Barchart.com U.S. Morning Call for Tuesday, January 19, 2010
Overnight Developments
* Global stocks are mostly lower with the European DJ Stoxx 50 Index down -0.66% and March S&Ps down -2.00 points. The dollar index climbed to a 1-week high and pushed most commodity prices higher, except for crude oil which slipped to a 3-week low on demand concerns. The biggest drag on European stocks is the larger-than-expected decline in the Jan German ZEW economic sentiment survey, which fell for the fourth straight month, -3.2 to 47.2, amid signs the economic recovery is slowing. Bank stocks are leading the way lower today with HSBC, Europe's largest bank, sliding 2.2% after Exane downgraded the bank to "underperform" from "neutral," while Barclays PLC dropped 2.2% after Credit Suisse AG cut its price estimate on Barclays by 13% saying its forecasts imply a "sizable capital deficit." Alstom SA, the world's second-largest train maker, fell 3.8% after it reported Q3 fiscal sales of 4.69 billion euros ($6.75 billion), well below analysts' estimates of 4.81 billion euros. Limiting losses in European stocks was the 3.7% jump in shares of Cadbury Plc after its board agreed on a revised 11.9 billion-pound ($19.7 billion) takeover offer from Kraft Foods.
* The Asian markets today closed mixed with Japan down -0.83%, Hong Kong +1.02%, China +0.19%, Taiwan -1.07%, Australia -1.02%, Singapore +0.03%, South Korea -0.11%, India -0.88%. Asian technology companies fell after a benchmark gauge of prices for dynamic-random-access memory chips fell 1.7%, the sixth straight day of declines, according to Dramexchange Technology. Japanese bank stocks closed lower after Barclays Capital said that Japanese banks' income from lending may slump, while Japanese car and electronic makers fell after the yen rallied to a 4-week high against the dollar and threatened the value of export earnings. Japan Airlines filed for bankruptcy under a 900 billion yen ($10 billion) turnaround plan after four government bailouts failed to revive the carrier. Asia's largest airline will shed staff, cut unprofitable routes and retire older planes as it restructures following a 131 billion first-half loss. Hong Kong stocks jumped after the head of Shanghai 's financial services office said that Shanghai is considering allowing individuals to invest in Hong Kong and "other overseas areas." Allowing Chinese individuals to invest overseas may help counter the flows that have helped boost China's foreign-exchange reserves to a record and spurred concern about asset bubbles.
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