US stocks fell yesterday as various leaks and rumours about the bank stress tests continued. The Wall Street Journal said at least 10 of the 19 banks under investigation may need to boost their capital, while its rumoured that Bank of America may require an additional $35bn. Federal Reserve Chairman Ben Bernanke gave a mixed view of the economy when speaking to the Joint Economic Committee. He said the economy should start to rebound later this year and the housing bust may be near a bottom. Although he stated that US growth would remain subdued and unemployment would still be high.
The Dow Jones slipped 16.09 points to close at 8,410.65 while the S&P 500 fell 3.44 points to end at 903.80. The Nasdaq dropped 9.44 points to finish at 1,754.12.
Banks were mixed as investors bet on the results of the stress tests. JPMorgan lost 2.7% while Wells Fargo fell 4%. In contrast Citigroup gained 3.4% even though it is thought it will be told to raise a further $10 billion in capital.
Procter & Gamble caused the biggest drag on the Dow after reports surfaced of problems at one of its manufacturing plants. Shares in the company lost 2.4%, knocking almost 10 points off the Dow.
Kraft Foods was one of the top risers on the Dow, up 4%, after reporting higher quarterly profit that beat expectations. Revenue was lower due to the strength of the dollar, but the company said higher prices and cost cuttings led to the stronger than expected earnings.
After the close, Walt Disney gained 2% after reporting a quarterly profit that topped analysts’ forecasts.
US light crude oil for June delivery lost $0.63 to $53.84 a barrel.
COMEX gold for June delivery added $2.10 to $904.30 an ounce.
Treasury prices fell, raising the yield on the 10 year note to 3.16% from 3.15%.
The Tokyo Stock Exchange is closed today.
The Hang Seng is 126 points higher at 16,556.08 this morning. HSBC leads financials higher after JPMorgan upgraded the stock. Cnooc Ltd, China's biggest offshore oil explorer, lost 3.3% after crude prices declined.
The FTSE 100 is currently 0.63 points higher at 4,337.57. A whole raft of stocks has started to trade ex-dividend today, keeping any gains for the blue chip index at a minimum. They include Drax (-6.6%), Antofagasta (-5.6%), Whitbread (-3.3%), Bunzl (-2.6%), Admiral (-2.3%), Royal Dutch Shell (-2.2%), Morrison Supermarkets (-2%) and Kingfisher (-1.2%). Intertek tops the risers board, up 6.5%, after UBS upgraded the stock to Buy from Neutral. Home Retail also benefits from the same upgrade, pushing the stock 3.2% higher. Standard Chartered continues to rise following its upbeat trading update from yesterday; shares are currently 4.3% stronger. Sage climbs 3.7% after meeting analysts’ first half forecasts.