North American Market Summary
Slide continues in North America
It was another day of despair in both New York and Toronto as markets continued its slide on both sides of the border. Dow fell 177 points to close 8,694 as 29 of its 30 companies fell during the day’s trading. Both S&P 500 and NASDAQ fell 20 points and 36 points to close at 899 and 1,581 respectively. Falling oil and gold prices dragged Toronto down with TSX losing 265 points to settle at 9,424. TSX venture index also fell sharply 4.56 percent to close at 872.
Investors are all concerned about deteriorating economic conditions as indicated by oil prices. Oil fell below 5 percent to close at $59.33 a barrel; a level seen in March 2007. London Brent crude also shed $3.37 to settle at $55.71 a barrel. A fall in import growth in China indicated that even otherwise robust China is also slowing down. Oil prices appear to continue its weakness unless a drastic cut by OPEC takes place.
General Motors (NYSE: GM) remains out of favour and fell 13 percent. The auto maker also announced a further 1,900 job cut in addition to the 3,600 cuts it announced on Friday. Markets fear a potential GM bankruptcy. Help however is expected as US House Speaker Nancy Polosi demanded ``immediate action'' to rescue US automakers soon. Along with GM, Ford Motor Co (NYSE: F) also fell 6.7 percent to $1.80, a 26-year low.
Other casualties include Alcoa (NYSE: AA) 7.1 percent, American Express (NYSE: AXP) 6.6 percent, Boeing Co. (NYSE: BA) 4.7 percent and Du Pont (NYSE: DD) 4.4 percent. American Express received U.S. Federal Reserve approval to operate as a commercial bank, thus availing it to be a recipient of the Treasury's $250 billion bank rescue package.
Nortel Networks (NYSE: NT, TSX: NT) fell another 5.5 percent to close at $0.86, a second day in a row. The NYSE requires an average minimum price of $1 calculated using a 30-day average trading share price to trade on the main board. A continued weakness may prompt a suspension. Tyson Foods Inc (NYSE: TSN) also fell 24 percent in response to an “underweight” recommendation by JPMorgan Chase.
Energy
In response to slowing world economies oil fell during the day and was trading below $59 at one point. Oil stocks in both Canada and the US weakened as a result. Exxon Mobil Corp. (NYSE: XOM) fell $1.37 to close at $72.65 while Chevron Corp. (NYSE: CVX) also fell $1.08 to reach $73.54. ConocoPhillips (NYSE: COP) and Marathon Oil (NYSE: MRO) fell $1.85 and $1.77 to close at $49.08 and $26.74 respectively.
In Toronto, EnCana Corp. (TSX: ECA) fell 3.54 percent to $56.94 while Suncor Energy Inc. (TSX: SU) fell $0.53 or 1.96 percent to $26.55. Petro-Canada (TSX: PCA) and Canadian Natural Resources (TSX: CNQ) also fell $0.59 and $4.05 to close $25.78 and $53.46 respectively. Husky Energy (TSX: HSE) fell $0.49 to $33.90.
Metals
Gold fell $13.70 to close at US$732.80 an ounce on the New York Mercantile Exchange while silver, platinum and copper were slid during the day.
Goldcorp Inc. (TSX: G) fell $1.74 to $25.81 while Barrick Gold Corp. (TSX: ABX) shed $1.47 or 4.9 percent to reach $28.48. Kinross Gold (TSX: K) fell slightly $0.10 to $16.23. Newmont Mining (NYSE: NEM) also fell $1.21 or 4.4 per cent to close at $26.26. Newmont also announced that it will delay a development decision on its Minas Conga copper-gold project in Peru until the first quarter of 2009 because of the global financial crisis.
Financials
US Insurance stocks fell sharply as credit woes continue to plague investor confidence. Hertford Financial Services Group (NYSE: HIG) fell 23 percent following comments by Goldman Sachs over a potential capital raising and a credit rating downgrade. Similar concerns prompted large sell offs of Prudential Financial (NYSE: PRU) and Lincoln National Corp (NYSE: LNC) to drive them 11 percent and 15 percent lower respectively.
Banks performed poorly in Canada as well. Bank of Montreal (TSX: BMO) dropped $0.19 to $41.91, TD Bank (TSX: TD) $0.95 to $55.86 and (TSX: CM) $0.94 to $53.91. Scotiabank (TSX: BNS) also fell $1.86 to $38.53
At the time of writing, Asian markets opened weak as investors continue to remain on sidelines.
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20/11/08 Dow dips below 8,000 as selling gathers pace
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18/11/08 North American Markets recover on technical rebound
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17/11/08 Recession fears drag markets down
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14/11/08 North American markets move back into the red
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14/11/08 An impressive bounce back
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12/11/08 Slide continues in North America
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11/11/08 A bleak start to the week
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29/10/08 Another day of wins with a little help from Central Banks
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28/10/08 Optimism reigns but the economic data point otherwise