Commodities rise sharp, oil get new record high
Global Market
UBS AG may have to eliminate as much as 35 percent of employees as leveraged lending dwindles and the pace of mergers and acquisitions slows. Some of the largest financial conglomerates may break up as Wall Street shifts focus to furnishing them with strategic advice. Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months.
UBS is seeking approval for a 15 billion-Swiss franc ($14.8 billion) capital increase. A bet on mortgage securities led to almost $38 billion of writedowns and 25 billion francs of losses. The leveraged credit market may not return to 2007 levels for five or six years. Standard & Poor's estimated that UBS still hold about $213 billion of leveraged loans they can't sell.
Goldman Sachs Group Inc. lost money in more trading day compare to Morgan Stanley or Lehman Brothers Holdings Inc. Goldman lost money on 17 days, compared with eight days at Morgan Stanley and seven at Lehman Brothers. Goldman's trading department had $100 million on 28 days, compared with 20 days at Morgan Stanley and Lehman reported made $90 million on 13 days.
Goldman declined $2.99 to $175.91. Lehman dropped $1.27 to $42.40 and Morgan Stanley fell 96 cents to $46.39.
Stock Market
U.S. stocks fell after United Parcel Service Inc. said shipments are slowing, Wall Street firms reported more securities that may be vulnerable to writedowns and oil climbed to a record.
UPS tumbled after saying first-quarter profit was hurt by higher fuel costs and a weakening economy. Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. dropped after reporting more assets freeze. Amazon.com Inc. posted its decline on an analyst report that reduced spending may curb earnings.
The Standard & Poor's 500 Index fell 11.05 points to 1,354.49. The Dow Jones Industrial Average lost 49.18 to 12,527.26. The Nasdaq Composite Index decreased 26.64 to 2,322.12.
Analysts have cut first-quarter earnings forecast as evidence grows at financial firms have pushed the economy into a recession. First-quarter profits at S&P 500 companies probably fell 11.3 percent.
UPS slumped $2.74 to $70.57. Earnings were 86-87 cents a share, missing the company's projection of 94-98 cents.
Retailers fell 2.3 percent, led by Amazon.com Inc. decline. Google Inc. lost $3.62 to $464.19. Analyst said they cautious on Internet firms given the apparent deceleration of the economy. The analyst said Amazon and Google are probably at greater risk than other top online companies.
Goldman fell $4.76 to $174.14. Morgan Stanley retreated $1.25 to $46.10. Lehman decreased $3.13 to $40.54. Freeze assets increased 39 percent at Goldman, 6.1 percent at Morgan Stanley and 1.3 percent at Lehman. More assets have become difficult to value as investors shunned a wider array of credit, freezing the trading of securities.
Circuit City Stores Inc. lost 8 cents to $4.45. They said sales at stores fell 10 percent in the fourth quarter and forecast a wider loss this quarter. Oil's advance to $112.21 a barrel also weighed on retailers. Energy companies gained, led by Exxon Mobil Corp. which added 9 cents to $89.70.
US economy will not grow at January through June. More and more analyst now forecast that U.S. is, or soon be, in a recession.
Boeing Co. is rising $3.58 to $78.60. They said a postponement in its delivery schedule for the Dreamliner doesn't change profit projections.
Financial stocks gained earlier after Citigroup Inc. talks to sell $12 billion of loans to Apollo Management LP, Blackstone Group LP and TPG Inc. It would shield Citigroup from further declines in the value of the debt. Citigroup lost 18 cents to $23.58 after earlier rising as much as 54 cents.
Washington Mutual Inc. decreased 36 cents to $11.45. They rejected an offer from JPMorgan Chase & Co. to buy it for $8 a share, before announcing it received $7 billion capital infusion from a group led by TPG Inc.
MGIC Investment Corp., PMI Group Inc. and Radian Group Inc. dropped after S&P cut their credit ratings and said they may lose money through next year.
