NY Disney fan
DIS Veteran
- Joined
- Jun 16, 2005
- Messages
- 5,255
Latest from the NY Times:
March 17, 2008
Shares Slide on Fed Move and Bear Deal
By KEITH BRADSHER and MARTIN FACKLER
European and Asian stocks fell Monday in response to renewed worries about the financial strength of the worlds banking system after the bargain-basement sale of Bear Stearns to JPMorgan Chase.
Stock markets across Europe fell 2 to 3 percent soon after opening on Monday, following drops on major Asian stock markets of 3 to 5 percent. Tokyos benchmark index hit a three-year low before it rebounded slightly; Chinese and Indian stock markets tumbled even more sharply.
In the United States, stock futures plunged overnight, indicating that the markets would open to heavy losses. Futures in the Dow Jones industrial average were down more than 200 points.
The euro rose again against the dollar and investors rushed to the relative safety of United States Treasuries. The dollar fell to a 13-year low against the yen, and oil hit a new record, near $112 in Asia.
The Bank of England moved to help bolster the liquidity of the financial markets and bring down interbank lending rates by offering $10 billion in three-day loans.
Investors across Europe and Asia tried to figure out who might invest more capital to shore up Western financial institutions caught with heavy losses on their holdings of mortgage-backed securities. Chinese state-run institutions, with some of the largest cash holdings, appeared to be on the sidelines, watching as the prices of financial shares plunged, while Citic announced that it would not proceed with a previously announced deal to acquire a $2 billion stake in Bear Stearns.
Tokyos benchmark Nikkei 225 index lost 3.7 percent to close at 11,787.51 points, after declining as much as 5 percent during the day.
By midday in Europe, the CAC 40 in France dropped 2.5 percent while the FTSE 100 index in Britain had fallen 2.2 percent. The Dow Jones Euro Stoxx 50 fell 3.0 percent, led down by the German DAX, down 3.3 percent.
The declines in Tokyo came even as the Japanese central bank, the Bank of Japan, moved to shore up financial markets by injecting $4.1 billion into short-term money markets. Asian stocks have also been hurt by the weakness of the dollar, which erodes the value in local currencies of overseas profits and forces big exporters like Toyota and Sony to raise prices in foreign markets.
Stock markets in Asias two emerging giants, China and India, suffered the biggest losses on Monday. The Shanghai A share market was down 3.6 percent in late trading, the Hang Seng Index in Hong Kong was down 5.2 percent and the Shenzhen A share market was down 6.4 percent. Investors in the China region were troubled not only by the ongoing financial troubles in the United States but also by a weekend of news reports of unrest in Tibet and adjacent Chinese provinces.
Local investor sentiment is not good the Hong Kong market is really caught in the middle between happenings in China and the United States, said Ricky Chan, a stockbroker at Phoenix Capital Securities Ltd. in Hong Kong. With the Shanghai market declining, he said, plus with the turmoil in Tibet, the local market is quite nervous at this point in time.
In the United States on Sunday the Federal Reserve made a sweeping move, lowering its rate for borrowing by one-quarter of a percentage point, to 3.25 percent, as well as aiding the purchase of Bear Stearns by JPMorgan Chase for $2 per share. The acquisition underscored the severity of the credit crisis in the United States and the weakness of the American economy.
Yet pockets of optimism remained among investors and stockbrokers that the broader health of Asian economies, especially Chinas, would allow the region to escape some of the worst effects of the economic slowdown in the United States although few now expect the region to emerge unscathed.
I expect a big rebound in the next two weeks because the market has been oversold, driven by market sentiment the fundamentals in the Hong Kong stock market are still O.K., said Peter Lai, a stockbroker at DBS Vickers in Hong Kong.
In India, the Sensex 30 index in Bombay plunged 5.1 percent by early afternoon. The index had climbed 47 percent last year on an often speculative boom fueled to a considerable extent by foreign investment.
But India also imports nearly all of its oil, and now faces rising costs with crude oil close to $110 a barrel; this has contributed to a weakening of industrial production, up just 5.3 percent in January from the same month a year ago, and rising wholesale prices, up 5.11 percent for the week ending March 1.
Officials for the China Investment Corporation, Chinas $200 billion sovereign wealth fund for domestic and overseas stock purchases, declined to comment on whether American financial companies had any appeal in the current credit market difficulties. Analysts were skeptical that the Chinese would step in while markets remain in turmoil.
I would think the Chinese will be very careful, said Hong Liang, a Goldman Sachs economist who specializes in China.
Investments by Chinas sovereign wealth fund, the China Investment Corporation, and by Chinese state-owned entities have had a dismal track record so far in the financial sector.
The China Investment Corporations maiden investment as it was being organized last spring was a $3 billion nonvoting stake in the initial public offering of the Blackstone Group, the American private equity company. Acquired for only a 4.5 percent discount to the initial offering price of $31, or $29.605, the investment has already lost nearly half its value as the stock has plunged, closing at $15.78 on Friday.
The Blackstone investment has been an embarrassment for the Chinese government because its price was widely reported at the time of the deal in contrast with bond purchases by Chinas central bank for the countrys foreign-exchange reserves, which are managed with the strictest secrecy.
