QUOTE
World Stock Markets on the verge spiraling out of control
Tokyo, Japan (Reuters) - Tokyo's Nikkei average tumbled more than 2 percent by midday Thursday, dropping below 16,000 for the first time in two months as exporters such as Fanuc lost ground following a sharp sell-off in U.S. stocks. Other markets in the region are also off sharply, with South Korea's Kospi down 3 percent and Australia's S&P/ASX200 about 1.7 percent lower. Singapore is showing a fall of about 2.5 percent, while Taiwan is down 1.2 percent. Shares of Japanese brokerages and insurers declined as investors worried about the impact of the stock market's slide on their earnings, although Daikin Industries climbed after it said it was considering buying a Malaysian firm. Steep declines in U.S. stocks the Dow Jones industrial average recorded its biggest one-day point drop in three years on Wednesday surprised the Tokyo market, said Soichiro Monji, chief strategist of equity management at Daiwa SB Investments. "Rather than any domestic factor, I think the decline in U.S. stocks is pretty much 100-percent responsible for the fall in Tokyo today," he said. But with the yen substantially weaker against the dollar, the sell-off was not likely to last, Monji said. "For the near future, I think today is likely to mark the climax of selling, of investors completely ignoring the weaker yen." The Nikkei finished the morning down 2.01 percent, or 327.32 points, at 15,980.35, below the 16,000 mark for the first time since March 10. The TOPIX index was down 2.24 percent at 1,619.90. The yen was at 110.64 to the dollar, off an eight-month high of 108.96 hit on Wednesday. A weaker yen helps Japan's exporters as it increases profits when revenues from abroad are brought home. Fanuc, a maker of industrial robots, dropped 2.3 percent to 10,350 yen. TDK Corp., a maker of electronic components, slid 3.5 percent to 9,440 yen, erasing almost all of its gains from the previous session. Sony Corp. fell 2.1 percent to 5,090 as investors shrugged off a brokerage upgrade of the electronics and entertainment conglomerate.
Steady decline
The Nikkei is now on track to book its seventh decline in eight sessions, having erased more than 1,300 points since its close on May 8. But the decline has been welcome news to those who thought stock prices were overheated, said Kirby Daley, strategist at Fimat. "We're taking some of the premium out of the markets (in Japan and the U.S.) that maybe didn't deserve to be there at this point," he said. However, he added that anything under 16,000 was too low for the benchmark. "Now we're getting into slightly undervalued territory, we should not see a 15,000 handle on the Nikkei at this point." Brokerage Nomura Holdings Inc. fell 3.8 percent to 2,280 yen. The company said it plans to pay investors a dividend of 32 yen per share in the financial year to March 2007, compared with 48 yen per share a year ago. Insurer T&D Holdings Inc. fell 5.8 percent to 7,630 yen. Insurers, like brokerages, were squeezed by concerns that lower stock prices will eat into their earnings from the market, said Daiwa SB's Monji. But shares of Daikin jumped 5.1 percent to 3,920 yen after the manufacturer of air conditioners said it was considering buying Malaysian firm OYL Industries Bhd. The deal would make Daikin the world's second-largest maker of air conditioners, the Nihon Keizai said. Trade edged down from a day earlier, with 1.01 billion shares changing hands on the Tokyo exchange's first section. That was still higher than last week's morning average of 920 million shares. Decliners overwhelmed gainers 1,497 to 164.