MGIC retreated 59 cents to $10.90. PMI declined 51 cents to $5.66. Radian fell 74 cents to $5.14. MBIA Inc. They has posted record losses because of guarantees on mortgage- related securities, slipped $1.02 to $11.97.
AMR Corp. lost $1.15 to $9.17. American canceled 1,000 flights today to reinspect jets. It stranded an estimated 110,000 travelers and follows 460 flights. UAL Corp.'s United Airlines lost $1.57 to $21.16. US Airways Group Inc. dropped $1.03 to $8.84.
Memory-chip makers gained after Elpida Memory Inc. raised prices 10 percent for module makers. SanDisk Corp. climbed $1.66 to $27.21. Micron Technology Inc. added 23 cents to $6.77. Inventories at U.S. wholesalers rose more than forecast, reflecting the biggest slump in sales. Federal Reserve officer said the housing market hasn't hit bottom and acknowledged that recent interest-rate cuts haven't lowered borrowing costs for households and companies.
Currencies
The dollar traded near of its record low against the euro on bets the Federal Reserve will cut borrowing costs by a quarter-percentage point while ECB stays on hold today.
The U.S. currency fell against the yen after IMF cut its U.S. growth forecast and said the dollar was on the strong side. The British pound dropped versus the euro as a report of U.K. consumer confidence declined.
The dollar traded at $1.5833 per euro. The U.S. currency traded at 101.78 yen. The yen traded at 161.15 per euro. The pound weakened beyond 80 pence per euro as a report showed U.K. consumer confidence slid to the lowest level. Analyst forecast that BOE will cut the main rate by a quarter-percentage point.
The dollar weakened as the IMF urged U.S. to strengthen their response to the housing slump and called ECB to lower rates as the global economy cools. Meanwhile ECB will leave its main refinancing rate at 4 percent. Traders added to bets that the Fed will lower its rate for by a half-percentage point.
Crude oil surged to $112.21 a barrel, boosting concern of U.S. inflation. It will accelerate inflation and the economy will slow. The euro's gains may accelerate and push the currency to $1.63.
Commodities
Oil
Oil was little changed after touching a record $112.21 a barrel following an unexpected decline in U.S. crude supplies.
The 3.1 million-barrel drop in US stockpiles reported sent the price up. Gasoline futures jumped 2.6 percent to the highest. At the pump, U.S. consumers pay $3.343 a gallon.
Crude oil for May delivery fell 31 cents to $110.56 a barrel. Futures climbed $2.37 to settle at $110.87 a barrel. Gasoline for May delivery fell to $2.7729 a gallon. Futures had reached $2.8228. U.S. pump prices are following futures higher. Regular gasoline rose 1.2 cents to the record. Diesel prices advanced 1.2 cents to $4.032 a gallon.
Rising fuel prices and cooling demand will produce losses at U.S. airlines. US airlines have started charging passengers for additional fee to blunt rising fuel costs.
Fed said that inflation has been a source of concern with higher commodity prices and the weaker dollar. And they expect inflation to moderate in coming quarters, with a leveling out of commodity prices and slower global growth will help US recovery.
Supplies of gasoline and distillate fuel also fell. Gasoline inventories dropped to 221.3 million. Crude-oil imports fell to 8.91 million barrels.
Heating oil for May delivery rose 12.43 cents to $3.2345 a gallon. Supplies of distillate fuel fell 3.7 million barrels. Compare with 1.5 million barrel decline was forecast. Brent crude for May settlement rose $2.13 to $108.47 a barrel
Gold
Gold rebounded after the dollar fell against the euro and crude-oil futures surged to a record. Silver also gained.
The dollar fell 1 percent against the euro. Oil climbed to $112.21 a barrel. Gold futures for June delivery rose $19.50 to $937.50 an ounce. Silver futures for May delivery climbed 49.2 cents to $18.20 an ounce.
Gold's gains accelerated as investors sought an inflation hedge after report on U.S. stockpiles unexpectedly dropped.
Gold may rise to $1,200 on demand for a hedge against credit-market turmoil, while output by mining companies trails consumption.
