Canada
At midday, Canadian equities are materially lowed led by losses in the Technology and Financial subsectors of the S&P/TSX as concerns lingered over the health of the U.S. financial system despite the Federal Reserve's rescue plan for U.S. insurer American International Group (AIG US).
The technology subsector is under pressure as Nortel Networks (NT) plunged over 44% after cutting its revenue forecasts and commented about looking to sell one of its businesses.
Canadian Financials are under pressure with all major Canadian banks selling off, led by the Canadian Imperial Bank of Commerce (CM) down 6.0%. Manulife Financial (MFC) fell 4.8% after outlining its exposure to AIG and Lehman Brothers Holdings
Materials are the only sector posting a positive return, up 1.7% on bargain-hunting and materially higher prices of gold as investors seeked a safe heaven. Barrick Gold (ABX) is up 10.6%
Canada's largest publicly traded durgmaker Biovail Corp (BVF) declined 5.7% after moving ahead with its plans to shift into central nervous system treatments by buying privately held drugmaker U.S. Prestwick Pharmaceuticals for $100 million.
US
At midday, U.S. equities are materially lower and trading near session lows with all ten subsectors of the S&P 500 posting negative returns led by Financials (down 7.6%) as an increase in bank borrowing costs increased fears that credit might be drying up in the global financial systems. 95% of stocks in the S&P 500 are posting a loss as the Fed's rescue of American International Group (AIG) failed to reassure investors after it said it will lend US$85 billion for a 79.9% stake in the company.
Morgan Stanley (MS US) reported its quarterly earnings and according to CNBC the bank is debating whether it should remain independendt or merge with another bank while taking into consideration the recent volatility in it's share price. Morgan Stanley is trading over 36% lower. Goldman Sachs (GS US) is also selling off today, down 25% after several brokerages cut their profit outlook for Goldman. Barclays PLC (BCS US) accounced that it would buy Lehman Brothers banking and capital markets business for US$250 million, saving approximately 10,000 jobs. Barclay's is trading 3.5% lower. According to a New York Post article, the U.S. Federal Reserve is trying to orchestrate a joint purchase of Washington Mutual Inc (WM US). WaMu is down 10.2%.
International
Equities in Asia had a mixed reaction to the Fed bailout of AIG. Banks and insurers fell with Macquarie Group Ltd. Declining 7.8% in Sydney amid fears it may have difficulty refinancing debt. In some M&A news, Hynix Semiconductor Inc surged 10% on speculation that prices would rise as a result of Samsung's bid to acquire SanDisk Corp.
European equities are trading marginally lower with all major European indicies posting negative returns after U.S. housing starts came in below expectations and bank's borrowing costs jumped as fears of a recession increased. Worthy of mention are Germany's largest builder Hochtief AG which declined 3.1% after the U.S. Commerce Department reported that housing starts sank to the lowest level in 17 years.
Currencies & commodities
Oil prices have been trading in a volatile fashion following the government's inventory data. For the week ending September 12, the U.S. Department of Energy reported a draw of 6.3 mmbbl in crude oil bringing inventory levels to 291.7 mmbbl - the draw was larger than Street expectations, which called for a draw of 3.2 mmbbl. Distillate fuel oil levels currently stand at 129.6 mmbbl after a draw of 0.9 mmbbl for the week, Street suggested a draw of 1.8 mmbbl. The U.S. DOE reported a draw of 3.3 mmbbl in motor gasoline, inventory levels currently stand at 184.6 mmbbl, Street expectations suggested a draw of 3.7 mmbbl. Crude oil is trading higher by $2.45 at $93.60 per barrel.
Gold prices have just jumped significantly. We're hearing rumours that there may be problems with a Central Bank in South America which may have sparked the jump. Gold futures now almost up US$80 per ounce. Gold stocks are doing very well right now.
At midday, Canadian equities are materially lowed led by losses in the Technology and Financial subsectors of the S&P/TSX as concerns lingered over the health of the U.S. financial system despite the Federal Reserve's rescue plan for U.S. insurer American International Group (AIG US).
The technology subsector is under pressure as Nortel Networks (NT) plunged over 44% after cutting its revenue forecasts and commented about looking to sell one of its businesses.
Canadian Financials are under pressure with all major Canadian banks selling off, led by the Canadian Imperial Bank of Commerce (CM) down 6.0%. Manulife Financial (MFC) fell 4.8% after outlining its exposure to AIG and Lehman Brothers Holdings
Materials are the only sector posting a positive return, up 1.7% on bargain-hunting and materially higher prices of gold as investors seeked a safe heaven. Barrick Gold (ABX) is up 10.6%
Canada's largest publicly traded durgmaker Biovail Corp (BVF) declined 5.7% after moving ahead with its plans to shift into central nervous system treatments by buying privately held drugmaker U.S. Prestwick Pharmaceuticals for $100 million.
US
At midday, U.S. equities are materially lower and trading near session lows with all ten subsectors of the S&P 500 posting negative returns led by Financials (down 7.6%) as an increase in bank borrowing costs increased fears that credit might be drying up in the global financial systems. 95% of stocks in the S&P 500 are posting a loss as the Fed's rescue of American International Group (AIG) failed to reassure investors after it said it will lend US$85 billion for a 79.9% stake in the company.
Morgan Stanley (MS US) reported its quarterly earnings and according to CNBC the bank is debating whether it should remain independendt or merge with another bank while taking into consideration the recent volatility in it's share price. Morgan Stanley is trading over 36% lower. Goldman Sachs (GS US) is also selling off today, down 25% after several brokerages cut their profit outlook for Goldman. Barclays PLC (BCS US) accounced that it would buy Lehman Brothers banking and capital markets business for US$250 million, saving approximately 10,000 jobs. Barclay's is trading 3.5% lower. According to a New York Post article, the U.S. Federal Reserve is trying to orchestrate a joint purchase of Washington Mutual Inc (WM US). WaMu is down 10.2%.
International
Equities in Asia had a mixed reaction to the Fed bailout of AIG. Banks and insurers fell with Macquarie Group Ltd. Declining 7.8% in Sydney amid fears it may have difficulty refinancing debt. In some M&A news, Hynix Semiconductor Inc surged 10% on speculation that prices would rise as a result of Samsung's bid to acquire SanDisk Corp.
European equities are trading marginally lower with all major European indicies posting negative returns after U.S. housing starts came in below expectations and bank's borrowing costs jumped as fears of a recession increased. Worthy of mention are Germany's largest builder Hochtief AG which declined 3.1% after the U.S. Commerce Department reported that housing starts sank to the lowest level in 17 years.
Currencies & commodities
Oil prices have been trading in a volatile fashion following the government's inventory data. For the week ending September 12, the U.S. Department of Energy reported a draw of 6.3 mmbbl in crude oil bringing inventory levels to 291.7 mmbbl - the draw was larger than Street expectations, which called for a draw of 3.2 mmbbl. Distillate fuel oil levels currently stand at 129.6 mmbbl after a draw of 0.9 mmbbl for the week, Street suggested a draw of 1.8 mmbbl. The U.S. DOE reported a draw of 3.3 mmbbl in motor gasoline, inventory levels currently stand at 184.6 mmbbl, Street expectations suggested a draw of 3.7 mmbbl. Crude oil is trading higher by $2.45 at $93.60 per barrel.
Gold prices have just jumped significantly. We're hearing rumours that there may be problems with a Central Bank in South America which may have sparked the jump. Gold futures now almost up US$80 per ounce. Gold stocks are doing very well right now.
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