Foreign Markets
The two day global rally ran out of steam on Thursday as the U.S. and Britain seem at odds of what the focus of the upcoming G20 meeting should be. Prime Minister Gordon Brown wants to talk regulation, while the Obama Administration wants a coordinated global recovery effort. In Europe, the FTSE 100 index of leading British shares was down 62.04 points, or 1.7 %, at 3,631.77, while Germany’s DAX fell 83.73 points, or 2.1 %, to 3,830.37. The CAC-40 in France was 51.81 points, or 1.9 %, lower at 2,622.39.
In Asia, Japan, the world’s second largest economy, saw a positive revision in its 4th quarter GDP; which contracted 3.2 % from the third quarter, compared with the initial estimate for a 3.3 % drop. Japan’s Nikkei 225 stock average fell 177.87 points, or 2.4 %, to 7,198.25. Hong Kong’s Hang Seng was down early in trading, however recovered to gain 0.6 % to 12,001.53.
U.S. Futures
Futures point negative before today’s economic data. Yesterday, the blue chips recorded their first two day gain since early February. Dow Jones industrial average futures fell 52, or 0.8 %, to 6,862. Standard & Poor’s 500 index futures fell 8, or 1.1 %, to 712.50, while Nasdaq 100 index futures fell 10.25, or 0.9 %, to 1,114.75.
Currencies and Commodities
The dollar traded at 96.582 yen, a drop of 0.7175% in the currency market. The euro lost 0.1402% to $1.2818. The pound also depreciated against the dollar, a 0.4624% move to $1.381. Gold gained $5.70 to $916.40 an ounce, while silver rose 0.78% to $12.90 as global equities fell. Light, sweet crude for April delivery gained $1.05, or 2.48% to $43.38 a barrel after selling off yesterday on a bearish inventory report
Corporate News
Freddie Mac (FRE) will request another $30.8 billion on top of the $13.8 billion it received as the government swooped in to save the quasi government mortgage lender. The mortgage finance company posted a loss of $23.9 billion, or $7.37 per share, in the fourth quarter of 2008.
Swiss pharmaceutical company Roche agreed to buy the remaining 44% stake in Genentech (DNA). The deal, approved and recommended by Genentech’s board, offers $95 per share; valuing the remaining 44% that Roche didn’t already own at $46,8 billion.
Smithfield Foods (SFD) reported loss from continuing operations was $21.4 million, or 15 cents per share; revenue climbed 7 % to $3.35 billion. This beat analysts’ expectations of a loss of 27 cents per share on sales of $3.41 billion.
Economic News
The U.S. Labor Department’s report on state unemployment for January showed that 4 states now pose an unemployment rate greater than 10%; California, South Carolina, Michigan and Rhode Island. Michigan’s jobless rate jumped to 11.6 % in January, the highest in the country.
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Jobless Claims: New unemployment claims for the week of March 7th, to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the acceleration of weakness in the economy. The consensus is for an increase of 645K, up from last week’s reading of 639K.
Retail Sales: measure the total receipts at stores that sell durable and nondurable goods. Consumer spending accounts for two-thirds of GDP and is therefore a key element in economic growth. The consensus is for a 0.5% decline in the month of February. That figure is down from an increase of 1.0% in January. The consensus range falls as low as -1.5%.
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Business Inventories: The dollar amount of inventories held by manufacturers, wholesalers, and retailers. The consensus is for a drop in January of 1.0% as businesses stockpile less to match the weary consumer. In December, inventories fell by 1.3%.
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