Fed Auctions $20 B, Morgan Stanley Losses

Market Update Analysis:

Author: 123jump.com Staff
123jump.com
Last Update: 5:06 PM EST December 19 2007

The U.S. Federal Reserve received bids three times the $20 billion of term loan it auctioned today at a rate 4.65%, below the discount rate of 4.75%. The Fed auction was conducted to ease the credit market crunch but most analysts believe that problems in the market will persist. Yesterday ECB pumped $500 billion of liquidity in the market. Morgan Stanley reported higher losses from its sub-prime lending and attracted $5 billion in investment from China. Oralce earnings jumped 35%.

4:30PM New York, 10:30PM Frankfurt, 8:30AM Sydney

Global Markets Indexes

Dow Jones Industrial Average closed down 25.20 or 0.19% to a close of 13,207.27, S&P 500 edged lower 0.14% or 1.98 to 1,453.00, and Nasdaq Composite Index traded up 4.98 or 0.2% to a close of 2,601.01. In Toronto TSX Composite gained 31.75 or 0.24% to close at 13,389.82.

Of the 30 stocks in Dow Jones Industrial Average, 13 closed higher, 17 closed lower, and none were unchanged.

Disney led the decliners in the index with a loss of 2.27% followed by losses in McDonalds of 1.52%, in du Pont of 1.39%, in AT&T of 1.28%, and in 3M Company of 1.12%. Altria led the gainers in the index with a rise of 1.15% followed by increases in Intel of 1.04%, in IBM of 1.02%, and in Coca Cola of 1.00%.

Of the stocks in S&P 500, 213 closed higher, 284 fell, and 3 were unchanged.

Eighteen stocks fell more than 3% and sixteen stocks rose more than 3%.

VF Corp led the gainers in the index with a rise of 7.73% followed by increases in C.R. Bard of 7.01%, in Juniper Networks of 4.78%, in Intercontinental of 4.5%, in Jabil Circuit of 4.3%, and in Morgan Stanley of 4.2%. Darden Restaurants led the decliners in the index with a loss of 21.3% followed by losses in SLM Corp of 20.7%, in Celgene Corp of 5.1%, in First Horizon of 5.1%, and in CIT Group of 4%.

In London FTSE 100 Index up 5.20 or 0.14% to 6,297.00, in Paris CAC 40 Index decreased 11.95 or 0.22% to close at 5,497.42, and in Frankfurt DAX index also decreased 13.42 or 0.17% to close at 7,837.32. In Zurich trading SMI closed down 72.11 or 0.85% to close at 8,394.96.

In Tokyo Nikkei 225 Index decline 177.35 or 1.17% to close down at 15,030.51, in Hong Kong Hang Seng index closed up 296.39 or 1.11% to 27,029.26, in Australia ASX 200 closed lower by 11.80 or 0.19% to close 6,280.80.

In South Korea Kospi Index increased 21.65 or 1.18% to close at 1,861.47, Thailand closed down 8.92 or 1.10% to 804.98, and Indonesia edged up by 11.75 or 0.44% to 2,657.98. India increased by 12.32 or 0.06% to 19,091.96.

In Latin Markets Peru led the gainers with a rise of 1.9% followed by increases in Brazil of 1.02%, in Colombia of 0.93%, in Chile of 0.3%, and in Argentina of 0.21%. Mexico lost 0.6%.

Bond Yields decreased on 10-year U.S. bonds to 4.03% and 30-year bonds declined to 4.45%.

Commodities, Metals, and Currencies

Crude oil rose $1.21 to close at $91.29 per barrel for a front month contract, natural gas increased 3 cents to $7.17 per mBtu, and gasoline futures increased 2.97 cents to close at 233.40 cents per gallon.

Gold edged lower $2.00 in New York trading to close at $805.40 per ounce, silver closed up 6 cents to $14.22 per ounce, and copper for front month delivery gained 7.35 cents to 295.80 per pound and in London futures fell $2.25 to $6,348.25.

Dollar edged higher against euro to $1.4378 and higher to 113.4080 yen.

12:00PM New York – U.S. stocks turned negative after opening higher.

Market averages opened higher in the face of weaker than expected earnings from Morgan Stanley and Palm. Stock market appears to welcome the decision by a sovereign fund controlled by China to invest $5 billion in Morgan Stanley.

Dow Jones Industrial Average lost 35.20 to 13,195.45, Nasdaq added 0.89 to 2,596.54, and S&P 500 decreased 2.68 to 1,452.30.

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