Tokyo, Japan (Reuters) - Tokyo's Nikkei average tumbled more than 2 percent by midday Thursday, dropping below 16,000 for the first time in two months as exporters such as Fanuc lost ground following a sharp sell-off in U.S. stocks. Other markets in the region are also off sharply, with South Korea's Kospi down 3 percent and Australia's S&P/ASX200 about 1.7 percent lower. Singapore is showing a fall of about 2.5 percent, while Taiwan is down 1.2 percent. Shares of Japanese brokerages and insurers declined as investors worried about the impact of the stock market's slide on their earnings, although Daikin Industries climbed after it said it was considering buying a Malaysian firm. Steep declines in U.S. stocks the Dow Jones industrial average recorded its biggest one-day point drop in three years on Wednesday surprised the Tokyo market, said Soichiro Monji, chief strategist of equity management at Daiwa SB Investments. "Rather than any domestic factor, I think the decline in U.S. stocks is pretty much 100-percent responsible for the fall in Tokyo today," he said. But with the yen substantially weaker against the dollar, the sell-off was not likely to last, Monji said. "For the near future, I think today is likely to mark the climax of selling, of investors completely ignoring the weaker yen." The Nikkei finished the morning down 2.01 percent, or 327.32 points, at 15,980.35, below the 16,000 mark for the first time since March 10. The TOPIX index was down 2.24 percent at 1,619.90. The yen was at 110.64 to the dollar, off an eight-month high of 108.96 hit on Wednesday. A weaker yen helps Japan's exporters as it increases profits when revenues from abroad are brought home. Fanuc, a maker of industrial robots, dropped 2.3 percent to 10,350 yen. TDK Corp., a maker of electronic components, slid 3.5 percent to 9,440 yen, erasing almost all of its gains from the previous session. Sony Corp. fell 2.1 percent to 5,090 as investors shrugged off a brokerage upgrade of the electronics and entertainment conglomerate.
Steady decline
The Nikkei is now on track to book its seventh decline in eight sessions, having erased more than 1,300 points since its close on May 8. But the decline has been welcome news to those who thought stock prices were overheated, said Kirby Daley, strategist at Fimat. "We're taking some of the premium out of the markets (in Japan and the U.S.) that maybe didn't deserve to be there at this point," he said. However, he added that anything under 16,000 was too low for the benchmark. "Now we're getting into slightly undervalued territory, we should not see a 15,000 handle on the Nikkei at this point." Brokerage Nomura Holdings Inc. fell 3.8 percent to 2,280 yen. The company said it plans to pay investors a dividend of 32 yen per share in the financial year to March 2007, compared with 48 yen per share a year ago. Insurer T&D Holdings Inc. fell 5.8 percent to 7,630 yen. Insurers, like brokerages, were squeezed by concerns that lower stock prices will eat into their earnings from the market, said Daiwa SB's Monji. But shares of Daikin jumped 5.1 percent to 3,920 yen after the manufacturer of air conditioners said it was considering buying Malaysian firm OYL Industries Bhd. The deal would make Daikin the world's second-largest maker of air conditioners, the Nihon Keizai said. Trade edged down from a day earlier, with 1.01 billion shares changing hands on the Tokyo exchange's first section. That was still higher than last week's morning average of 920 million shares. Decliners overwhelmed gainers 1,497 to 164.
CNN
QUOTE
Dow suffers biggest one-day loss in 3 years
Blue-chip measure drops 214 points, other gauges tumble after consumer price report fuels concerns about inflation and interest rates; bonds fall, dollar gains.
By Jessica Seid, CNN Money.com staff writer May 17, 2006
NEW YORK (CNNMoney.com) - Blue chips led a broad selloff Wednesday, with the Dow Jones industrial average posting its biggest single-day loss in three years, after a stronger-than-expected consumer inflation report re-ignited fears of inflation. The Dow (down 214.28 to 11,205.61, Charts) skidded about 1.8 percent after being down as much as 245 points earlier. The broader Standard & Poor's 500 (down 21.76 to 1,270.32, Charts) index sank 1.7 percent and the Nasdaq composite (down 33.33 to 2,195.80, Charts) stumbled 1.5 percent, erasing its gains for the year. The selling started after the Labor Department said its Consumer Price Index, the government's main inflation gauge, jumped a bigger-than-expected 0.6 percent in April while the so-called core CPI, which excludes energy and food prices, rose by 0.3 percent. Both readings came in a shade above economists' forecasts. Investors have been particularly concerned about inflation in recent days as they look for clues as to what the Fed will do with interest rates at its next meeting June 28-29. "The fear of higher inflation was displaced today in the CPI report," said Peter Cardillo, chief market analyst at S.W. Bach & Co, which may mean that the Fed won't pause its interest-rate hiking campaign and decide to raise rates again in June. The selloff started last week after the Dow, the world's most widely watched stock market gauge, had come within about 80 points of its all-time high set in January 2000. The 30-share Dow is off nearly 4 percent since the selloff started. Treasury prices tumbled along with stocks Wednesday, raising the yield on the benchmark 10-year note to 5.15 percent, up from 5.10 percent Tuesday. Bond prices and yields move in opposite directions. But the dollar rallied as investors bet that the Fed might be forced to keep raising rates longer than markets had been expecting. Higher rates tend to slow economic growth - which can hurt stock and bond prices - but can also help a currency since they tend to attract investors from overseas. Investors will be paying close attention to the string of economic reports on deck, including jobless claims due Thursday, and new and existing home sales next week.
