $0.20 lower at $88.30 per barrel.
Gold for immediate delivery is trading 0.2% higher today, at $1,583.45 per ounce.
US Market Snapshot
US markets fell yesterday, with the DJIA index logging its third-consecutive triple-digit loss, after an index of US manufacturing expanded at its slowest pace since late 2010 in July and amid concern Europe’s debt crisis is worsening and disappointing US corporate earnings reports. However, losses were pared amid speculation the Federal Reserve might act to boost growth. United Parcel Service declined 4.6%, as its second quarter results trailed market estimates and after it cut its 2012 outlook. Cisco Systems dropped 5.9%, amid concern about possible slowdown in sales and threat from VMware Inc.’s planned purchase of Nicira. DuPont declined 2.0%, as it issued a cautious outlook. AT&T dropped 2.1%, amid sluggish sales growth. Whirlpool dropped 7.5%, as its second-quarter profits came in below market expectations.
DJIA fell 0.8% to settle at 12,617.3. NASDAQ shed 0.9% to close at 2,863.0. S&P 500 slipped 0.9% to end at 1,338.3.
Asian Market Snapshot
Asian markets are trading lower this morning, amid concern that Greece might need more debt restructuring and following bearish comments from the IMF on China’s economy. Disappointing US corporate earnings also weighed on market sentiment. In Japan, Toshiba which supplies chips for Apple, slumped after sales of Apple's iPhones trailed market expectations. Canon and Nikon paced losses, as the yen firmed against the euro. In Hong-Kong, Cheung Kong Holdings dropped on report that it is leading a consortium to buy UK gas distribution assets. Hutchison Whampoa, with significant exposure to Europe traded lower. In South Korea, POSCO traded lower after it reported a sharp drop in its quarterly operating profit.
Nikkei 225 index is trading 1.0% lower at 8,402.9. Hang Seng index is trading 0.5% lower at 18,814.5. Kospi index is trading 0.8% lower at 1,778.9.
UK Market Snapshot
UK markets slid yesterday, after Moody's Investors Service cut Germany’s credit outlook and after a US manufacturing gauge contracted more-than-estimated in July. Royal Bank of Scotland, HSBC, Barclays and Standard Chartered lost between 0.7% and 2.0%, as risk appetite decreased amongst investors. International Airlines Group, slated to report its second quarter results next week, slipped 2.2%, as Citigroup forecasted a sharp drop in the company’s profits. Vodafone lost 1.0%, after its Dutch peer Royal KPN reported a drop in its second quarter earnings and cut its dividend.  Glencore International declined 2.3%, amid profit booking by investors. Interdealer broker ICAP fell 2.0%, on concerns over falling trading volumes. BP eased 0.6%, as it began discussion with Rosneft to sell its stake in Russia’s TNK-BP. Vedanta Resources, Anglo American and Rio Tinto dropped between 0.3% and 1.2%, amid fears of shrinking metal demand.
FTSE 100 shed 0.6% to close at 5,499.2, while FTSE 250 edged down 0.1% to end at 10,885.9.
European Market Snapshot
Other European markets closed lower yesterday, amid persistent worries that Spain might require a full sovereign bailout, and after Germany’s credit outlook was lowered by Moody’s Investors Service. Financial stocks, Banco Santander and BBVA slipped 4.5% and 4.2%, respectively, as borrowing costs continued to surge in Spain. STMicroelectronics declined 3.7%, after the company forecasted downbeat third-quarter results, amid a slowdown in demand. ProSiebenSat.1 Media dropped 2.5%, after Barclays downgraded its recommendation on the stock to “Equal Weight” from “Overweight”. Royal KPN fell 7.3%, after the company reported a drop in its second-quarter earnings and slashed its dividend. However, Software surged 10.8%, after the company posted robust second-quarter results.
FTSEurofirst 300 index eased 0.6% to 1,018.6. German DAX Xetra 30 fell 0.5% to 6,390.4. French CAC-40 closed 0.9 % lower at 3,074.7.
Commodities
In Asia, crude oil for September delivery is trading 0.2% or $0.20 lower at $88.30 per barrel. Yesterday, crude oil for September delivery gained 0.4% or $0.36 to $88.50 per barrel, as unrest in Syria intensified concerns over supply disruption from Middle East region and after a report revealed that China’s HSBC manufacturing purchasing managers’ index rose to its highest in five months in July. Later in the day, the American Petroleum Institute reported that US crude oil inventories increased for the first time in four weeks by 1.35 million barrels last week.
Gold for immediate delivery is trading 0.2% higher today, at $1,583.45 per ounce. Gold for August delivery settled down 0.1% or $1.20 at $1,576.20 per ounce yesterday, as the dollar traded higher against the euro after Moody’s Investors Service lowered its outlook on Germany, Netherlands and Luxembourg’s triple-A rating to ‘Negative’ from ‘Stable’.
Currencies
At 0400 BST today, the GBP is trading marginally higher against the USD at $1.5506, flat against the EUR at €1.2848, and 0.1% higher against the JPY at ¥121.16.
The EUR is trading marginally higher against the USD at $1.2069. However, earlier in the session the EUR traded lower against the USD, ahead of a report which is expected to show that German business confidence fell to the lowest level since 2010 in July and after Moody’s Investors Service, in a statement today, revealed that it had also lowered the rating outlook for the European Financial Stability Facility (EFSF) to ‘Negative’ from ‘Stable’.
 The EUR is trading 0.1% higher against the JPY at ¥94.30. Earlier in the session, the JPY traded higher against most of its major peers, after Japan unexpectedly posted a trade surplus in June.
The NZD is trading lower against the USD, even after a report indicated that New Zealand’s annual trade deficit unexpectedly fell in June.
Yesterday, the EUR closed lower against the USD, after a report indicated that a downturn in the eurozone private sector continued in July. The EUR also fell, after a report showed that European Union officials believed Greece might not be able to pay its debt and might require additional debt restructuring, and after Moody’s Investors Service cut its triple-A credit ratings outlook for Germany, the Netherlands and Luxembourg to ‘Negative’ from ‘Stable’. The GBP ended lower against the USD, after a report indicated that UK BBA mortgage approvals fell unexpectedly in June. The USD and the JPY ended higher against their major counterparts, as mounting worries over European debt crisis spurred demand for the safe haven currencies.

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