Stocks plummeted yesterday after the World Bank cut its global growth forecast and commodity prices tumbled. The World Bank now expects global growth to shrink by 2.9% in 2009 against its earlier forecast for a 1.7% contraction. It also expects global trade to drop 9.7% this year. As a result, the Dow Jones plunged 200.72 points to close at 8,339.01 while the S&P 500 dropped 28.19 points to 893.04. The Nasdaq tumbled 61.28 points to finish at 1,766.19.
Losses were broad based with 27 of the 30 Dow components falling. Chevron Corp and Exxon Mobil led the blue chip index lower after US light crude oil for July delivery slumped $2.62 to $66.93 a barrel - a two week low. Chevron sank 3.4% and Exxon Mobil lost 3.1%, knocking 17.4 and 16.7 points off the index, respectively.
Apple limited its losses after announcing that it had sold more than 1 million of its newest iPhone in the first three days of its launch, beating expectations. Shares ended 1.5% lower. Elsewhere, pharmacy chain Walgreen Co reported a bigger than expected drop in quarterly profit sending shares 5.7% lower.
COMEX gold for August delivery dropped $15.20 to $921 an ounce. Treasury prices surged, lowering the yield on the 10 year note to 3.7% from 3.83%.
The Nikkei fell 276.66 points to close at 9,549.61 this morning. Commodity related companies including Mitsubishi Corp, a trading company that gets half its sales from resources, slid 5.3%. Canon Inc, which gets a third of its sales from the Americas, declined 2.8% as the yen rose to a three week high against the dollar.
The Hang Seng is currently 508.89 points lower at 17,550.66. Commodity related stocks were again among the biggest losers. Cnooc, China's largest offshore oil producer, loses 4.3% while Jiangxi Copper, China's largest smelter, slides 5.5% after copper retreated 5.2%.
The FTSE 100 is currently 14.22 points higher at 4,248.27. Thomson Reuters tops the risers board, up nearly 6%, after announcing that it is seeking shareholder approval to unify its dual-listed company structure. In connection with the unification, the company said it may repurchase the equivalent of up to $500 million of its shares in one or more of its markets. Bunzl gains 1.2% after reporting its first half revenue rose 17%. On the downside, Anglo American continues to fall following news of a potential merger with Xstrata. Legal & General slips 2.4% after SocGen cut its rating on the stock to Sell from Hold.