UBS AG may have to eliminate as much as 35 percent of employees as leveraged lending dwindles and the pace of mergers and acquisitions slows. Some of the largest financial conglomerates may break up as Wall Street shifts focus to furnishing them with strategic advice. Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months.
UBS is seeking approval for a 15 billion-Swiss franc ($14.8 billion) capital increase. A bet on mortgage securities led to almost $38 billion of writedowns and 25 billion francs of losses. The leveraged credit market may not return to 2007 levels for five or six years. Standard & Poor's estimated that UBS still hold about $213 billion of leveraged loans they can't sell.
Goldman Sachs Group Inc. lost money in more trading day compare to Morgan Stanley or Lehman Brothers Holdings Inc. Goldman lost money on 17 days, compared with eight days at Morgan Stanley and seven at Lehman Brothers. Goldman's trading department had $100 million on 28 days, compared with 20 days at Morgan Stanley and Lehman reported made $90 million on 13 days.
Goldman declined $2.99 to $175.91. Lehman dropped $1.27 to $42.40 and Morgan Stanley fell 96 cents to $46.39.
Stock Market
U.S. stocks fell after United Parcel Service Inc. said shipments are slowing, Wall Street firms reported more securities that may be vulnerable to writedowns and oil climbed to a record.
UPS tumbled after saying first-quarter profit was hurt by higher fuel costs and a weakening economy. Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. dropped after reporting more assets freeze. Amazon.com Inc. posted its decline on an analyst report that reduced spending may curb earnings.
The Standard & Poor's 500 Index fell 11.05 points to 1,354.49. The Dow Jones Industrial Average lost 49.18 to 12,527.26. The Nasdaq Composite Index decreased 26.64 to 2,322.12.
Analysts have cut first-quarter earnings forecast as evidence grows at financial firms have pushed the economy into a recession. First-quarter profits at S&P 500 companies probably fell 11.3 percent.
UPS slumped $2.74 to $70.57. Earnings were 86-87 cents a share, missing the company's projection of 94-98 cents.
Retailers fell 2.3 percent, led by Amazon.com Inc. decline. Google Inc. lost $3.62 to $464.19. Analyst said they cautious on Internet firms given the apparent deceleration of the economy. The analyst said Amazon and Google are probably at greater risk than other top online companies.
Goldman fell $4.76 to $174.14. Morgan Stanley retreated $1.25 to $46.10. Lehman decreased $3.13 to $40.54. Freeze assets increased 39 percent at Goldman, 6.1 percent at Morgan Stanley and 1.3 percent at Lehman. More assets have become difficult to value as investors shunned a wider array of credit, freezing the trading of securities.
Circuit City Stores Inc. lost 8 cents to $4.45. They said sales at stores fell 10 percent in the fourth quarter and forecast a wider loss this quarter. Oil's advance to $112.21 a barrel also weighed on retailers. Energy companies gained, led by Exxon Mobil Corp. which added 9 cents to $89.70.
US economy will not grow at January through June. More and more analyst now forecast that U.S. is, or soon be, in a recession.
Boeing Co. is rising $3.58 to $78.60. They said a postponement in its delivery schedule for the Dreamliner doesn't change profit projections.
Financial stocks gained earlier after Citigroup Inc. talks to sell $12 billion of loans to Apollo Management LP, Blackstone Group LP and TPG Inc. It would shield Citigroup from further declines in the value of the debt. Citigroup lost 18 cents to $23.58 after earlier rising as much as 54 cents.
Washington Mutual Inc. decreased 36 cents to $11.45. They rejected an offer from JPMorgan Chase & Co. to buy it for $8 a share, before announcing it received $7 billion capital infusion from a group led by TPG Inc.
MGIC Investment Corp., PMI Group Inc. and Radian Group Inc. dropped after S&P cut their credit ratings and said they may lose money through next year.