What moved?
- After the closing bell, shares of Synopsys (up $0.03 to $20.44, Research) jumped over 3 percent after the maker of software for designing microchips posted a quarterly profit after a year-ago loss.
- BEA Systems (down $0.11 to $11.86, Research) was also higher after the business software maker posted a higher quarterly net profit due to stronger sales and license fees.
- Gymboree (down $0.88 to $32.95, Research) rose in extended trade after the children's apparel retailer posted a sharp rise in quarterly profit.
- Salesforce.com (down $0.33 to $30.17, Research) fell 2 percent after posting a slight quarterly loss on higher expenses.
- Napster (up $0.26 to $3.93, Research) sank 4 percent in extended trade after reporting a narrower quarterly loss.
During the regular trading session, selling was broad-based, with 29 of 30 Dow stocks falling. Dow component Hewlett-Packard (up $1.05 to $32.16, Research) reported a 45 percent quarterly profit increase that handily beat Wall Street analysts' expectations, sending shares up over 3 percent. Shares of Applied Materials (down $0.92 to $16.93, Research) fell 5 percent after the chip equipment maker posted a higher quarterly profit but guidance disappointed investors.
- Talbots (down $1.19 to $22.77, Research) sank nearly 5 percent after the women's apparel retailer said quarterly profit fell on softer-than-expected sales.
- Zale (up $1.26 to $23.06, Research) jumped nearly 6 percent after the jewelry retailer posted a better-than-expected quarterly profit.
- Circuit City (up $0.52 to $29.45, Research) gained close to 2 percent after Chief Financial Officer Mike Foss said sales in the quarter have "continued to be very strong."
- Abercrombie & Fitch (up $1.29 to $61.01, Research) rose over 2 percent after the teen clothing retailer said first-quarter net profit rose 39 percent, beating Wall Street estimates
- Verizon Communications (down $0.89 to $30.81, Research) pulled back after it denied earlier media reports that it entered into a contract with the National Security Agency, providing the government office with info about its customer phone calls. AT&T (down $0.67 to $25.10, Research) and Sprint Nextel (down $0.31 to $24.43, Research) were also lower.
Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by five to one on volume of 2.1 billion shares. On the Nasdaq, losers edged out winners by a margin of three to one as 2.4 billion shares changed hands. Crude oil for June delivery fell 84 cents to $68.69 a barrel on the New York Mercantile Exchange after the government said supplies of gasoline rose less than expected.
COMEX gold for June delivery lost $2.90 to $690 an ounce.
Blue-chip measure drops 214 points, other gauges tumble after consumer price report fuels concerns about inflation and interest rates; bonds fall, dollar gains.
