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Sovereign Debt | www.usspost.com

February 4, 2010 by USA Post 

Sovereign Debt | www.usspost.com:U.S. stocks fell more within three months of disappointing earnings, an unexpected rise in jobless claims and a growing concern that Greece, Spain and Portugal in the struggle to reduce the budget deficit.

MasterCard declined 8.6 percent after the fourth-quarter profit belowanlysts estimates. Kellogg lost 3.8 percent after profit fell. Boeing Co. slipped after the aircraft maker and its rival Airbus SAS expected slowdown in demand will continue at least for another two years. All 10 industry groups in the Standard & Poor’s 500 index fell 1.3 percent, at least under the weight down when the government said the unemployment rate rose to 480,000 initial claims last week.

And Standard & Poor’s 500 index fell 2.4 percent to 1,070.97 at 1:29 pm in New York, lost as much as 2.7 percent, the sharpest decline during the day since Oct. 30. In the Dow Jones industrial average sank 205.26 points, or 2 percent, to 10,065.29. MSCI World Index of stocks in 23 developed countries fell by 2.4 percent.

“People are very nervous about the issues of debt recovery in European and United States,” said Ryan Bend, portfolio manager for Federated Investors’ Beer wise Fund, which manages about $ 1.6 billion. “Companies are to achieve a decent profit, but investors are still selling. I would be cautious in possession of some of these stocks because there are many vendors in the market.”

Jobs concern

Only 15 stocks in the S & P 500 company and one day, with the Dow developed a jump in jobless claims The concern that prospects for employment growth may be overly optimistic. Average forecast in a Bloomberg survey of economists is to increase employment opportunities at the 15,000 government releases the monthly labor market report tomorrow.

Portugal, Greece and led the high cost of insurance from default of sovereign debt. The European Central Bank kept its benchmark interest rate at 1 percent, a record, and probably delayed the dismantling of any more emergency measures lending concerns about the budget deficit and the rise in unemployment.

Drag the slide on the S & P 500 below its lowest close since November. The benchmark for U.S. equities lost 3.7 percent last month as concern about sovereign debt grew, China has stepped up measures to curb lending and President Barack Obama’s proposed rules to reduce risk in the banks.

‘Certainly disappointing’

“The number of jobless claims is certainly disappointing,” said Cliff Remily, a portfolio manager in Santa Fe, New Mexico-based Thornburg Investment, which oversees $ 53 billion. “Investors are skittish. I have been looking towards recovery in 2010, which may not be as strong as expected.”

Raw material producers in the S & P 500 by 3 percent collectively as copper, gold and silver prices fell, while the dollar rose as investors fled risky assets.

Freeport McMoran Copper and Gold Inc., the world’s largest publicly traded copper producer, sank 4.8 percent to $ 67.07 on concern slowing growth will reduce demand for metals. Titanium Metals Co. lost 9.8 percent to 10.92. Slopes of limited natural resources fell 8.5 percent to 40.76.

Energy companies fell 3.1 percent, the biggest drop among 10 industry groups in the Standard & Poor’s 500. Exxon Mobil, the largest U.S. oil company, lost 2.1 to 65.22. Chevron Corp. lost 2.2 percent to 71.61. And crude oil prices tumbled more than six months, and the loss of 5 percent to 73.15 dollars per barrel.

Earnings season.

Twenty-four companies in the Standard & Poor’s 500 was scheduled to submit the outcome of today. Since January 11, about 77 percent of the index members had topped the averageanlyst earnings per share estimate, according to Bloomberg data.

MasterCard declined 8.6 percent to 226.34. The world’s second-largest network of payments recorded a fourth-quarter profit excluding some items $ 2.43 per share. Analysts surveyed by Bloomberg estimated average profit of $ 2.48.

Visa Inc. gained $ 2 to 85.21 percent after first-quarter profit excluding some items was $ 1.02 per share, beating the average estimate compiled by Bloomberg from 92 cents.

Kellogg fell 3.8 percent to 53.07. In the United States, the largest maker of breakfast cereal, “said fourth-quarter profit fell 1.7 percent, affected by a slump in the food service industry and the shutdown of its factory Eggo nonsense.

Boeing lost 2.6 percent to $ 59.85 after the company and Airbus, the world’s two largest planemakers, said they did not expect a decrease in demand to continue at least two more years.

‘Difficult route’

“It was a difficult route,” said Boeing Commercial Airplanes President of Marketing Randy Tinseth in an interview. “Things are better, but still able to improve a great deal more than that.”

Chief Operating Officer of Airbus, John Leahy said the market will remain slow for new applications until 2012. In the European Aeronautic Defense and Space Unit and the company expects to win between 250 and 300 applications this year, he said. That would be the third in a row, down from 1,458 the standard achieved in 2007.

Beast in all parts of the world and the company fell 20 percent to $ 13.15 for the biggest drop in the S & P 500. Recruit online for losses in the fourth quarter of 1 per cent per share, excluding some items, missing the averageanlyst estimate of a Bloomberg survey. Monster also said it had agreed to buy the assets of Yahoo! HotJobs, the online recruitment Web site, the Yahoo! Inc. for $ 225 million in cash.

Berkshire Hathaway by 2.1 percent and shares fell to $ 72.83. Warren Buffett and the company plans to sell $ 8 billion of unsecured senior notes to partially finance the acquisition of railroad Burlington Northern Sante Fe Corp., the company was stripped of the last AAA credit rating by Standard & Poor’s.

Cisco gains

Cisco Systems, gathered for the fourth consecutive day, rising 1 percent to 23.31 for progress only in the Dow Jones. The company topped estimates ofanlysts expected profit and third-quarter revenue will rise 23 percent to 26 percent from the previous year has also resumed spending customers to deal with the increase in Internet traffic.

Hotels & Resorts Worldwide, Inc. company rose 4.7 percent to $ 37.12 for the second-largest made in the Standard & Poor’s 500. Owner of the St. Regis and W hotel brands from the fourth-quarter profit excluding items more than once that beat estimates on cost-cutting and the sale of assets.

Abercrombie & Fitch Co. gained 5.9 percent to 33.85. Teen clothing stores said January same store sales advanced 8 percent.

U.S. stocks fell yesterday, as Pfizer Inc. ‘s late projections of profit and a report showed service industries expanded less than expected. And Standard & Poor’s 500 has risen 62 percent since March, governments and central banks have maintained a global level and low interest rates and committed more than $ 12 trillion to stimulate economic growth.

- Author: Michael Regan, Chris Nagi

To connect to reporters about this topic: Nikolaj Gammeltoft in New York or +1-212-617-1061 ngammeltoft@bloomberg.net

To contact the editor responsible for this story: Nick Baker +1-212-617-5919 or nbaker7@bloomberg.net.

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