TOKYO (Nikkei)--Concerns about a double dip in the economy appear to be weighing less on the minds of business leaders compared to six months ago, according to the results of a quarterly survey conducted by Nikkei Inc.
A total of 34.2% of respondents said they see a double dip as an on going risk, a 6.7 percentage point decline from the 40.9% who saw such risk in March. On the other hand, 25% said they see "almost no" risk of a double dip, while 3.6% said they see "none."
But some respondents warned that conditions were still uncertain. "The domestic economy could continue treading water," warned a top executive at a major nonlife insurer. The chief of a major homebuilding company also asserted that domestic conditions could depend on "political developments and fiscal policy."
Among the 2.1% who pointed to "considerable" risk of a double dip and the 32.1% who cited "some" risk, the largest percentage, 39.5%, predicted it could occur this year, in the October-December quarter, while 31.2% said the first quarter of next year. Respondents thought the main catalyst likely to trigger another downslide would be "fiscal woes in Europe," cited by 77.1%.
Meanwhile, nearly 60% of bosses said the impact of the yuan's appreciation, resulting from the Chinese government's plan to allow the currency more flexibility, on their operations has been "minimal" so far. A mere 0.7% cited the currency's strength as "a major minus," while 17.9% said it was a "slight minus."
And the percentage of chiefs citing excessive facilities at their companies improved to 22.9% in the latest survey compared to a previous 37.3%. A total of 49.3% said they would focus their fiscal 2010 capital spending in Japan. But the emphasis on emerging markets was made clear by the 23.6% who will spend in "China and other regions in East Asia."
Tuesday, June 29, 2010
Tuesday, June 22, 2010
Yuan Appreciation and the affected NYSE Co.
DateTime: 03:33:15 21 Jun 2010
China's signal it will let its yuan currency appreciate is good news for global manufacturers and resource companies that supply the world's third-biggest economy with the equipment and commodities it needs to fuel growth.
China's signal that it will allow its yuan currency to appreciate could make winners out of companies with strong foreign businesses, like machinery maker Caterpillar.
On the other hand, it could dampen the outlook for China's own exporters and commodity producers. A relatively mild yuan appreciation against the dollar of about 5 percent would cause losses at these companies, according to a Reuters poll conducted at China's top trade fair in April.
Following is a list of some likely winners from any yuan appreciation.
Foreign Resource Companies
The shares of Brazilian mining giant Vale [VALE 27.73 0.85 (+3.16%) ] traded in New York picked up gains and were the seventh most actively traded issue on the New York Stock Exchange on Monday.
Freeport-McMoRan Copper & Gold [VALE 27.73 0.85 (+3.16%) ] rose more than three percent and was among the 15 most active stocks in New York.
In Canada, base metal producers Inmet Mining [IEMMF 49.293 3.4593 (+7.55%) ], First Quantum Minerals [FQM-LN 4379.00 245.00 (+5.93%) ] and Teck Resources [TCK 35.81 1.04 (+2.99%) ] all rose on Monday on hopes China's move would increase its resource imports.
Foreign Heavy Machinery Makers
The world's largest maker of earth-moving equipment, Caterpillar [CAT 66.07 0.22 (+0.33%) ], could be a major winner. The U.S. machinery giant sells billions of dollars worth of machinery and products to China each year.
Its group president said on Saturday that Beijing's move would help lift U.S. exports.
Second-ranked Komatsu said every 1 percent rise in the yuan would boost its operating profit by 1.1 billion yen ($12.1 million).
Caterpillar shares were up 0.4 percent late on Monday and Komatsu rose 4.6 percent in Tokyo.
Foreign Automakers
Foreign automakers that sell cars in the world's largest vehicle market, such as BMW, Volkswagen, General Motors, PSA Peugeot Citroen, the Renault-Nissan alliance and Fiat, should also gain.
BMW would benefit the most if the yuan continues to rise against the euro—an outcome that is far from certain—as its auto manufacturing joint venture with Brilliance China imports about half its parts, mainly from Germany.
