U.S. Bank, Auto Worries Hit World Markets

Retreat Follows A Sell-Off On Wall Street Where Investors Booked Profits On Dow Jones

(AP)  World stock markets tumbled Monday, with Hong Kong's key index sinking nearly 5 percent, as downbeat comments from major U.S. banks and mounting woes at American auto giants undermined recent optimism about economic recovery.

The retreat followed a sell-off Friday on Wall Street where investors booked profits on the Dow Jones industrial average's 21 percent gain over 13 trading days.

Data showing a dip in U.S. personal incomes and a slowdown in personal spending were reminders that the world's largest economy and its banking system remain troubled.

Investors in Asia were also unnerved by reports that the chief executives of JP Morgan Chase & Co. and Bank of America Corp. both said business conditions had got tougher since they reported being profitable for January and February.

"The comments from these two banks show that problems in the U.S. financial sector aren't over and that's negative for sentiment," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong.

"Investors are also cautious before U.S. employment data this week. If the unemployment rate continues to rise that will be a problem for the U.S. and for stock markets in countries like Japan that rely on the U.S. economy," he said.

Japan's Nikkei 225 stock average sank 390.89 points, or 4.5 percent, to 8,236.08, and Hong Kong's Hang Seng slid 663.17, or 4.7 percent, to 13,456.33. South Korea's benchmark was down 3.2 percent while markets in Singapore, Taiwan, and India fell 3 percent or more.

As European trading got underway, Germany's DAX was down 3.7 percent, Britain's FTSE 100 shed 2.5 percent and France's CAC 40 lost 3 percent.

U.S. stock futures pointed to more losses Monday on Wall Street. Dow futures fell 187, or 2.4 percent, to 7,575 and S&P 500 futures were off 23, or 2.8 percent, at 793.10.

Adding to the gloom in Asia, data released Monday in Japan showed that industrial production in the world's second-largest economy fell 9.4 percent in February as the sharp slump in global demand continued to paralyze the nation's factories.

In Tokyo trade, shares of automakers fell after the White House said ailing automakers General Motors and Chrysler had not submitted acceptable plans to receive billions more in bailout money, increasing the odds the two American auto giants will eventually file for bankruptcy protection.

Japanese automakers have said the possible collapse of major American automakers would hurt them as well by putting pressure on U.S.-based car parts suppliers. Potential job losses in the U.S. would also weigh on consumer spending.

Toyota Motor Co., the world's largest automaker, fell 3.7 percent, Honda Motor Co. shed 6.7 percent, and Nissan Motor Co. dived 7.7 percent.

A rising yen sent tech shares broadly lower. Sony Corp. declined 7.4 percent, Sharp Corp. lost 5.1 percent and chip maker Elpida Memory Inc. plunged 12.2 percent.

Financial shares were also weak in Asia. In Seoul, KB Financial Group was down 6.5 percent and Mitsubishi UFJ Finance dived 8.8 percent in Tokyo after being downgraded to "conviction sell" from "neutral" by Goldman Sachs analysts who cited rising credit and equity losses.

On Friday, the Dow Jones industrials fell 148.38, or 1.9 percent, to 7,776.18. The Standard & Poor's 500 index fell 16.92, or 2 percent, to 815.94 and the Nasdaq composite index dropped 41.80, or 2.6 percent, to 1,545.20.

In oil markets, prices tumbled to below $51 a barrel as investors cashed in on recent gains, and in tandem with losses in regional stock markets. Benchmark crude for May delivery fell $1.86 to $50.52 by midafternoon in Asian electronic trading on the New York Mercantile Exchange. The contract dropped $1.96 to settle at $52.38 on Friday.

The dollar fell to 96.46 yen from 97.84 yen late Friday, while the euro dropped to $1.3199 from $1.3288.

[sjc_1]

"You want to wait until we have 50% unemployment before you will grudgingly admit that something is amiss."

