close
2 mins to read

Irish bailout fails to prevent stocks slumping on Wall Street

Stocks on Wall Street declined despite the agreement to an international bailout of Ireland.The amount is unknown but could be as high as €100 billion. It has already sparked a political crisis in Ireland with the Greens, a junior partner in the ruli

Nevil Gibson
Tue, 23 Nov 2010

Stocks on Wall Street declined despite the agreement to an international bailout of Ireland.

The amount is unknown but could be as high as €100 billion. It has already sparked a political crisis in Ireland with the Greens, a junior partner in the ruling coalition, calling for a new election.

The risk that other countries, such as Spain and Portgual, could face a similar crunch also rose.

The Dow Jones Industrial Average dropped 24.97 points, or 0.2%, to 11,178.58 at the close (10am NZ time). Financial shares led the decline, with Bank of America off 3.1% and JP Morgan Chase down 2.4%.

The financial sector also weighed on the S&P 500 index, which shed 0.2% to 1197.84, its first drop in four days.

Hewlett-Packard led the Dow's few gainers with a 1.8% increase ahead of the company's quarterly earnings. Other technology stocks also rose, pushing the Nasdaq Composite up 0.55% to 2532.02.

Novell rose 6.6% after an investor group reached a deal to acquire the company for about $US2.2 billion, ending an eight-month takeover battle for the software company.

Netflix rose 8.8% after launching its movie-streaming service.

Other markets: Europe down, Asia up

European stock markets fell as initial enthusiasm over the Irish bailout.

The Stoxx Europe 600 index was down 0.6% to 267.74. Stocks across Europe were already heading south when Moody's Investors Service announced that a review of Ireland's Aa2 rating would likely result in a "multi-notch downgrade."

The Irish ISEQ index fell 1.4% to 2758.06, weighed by heavy losses for financial stocks. Spain's IBEX 35 index fell 1.8% and Portugal's PSI 20 index fell 0.8%.

In London, the FTSE 100 index fell 0.9%. Royal Bank of Scotland Group PLC, viewed as having the most exposure to Ireland, slid 4.2%. The German DAX index shed 0.2%, while the CAC 40 was down 0.6% in Paris.

In Asia, most markets rose. QR National's debut supported Australia's stock market while Japan's Nikkei Stock Average logged its fourth winning sessions in a row.

QR National closed at $A2.65, up 3.9% from its $A2.55 offer price. Real-estate shares in Hong Kong finished sharply lower in the wake of government measures to cool red-hot property prices.

In Japan, the Nikkei Stock Average closed up 0.9% at 10,115.19. Australia's S&P/ASX 200 added 0.3% to 4643.53, India's Sensex rose 1.9% to 19,957.59 and Taiwan's Taiex gained 0.8% to 8374.91.

The Shanghai Composite Index eased 0.2% to 2884.37 and Hong Kong's Hang Seng Index shed 0.4% to 23524.02, its sixth loss in the last seven.

Commodities: Oil down, gold up

Crude-oil futures fell. Light, sweet crude for January delivery settled 24USc, of 0.3%, down at $US81.74 a barrel in New York. Brent crude on the ICE futures exchange fell 38USc, or 0.5%, to $US83.96 a barrel.

Gold futures rose with the most actively traded gold contract, for December delivery, rising $U5.50, or 0.4%, to $US1357.80 an ounce in New York.

Currencies: Euro down, pound down

The euro fell against the dollar, giving up earlier gains that had come in the wake of Ireland's formal request for financial aid.

The currency came within striking distance of $US1.38, but fears about sovereign debt spreading to Portugal or Spain sent the euro below $US1.36.

The euro was at $US1.3610 from $US1.3685 late on Friday. The dollar was at ¥83.47 from ¥83.48, while the euro was at ¥113.58 from ¥114.24. The pound was at $US1.5927 from $US1.5989. The dollar was at 0.9912 Swiss franc from 0.9921 franc.

Nevil Gibson
Tue, 23 Nov 2010
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Irish bailout fails to prevent stocks slumping on Wall Street
10573