Friday (01/13/12) Mid-Day Market Report: US markets tumble amid European fears

Friday (01/13/12) Mid-Day Market Report: US markets tumble amid European fears

Mid-Day Market Action


  • US:  Dow: 12351.94 (-0.95%), S&P 500: 1281.79 (-1.07%), NASDAQ: 2698.63 (-0.96%)
  • Europe: CAC: 3196.49 (-0.11%), DAX: 6143.08 (-0.59%), FTSE: 5636.64 (-0.46%).
  • Asia:Australia: 4195.40 (0.36%),China: 2244.58 (-1.36%),Hong Kong: 19204.42 (0.57%),India: 4866.00 (0.72%),Japan: 8500.02 (1.35%),Korea: 1875.68 (0.59%),Singapore: 2791.54 (1.72%),
  • Metals: Gold: 1631.90 (-0.96%), Silver: 29.59 (-1.77%), Copper: 3.63 (-0.48%)
  • Energy: Crude Oil: 98.22 (-0.89%), Natural Gas: 2.67 (-1.15%)
  • Agriculture: Corn: 6.04 (-1.23%), Soya Bean: 11.77 (-0.13%), Wheat: 6.04 (-0.21%).
  • Currency: EUR/USD: 1.2656 (-1.2365%), GBP/USD: 1.5285 (-0.3142%), USD/JPY: 76.9460 (0.2427%)
  • 10 year US Treasury: 1.836% (-0.085)


Two Sigma’s Venn outlines factor performance for March

EuropeEquities did well last month as most market watchers have noted that Value outperformed growth. In his March Factor Performance report, Alex Botte of Venn by Two Sigma noted that March was a strong month for the global Equity factor, especially in developed markets. Q1 2021 hedge fund letters, conferences and more He said Europe Read More


Market News Update


US markets tumble amid European fears: U.S. stocks fell, snapping a four- day rally for the Standard & Poor’s 500 Index, as euro-region governments braced for possible credit downgrades by S&P and as JP Morgan Chase & Co.’s profit slumped 23 percent. As of 12:45 a.m. ET, the Dow Jones Industrial Average fell 110 points, or 0.88%, to 12361, the S&P 500 dipped 12.4 points, or 0.95%, to 1283 and the Nasdaq Composite skidded 23.7 points, or 0.87%, to 2700.
Five European nations likely to be downgraded by S&P: According to the French newspaper, Les Echos, Standard & Poor’s will cut the credit ratings ofItaly,Spain andPortugal by two notches and downgradeFrance andAustria by one notch.


Greek debt talk halted: Talk between Greece and its creditor banks, aimed at avoiding a disorderly default broke down on Friday, with Greeks warning of disastrous results if a bond swap deal is not reached soon.


Euro falls: The euro fell to its lowest level against the dollar in nearly 17 months on Friday as talk of an imminent downgrade of euro zone countries and a lackluster Italian debt auction prompted investors to seek safety elsewhere.


Oil drops to three-week low: Oil prices fell on Friday in choppy trading as pressure from expectations of credit downgrades for some euro zone countries countered the supportive effect of potential supply disruptions in Nigeria and Iranian threats to shipping.




Company News Update


  • J.P. Morgan Chase & Co. (JPM) reported a 23% drop in fourth-quarter profit, the result of another weak quarter for investment-banking operations, though executives touted loan growth as a sign of an improving economy and the bank closed out a record year for profits.
  • The Swiss drugmaker Novartis is cutting nearly 2,000 jobs in the United States, anticipating the impending loss of patent protection on its blockbuster drug Diovan.
  • Apple Inc (AAPL) released on Friday a comprehensive audit of its major suppliers, saying it discovered a number of environmental violations in plants inChina.
  • United Parcel Service Inc. (UPS) declined 1.2 percent to $73.87. The world’s largest package-delivery company was cut to “neutral” from “overweight” at JPMorgan.
  • Charles Schwab Corp. (SCHW) lost 3.5 percent to $12.03. The independent, San Francisco-based brokerage was downgraded to “market perform” from “outperform” at Wells Fargo & Co.
  • Diamond Foods Inc. (DMND), which makes Emerald Nuts, plunged 13 percent after The Wall Street Journal reported that federal prosecutors opened a criminal inquiry into its financial practices. The Journal also reported that two large shareholders have dumped most of their stakes in the company.
  • Safeway Inc. (SWY) rose 1 percent. An analyst at Jefferies placed a “buy” rating on the stock on the expectation that the grocery store chain will benefit from an improving job market, especially inCalifornia.
  • Alpha Natural Resources (ANR) fell 9 percent, the largest loss in the S&P 500. The coal company bought Massey Energy last year, and the U.S. Department of Justice is considering whether to prosecute those who ran Massey when its Big Branch mine exploded in 2010.


Hedge Fund News Update


  • The USSecurities and Exchange Commission (SEC) is being urged by the Managed Funds Association (MFA) to amend rules preventing hedge fund managers from openly communicating with investors and the media about their products.
  • Hedge funds are positioning to profit from a plan to slash Greece’s towering debt pile as Athensenters final talks that could sway the country’s membership of the euro, writes Reuters. York Capital, the $14bn fund part-owned by Swiss banking giant Credit Suisse, New York-listed Och Ziff, and $10bn-strong Marathon Asset Management are among those who collectively may have built up sufficiently large positions to scupper the bailout deal, several sources close to the debt restructuring told Reuters.
  • Despite big losses last year, billionaire hedge fund manager John Paulson, who made bets in 2011 against subprime mortgages nationwide, is continuing to make bullish investments in residential and commercial mortgage-backed securities, Bloomberg News reported, a move that his helped his Credit Opportunities fund to gain about 1 percent last quarter.
  • Participation by foreign pension, hedge funds, private equity funds and brokers in Indian commodity futures trading may not fructify if the government there accepts a recommendation of the Parliamentary Standing Committee (PSC) on Consumer Affairs, which feels the time is not yet ripe for their presence.
  • After a gut-wrenching 2011, hedge funds are betting signs of improvement in financial markets will give traditional “macro” trades based on economic growth and inflation a better chance of paying off.
  • Hedge fund investors are likely to move almost a sixth of their cash into the hands of different managers in 2012, a report on Friday showed, as firms in the $2 trillion sector grapple with winning back the confidence of clients hurt by losses in 2011.


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