You do not know me nor what I want. Again, you have to get over your god complex, where you think know what people want. Just because things happen to you, that does not mean that they happen to every body.

[hungry1968-15]

Gee, I wonder how Debbie Stabenow and Carl Lavin feel about this ?


I'm sure right about now they are thinking, "Uh, Barry - you said you'd stop pork in your campaign - but THIS is crazy !"


yup - Expect Michigan to go Republican when they come up for re-election.
Posted by speakinup at 7:31 AM : Mar 30, 2009




They were a predominantly republican state - governor, legislature, federal senators, etc, etc.

That's why their economy is currently in the outhouse.

[speakinup]

Gee, I wonder how Debbie Stabenow and Carl Lavin feel about this ?


I'm sure right about now they are thinking, "Uh, Barry - you said you'd stop pork in your campaign - but THIS is crazy !"


yup - Expect Michigan to go Republican when they come up for re-election.

[erichsh]

On cbsnews.com front page:
(a) Obama tells banks to "show some restraint"
(b) Obama is taking over GM and Chrysler
(c) World stocks tank on concerns about banks and the auto industry
Seems to be a pattern here, a certain "Obama opens his mouth" pattern.

[jimmyc1955]

quapawsix - Why don't you take your own advice, by Ted Kazinski's place in Montana and hunker down for the end of the world.

Meanwhile I will be here when returns improve, jobs are plentiful and your still eating freeze dried beets in a log cabin.

[jimmyc1955]

I was under the impression that Obama would be more welcome in Europe. He maybe but his wild spending programs aren't. Seems Germany is not too fond of Obama's plan to ruin the nation in order to save it.

Even the EU countries know not to spend the way Obama and the current congress seem intent on spending. The economy may be bad but bankrupting us for 20 years and having to create crushing debt and taxes doesn't seem much of a cure.

http://www.nytimes.com/2009/03/30/world/europe/30merkel.html?ref=global-home

[rickwar98]

Buy low, sell high? If you bought before the Obungle regime wrecked the markets, YOU'RE OUT OF LUCK.

Posted by sndkzyaa at 7:13 AM : Mar 28, 2009

Depends on what you bought. I've bought stocks for 39 years and contrary to what you might think, returns have been worse and the market more erratic. Also, if you know how to work the bottom, there is a very nice return to be made.

What's interesting is how you hear opinion on what the market can do, how much it's lost. Then you ask the question "How much stock do you have?" The answer more times than you may think: Well, I don't own stock. Better yet-- "I've lost money in the stock market" Then ask this question: Did you sell? Anser: No. Well youve lost "value" you haven't lost real money yet. If the stock goes back up, you may not lose anything, in fact you may gain. If your stock still is worth more than you paid, you're still ahead, just not as much.

The market isn't for the weak hearted, never has been, never will be. I've seen 8 presidents now, seen the market up, seen it down. Who is president makes damn little difference. The market is what the market is and does what it does.

Stop whining and speading doom and gloom, start buying into the market more, cover your bases, long, short, very short term, do some day trading. Don't just hand your money to a broker and wait. It's your money--not theirs, manage it.

[quapawsix]

Start buying food guns and ammo. Then learn how to grow your own food. This isn't over with yet.

[sndkzyaa]

Well, time will tell if now is worse than 1930 for the stock market. We will only know after the fact when you can compare the two periods.
Posted by sjc_1 at 9:18 AM : Mar 29, 2009

So far, it is worse.

In the first quarter of 1930, the stock market rose steadily. By April it was 25% higher than it was in January.

In the first quarter of 2009, it dropped sharply after the new president took office, and it still hasn't even caught up with where it was the day before he did.

But you're one of the fools still desperate to defend Obama, so you pretend not to see. You want to wait until we have 50% unemployment before you will grudgingly admit that something is amiss.

[sjc_1]

Well, time will tell if now is worse than 1930 for the stock market. We will only know after the fact when you can compare the two periods.