BMW shares were up 2.7 percent, Volkswagen rose 1 percent, Renault rose 3.6 percent, Nissan rose 2.8 percent, Fiat fell 0.2 percent and Brilliance rose 4.8 percent.
Consumers, Techs
U.S. companies such as General Electric [GE 16.10 0.15 (+0.94%) ], the parent company of CNBC.com, and Procter & Gamble [PG 61.10 -0.20 (-0.33%) ] are likely to make currency exchange gains when their China profits are converted into U.S. dollars.
A spokeswoman for GE, which makes many of the products it sells in China in that country, said the U.S. conglomerate does not expect "any material impact" to its earnings from the change.
Credit Suisse analysts estimated every 10 percent of appreciation of the yuan versus the dollar would boost the revenue and earnings of U.S. electric equipment makers by about 1 percent.
PC maker Lenovo Group [PG 61.10 -0.20 (-0.33%) ], which earned 47 percent of its sales in China in 2009, reports earnings in U.S. dollars. Lenovo shares were up more than 5 percent on Monday.
Yum Brands [YUM 42.79 0.30 (+0.71%) ], which owns the KFC and Pizza Hut fast-food chains and generates more than one-third of its profits from its 3,500 locations in China, regards the move as good news, said spokesman Jonathan Blum.
"China represents our No. 1 growth opportunity and we expect this to be a very positive development over the long-term," Blum said.
No. 1 chipmaker Intel [INTC 21.19 -0.21 (-0.98%) ] expects limited effect from the change, a spokesman said.
"All of Intel's transactions worldwide are conducted in dollars so the effect of currency fluctuations is not a direct one on the company," said spokesman Tom Beermann. "There would be secondary effects if currency valuations caused demand for our products (or products that use our chips) to increase or decline overseas."
Shares of Baidu [BIDU 76.36 2.27 (+3.06%) ], China's top search engine, closed up 3 percent on the Nasdaq Monday. GE, Yum and Lenovo all rose; Procter & Gamble ended down for the day.
(source : CNBC)
China's signal it will let its yuan currency appreciate is good news for global manufacturers and resource companies that supply the world's third-biggest economy with the equipment and commodities it needs to fuel growth.
China's signal that it will allow its yuan currency to appreciate could make winners out of companies with strong foreign businesses, like machinery maker Caterpillar.
On the other hand, it could dampen the outlook for China's own exporters and commodity producers. A relatively mild yuan appreciation against the dollar of about 5 percent would cause losses at these companies, according to a Reuters poll conducted at China's top trade fair in April.
Following is a list of some likely winners from any yuan appreciation.
Foreign Resource Companies
The shares of Brazilian mining giant Vale [VALE 27.73 0.85 (+3.16%) ] traded in New York picked up gains and were the seventh most actively traded issue on the New York Stock Exchange on Monday.
Freeport-McMoRan Copper & Gold [VALE 27.73 0.85 (+3.16%) ] rose more than three percent and was among the 15 most active stocks in New York.
In Canada, base metal producers Inmet Mining [IEMMF 49.293 3.4593 (+7.55%) ], First Quantum Minerals [FQM-LN 4379.00 245.00 (+5.93%) ] and Teck Resources [TCK 35.81 1.04 (+2.99%) ] all rose on Monday on hopes China's move would increase its resource imports.
Foreign Heavy Machinery Makers
The world's largest maker of earth-moving equipment, Caterpillar [CAT 66.07 0.22 (+0.33%) ], could be a major winner. The U.S. machinery giant sells billions of dollars worth of machinery and products to China each year.
Its group president said on Saturday that Beijing's move would help lift U.S. exports.
Second-ranked Komatsu said every 1 percent rise in the yuan would boost its operating profit by 1.1 billion yen ($12.1 million).
Caterpillar shares were up 0.4 percent late on Monday and Komatsu rose 4.6 percent in Tokyo.