March 17, 2008
Shares Slide on Fed Move and Bear Deal
By KEITH BRADSHER and MARTIN FACKLER
European and Asian stocks fell Monday in response to renewed worries about the financial strength of the worlds banking system after the bargain-basement sale of Bear Stearns to JPMorgan Chase.
Stock markets across Europe fell 2 to 3 percent soon after opening on Monday, following drops on major Asian stock markets of 3 to 5 percent. Tokyos benchmark index hit a three-year low before it rebounded slightly; Chinese and Indian stock markets tumbled even more sharply.
In the United States, stock futures plunged overnight, indicating that the markets would open to heavy losses. Futures in the Dow Jones industrial average were down more than 200 points.
The euro rose again against the dollar and investors rushed to the relative safety of United States Treasuries. The dollar fell to a 13-year low against the yen, and oil hit a new record, near $112 in Asia.
The Bank of England moved to help bolster the liquidity of the financial markets and bring down interbank lending rates by offering $10 billion in three-day loans.
Investors across Europe and Asia tried to figure out who might invest more capital to shore up Western financial institutions caught with heavy losses on their holdings of mortgage-backed securities. Chinese state-run institutions, with some of the largest cash holdings, appeared to be on the sidelines, watching as the prices of financial shares plunged, while Citic announced that it would not proceed with a previously announced deal to acquire a $2 billion stake in Bear Stearns.
Tokyos benchmark Nikkei 225 index lost 3.7 percent to close at 11,787.51 points, after declining as much as 5 percent during the day.
By midday in Europe, the CAC 40 in France dropped 2.5 percent while the FTSE 100 index in Britain had fallen 2.2 percent. The Dow Jones Euro Stoxx 50 fell 3.0 percent, led down by the German DAX, down 3.3 percent.
The declines in Tokyo came even as the Japanese central bank, the Bank of Japan, moved to shore up financial markets by injecting $4.1 billion into short-term money markets. Asian stocks have also been hurt by the weakness of the dollar, which erodes the value in local currencies of overseas profits and forces big exporters like Toyota and Sony to raise prices in foreign markets.
Stock markets in Asias two emerging giants, China and India, suffered the biggest losses on Monday. The Shanghai A share market was down 3.6 percent in late trading, the Hang Seng Index in Hong Kong was down 5.2 percent and the Shenzhen A share market was down 6.4 percent. Investors in the China region were troubled not only by the ongoing financial troubles in the United States but also by a weekend of news reports of unrest in Tibet and adjacent Chinese provinces.
Local investor sentiment is not good the Hong Kong market is really caught in the middle between happenings in China and the United States, said Ricky Chan, a stockbroker at Phoenix Capital Securities Ltd. in Hong Kong. With the Shanghai market declining, he said, plus with the turmoil in Tibet, the local market is quite nervous at this point in time.
In the United States on Sunday the Federal Reserve made a sweeping move, lowering its rate for borrowing by one-quarter of a percentage point, to 3.25 percent, as well as aiding the purchase of Bear Stearns by JPMorgan Chase for $2 per share. The acquisition underscored the severity of the credit crisis in the United States and the weakness of the American economy.
Yet pockets of optimism remained among investors and stockbrokers that the broader health of Asian economies, especially Chinas, would allow the region to escape some of the worst effects of the economic slowdown in the United States although few now expect the region to emerge unscathed.
I expect a big rebound in the next two weeks because the market has been oversold, driven by market sentiment the fundamentals in the Hong Kong stock market are still O.K., said Peter Lai, a stockbroker at DBS Vickers in Hong Kong.
In India, the Sensex 30 index in Bombay plunged 5.1 percent by early afternoon. The index had climbed 47 percent last year on an often speculative boom fueled to a considerable extent by foreign investment.
But India also imports nearly all of its oil, and now faces rising costs with crude oil close to $110 a barrel; this has contributed to a weakening of industrial production, up just 5.3 percent in January from the same month a year ago, and rising wholesale prices, up 5.11 percent for the week ending March 1.
Officials for the China Investment Corporation, Chinas $200 billion sovereign wealth fund for domestic and overseas stock purchases, declined to comment on whether American financial companies had any appeal in the current credit market difficulties. Analysts were skeptical that the Chinese would step in while markets remain in turmoil.
I would think the Chinese will be very careful, said Hong Liang, a Goldman Sachs economist who specializes in China.
Investments by Chinas sovereign wealth fund, the China Investment Corporation, and by Chinese state-owned entities have had a dismal track record so far in the financial sector.
The China Investment Corporations maiden investment as it was being organized last spring was a $3 billion nonvoting stake in the initial public offering of the Blackstone Group, the American private equity company. Acquired for only a 4.5 percent discount to the initial offering price of $31, or $29.605, the investment has already lost nearly half its value as the stock has plunged, closing at $15.78 on Friday.
The Blackstone investment has been an embarrassment for the Chinese government because its price was widely reported at the time of the deal in contrast with bond purchases by Chinas central bank for the countrys foreign-exchange reserves, which are managed with the strictest secrecy.
)
just kidding!
