11.09.2008 12:09

Stock market: Thursday summary

Stock market fixing:

Nikkei 225 -54.02 -0.4% 12,346.63
Topix +0.79 +0.1% 1,192.38
DAX 30 -23.09 -0.37% 6,210.32
САС 40 -9.68 -0.23% 4,283.66
FTSE 100 -49.40 -0.91% 5,366.20
Dow +38.19 +0.34% 11,268.92
Nasdaq +18.89 +0.85% 2,228.70
S&P +7.53 +0.61% 1,232.04
10yr Note +0.4500 +0.125% 3.641%
NYMEX Crude Oil -0.68 -0.66% 102.58
Gold -29.50 -3.72% 762.50

Most Japan stocks rose, led by banks, on speculation a stake sale by Lehman Brothers Holdings Inc. will quell uncertainty in financial markets. Commodity shares fell on concern slower economic growth will curb raw materials demand.
Resona Holdings Inc., Japan's fourth-largest listed bank by value, erased early losses to climb 6 percent after South Korea's Yonhap news agency said Korea Development Bank seeks to buy a stake in Lehman. KDB said after the market closed it ended talks with the U.S. brokerage. Sumitomo Metal Mining Co., Japan's biggest nickel maker, slumped to the lowest in almost three years after metals prices retreated.
The Topix index gained 0.79, or 0.1 percent, to 1,192.38 at the close of trading in Tokyo. About nine shares rose for every seven that declined on the gauge. The Nikkei 225 Stock Average fell 54.02, or 0.4 percent, to 12,346.63.
Both gauges earlier sank as much as 1.9 percent on concern Lehman would not be able to acquire additional capital, extending credit-market turmoil.
Resona rose 6%. Mitsubishi UFJ Financial Group Inc., the country's biggest lender by market value, advanced 3.2%. Nomura, Japan's largest brokerage, climbed 3.2%.
KDB is seeking to spend about $6 billion to acquire a more than 25 percent stake in Lehman, Yonhap said today. Following the report, KDB said in an e-mailed statement it has ``ended the negotiations as there's differences over the terms of the deal and considering financial market conditions at home and overseas.''
Lehman, the fourth-largest U.S. securities firm, said yesterday will announce third-quarter results a week ahead of schedule along with ``key strategic initiatives.''
Sumitomo Metal retreated 3.8%, a level not seen since November 2005. Inpex Holdings Inc., the country's largest oil explorer, declined 2.7%. Mitsubishi Corp., Japan's largest trading company, lost 2.7%.

European stocks fell for a second day after the European Commission cut its forecast for the region's economic growth and concern deepened bank losses will increase.
Carnival Plc, the world's largest cruise-line company, sank 3.8 percent, while GDF Suez SA, France's biggest utility, lost 3.3 percent after the commission said the euro-area economy will expand 1.3 percent this year, down from an earlier forecast of 1.7 percent. Credit Agricole SA dropped 4.8 percent and UBS AG declined 4 percent. Lehman Brothers Holdings Inc. reported a $3.9 billion loss in the third quarter.
Cie. Financiere Richemont SA tumbled 7.7 percent after the world's largest jewelry maker said U.S. sales are slowing. RSA Insurance Group Plc slumped 6.5 percent after JPMorgan Chase & Co. recommended selling shares of the U.K's second-largest non- life insurer, saying takeover prospects were limited.
National benchmark indexes dropped in all 18 western European markets except Norway. Germany's DAX declined 0.4 percent, and the U.K.'s FTSE 100 lost 0.9 percent. France's CAC 40 fell 0.2 percent.
Separately, the National Institute for Economic and Social Research said the U.K. economy is contracting for the first time in at least a decade.
Analysts slashed earnings estimates this year as the global economy cooled and the biggest surge in mortgage defaults in at least three decades pushed banks to write down assets. Profit for companies in the Stoxx will slump 2.1 percent in 2008, down from 11 percent growth forecast at the end last year, according to data compiled by Bloomberg.
Credit Agricole, France's third-largest bank, fell 4.8%. UBS, the European bank hardest hit by subprime-related losses, declined 4%. Barclays Plc lost 5.3%.
Richemont, the world's largest jewelry maker, fell 7.7% after saying all but the most expensive luxury goods face ``difficult'' conditions. Total sales rose by 11 percent from April through August, down from the 13 percent pace in the first quarter.
RSA declined 6.5% after JPMorgan cut the insurer to ``underweight'' from ``overweight'' as analysts said they see limited prospects for mergers and acquisitions at current levels. Separately, Royal Bank of Scotland Group Plc lowered its recommendation for the shares to ``hold'' from ``buy.''

The stock market posted a solid gain Wednesday in a roller coaster session. Much of the volatility was fueled by a third quarter earnings preannouncement from Lehman Brothers (-0.55). Eight of the ten economic sectors posted a gain.
Lehman reported a third quarter loss of $5.92 per share, or $3.9 billion, which missed the consensus estimate that called for a loss of $3.35 per share. In addition, Lehman is cutting its common stock annual dividend to $0.05 per share from $0.68, plans to sell 55% of its asset management business, will spin off its commercial real estate assets and is in talks with BlackRock (+5.99) to sell roughly $4.0 billion of Lehman's UK residential mortgage portfolio.
Financials as a whole saw a great deal of volatility, trading between a range of -2.6% and +1.6% before ending the day with a 0.7% decline. The regional banks group fell 3.2% after Keefe Bruyette downgraded several regional banks, citing valuation. Washington Mutual (-0.94) dropped 28% on reports that at least three potential acquirers are no longer interested in the company due to an accounting rule change.
In other corporate news, Texas Instruments (+0.15) tightened its third quarter outlook, which remains in-line with expectations. Some analysts expected that TXN would reduce its forecast, so shares advanced on the news. The tech sector rose 0.7%.
FedEx (+3.12) posted a solid advance of 3.7% after the company raised its fiscal first quarter earnings guidance to $1.23 per share from its previous guidance of between $0.80 and $1.00. The company reaffirmed its full year outlook. The raised guidance is not as good as it seems, as the unexpected drop in fuel costs prompted the move, not increased demand. The company said slowing economic growth trends in the U.S. are extending into other areas of the global economy.
On a related note, the European Union cut its 2008 growth forecast for the European economy to 1.4% from 2.0%, and forecast that the U.K., Germany and Spain will enter a recession.
The news gave a boost to the dollar, which rose 0.9% against a basket of currencies, with the euro plunging 1.2%.
The strength in the dollar spurred a decline in commodities (-0.7%), with gold falling 3.8% and oil retreating 0.2% to $102.96 per barrel. Oil’s decline came in the face of reports that OPEC plans to stop producing above its previously agreed quota of 27.3 million barrels per day, which means output will be reduced by about 500,000 barrels per day. In addition, the Department of Energy reported larger-than-expected declines in crude oil and gasoline inventories.
Despite the drop in oil and commodity prices, the energy (+3.6%) and materials (+1.9%) sectors rallied, benefiting from a rebound bid following the sectors' declines over the previous eight sessions of 16% and 12%, respectively.