By Jessica Seid, CNN Money.com staff writer May 17, 2006
NEW YORK (CNNMoney.com) - Blue chips led a broad selloff Wednesday, with the Dow Jones industrial average posting its biggest single-day loss in three years, after a stronger-than-expected consumer inflation report re-ignited fears of inflation. The Dow (down 214.28 to 11,205.61, Charts) skidded about 1.8 percent after being down as much as 245 points earlier. The broader Standard & Poor's 500 (down 21.76 to 1,270.32, Charts) index sank 1.7 percent and the Nasdaq composite (down 33.33 to 2,195.80, Charts) stumbled 1.5 percent, erasing its gains for the year. The selling started after the Labor Department said its Consumer Price Index, the government's main inflation gauge, jumped a bigger-than-expected 0.6 percent in April while the so-called core CPI, which excludes energy and food prices, rose by 0.3 percent. Both readings came in a shade above economists' forecasts. Investors have been particularly concerned about inflation in recent days as they look for clues as to what the Fed will do with interest rates at its next meeting June 28-29. "The fear of higher inflation was displaced today in the CPI report," said Peter Cardillo, chief market analyst at S.W. Bach & Co, which may mean that the Fed won't pause its interest-rate hiking campaign and decide to raise rates again in June. The selloff started last week after the Dow, the world's most widely watched stock market gauge, had come within about 80 points of its all-time high set in January 2000. The 30-share Dow is off nearly 4 percent since the selloff started. Treasury prices tumbled along with stocks Wednesday, raising the yield on the benchmark 10-year note to 5.15 percent, up from 5.10 percent Tuesday. Bond prices and yields move in opposite directions. But the dollar rallied as investors bet that the Fed might be forced to keep raising rates longer than markets had been expecting. Higher rates tend to slow economic growth - which can hurt stock and bond prices - but can also help a currency since they tend to attract investors from overseas. Investors will be paying close attention to the string of economic reports on deck, including jobless claims due Thursday, and new and existing home sales next week.
What moved?
- After the closing bell, shares of Synopsys (up $0.03 to $20.44, Research) jumped over 3 percent after the maker of software for designing microchips posted a quarterly profit after a year-ago loss.
- BEA Systems (down $0.11 to $11.86, Research) was also higher after the business software maker posted a higher quarterly net profit due to stronger sales and license fees.
- Gymboree (down $0.88 to $32.95, Research) rose in extended trade after the children's apparel retailer posted a sharp rise in quarterly profit.
- Salesforce.com (down $0.33 to $30.17, Research) fell 2 percent after posting a slight quarterly loss on higher expenses.
- Napster (up $0.26 to $3.93, Research) sank 4 percent in extended trade after reporting a narrower quarterly loss.
During the regular trading session, selling was broad-based, with 29 of 30 Dow stocks falling. Dow component Hewlett-Packard (up $1.05 to $32.16, Research) reported a 45 percent quarterly profit increase that handily beat Wall Street analysts' expectations, sending shares up over 3 percent. Shares of Applied Materials (down $0.92 to $16.93, Research) fell 5 percent after the chip equipment maker posted a higher quarterly profit but guidance disappointed investors.
- Talbots (down $1.19 to $22.77, Research) sank nearly 5 percent after the women's apparel retailer said quarterly profit fell on softer-than-expected sales.
- Zale (up $1.26 to $23.06, Research) jumped nearly 6 percent after the jewelry retailer posted a better-than-expected quarterly profit.
- Circuit City (up $0.52 to $29.45, Research) gained close to 2 percent after Chief Financial Officer Mike Foss said sales in the quarter have "continued to be very strong."
- Abercrombie & Fitch (up $1.29 to $61.01, Research) rose over 2 percent after the teen clothing retailer said first-quarter net profit rose 39 percent, beating Wall Street estimates
- Verizon Communications (down $0.89 to $30.81, Research) pulled back after it denied earlier media reports that it entered into a contract with the National Security Agency, providing the government office with info about its customer phone calls. AT&T (down $0.67 to $25.10, Research) and Sprint Nextel (down $0.31 to $24.43, Research) were also lower.
Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by five to one on volume of 2.1 billion shares. On the Nasdaq, losers edged out winners by a margin of three to one as 2.4 billion shares changed hands. Crude oil for June delivery fell 84 cents to $68.69 a barrel on the New York Mercantile Exchange after the government said supplies of gasoline rose less than expected.
COMEX gold for June delivery lost $2.90 to $690 an ounce.
