Consumer confidence fell to the lowest
Global Market
Confidence among U.S. consumers fell after employers fired workers and gasoline prices surged. The preliminary index of consumer sentiment decreased to 63.2 this month, when the jobless rate approached 11 percent. Meanwhile the cost of imported goods climbed 14.8 percent, led by oil. The reports validate concern that the economy will shrink in the first half of the year, and traders now anticipate Fed will lower its rate by another half point. US are confronting the loss of 232,000 jobs, along with higher costs and overall weakening in the economy. Consumer spending will advance at the weakest rate. Import prices rose 2.8 percent. Expenses excluding fuels jumped 0.9 percent. Import prices were forecast to rise 2 percent.
The index of consumer expectations fell to 53.4. Consumer spending will rise at annual pace of 0.5 percent. That would be the smallest gain since purchases fell. The economy will not expand at the first six months of this year. Analyst also projected the world's largest economy is, or will soon be, in a recession. Job losses may continue. Report said that the number of people remaining on unemployment-benefit rolls rose.
Higher energy costs have weighed on consumers outlooks. Gasoline remain high at an average of $3.54 a gallon.
Fed anticipated the economy will shrink in the first half and expressed concern about a prolonged and severe economic downturn as they cut interest rates.
Group of Seven nations said the global economic slowdown may worsen amid an entrenched credit squeeze and signaled concern over the dollar's slide.
They downgraded outlook for the world economy, blaming the U.S. housing recession, credit-market turmoil, commodity prices and inflation pressures. They urged financial companies to fully disclose in their mid-year earnings reports their investments at risk of loss. Firms should establish fair value estimates for the complex assets that investors have shunned and boost their capital as needed. The G-7 pledged to implement further monetary and fiscal policies as appropriate without giving details.
The G7 met after IMF estimated a global recession this year. A collapse in U.S. subprime mortgages has pushed the U.S. to contraction and prompted banks to shun lending after asset writedowns and credit losses since 2007. While the dollar's drop help support the U.S. economy by boosting exports, its triggered criticism from abroad worried about the impact. The G-7 may fail to reverse the dollar's slump because they don’t want to intervene and the U.S. economy is weaker than its counterparts. Meanwhile The G-7 urged China to allow accelerated appreciation in its currency, while acknowledging its recent rise through 7 per dollar.
Other than promising to ensure orderly financial markets, they stopped short of introducing new measures to boost liquidity, even as the cost of borrowing euros and dollars for three months holds. The group said previous efforts by some central banks to bolster liquidity were helping.
Stock Market
U.S. stocks tumbled after General Electric Co. stunned investors with a decline in profit and consumer confidence fell to the lower. GE slumped because of failed asset sales and losses at its finance businesses.
The S&P 500 sank 27.72 points to 1,332.83. The Dow average tumbled 256.56 to 12,325.42. The Nasdaq Composite Index dropped 61.46 to 2,290.24.
GE's results capped the earnings season projected with declining profits. Alcoa Inc. posted earnings that trailed estimates and Advanced Micro Devices Inc. said first-quarter sales fell short of forecasts. The next day United Parcel Service Inc. lowered its earnings estimate because of higher fuel prices and a weakening economy.
Stocks also retreated after the index of confidence among U.S. consumers slumped to a 63.2 as the labor market continued to weaken and gasoline prices rose.
GE lost $4.70 to $32.05. Their profit from continuing operations dropped to $4.36 billion, or 44 cents a share, trailing the estimate of 51 cents. GE's miss came without warning after it was forced to reduce the value of some securities as capital markets seized. Analyst downgraded GE to neutral after profit decline raises credibility concerns. Industrial stocks fell after GE's report signaled the U.S. economy may be worsening.
United Technologies slid $2.32 to $69.53. Honeywell lost $1.81 to $56.99. 3M slid $1.88 to $78.47.
Financial stocks declined 1.8 percent, led by JPMorgan Chase & Co. and American International Group Inc. Analyst said the global credit market crisis worsened and recovery may take until next year. JPMorgan lost $1.33 to $42.53. AIG dropped $1.51 to $44.05. Washington Mutual Inc. slid 47 cents to $10.95 after analysts recommended selling the shares short. They probably lose $3.30 a share this year. BlackRock Inc. fell $12.89 to $207.50. The stock downgraded by analysts.
Frontier Airlines Holdings Inc. plunged $1.09 to 48 cents after they filed for bankruptcy protection. They did it after its main credit-card processor began withholding proceeds from ticket sales.
CIT Group Inc. dropping 57 cents to $11.79 on concern that earnings may be worse than forecast. Analyst lowered profit estimate 56 percent to $1.95 a share, forecasting lower fee revenue and losses from student lending.
Hershey Co. dropped $2.46 to $35.89. Their rate was cut to underperform by analysts. Their annual earnings estimate to $1.81 a share on weaker sales growth.
Nvidia Corp. is declining $1.35 to $18.53. The stock price target lowered by analyst to $22 from $24 and said slowing demand is likely to hurt the company.
