30/07/07

The S&P500 closed 23.71 points lower at 1458.95 and the Nasdaq closed 37.10 points lower at 2562.24. Credit market fears, which sparked Thursday's 311 points drop and a 262 points sell off on Tuesday once again wreaked havoc on investors nerves, while a surge in oil prices helped pressure stocks.

Cadbury Schweppes closed 30 cents higher at $48.74 after announcing that it had decided to delay the sale of its North American beverage unit, citing recent turmoil in the debt market.

Wall Street found some comfort in a better than expected second quarter GDP reading and comments by Treasury Secretary Henry Paulson that the US economy is the strongest he has seen in several decades, helped by growth outside the US.

Gap Inc was one of the few gainers on Friday closing 88 cents higher at $17.79, on news that the apparel maker named Glenn Murphy as the company's new CEO.

Shares of the spinal products maker Kyphon Inc added $12.92 to close at $66.60 after fellow devicemaker Medtronic said it had agreed to buy the company for $3.9bn.

Treasury bonds kept climbing after a big run up in the previous session, as investors once again sought shelter from falling stock prices. The 10 year note rose to 4.76 percent, down from 4.78 percent in the previous session.

The dollar gained versus the euro and was lower against the yen.

COMEX gold for December fell $2.80 to $672.30 an ounce.

The Nikkei average closed 5.5 points higher at 17289.3 today, after hitting its lowest in nearly four months as a stronger yen weighed on Canon Inc and other exporters, but the market largely brushed aside the defeat of Prime Minister Shinzo Abe's ruling camp in Sunday's upper house elections. The broader TOPIX rose 0.35 percent after Nippon Steel Corp and JFE Holdings Inc reported strong quarterly gains in profit on higher prices, and JFE raised its full year forecast by 4 percent.

The FTSE100 ended lower on Friday after dipping in and out of positive territory as interest rate worries, and concerns that a rise in defaults on US subprime mortgage loans could spiral into a broader financial crunch stalked markets. The FTSE100 closed 36 points lower at 6215.2, its lowest close since mid March.

Mining shares dragged the index into the red, accounting for 17 points of FTSE losses, as traders said credit concerns may adversely affect future M&A activity within the sector and also hit global demand for metals. Antofagasta fell 3.6 percent, Anglo American fell 4 percent, Vedanta lost 3.9 percent and Kazakhmys lost 2.9 percent.

Resolution gained 2.9 percent on speculation that rival Pearl could muscle in on its planned merger with Friends Provident, after Pearl boosted its holding in Resolution and called for talks. Entrepreneur Hugh Osmond's Pearl, said last year it could consider deals above £7bn, well above Resolution's market value of almost £4.5bn.

Property stocks featured among leading gainers, as traders said recent interest rate worries that had affected the sector had dragged the stocks too low. Land Securities added 0.6 percent, British land added 0.7 percent, Barratt Development climbed 1.6 percent and Persimmon added 2 percent.

In other news, analysts said a $9bn wave of risky mortgages resetting at higher interest rates in the US could force HSBC to absorb another big hit to profits as more customers default.

Alliance and Leicester reported a 10 percent in underlying profits, just ahead of expectations, as it boosted efficiency by attracting more Internet customers. But stocks fell 1.4 percent.

BG Group rose 0.1 percent after reporting a 13 percent rise in second quarter earnings, as asset sales and strong earnings from its liquefied natural gas business outweighed a rare drop in production.

Reuters Group posted higher than expected first half trading profit and said sales were strong. Its shares fell 0.2 percent.

Economics
UK Consumer Credit & Mortgages (Jun) 0930 BST

The data from the BBA, which covers around 60% of all banks and building societies, shows that higher interest rates are starting to have the desired affect on credit. Analysts expect consumer credit of £0.6bn in June. Mortgage approvals rose unexpectedly in May which mat be a result of a flurry of activity in May, in the build up to the Home Information Pack (HIP). Analysts expect a retreat this month, suggesting a roughly 10% yoy decline in new mortgage approvals.

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