CNN Money
QUOTE
Europe in biggest fall since 2002
LONDON, England (Reuters) - European shares suffered their biggest points fall since October 2002 to close at a more than three-month low on Wednesday as strong U.S. inflation data sparked fresh fears over rising interest rates. The session's late slide wiped more than 180 billion euros off the value of Europe's top 300 companies. Shares have lost 7 percent since last Tuesday. Auto stocks were the worst hit as exporters were hurt by dollar weakness, although the greenback rebounded on the inflation data and the French finance minister saying the euro must not be allowed to strengthen too much. The FTSEurofirst 300 index of top European shares unofficially closed 2.6 percent or 35 points weaker at 1,312.21 points. Britain's FTSE 100 lost 2.9 percent, Germany's DAX shed 3.4 percent and France's CAC 40 fell 3.2 percent. In New York the Dow Jones Industrial average was trading 1.4 percent down at 11,255.50. While investors are worried, they are also staying pragmatic. "There's certainly a lot of caution and bearishness around," said SVM Asset Management managing director, Colin McLean, which has $1 billion under management. "And while there may be more losses to come in the next few sessions, the scale and pace of the moves in the last week are no different to other setbacks we've seen in the past year or so." The market had been trading flat before data showed headline U.S. consumer prices rose by 0.6 percent in April with core prices up an unexpectedly strong 0.3 percent, fueling worries the Federal Reserve will continue tightening monetary policy. Wall Street economists had forecast a 0.5 percent rise in consumer prices with a 0.2 percent rise in the core figure, which strips out volatile food and energy costs. The FTSEurofirst, which is still up 3 percent in 2006, had hit a near five-year high earlier this month on the back of bullish earnings and takeover activity before the sell-off took hold. Shares lost 0.6 percent last Wednesday, 0.4 percent on Thursday, 2.1 percent on Friday and 1.3 percent on Monday with inflation worries contrasting with a sell-off in commodity prices which hit high-flying mining shares. The benchmark nudged up 0.2 percent on Tuesday, supported by earnings. Miners were the second biggest fallers after autos with the DJ Stoxx basic resources sector slipping 3.6 percent as metals succumbed to profit-taking.
LONDON, England (Reuters) - European shares suffered their biggest points fall since October 2002 to close at a more than three-month low on Wednesday as strong U.S. inflation data sparked fresh fears over rising interest rates. The session's late slide wiped more than 180 billion euros off the value of Europe's top 300 companies. Shares have lost 7 percent since last Tuesday. Auto stocks were the worst hit as exporters were hurt by dollar weakness, although the greenback rebounded on the inflation data and the French finance minister saying the euro must not be allowed to strengthen too much. The FTSEurofirst 300 index of top European shares unofficially closed 2.6 percent or 35 points weaker at 1,312.21 points. Britain's FTSE 100 lost 2.9 percent, Germany's DAX shed 3.4 percent and France's CAC 40 fell 3.2 percent. In New York the Dow Jones Industrial average was trading 1.4 percent down at 11,255.50. While investors are worried, they are also staying pragmatic. "There's certainly a lot of caution and bearishness around," said SVM Asset Management managing director, Colin McLean, which has $1 billion under management. "And while there may be more losses to come in the next few sessions, the scale and pace of the moves in the last week are no different to other setbacks we've seen in the past year or so." The market had been trading flat before data showed headline U.S. consumer prices rose by 0.6 percent in April with core prices up an unexpectedly strong 0.3 percent, fueling worries the Federal Reserve will continue tightening monetary policy. Wall Street economists had forecast a 0.5 percent rise in consumer prices with a 0.2 percent rise in the core figure, which strips out volatile food and energy costs. The FTSEurofirst, which is still up 3 percent in 2006, had hit a near five-year high earlier this month on the back of bullish earnings and takeover activity before the sell-off took hold. Shares lost 0.6 percent last Wednesday, 0.4 percent on Thursday, 2.1 percent on Friday and 1.3 percent on Monday with inflation worries contrasting with a sell-off in commodity prices which hit high-flying mining shares. The benchmark nudged up 0.2 percent on Tuesday, supported by earnings. Miners were the second biggest fallers after autos with the DJ Stoxx basic resources sector slipping 3.6 percent as metals succumbed to profit-taking.
CNN