Currencies
The pace of the dollar's decline against the major currencies may slow after Group of Seven expressed concern about fluctuations in exchange rates.
The Dollar Index has tumbled amid concern that credit-market losses will push the U.S. economy into a recession. The Dollar Index traded declined to 71.799. The G-7 statement was released after the close of trading.
Against the euro, the dollar fell to $1.5831. The U.S. currency dropped 0.7 percent to 100.77 yen. The Swiss franc advanced to 0.9999 per dollar and to 1.5834 per euro. The yen was at 159.56 per euro.
The euro failed to push through $1.60 as ECB said that financial-market tension may have a broader than currently expected impact on the real economy. The pound fell against the euro on bets the Bank of England will keep cutting interest rates.
The yen and Swiss franc rose against major currencies as investors reduced carry trades.
Commodities
Oil
Crude oil was little changed after the International Energy Agency cut its 2008 global oil-demand forecast. The IEA reduced its outlook by 310,000 barrels to 87.23 million barrels a day. General Electric Co reported decline in quarterly profit and missing analyst estimates.
Crude oil for May delivery rose 3 cents to $110.14 a barrel. Brent crude for May delivery rose 55 cents to $108.75 a barrel.
Demand will fall 410,000 barrels to 20.38 million barrels a day according to the IEA report. Strong demand in Asia and Middle East will keep global consumption growth.
Confidence among U.S. consumers sank as the labor market weakened and gasoline prices rose. The preliminary index of consumer sentiment decreased to 63.2, lower than forecast. The U.S. consumes a quarter of the world's oil.
The U.S. economy will not expand during the first six months of this year. Analyst projected US economy is, or will soon be, in a recession.
U.S. gasoline demand at the pump was down 6.8 percent from a year earlier.
Gold
Gold and silver fell on speculation the precious-metals rally will falter after prices failed to keep pace with crude oil and the euro.
Gold futures for June delivery fell $4.80 to $927 an ounce. Silver futures for May delivery fell 35.3 cents to $17.69 an ounce. A decline in crude-oil prices also hurt gold's demand. Oil futures are dropping to $108.92 a barrel.
Gold's losses were limited as the euro traded higher against the dollar on speculation the Group of Seven meeting are unlikely to agree on a plan to support the dollar. Weak earnings from U.S. companies also steer investors away from equities and toward gold.
Gold may top $1,200 this year on demand for a hedge against credit-market turmoil as output by mining companies lags behind consumption.
Confidence among U.S. consumers fell after employers fired workers and gasoline prices surged. The preliminary index of consumer sentiment decreased to 63.2 this month, when the jobless rate approached 11 percent. Meanwhile the cost of imported goods climbed 14.8 percent, led by oil. The reports validate concern that the economy will shrink in the first half of the year, and traders now anticipate Fed will lower its rate by another half point. US are confronting the loss of 232,000 jobs, along with higher costs and overall weakening in the economy. Consumer spending will advance at the weakest rate. Import prices rose 2.8 percent. Expenses excluding fuels jumped 0.9 percent. Import prices were forecast to rise 2 percent.
The index of consumer expectations fell to 53.4. Consumer spending will rise at annual pace of 0.5 percent. That would be the smallest gain since purchases fell. The economy will not expand at the first six months of this year. Analyst also projected the world's largest economy is, or will soon be, in a recession. Job losses may continue. Report said that the number of people remaining on unemployment-benefit rolls rose.
Higher energy costs have weighed on consumers outlooks. Gasoline remain high at an average of $3.54 a gallon.
Fed anticipated the economy will shrink in the first half and expressed concern about a prolonged and severe economic downturn as they cut interest rates.
Group of Seven nations said the global economic slowdown may worsen amid an entrenched credit squeeze and signaled concern over the dollar's slide.
They downgraded outlook for the world economy, blaming the U.S. housing recession, credit-market turmoil, commodity prices and inflation pressures. They urged financial companies to fully disclose in their mid-year earnings reports their investments at risk of loss. Firms should establish fair value estimates for the complex assets that investors have shunned and boost their capital as needed. The G-7 pledged to implement further monetary and fiscal policies as appropriate without giving details.
The G7 met after IMF estimated a global recession this year. A collapse in U.S. subprime mortgages has pushed the U.S. to contraction and prompted banks to shun lending after asset writedowns and credit losses since 2007. While the dollar's drop help support the U.S. economy by boosting exports, its triggered criticism from abroad worried about the impact. The G-7 may fail to reverse the dollar's slump because they don’t want to intervene and the U.S. economy is weaker than its counterparts. Meanwhile The G-7 urged China to allow accelerated appreciation in its currency, while acknowledging its recent rise through 7 per dollar.
Other than promising to ensure orderly financial markets, they stopped short of introducing new measures to boost liquidity, even as the cost of borrowing euros and dollars for three months holds. The group said previous efforts by some central banks to bolster liquidity were helping.