Foreign Automakers
Foreign automakers that sell cars in the world's largest vehicle market, such as BMW, Volkswagen, General Motors, PSA Peugeot Citroen, the Renault-Nissan alliance and Fiat, should also gain.
BMW would benefit the most if the yuan continues to rise against the euro—an outcome that is far from certain—as its auto manufacturing joint venture with Brilliance China imports about half its parts, mainly from Germany.
BMW shares were up 2.7 percent, Volkswagen rose 1 percent, Renault rose 3.6 percent, Nissan rose 2.8 percent, Fiat fell 0.2 percent and Brilliance rose 4.8 percent.
Consumers, Techs
U.S. companies such as General Electric [GE 16.10 0.15 (+0.94%) ], the parent company of CNBC.com, and Procter & Gamble [PG 61.10 -0.20 (-0.33%) ] are likely to make currency exchange gains when their China profits are converted into U.S. dollars.
A spokeswoman for GE, which makes many of the products it sells in China in that country, said the U.S. conglomerate does not expect "any material impact" to its earnings from the change.
Credit Suisse analysts estimated every 10 percent of appreciation of the yuan versus the dollar would boost the revenue and earnings of U.S. electric equipment makers by about 1 percent.
PC maker Lenovo Group [PG 61.10 -0.20 (-0.33%) ], which earned 47 percent of its sales in China in 2009, reports earnings in U.S. dollars. Lenovo shares were up more than 5 percent on Monday.
Yum Brands [YUM 42.79 0.30 (+0.71%) ], which owns the KFC and Pizza Hut fast-food chains and generates more than one-third of its profits from its 3,500 locations in China, regards the move as good news, said spokesman Jonathan Blum.
"China represents our No. 1 growth opportunity and we expect this to be a very positive development over the long-term," Blum said.
No. 1 chipmaker Intel [INTC 21.19 -0.21 (-0.98%) ] expects limited effect from the change, a spokesman said.
"All of Intel's transactions worldwide are conducted in dollars so the effect of currency fluctuations is not a direct one on the company," said spokesman Tom Beermann. "There would be secondary effects if currency valuations caused demand for our products (or products that use our chips) to increase or decline overseas."
Shares of Baidu [BIDU 76.36 2.27 (+3.06%) ], China's top search engine, closed up 3 percent on the Nasdaq Monday. GE, Yum and Lenovo all rose; Procter & Gamble ended down for the day.
(source : CNBC)
Monday, June 21, 2010
Stronger Yuan and its Impact To Share Market
China’s airlines and commodities companies, which would benefit from yuan gains that reduce the cost of their overseas purchases, may lead stock gains after the central bank signaled an end to the currency’s peg to the dollar.
The People’s Bank of China pledged to make the yuan more flexible, while ruling out a one-time revaluation of the currency that’s been held at about 6.83 yuan per dollar since mid-2008. A stronger yuan would help airlines reduce dollar- denominated fuel bills and debt incurred from buying Boeing Co. and Airbus SAS planes. Raw materials costs for companies such as China Petroleum & Chemical Corp. would also fall.
Yuan-denominated shares in Shanghai and Shenzhen will rise today as an appreciation of the currency will also help curb inflation and bolster purchasing power in the world’s fastest- growing major economy, according to China International Capital Corp. and Societe Generale SA. China’s benchmark Shanghai Composite Index gained 2.5 percent the day after the nation ended a decade-long peg to the dollar in July 2005.
“An appreciation in the yuan will reduce inflationary pressures and benefit consumption by increasing purchasing power,” said Shi Bo, general manager of Shanghai Elegant Investment Co., which oversees about $278 million in assets. “On balance, a strong yuan is good for China’s efforts to rebalance its economy away from exports to domestic consumption.”
The central bank said June 19 that it will “increase the renminbi’s exchange-rate flexibility” after the economy grew 11.9 percent in the first quarter.
