4/8/8

The Dow Jones fell 51.7 points to finish at 11,326.32, the S&P 500 declined 7.07 points to end at 1,260.31. The Nasdaq dropped 14.59 points to finish at 2,310.96.

Car manufacturers were in focus after a number of companies reported sales figures that fell more than expected. Toyota, Ford Motor and Nissan all reported sales figures that fell more than expected, but the sector had already gone lower following General Motors second quarter report. GM made a net loss of $15.5 billion, which the company said was due to restructuring costs. Revenue was down to $37.7 billion against $45.8 billion a year earlier, well below estimates of $44.6 billion. Shares fell nearly 8% as a result.

Alcoa and Caterpillar caused the biggest drags on the Dow following a drop in global metal prices and weak manufacturing data. Aluminium maker, Alcoa, tumbled almost 5%, while Caterpillar, which makes mining equipment, slid 2%.

The biggest drag on the Nasdaq came from Biogen which plummeted more than 28%. The biotechnology company deserted by investors following renewed concerns about its multiple sclerosis drug. Two new brain disease cases were detected in patients taking Tysabri, which Biogen jointly manufactures with Elan.

US light crude oil for September delivery gained $1.02 to settle at $125.10 a barrel. The price of the commodity had been as much as $4 higher earlier in the session on renewed concerns over Iran's nuclear program.

COMEX gold for December delivery slipped $5.20 to $917.50 an ounce.

Treasury prices went higher, sending the yield on the 10 year note down to 3.93%.

The Nikkei fell 161.41 points to close at 12,933.18 this morning. Car manufacturers were lower following the drop in US car sales. Nissan fell to a five year low, while Mazda slumped to a six year low. Mitsui & Co, Japan's second largest trading company, plunged after first quarter profit declined.

The Hang Seng is currently 353.99 points lower at 22,508.61. HSBC is causing the biggest drag on the index ahead of its profit figures due out today. Li & Fung, which supplies goods to Wal-Mart, declined on concerns that demand for its products in the US will fall after the nation's unemployment rate continued to rise.

The FTSE is currently 3.2 points lower at 5,351.50. Shares were lower at the open on Monday following pre-weekend falls on Wall Street, with further earnings reports from UK banks, kicking off later this morning with HSBC, and global interest rate decisions to be the main focus of attention this week. BT is the leading riser after being awarded a new three year, multi-million pound contract with the Ministry of Justice, to provide an automated fine payment service for Magistrates' Courts across England and Wales. Eurasian Natural Resources heads up the fallers board with a number of other mining companies which falling in line with global metal prices.

Economics
US Personal income and spending 13.30 bst

The core PCE deflator rose 2.1 percent in Q2, a greater than anticipated increase. If the April and May data were to stay unrevised at 0.14 percent and 0.11 percent respectively, this suggests that the June core PCE deflator rose 0.4 percent. However, a more likely outcome is a smaller rise in June (HSBC expect +0.26 percent, compared with +0.32 percent for core CPI), with April or May, being revised up to +0.2 percent. This would take the June year on year rate up to 2.3 percent, with a possible chance of 2.4 percent.

The Q2 GDP report showed deep downward revisions to real PCE for each of the past three quarters (2 percent from 2.8 percent for Q3 2007, 1 percent from 2.3 percent for Q4 2007, and 0.9 percent from 1.2 percent in Q1 2008), while Q2 was weaker than expected at 1.5 percent (HSBC expected 1.9 percent). They estimate that June real PCE fell 0.3 percent, with downward revisions to prior months explaining the rest of weaker Q2 result. Nominal spending in June could rise 0.5 percent, while June personal income may fall 0.3 percent. Government social benefits should fall month on month, as stimulus payments made in June totalled around two thirds of the amount paid in May.

US Factory orders (Jun) 15.00 bst

Durable goods orders rose 0.8 percent in June, boosted by big gains in electrical equipment, machinery, and metals. Oil prices were still rising over the month of June, and non durable orders are seen rising by 1.1 percent. This should translate into a 0.9 percent increase for total factory orders.

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