Fall in U.S. Sparks a Decline in Global Markets

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Author: 123jump.com Staff
123jump.com
Last Update: 7:49 AM EST January 15 2008

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U.S. stocks fell sharply as investors grew nervous of the impending slow-down in the economy. The growing perception that the ongoing housing market correction will eventually slow-down the economy. Citigroup reported 70% decline in revenue and a loss of $9.8 billion on $18.1 billion write down related to subprime and consumer lending. Merrill and Citigroup are in deals to secure $21 billion in investments from investors in Singapore, Japan, Korea, and Middle East. Intel earnings jumped 51%.

The Australian dollar closed half a US cent higher today heightening expectations that interest rates will fall in the US, making Australian investments more attractive.

At the close, the dollar was trading at US$0.8997, up from yesterday''s close of US$0.8944.

The U.S. Federal Reserve Bank is widely anticipated to cut interest rate at the end of this month. The move would widen the interest rate differential between the U.S. and Australia.

Of the ASX 200 index shares, Energy Resource Australia led the gainers with a rise of 9% followed by increases in Lynas Corporation Limited of 8%, in Paladin energy of 7.2%, in Henderson of 5.2%, and in Kagara limited of 5.1%.

Of the ASX 200 index stocks, Centro Retail led the decliners with a fall of 44.4% followed by losses in Centro Properties of 30.2%, in MFS Limited of 19.3%, in Sundance Resource of 8.5% and in Transfield Service of 6.7%.

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