MGIC retreated 59 cents to $10.90. PMI declined 51 cents to $5.66. Radian fell 74 cents to $5.14. MBIA Inc. They has posted record losses because of guarantees on mortgage- related securities, slipped $1.02 to $11.97.
AMR Corp. lost $1.15 to $9.17. American canceled 1,000 flights today to reinspect jets. It stranded an estimated 110,000 travelers and follows 460 flights. UAL Corp.'s United Airlines lost $1.57 to $21.16. US Airways Group Inc. dropped $1.03 to $8.84.
Memory-chip makers gained after Elpida Memory Inc. raised prices 10 percent for module makers. SanDisk Corp. climbed $1.66 to $27.21. Micron Technology Inc. added 23 cents to $6.77. Inventories at U.S. wholesalers rose more than forecast, reflecting the biggest slump in sales. Federal Reserve officer said the housing market hasn't hit bottom and acknowledged that recent interest-rate cuts haven't lowered borrowing costs for households and companies.
Currencies
The dollar traded near of its record low against the euro on bets the Federal Reserve will cut borrowing costs by a quarter-percentage point while ECB stays on hold today.
The U.S. currency fell against the yen after IMF cut its U.S. growth forecast and said the dollar was on the strong side. The British pound dropped versus the euro as a report of U.K. consumer confidence declined.
The dollar traded at $1.5833 per euro. The U.S. currency traded at 101.78 yen. The yen traded at 161.15 per euro. The pound weakened beyond 80 pence per euro as a report showed U.K. consumer confidence slid to the lowest level. Analyst forecast that BOE will cut the main rate by a quarter-percentage point.
The dollar weakened as the IMF urged U.S. to strengthen their response to the housing slump and called ECB to lower rates as the global economy cools. Meanwhile ECB will leave its main refinancing rate at 4 percent. Traders added to bets that the Fed will lower its rate for by a half-percentage point.
Crude oil surged to $112.21 a barrel, boosting concern of U.S. inflation. It will accelerate inflation and the economy will slow. The euro's gains may accelerate and push the currency to $1.63.
Commodities
Oil
Oil was little changed after touching a record $112.21 a barrel following an unexpected decline in U.S. crude supplies.
The 3.1 million-barrel drop in US stockpiles reported sent the price up. Gasoline futures jumped 2.6 percent to the highest. At the pump, U.S. consumers pay $3.343 a gallon.
Crude oil for May delivery fell 31 cents to $110.56 a barrel. Futures climbed $2.37 to settle at $110.87 a barrel. Gasoline for May delivery fell to $2.7729 a gallon. Futures had reached $2.8228. U.S. pump prices are following futures higher. Regular gasoline rose 1.2 cents to the record. Diesel prices advanced 1.2 cents to $4.032 a gallon.
Rising fuel prices and cooling demand will produce losses at U.S. airlines. US airlines have started charging passengers for additional fee to blunt rising fuel costs.
Fed said that inflation has been a source of concern with higher commodity prices and the weaker dollar. And they expect inflation to moderate in coming quarters, with a leveling out of commodity prices and slower global growth will help US recovery.
Supplies of gasoline and distillate fuel also fell. Gasoline inventories dropped to 221.3 million. Crude-oil imports fell to 8.91 million barrels.
Heating oil for May delivery rose 12.43 cents to $3.2345 a gallon. Supplies of distillate fuel fell 3.7 million barrels. Compare with 1.5 million barrel decline was forecast. Brent crude for May settlement rose $2.13 to $108.47 a barrel
Gold
Gold rebounded after the dollar fell against the euro and crude-oil futures surged to a record. Silver also gained.
The dollar fell 1 percent against the euro. Oil climbed to $112.21 a barrel. Gold futures for June delivery rose $19.50 to $937.50 an ounce. Silver futures for May delivery climbed 49.2 cents to $18.20 an ounce.
Gold's gains accelerated as investors sought an inflation hedge after report on U.S. stockpiles unexpectedly dropped.
Gold may rise to $1,200 on demand for a hedge against credit-market turmoil, while output by mining companies trails consumption.
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