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Market Update Analysis: 
Fed Minutes Drag Stocks Lower, Crude Surges
Author: 123jump.com Staff
123jump.com
Last Update: 4:47 PM EDT May 21 2008


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U.S. stocks fell after the Fed minutes showed that future rate cuts may not be necessary unless the economy deteriorates further. The Fed officials appear to think that risks of inflation and impediments to growth appear to be in balance. The Fed monetary policies have come under heavy criticism and follow in the footsteps of the loose credit path initiated during the Greenspan time. The U.S. stocks fell sharply after the minutes release and crude oil surged above $133 a barrel.

 
In Tokyo Nikkei 225 Index closed lower 233.79 or 1.65% to 13,926.30, in Hong Kong Hang Seng index increased 290.83 or 1.16% closed to 25,460.29. In Australia ASX 200 index lower 84.70 or 1.43% to close 5,823.40. In Malaysia KL Composite index decreased 6.23 or 0.48% closed to 1,281.20.

In South Korea Kospi Index decreased 25.64 or 1.37% to close at 1,847.51, in Thailand SET index closed higher 10.37 or 1.19% to 884.19 and Indonesia JSE Index edged decreased 16.25 or 0.65% to 2,494.71. Sensex index in India increased 12.98 or 0.08% to 17,243.16.

Commodities, Metals, and Currencies

Crude oil increased $4.77 to close at $133.75 a barrel for a front month contract, natural gas increased 33 cents to $11.70 per mBtu, and gasoline futures increased 10.40 cents to close at 340.84 cents per gallon.

Gold increased $8.40 in New York trading to close at $928.60 per ounce, silver closed up 32 cents to $18.05 per ounce, and copper for front month delivery decreased 2.80 cents to $3.74 per pound.

Wheat futures decreased 6.00 cent in Chicago trading and closed at $7.78 per bushel. Sugar decreased 3 cent to $10.60 per pound. Soybean future closed up 17.50 cents to $13.49 a bushel.

Dollar edged lower and traded near record low against euro to $1.5791 and fell against yen to 103.02.

Yields on U.S. bonds increased to 3.80% with 10 years of maturities and increased to 4.54% with 30-year of maturities.
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