Benefits Employment
An appreciation of the yuan, also known as the renminbi, will benefit exporters and the nation’s employment situation more than it hurts them, the central bank said in a statement. A more flexible currency would also help to curb consumer-price gains, asset bubbles and dependence on exports for growth, it said.
After China’s revaluation of the yuan in July 2005, China Eastern Airlines Corp. climbed 7.1 percent in Shanghai trading and China Southern Airlines Co. rose 4.8 percent. China Petroleum & Chemical, also known as Sinopec, gained 5.8 percent.
“If it leads to appreciation for the yuan, it’s good news for the market,” Hao Hong, global equity strategist for CICC in Beijing, said in a report yesterday. “Investors will want to get into Chinese assets because they will be worth more.”
An appreciation of the yuan would benefit Chinese airlines, Luo Zhuping, China Eastern Airlines Corp.’s board secretary, said in an interview yesterday. Foreign-currency debt accounts for about 60 percent of the company’s total debt, Luo said. Yuan gains “will help reduce the burden,” he said.
Biggest Boost China Eastern, the nation’s second-biggest airline, would get the biggest profit boost from yuan appreciation of the country’s three largest carriers, Citigroup Inc. said in April. China Southern, the biggest carrier, would gain most in absolute terms as it has the largest debt and fleet, Citigroup analyst Ally Ma said. Air China Ltd. would benefit least as it has the highest proportion of overseas sales, Ma said.
Sinopec, Asia’s biggest refiner, would also benefit as 75 percent to 80 percent of oil it processes by volume is purchased from overseas in U.S. dollars, spokesman Huang Wensheng said.
“If the ability of domestic consumers to take on higher costs increases and the cost of our overseas purchases decreases, then the result for us is an obvious one,” Huang said yesterday.
BHP, Rio Tinto
BHP Billiton Ltd., Rio Tinto Group and other raw materials suppliers to China may also benefit as a stronger yuan reduces the cost of importing commodities from overseas. The nation is the world’s largest consumer of materials including iron ore, copper and soy beans, and the second-biggest energy consumer. Australian mining companies BHP Billiton and Rio Tinto are the world’s largest iron ore suppliers.
“You’d have to nominate BHP and Rio Tinto as the two main candidates to benefit,” said Saxon Nicholls, a fund manager at Herschel Asset Management Ltd. in Melbourne who helps oversee $785 million. “We think it’s good for commodity prices themselves. We also think it’s actually good for the value of the commodity equities.”
As an appreciation of the yuan reduces the cost of importing commodities, it may also make Chinese exports of clothing, shoes and electronics less attractive, said David Cohen, an economist at Action Economics in Singapore. Companies that may be affected include Shanghai Zhenhua Heavy Industry Co. and Hon Hai Precision Industry Co., based in Taipei.
The People’s Bank of China pledged to make the yuan more flexible, while ruling out a one-time revaluation of the currency that’s been held at about 6.83 yuan per dollar since mid-2008. A stronger yuan would help airlines reduce dollar- denominated fuel bills and debt incurred from buying Boeing Co. and Airbus SAS planes. Raw materials costs for companies such as China Petroleum & Chemical Corp. would also fall.
Yuan-denominated shares in Shanghai and Shenzhen will rise today as an appreciation of the currency will also help curb inflation and bolster purchasing power in the world’s fastest- growing major economy, according to China International Capital Corp. and Societe Generale SA. China’s benchmark Shanghai Composite Index gained 2.5 percent the day after the nation ended a decade-long peg to the dollar in July 2005.
“An appreciation in the yuan will reduce inflationary pressures and benefit consumption by increasing purchasing power,” said Shi Bo, general manager of Shanghai Elegant Investment Co., which oversees about $278 million in assets. “On balance, a strong yuan is good for China’s efforts to rebalance its economy away from exports to domestic consumption.”
The central bank said June 19 that it will “increase the renminbi’s exchange-rate flexibility” after the economy grew 11.9 percent in the first quarter.
