E.L. & C. Baillieu Morning Wrap; Crude oil futures lower on US stockpile dataReported by Proactive Investors on Wednesday, 23 May 2012 (on May 23, 2012)
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Author: E.L. & C. Baillieu Stockbroking - by Andrew Thain
HEADLINES
- Investors reversed steep U.S. stock losses to finish the day roughly flat, though European stocks and the euro tumbled to 2012 lows amid growing chatter about a potential Greek exit from the euro zone.
- Renewed speculation that Greece could exit the euro zone battered European stocks Wednesday and sent yields on Italian and Spanish bonds higher.
- Crude-oil futures prices settled at a fresh seven-month low, breaking below $90 a barrel Wednesday, as the latest U.S. weekly oil data showed stockpiles remaining at 22-year highs amid sluggish demand.
- Gold futures slumped for a third day on Wednesday, as worries about the fallout from a potential Greek exit of the euro zone pushed investors to pile into the U.S. dollar.
US MARKETS
Investors reversed steep U.S. stock losses to finish the day roughly flat, though European stocks and the euro tumbled to 2012 lows amid growing chatter about a potential Greek exit from the euro zone.
The Dow Jones Industrial Average ended a volatile session off just 6.66 points, or 0.05%, at 12496.15. The single-digit point decline came on a day that saw the blue-chip index fall as many as 191 points before briefly turning positive in late trading.
The Standard Poor's 500-stock index erased its declines to rise 2.23 points, or 0.17%, to 1318.86 while the Nasdaq Composite gained 11.04 points, or 0.39%, to 2850.12.
The 17% stumble at Dell had broad ripple effects across the tech sector. Blue chips
Hewlett-Packard, Intel and Microsoft fell 3.2%, 2.3% and 2.2%, respectively, to lead the Dow decliners.
Beyond the Dow components, Advanced Micro Devices fell 1.3% and Juniper Networks declined 4.2%. After the closing bell, H-P surged 6.1% after topping revenue expectations.
EUROPEAN MARKETS
Renewed speculation that Greece could exit the euro zone battered European stocks
Wednesday and sent yields on Italian and Spanish bonds higher. The Stoxx Europe 600
index fell 2.1% to 239.51, the biggest one-day drop since April 23 and its second-lowest close of the year.
Spain's IBEX 35 index skidded 3.3% to 6440.50, its lowest close in nine years, and the
FTSE MIB Italy index slumped 3.7% to 12960.87. Banks dragged on both benchmarks,
which have been battered all years amid worries about the financial health of their
governments, as yields on 10-year Spanish and Italian government bonds jumped higher.
Crédit Agricole sank 6.3%, Société Générale tumbled 4.3% and BNP Paribas dropped
3.2%, all in Paris. HSBC Holdings gave up 3% in London while Deutsche Bank lost 2.8%
in Frankfurt.
Among other national benchmarks, the French CAC 40 index dropped 2.6% to 3003.27, London's FTSE 100 index fell 2.5% to 5266.41 and the German DAX 30 index shed 2.3% to 6285.75.
ASIAN MARKETS
Asian markets and commodities fell Wednesday after the former Greek Prime Minister said
preparations for an exit from the euro zone are being considered, damping optimism ahead of a European Union summit.
Japan's Nikkei closed 2% down at 8556.60, Australia's S&P ASX 200 finished 1.3% down
to 4067.00, and Hong Kong's Hang Seng Index dropped 1.3% to 18786.19. Korea's Kospi
fell 1.1% to 1808.62 and the China Shanghai SE Composite dropped 0.4% to 2363.44.
Japanese real estate stocks, which climbed in the last two sessions in anticipation of
central bank easing, underperformed the Nikkei: Mitsui Fudosan dropped 2.8%, while
Mitsubishi Estate fell 3.2%.
AUSTRALIAN MARKETS
Australian stocks tumbled on fresh fears about a possible Greek exit from the euro zone, with all major stock sectors weaker and the Australian dollar touching a six-month low against the greenback.
At the close, the benchmark S&P/ASX200 index was down 54 points, or 1.3 per cent, at
4,067 - reversing the previous day’s advance. The broader All Ordinaries index was down
54.7 points, or 1.3 per cent, at 4,118.8. Today's loss lopped about another $16 billion in market value, bringing the slide this month to about $100 billion.
OIL
Crude-oil futures prices settled at a fresh seven-month low, breaking below $90 a barrel Wednesday, as the latest U.S. weekly oil data showed stockpiles remaining at 22-year highs amid sluggish demand.
U.S. benchmark crude futures on the New York Mercantile Exchange have fallen by 15.3%,
or $16.26 a barrel, since May 1, as crude oil inventories continued to grow and demand for key petroleum products, such as gasoline, has been weak.
Nymex light, sweet crude oil for July delivery fell $1.95, or 2.1%, to settle at $89.90 a barrel, the lowest price since Oct. 21, 2011. ICE North Sea Brent crude for July fell 2.6%, or $2.83 a barrel, to $105.56, the lowest level since Dec. 19.
METALS
Gold futures slumped for a third day on Wednesday, as worries about the fallout from a
potential Greek exit of the euro zone pushed investors to pile into the U.S. dollar.
The most actively traded gold contract, for June delivery, fell $28.20, or 1.8%, to settle at $1,548.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
Futures had traded lower earlier in the day, threatening to end below last week's 10-month settlement low of $1,536.60 an ounce.
Links:  Full news story
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