Eyes remain fixed on the economy (27-03-2008)

Wall Street retreated on Wednesday as the data released displayed more weakness for the U.S. economy: orders for durable goods came in lower for the month of February and the sentiment was intensified by the fourth consecutive drop in new home sales. Financials had a bad day after a downgrade in first quarter earnings by Oppenheimer. 

Main Asian markets fell after going in and out of negative territory for most of the day led by mainland China shares, which were burdened by steelmakers. Financials were mixed in Japan, where Mitsubishi UFJ lost 2.12%, Sumitomo declined by 1.26% and Mizuho Financials dropped by 3.8%. The Hang Seng ended flat only just in positive territory. 

Overnight, the economic data out of the U.S. as well as lower inventories caused oil prices to jump to $106 per barrel, while the dollar slumped back below 100 yen and extended above $1.58 versus the euro. 

In Europe shares remained well within positive territory, as banks gained after the European Central Bank promised to supply money markets with extra liquidity as needed, while Swedish retailer H&M and Swiss Re had been supporting markets from early on. 

Back on the other side of the Atlantic futures were pointing to a flat open for the broader market while the NASDAQ looked under pressure from disappointing sales by Oracle. Among the economic data expected today, the GDP reading and the initial jobless claims report, both out at 12:30 GMT, would play a role on investor sentiment today, although a ruling forcing lenders to finance the Clear Channel merger may alleviate yesterday’s worry regarding the possibility of the deal unraveling.

Source ISFM