A roundup of trading on major world markets:
NEW YORK – US stocks fell on Thursday, a day before Federal Reserve chief Ben Bernanke gives a much-anticipated speech that will offer hints of how the Fed may act to stimulate the ailing US economy.
The Dow Jones Industrial Average dropped 170.89 points (1.51 per cent) to 11,149.82 in closing trade.
The broader S&P 500 dropped 18.33 points (1.56 per cent) to 1,159.27, while the tech-heavy Nasdaq Composite slumped 48.06 points (1.95 per cent) to 2,419.63.
Stocks have slumped in recent weeks amid fears of a slowing US economy and fallout from Europe’s debt crisis, and investors have been waiting to see if the Fed will react by further loosening monetary policy.
Apple closed 0.7 per cent lower, a relatively muted reaction after its famed chief executive Steve Jobs resigned for health reasons late Wednesday, ushering in a period of uncertainty for the wildly successful tech company.
Bank of America skyrocketed by 9.4 per cent after billionaire Warren Buffett agreed to invest $US5 billion ($A4.78 billion) in the troubled US lender, whose share price has been pummelled in a brutal sell-off in recent weeks.
Buffett’s seal of approval for BofA appeared to help other bank stocks too, as Citigroup gained 4.9 per cent and Morgan Stanley jumped 2.7 per cent.
Bond prices rose. The yield on the 10-year Treasury note dropped to 2.22 per cent from 2.26 per cent late Wednesday, while that on the 30-year bond fell to 3.59 per cent from 3.61 per cent.
Bond prices and yields move in opposite directions.
LONDON – A flash slide in Germany’s stock market dragged down indexes in Europe, erasing earlier gains and shaking the confidence of investors cheering a $US5 billion ($A4.78 billion) investment by Warren Buffett in Bank of America.
Germany’s main index, the DAX, fell about 250 points in a matter of minutes to trade down more than 4 per cent before recovering somewhat. By the close it was down 1.7 per cent at 5,584.14.
Analysts and traders could not immediately identify a reason for the slide. Thilo Mueller of MB Fund Advisory GmbH said there was no obvious news to send the market down so suddenly and that the drop came “like lightning out of a clear sky”.
Britain’s FTSE 100 was pulled 1.4 per cent lower to close at 5,131.10, while France’s CAC-40 ended 0.7 per cent lower at 3,119.00. Like all world markets, they had been trading higher before the DAX’s slide.
HONG KONG – Asian markets surged, following another rally on Wall Street and ahead of a speech by Fed chief Ben Bernanke that many hope will outline plans to kickstart the ailing US economy.
The more positive mood — helped by a strong batch of US manufacturing data — saw safe haven assets fall, with gold tumbling further from its record high above $US1,900 and the yen weakening.
Regional firms with links to Apple slipped while its rivals rose after Steve Jobs announced his resignation as chief executive of the US computer giant on Wednesday.
Tokyo closed 1.54 per cent, or 132.75 points, higher at 8,772.36 while Seoul rose 0.56 per cent, or 9.80 points, to 1,764.58 and Sydney added 0.98 per cent, or 45.2 points, to 4,212.8.
Hong Kong rose 1.47 per cent, or 285.69 points, to 19,752.48 while Shanghai soared 2.92 per cent, or 74.17 points, to 2,615.26.
Traders took their cue from a third straight day of gains on Wall Street, where sentiment was boosted by data from the US Commerce Department showing new orders for durable goods rebounding 4.0 per cent in July from June, suggesting manufacturing growth could pick up in the coming months.
Markets were also buoyant as they awaited Bernanke’s speech on Friday, which will be closely watched for signs of whether he endorses a further loosening of monetary policy to boost the world’s leading economy.
On currency markets the yen was slightly down from the previous day’s highs.
The dollar rose to 77.07 yen in Tokyo morning trade from 76.97 yen in New York late Wednesday. It had been at 76.64 in Asia Wednesday.
Against the Japanese currency the euro edged up to 111.16 yen from 110.97 in New York Wednesday and 110.49 in Asia.
The euro bought $1.4418, just up from $1.4413 in New York.
In other markets: Singapore closed 1.69 per cent, or 45.84 points, higher at 2,765.74, Taipei fell 1.23 per cent, or 92.06 points, to 7,410.87 and Manila closed 0.54 per cent, or 23.76 points, lower at 4,342.69.
WELLINGTON – The New Zealand market has rewarded high achievers, but it was another story for those delivering bad news.
The result reflected an improved trading environment as customers recovered from the impact of the global financial crisis.
The benchmark NZX-50 index closed up 14.054 points, or 0.427 per cent, at 3301.578.
