Concerns over a possible slowdown in China hit Asian stocks for a second day., particularly resource stocks The Nikkei fell .6% to 10086, as exporters fell heavily. Sony shares tumbled 4.5%. The Kospi dropped .7%, the ASX 200 declined .5%, and the Hang Seng eased .2% to 20857. Ironically, China’s Shanghai Composite bucked the trend, inching up .1% to 2378.
In Europe, the major indexes closed mixed after trading in a narrow range all day. The DAX gained .2%, the CAC40 fell .1% and the FTSE closed flat. Food retailer, J Sainsbury rallied 4.5% after beating analyst forecasts.
US stocks closed mostly lower as disappointing home sales data weighed on sentiment. The Dow slid 46 points to 13124, the S&P 500 slipped .2%, and the Nasdaq rose fractionally.
Dow Drops 46 Points
Oracle shares fell 2.3%, surrendering early gains, despite reporting earnings which beat estimates.
Currencies
After rising and falling throughout the day, the currency markets closed near their opening prices. The Euro, Swiss Franc, and Canadian Dollar settled down .1%, while the Pound rose .1%. The Australian Dollar slipped .3% to 1.0450, and the Yen gained .3% to 83.41.
Economic Outlook
Existing home sales dropped .9%, more than expected, to an annualized rate of 4.59M, down from last month’s 4.63M, and the supply of houses rose. Weekly mortgage applications declined, added to concerns over the housing markets recovery.
Weak PMI Data from China and Europe Weighs on Stocks
EquitiesPMI data from China showed industrial activity slowed for a fifth straight month, reinforcing concerns of a slowdown in the region. Nonetheless, consumer stocks gained after the Ministry of Commerce in China said consumption is likely load growth in China. The Shanghai Composite eased .1%, and the Hang Seng rose .2% to 20902. The Nikkei rose .4% to 10127, the ASX 200 advanced .5%, and the Kospi closed down fractionally.
European markets skidded, as negative news from China and and the Euro zone unsettled investors. The CAC40 tanked 1.6%, the DAX sank 1.3%, and the FTSE shed .8%. PMI data from Germany and France, a showed an unexpected drop in manufacturing, stoking fears of another recession. Materials stocks tumbled, dropping 3.4%.
US stocks closed lower, but fared better than their European counterparts. The Dow lost 78 points to 13046, the S&P 500 dropped .7%, and the Nasdaq fell .4%.
Currencies
The Yen surged 1% to 82.57 as growth currencies triggered a flight to safety. The Australian Dollar fell .6%, to 1.0396 and the Canadian Dollar slumped .7% to .9992 as the two commodity currencies dropped. The Euro and Swiss Franc both eased .1%, and the Pound declined .3% to 1.5820.
Economic Outlook
Despite the weakness overseas, the US economy continues to show signs of a modest recovery. Weekly jobless claims fell to 348K, 5K better than last week, and leading indicators rose .7%, better than forecast.
Bernanke’s Comments Trigger Stock Market Rally
EquitiesAsian markets traded mixed on Monday following Friday’s disappointing home sales data from Wall Street,. The Nikkei rose .1% to 10018, the ASX 200 slipped .2%, and the Kospi dropped .4%. In China, the Shanghai Composite rose fractionally, and the Hang Seng settled flat.
European markets rallied in the afternoon as comments by Fed Chairman, Bernanke, suggested further economic easing was likely. Bernanke said the economy must grow quicker to produce more jobs, and suggested that process could be aided by government policies.
The DAX climbed 1.2%, the FTSE advanced .8%, and the CAC40 gained .7%. Germany’s IFO business activity report rose unexpectedly, contributing to the gains.
US stocks posted large gains, encouraged by the Bernanke’s remarks. The Nasdaq surged 1.8%, the S&P 500 climbed 1.4%, and the Dow advanced 161 points to 13242.
Nasdaq Spikes 1.8%
Lions Gate Entertainment jumped 4.5% after the new movie, “The Hunger Games”, netted $214 million in its opening weekend.
Currencies
The Dollar tanked in the currency markets. The Australian Dollar led the gains, rising 1.3% to 1.0536. In Europe, the Euro gained 1.2% to 1.3356, the Swiss Franc rose 1.1% to 1.1074, and the Pound advanced .9% to 1.5968. The Yen bucked the trend, slipping .3% to 82.88.
Economic Outlook
Continuing Friday’s dreary housing news, pending home sales unexpectedly fell .5%. Analysts had forecast a gain of 1% after last month’s 2% jump.
Asia Spikes, West Consolidates, after Monday’s Rally
EquitiesAsian markets jumped in response to Monday’s Wall Street rally, inspired by Bernanke’s suggestion of another round of government stimulus. The Nikkei surged 2.4% to 10255 its highest close in more than a year. The Hang Seng rallied 1.8% to 21047, the ASX 200 climbed .9%, and the Kospi advanced 1% to 2040. The Shanghai Composite bucked the trend, easing .2% to 2347.
In Europe, markets declined, surrendering some of Tuesday’s gains after US consumer confidence data came in below forecasts. The CAC40 slumped .9%, the FTSE slid .6%, while the DAX closed flat. The Royal bank of Scotland advanced 3.3% on rumors of a possible investment by Abu Dhabi’s ruling family.
US stocks closed lower after hovering near break even for most of the session. The Dow declined 44 points to 13198, the S&P 500 lost .3% to 1413, and the Nasdaq settled down .1% at 3120.
Dow Slips 44 Points
Bank of America skidded 3.3% after Baird downgraded the stock.
Currencies
The Dollar traded modestly higher on Tuesday, as currency markets traded in a narrow range. The Australian Dollar shed .5% to 1.0482, the Canadian Dollar lost .3% to .9944, and the Pound traded flat. The Euro and Swiss Franc both declined .2%, and the Yen dropped .3% to 83.10.
Economic Outlook
The Case Shiller home price index showed prices remained flat in January,. Consumer confidence fell to 70.2 from 71.6 last month, slightly below expectations.