10 October 2008
Wall Street resumed the downward pressure over T Dong
After the opening of a very bad omen and a brief recovery, the U.S. markets back into the red.
New meeting difficult on Wall Street. The Dow Jones lost more than 6% at the opening, rising briefly in the 8000 points. The Nasdaq, which tech stocks meanwhile fell more than 4% at the same time. The index briefly regained balance to 16.15, before returning in the red. The Dow lost more than 4% to 17.30, the Nasdaq sells more than 3%.
Rumors rife on bank Morgan Stanley, seen as the next potential victim of the crisis, collapsed Friday after having dropped 25% yesterday. General Motors, which fell 31% yesterday after a warning from Standard & Poor's on its debt, is recovering slowly. Traders are concerned about the impact of financial crisis on the real economy. The banking crisis and credit could ultimately affect companies seeking funds to invest. The Dow Jones has already lost almost 20% over the last five days.
Recent economic statistics are grim about the health of the U.S. economy and labor market. Moreover, according to the Wall Street Journal, the 52 economists surveyed by the newspaper, believe that the economy went into recession (negative growth for two quarters in a row) in the third quarter and should remain there until the first quarter of 2009. 89% of economists surveyed foresee a recession in the next 12 months, against 60% a month ago.
Towards a comprehensive solution?
The eyes are now riveted to Washington today to meet finance ministers and central bankers of the G7 (Canada, USA, France, Italy, Japan and the United Kingdom). They will try to find solutions to address the financial crisis. Japanese Prime Minister Taro Aso said that Japan, which chairs the G8 this year, is ready to convene a special summit if no solution emerges from the G7 meeting.
Traders seem to expect a solution of countries, not isolation. So far, the various measures taken by governments and central banks (injection of liquidity, concerted rate cuts, partial nationalization, deposit guarantee) did not reassured operators to run. According to the Wall Street Journal on its website, the United States consider temporarily guarantee all bank deposits and debts of banks. Yesterday, the New York Times, which quoted members of the administration, indicated that the Treasury Department was considering taking stakes in U.S. banks. U.S. Treasury Secretary Henry Paulson did not want to say whether the administration had come to the capital of institutions. He only indicated that the rescue plan for banks gave him that opportunity. Pending a better visibility on measures to be taken by the authorities, is prudence, even panic prevailed.
On the macroeconomic front, the U.S. trade deficit fell in August by 3.5% from July to 59.1 billion dollars, according to figures adjusted for seasonal variations. This figure is in line with analysts' expectations. For the month of July, the deficit amounted to 61.3 billion dollars against 62.2 billion initially announced. Exports fell 2% to 164.7 billion dollars and imports by 2.4% to 223.9 billion dollars.
Yesterday, the Dow Jones fell by 7.33% to 8579 points and the Nasdaq Composite fell by 5.47% to 1645 points.
Values to follow
Citigroup has ceased discussions with Wells Fargo about a possible division of Wachovia. It will claim up to 60 billion dollars to two banks but said it would not prevent the proposed acquisition of Wachovia by Wells Fargo.
American International Group has borrowed 70.3 billion dollars so far, according to the Wall Street Journal. The loan was initially $ 85 billion, then increased to 122.8 billion dollars.
General Electric reported net income dropped 23% in the third quarter. The group targets a net profit of between 19.5 and 21 billion dollars, against 22 to 23 billion previously. He was on course to achieve its annual targets revised downwards in late September.
Moody's plans to reduce the note on the long-term debt of Morgan Stanley. Analysts fear that the first Japanese bank Mitsubishi UFJ abandon its plan to invest $ 9 billion in the U.S. bank. Yet Mitsubishi UFJ has yet indicated Friday that it did not throw in the towel.
The results in the third quarter of the upstream arm of Chevron should be lower than the second quarter, following lower crude prices and hurricanes in the Gulf of Mexico. Hurricanes have cut its U.S. production by about 150,000 barrels of oil equivalent per day in September, said Chevron.
Standard and Poor's placed under surveillance negative notes in the long-term debt (B-) Ford and General Motors. She also placed under surveillance notes of the subsidiary to 49% of GM, GMAC and the 100% subsidiary of Ford, Ford Motor Credit, both specializing in financial services. The agency said that: "The supervision reflects the rapid deterioration of global automotive markets and credit markets, which will be a serious challenge for the months to come."
Speculation surrounding Research In Motion. The decline of the title, following the financial crisis, reports Research In Motion attractive prey for giants like Microsoft. The RIM is traded around 60 dollars against 150 dollars ago as four months.
by erectusplus at 17:26:00 |
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