Benefits Employment
An appreciation of the yuan, also known as the renminbi, will benefit exporters and the nation’s employment situation more than it hurts them, the central bank said in a statement. A more flexible currency would also help to curb consumer-price gains, asset bubbles and dependence on exports for growth, it said.
After China’s revaluation of the yuan in July 2005, China Eastern Airlines Corp. climbed 7.1 percent in Shanghai trading and China Southern Airlines Co. rose 4.8 percent. China Petroleum & Chemical, also known as Sinopec, gained 5.8 percent.
“If it leads to appreciation for the yuan, it’s good news for the market,” Hao Hong, global equity strategist for CICC in Beijing, said in a report yesterday. “Investors will want to get into Chinese assets because they will be worth more.”
An appreciation of the yuan would benefit Chinese airlines, Luo Zhuping, China Eastern Airlines Corp.’s board secretary, said in an interview yesterday. Foreign-currency debt accounts for about 60 percent of the company’s total debt, Luo said. Yuan gains “will help reduce the burden,” he said.
Biggest Boost China Eastern, the nation’s second-biggest airline, would get the biggest profit boost from yuan appreciation of the country’s three largest carriers, Citigroup Inc. said in April. China Southern, the biggest carrier, would gain most in absolute terms as it has the largest debt and fleet, Citigroup analyst Ally Ma said. Air China Ltd. would benefit least as it has the highest proportion of overseas sales, Ma said.
Sinopec, Asia’s biggest refiner, would also benefit as 75 percent to 80 percent of oil it processes by volume is purchased from overseas in U.S. dollars, spokesman Huang Wensheng said.
“If the ability of domestic consumers to take on higher costs increases and the cost of our overseas purchases decreases, then the result for us is an obvious one,” Huang said yesterday.
BHP, Rio Tinto
BHP Billiton Ltd., Rio Tinto Group and other raw materials suppliers to China may also benefit as a stronger yuan reduces the cost of importing commodities from overseas. The nation is the world’s largest consumer of materials including iron ore, copper and soy beans, and the second-biggest energy consumer. Australian mining companies BHP Billiton and Rio Tinto are the world’s largest iron ore suppliers.
“You’d have to nominate BHP and Rio Tinto as the two main candidates to benefit,” said Saxon Nicholls, a fund manager at Herschel Asset Management Ltd. in Melbourne who helps oversee $785 million. “We think it’s good for commodity prices themselves. We also think it’s actually good for the value of the commodity equities.”
As an appreciation of the yuan reduces the cost of importing commodities, it may also make Chinese exports of clothing, shoes and electronics less attractive, said David Cohen, an economist at Action Economics in Singapore. Companies that may be affected include Shanghai Zhenhua Heavy Industry Co. and Hon Hai Precision Industry Co., based in Taipei.
Monday, June 7, 2010
Telco in India - Reliance
By Saikat Chatterjee
June 7 (Bloomberg) -- Reliance Communications Ltd., controlled by Indian billionaire Anil Ambani, may raise 90.5 billion rupees ($1.9 billion) if it sells a 26 percent stake at the current market price to fund expansion after it acquired 3G licenses.
Mumbai-based Reliance Communications, which paid 85.9 billion rupees to the government in license fees for third- generation mobile-phone frequencies, said yesterday its board “in principle” approved the sale of as much as 26 percent to a strategic or private-equity investor. AT&T Inc. had preliminary talks to buy a stake in Reliance, the Wall Street Journal reported yesterday, citing people familiar with the situation.
The stake sale may help India’s second-biggest mobile-phone operator to cut debt and expand in the world’s largest wireless market by subscribers after China. The license fees paid by operators such as Reliance have stoked concerns that the companies won’t be able to recoup their investments and that interest costs on their debt will surge.
“With the kind of capital expenditure that the company would need going forward it may require an infusion of funds,” said Rahul Jain, a Mumbai-based analyst with Angel Broking Ltd., who has a “neutral” recommendation on the stock. Reliance’s plan to sell a stake in its mobile-phone tower business to the public “may not happen” because of the current market, he said.
