Mid-Day Update: Pain In Spain Drives Markets Lower
While news of upbeat corporate earnings reports, mergers and new product developments might have been expected to send markets soaring today, worries over Spain have overshadowed these factors.
Spanish growth expectations were revised downward, pushing the benchmark yield on 10-year Spanish bonds back over 7% and the markets down, especially in Europe, as finance officials in euro-zone approved a plan to bail out Spanish banks and released 30 million EUR of the 100 billion EUR earmarked to help the ailing country. Spain's Valencia region, in particular, said that it plans to seek help from the government in refinancing its debt. Current reports are that the country will remain in recession at least through next year. All in all, the news sparked a mass sell-off, which drove the markets lower.
In the US, the government is trying to speed up the sell off of the assets it collected during the financial bailout four years ago. Included amongst these assets are everything from bank shares to mortgage securities. The selling of these assets is meant to extricate the government from the investments it made. Some of those paid off, such as most of what went into banks and toxic assets, but the government is still in the red on the investments it made in Fannie Mae, Freddie Mac, and certain companies.
Crude oil was down to around $91.25 per barrel. Natural gas was up to near $3.00 per 1 million BTU. Gold was down to $1,580.30 an ounce, while silver was down to around $27.20 an ounce. Copper was down to about $3.45 per pound.
Among energy ETFs, the United States Oil Fund is down 1.8% to $34 while the United States Natural Gas Fund fund is down 0.4% to $20.60. Amongst precious-metal funds, the Market Vectors Gold Miners ETF is down 0.4% to $41.43 while SPDR Gold Shares are down 0.06% to $153.29. The iShares Silver Trust is down 0.11% to $26.39.
Here's where the markets stood at mid-day:
NYSE Composite Index down 75.41 (-1.0%) to $7,774.34
Dow Jones Industrial Index down 87.11 (-0.7%) to $12,856.18
S&P 500 down 8.56 (-0.6%) to $1,367.97
Nasdaq Composite Index down 22.55 (-0.8%) to $2,943.69 Â
FTSE 100 down 59.68 (-1.0%) to 5,654.62
DAX down 124.57 (-1.8%) to 6,633.25
CAC 40 down 65.79 (-2.0%) to 3,197.85
Nikkei 225 down 125.68 (-1.4%) to 8,669.87
Hang Seng Index up 81.75 (+0.42%) to 19,640.80
Shanghai China Composite Index down 16.20 (-0.7%) to 2,168.64
NYSE SECTOR INDICES
NYSE Energy Sector Index down 94.05 (-0.8%) to 12,058.24
NYSE Financial Sector Index down 69.05 (-1.6%) to 4,361.46
NYSE Healthcare Sector Index down 77.48 (-1.0%) to 7,545.92
FSBI (+65%, hit new year highs) Company announced that it and WesBanco Inc. ( WSBC ) have entered into and agreement and plan of merger. As a result of the Merger, the separate corporate existence of Fidelity will cease and WesBanco will continue as the surviving
corporation in the Merger.
AONE (+22.5%) Company announced that it will supply a 2MW grid energy storage system to Chinese company Ray Power Systems Co. Ltd.
EDU (+12.2%) Announced that members of its senior management team, including its chairman and chief executive officer Michael Minhong Yu, director, president and chief financial officer Louis T. Hsieh, director and executive vice president Chenggang Zhou, executive president, domestic business Xiangdong Chen and senior vice president Yunlong Sha, have informed the company of their intention to use their personal funds to purchase the company's American depositary shares on the open market for an aggregate amount up to a maximum of $50 million within the next three months
LNET (-25%, hit year lows) Reported a Q2 loss of $0.36 per share, ex one-time items, compared with the prior year period's 0.17 loss per share. No analyst estimate for the company's bottom line is available for comparison.
CPHD (-22.2%) Announced that adjusted its Q2 EPS was $0.11, in line with the analyst consensus on Capital IQ. Revenue was $81 million vs. the Street view of $82.67 million.
MIG (-11.4%, hit year lows) Forecast a Q2 loss of about $0.15-$0.16 per share vs. analyst estimates of a gain of $0.22 per share.