Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Tuesday 29th July 2008

Text too small?
Lingering concern over the outlook for financial companies pushed Wall Street lower on Monday, reflecting the failure of two more small US banks late last week and comments by the International Monetary Fund that the US housing market had yet to reach a bottom.

The Standard & Poor's 500 Index retreated 23.39 points, or 1.9%, to 1,234.37, its lowest level since reaching an almost three-year low on July 15. The Dow lost 239.61, or 2.1%, to 11,131.08. The Nasdaq Composite Index slipped 46.31, or 2%, to 2,264.22. Four stocks fell for each that rose on the New York Stock Exchange.

Merrill Lynch, American International Group and Fannie Mae led financial shares to a third straight drop.

Lehman Brothers Holdings also stumbled after a Merrill analyst said the firm might post a third-quarter loss and report more losses on its residential mortgage portfolio.

The S&P financial index shed 4.6%. The sell-off came after a rally last week that lifted many banks' shares 40% or more.

There was little good news elsewhere in the market with Verizon Communications sliding and Apple Inc. leading the Nasdaq lower.

The bear market in US stocks would probably "bottom" in the next month after oil prices fell, Congress passed legislation to shore up the housing market and bank earnings topped estimates, JPMorgan Chase said on Monday.

So-called technical indicators including relative strength indexes, moving averages, short interest and sentiment surveys also signaled that the S&P 500 won't extend a 22% decline from its October record, Thomas Lee, JPMorgan's chief US equity strategist, wrote in a note to clients.

Housing market support

In a bid to shore up the US housing market, the US Treasury and the nation's four biggest banks on Monday said they would start a market for an investment product to support home financing.

Bank of America, Citigroup, JPMorgan and Chased Wells Fargo said they planned to begin issuing covered bonds, which are secured by pools of assets like home loans.

Earlier in the session, the IMF warned in a report that deteriorating credit conditions for consumers and banks might prolong a period of slow economic growth. It stood by its April forecast for about $US1 trillion in losses stemming from the US mortgage crisis.

In late afternoon trading, the New York Board of Trade's dollar index, which tracks the greenback's performance against a basket of six major currencies, hovered around 72.668, down 0.2%, after having dropped as low as 72.609.

Declines in US stocks helped pull the dollar down from a one-month high scaled earlier against the Japanese yen at 108.08 yen. The dollar was last trading 0.4% lower at 107.46.

The two-year note's yield declined 13 basis points, or 0.13%age point, to 2.59% at 4:36 p.m. in New York, according to BGCantor Market Data. The price of the 2.75% security due in July 2010 rose 1/4, or $2.50 per $1,000 face amount, to 100 10/32. The 10-year yield fell 9 basis points to 4.01%.

US crude gained $1.47 to settle at $124.73 a barrel, down from the July 11 record above $147. London Brent rose $1.32 to $125.84 a barrel.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

18th October 2021 Morning Report
T&G Global Limited (NZX: TGG) FY21 Earnings Guidance Update
Arvida Group Limited (NZX: ARV) Successful Completion of $155m Placement
FreshLeaf: Cannabis on course to be 'medicine of the masses'
Arvida Group Limited (NZX: ARV) to Acquire Arena Living Retirement Living Portfolio
My Food Bag Group Limited (NZX: MFB) Market Update and HY Results Announcement Date
Harmoney Corp Limited (NZX: HMY) Delivers Record September Quarter
Vital Healthcare Property Trust (NZX: VHP) Announces Successful Completion of $115m Placement
14th October 2021 Morning Report
General Capital Limited (NZX: GEN) Completes Greenfern Listing