US stocks had a grim day Tuesday, following Citigroup's report of massive subprime-related losses, project delays at Boeing and weak retail-sales data.
The Dow Jones Industrial Average closed own 277.04 points on Tuesday, off 2.2%, at 12501.11. All 30 of its components retreated, led by Citigroup. The Standard & Poor's 500dropped 2.5%, or 35.29 points, to 1380.96a and the tech-dominant Nasdaq Composite Index also fell 2.5%, or 60.71 points, to 2417.59.
Citigroup on Tuesday reported a net loss for the 2007 fourth quarter of $9.83 billion, or $1.99 per share. Results included $18.1 billion in pre-tax write-downs and credit costs on sub-prime related direct exposures in fixed income markets, and a $4.1 billion increase in credit costs in US consumer primarily related to higher current and estimated losses on consumer loans.
Citi's share price fell 7.3%.
Struggling investment bank Merrill Lynch, which will report earnings on Thursday and is also expected to announce huge subprime related write-downs, announced on Tuesday that it was getting a $6.6 billion capital injection, mainly from sovereign wealth funds of Kuwait and Korea as well as Japan's Mizuho Corporate Bank.
Merrill Lynch's share price fell 3.4% Tuesday.
Intel, the chip giant, plunged 14% in after-close trading even though it reported impressive results for 2007 but was cautious about 2008.
US Retail sales fell in December and while there was a slight drop in producer prices, the annual rate at 6.3% was the highest since 1981 - report.
The Wall Street Journal reported that Boeing, a Dow component, already six months behind schedule on its 787 Dreamliner jet program, is close to announcing more delays that might hurt its ability to deliver as many planes as promised in the initial year of production.
The Journal said that the aircraft maker continues to experience problems on a variety of fronts, according to people familiar with the situation. It has had difficulty getting the first plane ready to fly, and now the 787 may not make its first flight until June. Boeing also has made slow progress in overcoming parts shortages and other issues at suppliers' factories. An announcement that would include a new time schedule might come as soon as today.
Further delays would likely make it impossible for Boeing to meet its goal of delivering 109 airplanes by the end of 2009. If that occurs, the company may have to pay millions of dollars in penalties to airlines for missing delivery deadlines.
Boeing's share price fell 5%.
Finfacts report October 2007: Boeing delays launch of 787 Dreamliner; Raises questions on model where it is only responsible for 10% of manufacturing value
Asia-Pacific stocks fell Wednesday, after the day of red ink in New York Tuesday.
The MSCI Asia Pacific Index, which tracks more than 1,050 regional companies, fell over 3% and in Tokyo, the Japan's Nikkei 225 Stock Average fell 3.35% to 13,504.51 - more than a 2-year low.
Hong Kong's Hang Seng Index slumped 5.65% and India's Bombay Sensex 30 Index is down 2.53% as are all markets in the region. Asia-Pacific - Key Benchmarks
European stocks fell sharply on Tuesday with retailers and financial companies in focus, after Tesco Plc reported Christmas sales that were below analysts' while UL luxury goods maker Burberry Group Plc dropped 12% after reporting a fall in full year earnings.
In Germany, Hypo Real Estate fell over 36% after saying pretax profit fell in 2007.
The Dow Jones Stoxx 600 Index plunged 2.27% and sentiment wasn't helped after the ZEW Center for European Economic Research said its index of investor sentiment in Germany plunged to the lowest in 15 years.
National benchmarks slumped in all of the 18 western European markets. France's CAC 40 fell 2.83%; the UK's FTSE 100 slid 2.23% and. Germany's DAX dropped 1.2%.
In Dublin, the ISEQ Index fell 3.76%.
Anglo Irish dropped 5.55% and AIB is down 4.49%
All 18 Western European markets are down in early trading Wednesday with sharp falls in some markets over 1% including Dublin.
National benchmarks - Europe
Irish Share Prices
AIB Daily Report
Bank of Ireland Daily Report
The euro is trading at $1.4805 and at £0.7555.
The US dollar sank to a two-and-half year low against the yen, trading at 105.98 yen versus 107.07 yen late Tuesday in New York.
For live currency updates, check the right-hand column of the Finfacts home page.
Crude oil for February delivery is trading on the New York Mercantile Exchange (Nymex) at $91.14 per barrel - down 76 cents overnight. In London, Brent is trading on the International Commodities Exchange at $90.24 down 74 cents.
Paul J. Harris, Head of Natural Resources Risk Management, Bank of Ireland Global Markets, commented today:
US Retail Sales data yesterday resurrected fears that the oil market would be hit by the looming US recession with around $2 shaved off crude prices which had advanced earlier in the session on geopolitical concerns. The EIA (US Energy Information Administration) data released this afternoon should shed further light on the near-term outlook for oil with a consensus amongst analysts of a stock build in crude of around 600,000 barrels reversing a falling trend which has been intact since November. It should be borne in mind that typically the EIA data can vary wildly from forecasts and whilst one swallow does not a summer make, the likelihood of the market taking any possible positives from the data (be it on the crude or distillate numbers) is high and the downside bias will prevail.
Additionally the IEA (International Energy Agency) monthly report which is released later today will be closely monitored. Current forecasts from the IEA are for global demand to exceed 2mio bpd - any revision down of this number will add to bearish sentiment.
Today's probable trading range for Brent is $89.70-91.60 with trenchant support at $88.75 outside of this. Bullish impacts of a weakening Dollar and geopolitical risks (Nigeria/Turkey-Iraq) should serve to prevent the market being oversold but the short-term outlook is for lower trading ranges in both the WTI (Nymex - West Texas Intermediate) & Brent contracts.
Gold spot price
The spot price of gold is at $884.50 per ounce, down $16.10 cents overnight.