Stocks: Tuesday’s review
Asian stocks tumbled, sending the regional benchmark index toward its lowest close in more than a year, after the U.S. Federal Reserve warned of “significant downside risks to the economic outlook” and Moody’s Investors Service cut its debt ratings on some American banks.
HSBC Holdings Plc, plunged 3.6 percent in Hong Kong as the currency union’s risk watchdog said threats to the financial system have increased “considerably.”
BHP Billiton Ltd. , the world’s largest mining company, slumped 4 percent in Sydney as copper futures entered a bear market.
Toyota Motor Corp. declined 1.7 percent in Tokyo and South Korea’s Samsung Electronics Co., which makes close to 80 percent of its revenue overseas, dropped 2.8 percent in Seoul.
Banks dropped after the Federal Reserve’s warning of growing “strains in global financial markets” and the European Systemic Risk Board said threats to the financial system have increased “considerably” amid a worsening debt crisis in Europe. The International Monetary Fund said the sovereign-debt issue has generated as much as 300 billion euros ($410 billion) in credit risk for European banks.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by market value, lost 1.5 percent to 332 yen in Tokyo and HSBC, which receives more than half its revenue from Europe, sank 3.6 percent to HK$60.65.
European stocks tumbled to a two- year low as the Federal Reserve signaled “significant downside risks” to the world’s largest economy and Moody’s Investors Service downgraded three U.S. banks.
National benchmark indexes retreated in all of the 18 western European markets. Germany’s DAX Index declined 5 percent and France’s CAC 40 dropped 5.3 percent. The U.K.’s FTSE 100 slid 4.7 percent, the most since March 2009.
Logitech International SA (LOGN), the world’s biggest maker of computer mice, plunged 12 percent after cutting its forecasts for the second time in two months. Rio Tinto Group, the world’s second-largest mining company, sank the most in more than two years as copper fell for a fifth day. LVMH Moet Hennessy Louis Vuitton SA (MC) and Burberry Group Plc (BRBY) led luxury stocks lower.
BNP Paribas SA, France’s biggest bank, retreated 5.7 percent to 23.06 euros. Chief Executive Officer Baudouin Prot said the bank plans “significant” staff reductions at its investment-banking unit as the lender cuts total assets by about 10 percent. Societe Generale (GLE) SA, France’s second-largest by assets, slid 9.6 percent to 15.31 euros, the lowest since 1992.
Lloyds Banking Group Plc (LLOY), Britain’s biggest mortgage lender, lost 10 percent to 32.51 pence while Barclays Plc (BARC) sank 9.4 percent to 138.85 pence. Raiffeisen Bank International AG (RBI) fell 8.4 percent to 20.25 euros.
U.S. stocks slumped, giving the Dow Jones Industrial Average its biggest two-day decline since December 2008, amid investors’ concern that policy makers are running out of tools to avoid another global economic recession.
Main stock indexes Wall Street, the session on Thursday substantial losses after some time started to be traded mixed in a downtrend. Before the end of trading the indices showed gains, but failed to even partially offset the incurred losses during the day. Following the session the index lost more than 3%.
All sectors of the S & P closed today in the red zone. The maximum loss showed sector conglomerates and the basic materials sector - 6.8% and 6.7% respectively.
Shares of Goodrich gained 10% after the aircraft-components maker agreed to be acquired by blue-chip conglomerate United Technologies for $16.4 billion in cash. United Technologies fell 9.2%. FedEx slipped 8.2% after the package-delivery service reported fiscal first-quarter results that were higher than expected, but said it slightly reduced its earnings outlook as it looked to adjust its cost structure to match lower demand. Red Hat gained 3%. The software company reported better-than-expected fiscal second-quarter results.
Shares of Bank of America Corp. (BAC) fell by 5%, Citigroup Inc.(C) fell by 6.1%.