Stock Market
U.S. stocks tumbled after General Electric Co. stunned investors with a decline in profit and consumer confidence fell to the lower. GE slumped because of failed asset sales and losses at its finance businesses.
The S&P 500 sank 27.72 points to 1,332.83. The Dow average tumbled 256.56 to 12,325.42. The Nasdaq Composite Index dropped 61.46 to 2,290.24.
GE's results capped the earnings season projected with declining profits. Alcoa Inc. posted earnings that trailed estimates and Advanced Micro Devices Inc. said first-quarter sales fell short of forecasts. The next day United Parcel Service Inc. lowered its earnings estimate because of higher fuel prices and a weakening economy.
Stocks also retreated after the index of confidence among U.S. consumers slumped to a 63.2 as the labor market continued to weaken and gasoline prices rose.
GE lost $4.70 to $32.05. Their profit from continuing operations dropped to $4.36 billion, or 44 cents a share, trailing the estimate of 51 cents. GE's miss came without warning after it was forced to reduce the value of some securities as capital markets seized. Analyst downgraded GE to neutral after profit decline raises credibility concerns. Industrial stocks fell after GE's report signaled the U.S. economy may be worsening.
United Technologies slid $2.32 to $69.53. Honeywell lost $1.81 to $56.99. 3M slid $1.88 to $78.47.
Financial stocks declined 1.8 percent, led by JPMorgan Chase & Co. and American International Group Inc. Analyst said the global credit market crisis worsened and recovery may take until next year. JPMorgan lost $1.33 to $42.53. AIG dropped $1.51 to $44.05. Washington Mutual Inc. slid 47 cents to $10.95 after analysts recommended selling the shares short. They probably lose $3.30 a share this year. BlackRock Inc. fell $12.89 to $207.50. The stock downgraded by analysts.
Frontier Airlines Holdings Inc. plunged $1.09 to 48 cents after they filed for bankruptcy protection. They did it after its main credit-card processor began withholding proceeds from ticket sales.
CIT Group Inc. dropping 57 cents to $11.79 on concern that earnings may be worse than forecast. Analyst lowered profit estimate 56 percent to $1.95 a share, forecasting lower fee revenue and losses from student lending.
Hershey Co. dropped $2.46 to $35.89. Their rate was cut to underperform by analysts. Their annual earnings estimate to $1.81 a share on weaker sales growth.
Nvidia Corp. is declining $1.35 to $18.53. The stock price target lowered by analyst to $22 from $24 and said slowing demand is likely to hurt the company.
Currencies
The pace of the dollar's decline against the major currencies may slow after Group of Seven expressed concern about fluctuations in exchange rates.
The Dollar Index has tumbled amid concern that credit-market losses will push the U.S. economy into a recession. The Dollar Index traded declined to 71.799. The G-7 statement was released after the close of trading.
Against the euro, the dollar fell to $1.5831. The U.S. currency dropped 0.7 percent to 100.77 yen. The Swiss franc advanced to 0.9999 per dollar and to 1.5834 per euro. The yen was at 159.56 per euro.
The euro failed to push through $1.60 as ECB said that financial-market tension may have a broader than currently expected impact on the real economy. The pound fell against the euro on bets the Bank of England will keep cutting interest rates.
The yen and Swiss franc rose against major currencies as investors reduced carry trades.
Commodities
Oil
Crude oil was little changed after the International Energy Agency cut its 2008 global oil-demand forecast. The IEA reduced its outlook by 310,000 barrels to 87.23 million barrels a day. General Electric Co reported decline in quarterly profit and missing analyst estimates.
Crude oil for May delivery rose 3 cents to $110.14 a barrel. Brent crude for May delivery rose 55 cents to $108.75 a barrel.
Demand will fall 410,000 barrels to 20.38 million barrels a day according to the IEA report. Strong demand in Asia and Middle East will keep global consumption growth.
Confidence among U.S. consumers sank as the labor market weakened and gasoline prices rose. The preliminary index of consumer sentiment decreased to 63.2, lower than forecast. The U.S. consumes a quarter of the world's oil.
The U.S. economy will not expand during the first six months of this year. Analyst projected US economy is, or will soon be, in a recession.
U.S. gasoline demand at the pump was down 6.8 percent from a year earlier.
Gold
Gold and silver fell on speculation the precious-metals rally will falter after prices failed to keep pace with crude oil and the euro.
Gold futures for June delivery fell $4.80 to $927 an ounce. Silver futures for May delivery fell 35.3 cents to $17.69 an ounce. A decline in crude-oil prices also hurt gold's demand. Oil futures are dropping to $108.92 a barrel.
Gold's losses were limited as the euro traded higher against the dollar on speculation the Group of Seven meeting are unlikely to agree on a plan to support the dollar. Weak earnings from U.S. companies also steer investors away from equities and toward gold.
Gold may top $1,200 this year on demand for a hedge against credit-market turmoil as output by mining companies lags behind consumption.
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