Reliance Communications, the nation’s second-largest mobile phone operator, has filed a draft prospectus for an initial share sale of 10 percent of tower operator Reliance Infratel Ltd. on Sept. 24.
Price Competition
Revenue in the mobile-phone services industry is poised to fall 22 percent for the year after declining 25 percent in 2009, according to estimates from Bank of America Corp.’s Merrill Lynch unit. Vodafone Group Plc on May 18 booked a $3.3 billion charge for its Indian unit, citing “intense” price competition. Mobile-phone calls cost as little as 1 U.S. cent per minute in India.
“The competition in the Indian market is getting intense and is showing no signs of stabilizing at all,” said Jain.
At the close of trading in Mumbai on Friday, Reliance Communications was worth $7.4 billion. The stock has dropped 49 percent in the past 12 months compared with a 15 percent gain for the Bombay Stock Exchange’s benchmark Sensitive Index. Larger rival Bharti Airtel Ltd. shed 31 percent during the same period.
‘Various Proposals’
In India, 3G offers carriers the opportunity to revive earnings growth and generate more revenue through faster data services used to download music and surf the Internet.
Reliance Communications said June 2 it had received “various proposals” from overseas companies, commenting after the Times of India newspaper reported Emirates Telecommunications Corp., known as Etisalat, was in advanced talks to buy a 25 percent stake. Etisalat spokesman Ahmed Bin Ali said on June 2 that Indian operators were among companies being looked at for possible investment, without specifying Reliance Communications or a timeframe for any deals.
The Economic Times reported on June 1 that the Indian company may restart merger talks with South Africa’s MTN Group Ltd., after earlier negotiations collapsed in July 2008.
Reliance will sell shares at an “appropriate premium to the prevailing market price” and “examine and pursue other appropriate strategic combination or consolidation opportunities,” the company said in its statement yesterday. It didn’t provide any names of potential buyers.
(source - Bloomberg)
June 7 (Bloomberg) -- Reliance Communications Ltd., controlled by Indian billionaire Anil Ambani, may raise 90.5 billion rupees ($1.9 billion) if it sells a 26 percent stake at the current market price to fund expansion after it acquired 3G licenses.
Mumbai-based Reliance Communications, which paid 85.9 billion rupees to the government in license fees for third- generation mobile-phone frequencies, said yesterday its board “in principle” approved the sale of as much as 26 percent to a strategic or private-equity investor. AT&T Inc. had preliminary talks to buy a stake in Reliance, the Wall Street Journal reported yesterday, citing people familiar with the situation.
The stake sale may help India’s second-biggest mobile-phone operator to cut debt and expand in the world’s largest wireless market by subscribers after China. The license fees paid by operators such as Reliance have stoked concerns that the companies won’t be able to recoup their investments and that interest costs on their debt will surge.
“With the kind of capital expenditure that the company would need going forward it may require an infusion of funds,” said Rahul Jain, a Mumbai-based analyst with Angel Broking Ltd., who has a “neutral” recommendation on the stock. Reliance’s plan to sell a stake in its mobile-phone tower business to the public “may not happen” because of the current market, he said.
Reliance Communications, the nation’s second-largest mobile phone operator, has filed a draft prospectus for an initial share sale of 10 percent of tower operator Reliance Infratel Ltd. on Sept. 24.
Price Competition
Revenue in the mobile-phone services industry is poised to fall 22 percent for the year after declining 25 percent in 2009, according to estimates from Bank of America Corp.’s Merrill Lynch unit. Vodafone Group Plc on May 18 booked a $3.3 billion charge for its Indian unit, citing “intense” price competition. Mobile-phone calls cost as little as 1 U.S. cent per minute in India.
“The competition in the Indian market is getting intense and is showing no signs of stabilizing at all,” said Jain.
At the close of trading in Mumbai on Friday, Reliance Communications was worth $7.4 billion. The stock has dropped 49 percent in the past 12 months compared with a 15 percent gain for the Bombay Stock Exchange’s benchmark Sensitive Index. Larger rival Bharti Airtel Ltd. shed 31 percent during the same period.
