BLBG: Canadian Dollar Rises as Commodities Including Crude Oil Gain
U.S. stock-index futures declined, indicating the Standard & Poor’s 500 Index will fall for the first time in three days, on concern the deepening global recession will hurt profits.
Exxon Mobil Corp. slipped 2.7 percent in pre-market trading in New York as crude traded below $35 a barrel. Alcoa Inc. dropped 2.2 percent in Europe as aluminum fell. Pfizer Inc. retreated after its Fablyn bone drug failed to win U.S. approval.
The S&P 500 is off to its second-worst start to a year, shattering the biggest rally since World War II, as analysts cut earnings estimates by a record 83 percentage points and companies signal worse to come.
“The market will remain nervous as we approach earnings announcements,” Chicuong Dang, a Paris-based analyst at KBL Richelieu Gestion, which has about $5.2 billion under management, said in a Bloomberg television interview. “Even if we know they won’t be good, we don’t yet know the amplitude.”
Futures on the S&P 500 expiring in March fell 1.1 percent to 839.1 at 12:15 p.m. in London. Dow Jones Industrial Average futures lost 1 percent to 8,163. Nasdaq-100 Index futures decreased 0.8 percent to 1,187.5. Stock markets were closed yesterday for the Martin Luther King Jr. holiday.
The S&P 500 fell 5.9 percent in the first 11 trading days of 2009, second only to last year’s 6.5 percent drop, according to data compiled by Bloomberg going back to 1928. The decline erased about half of a 24 percent rally since Nov. 20 as optimism that government spending would revive the economy evaporated.
Obama Inauguration
Europe’s Dow Jones Stoxx 600 Index retreated 0.8 percent, led by banks and technology companies. The MSCI Asia Pacific Index dropped 2.2 percent.
Barack Obama will be inaugurated as the 44th U.S. president today, inheriting the most severe economic crisis since Franklin D. Roosevelt was sworn in 76 years ago. The turmoil has dragged the world’s largest economies into recession, caused more than $1 trillion of losses at financial institutions and prompted a sell- off in global stock markets.
Treasuries fell for a second day on speculation Obama will sell record amounts of debt to battle the recession. The dollar strengthened for a second day against the euro.
Exxon, the largest U.S. oil company, slipped 2.7 percent to $76. Crude oil fell as much as 10 percent to $32.70 a barrel in New York on concern a global recession may deepen, eroding demand for energy.
ConocoPhillips sank 2.7 percent to $48.04 in Germany. The second-largest U.S. refiner said it plans to cut 4 percent of its workforce and will take several writedowns in the fourth quarter as energy prices plunged.
Alcoa, Pfizer
Alcoa, the largest U.S. aluminum producer, sank 2.2 percent to $9.22. Aluminum declined for the seventh straight day in London, falling as much as 3.7 percent to $1,370 a ton, on speculation that demand will weaken as the housing slump worsens.
Pfizer lost 0.9 percent to $17.34 in New York. The world’s largest drugmaker said it failed to win U.S. approval to sell a treatment for women with weak bones. A clinical trial showed an increase in deaths.
Goldman Sachs Group Inc., the biggest U.S. securities firm to convert to a bank, dropped 1.6 percent to $71.88 in Germany. JPMorgan Chase & Co. fell 3.3 percent to $22.07 in New York.
U.S. financial losses from the credit crisis may reach $3.6 trillion, according to New York University Professor Nouriel Roubini, who predicted last year’s economic and stock-market meltdowns.
“The problems of Citi, Bank of America and others suggest the system is bankrupt,” Roubini said at a conference in Dubai today.
IBM, Intel
International Business Machines Corp. dropped 1.2 percent to $83.93 in Germany. The world’s third-biggest software maker will face accusations for a second time that it’s abusing its market dominance in mainframe computers to shut out rival products in violation of European Union antitrust rules.
Intel Corp. retreated 0.9 percent to $13.61. The world’s biggest maker of semiconductors cut the price of some processors by as much as 48 percent, confronting falling demand and new, lower-cost chips from Advanced Micro Devices Inc.
Polo Ralph Lauren Corp. lost 3.9 percent to $39.52. Goldman Sachs downgraded shares of the designer of the U.S. Olympics team’s official uniform to “sell” from “neutral,” citing “a likely cautious outlook well below consensus.”
