Intel Rekindles Worry about the Economy (04-03-2008)

Volatility ruled the session yesterday on Wall Street and if it hadn’t been for commodity shares offsetting banking and financial shares the Dow would have ended at least 100 points in the red. Companies the likes of Alcoa and Exxon Mobil gained while financial shares plunged on news that mortgage lender Thornburg Mortgage Inc said that it does not have enough cash to meet its creditors' demands, which more than halved the value of its share.

Gold continued its rapid rise while crude oil spiked to nearly $104 per barrel before pulling back slightly to above $102.

Asia Pacific stock markets were mixed with Tokyo ending unchanged after losses by banks and financials were offset by bargain hunting among exporters. Mitsubishi UFJ was unchanged, while Sumitomo declined by 2.34% and Mizuho lost 1.89%.

In Australia stocks declined after the Reserve Bank of Australia Tuesday raised its lending rate by a quarter point to 7.25%, to curb rising inflation as global growth slows down. Australia & New Zealand Banking Group rose by 2.4% while Commonwealth Bank of Australia steadied after falling in previous days.

In early trading on Tuesday, European shares rose as surging commodity prices boosted mining shares and the financial sector began to recover from previous day lows. However, by midday markets had turned negative as investor concern about the underlying problems in the financial sector sent stocks downward again, while technology shares retreated on Intel’s warning on its weakening outlook.

This last is weighing also on U.S. market futures, as investors also await comments from Ben Bernanke who is addressing Independent Community Bankers of America in Orlando about "Reducing Preventable Mortgage Foreclosures." The FOMC is scheduled to meet in two weeks to discuss interest rates.

Source: ISFM