‘Various Proposals’
In India, 3G offers carriers the opportunity to revive earnings growth and generate more revenue through faster data services used to download music and surf the Internet.
Reliance Communications said June 2 it had received “various proposals” from overseas companies, commenting after the Times of India newspaper reported Emirates Telecommunications Corp., known as Etisalat, was in advanced talks to buy a 25 percent stake. Etisalat spokesman Ahmed Bin Ali said on June 2 that Indian operators were among companies being looked at for possible investment, without specifying Reliance Communications or a timeframe for any deals.
The Economic Times reported on June 1 that the Indian company may restart merger talks with South Africa’s MTN Group Ltd., after earlier negotiations collapsed in July 2008.
Reliance will sell shares at an “appropriate premium to the prevailing market price” and “examine and pursue other appropriate strategic combination or consolidation opportunities,” the company said in its statement yesterday. It didn’t provide any names of potential buyers.
(source - Bloomberg)
US in correction mode
Major U.S. Indexes
Last Change Today's % Change 1 Week % Change YTD % Change
Dow 9931.22 -324.06 -3.16% -2.03% -4.76%
NASDAQ 2219.17 -83.86 -3.64% -1.68% -2.20%
S&P 500 1064.88 -37.95 -3.44% -2.25% -4.50%
Russell 2000 633.97 -33.40 -5.00% -4.18% 1.37%
CBOE VIX 35.61 6.15 20.88% 11.04% 64.25%
FTSE CNBC Global 300 4023.99 -118.26 -2.85% -1.93% -11.36%
The Dow Jones Industrial Average lost 323.31, or 3.2 percent, to end at 9,931.97, its lowest close since February. Industrials led the decline, with Caterpillar [CAT 57.76 -3.35 (-5.48%) ] and Boeing [BA 61.1525 -3.1575 (-4.91%) ] among the biggest laggards on the Dow. Materials and financial stocks also took a hit.
All three major indexes are in correction territory, defined as being down more than 10 percent from its recent high. The Dow is now down 11 percent from its April high, while the S&P 500 and Nasdaq are down 12 percent from those levels.
Volume was heavy, with more than 1.6 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 10 to 1. The CBOE volatility index spiked more than 20 percent, topping 35.
The market's mood started off sour as a carryover from Europe as investors there worried about rumors that SocGen may be having trouble with its derivatives operations and news that Hungary is very close to defaulting on its debt.
source - CNBC
Last Change Today's % Change 1 Week % Change YTD % Change
Dow 9931.22 -324.06 -3.16% -2.03% -4.76%
NASDAQ 2219.17 -83.86 -3.64% -1.68% -2.20%
S&P 500 1064.88 -37.95 -3.44% -2.25% -4.50%
Russell 2000 633.97 -33.40 -5.00% -4.18% 1.37%
CBOE VIX 35.61 6.15 20.88% 11.04% 64.25%
FTSE CNBC Global 300 4023.99 -118.26 -2.85% -1.93% -11.36%
The Dow Jones Industrial Average lost 323.31, or 3.2 percent, to end at 9,931.97, its lowest close since February. Industrials led the decline, with Caterpillar [CAT 57.76 -3.35 (-5.48%) ] and Boeing [BA 61.1525 -3.1575 (-4.91%) ] among the biggest laggards on the Dow. Materials and financial stocks also took a hit.
All three major indexes are in correction territory, defined as being down more than 10 percent from its recent high. The Dow is now down 11 percent from its April high, while the S&P 500 and Nasdaq are down 12 percent from those levels.
Volume was heavy, with more than 1.6 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 10 to 1. The CBOE volatility index spiked more than 20 percent, topping 35.
The market's mood started off sour as a carryover from Europe as investors there worried about rumors that SocGen may be having trouble with its derivatives operations and news that Hungary is very close to defaulting on its debt.
source - CNBC
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