Tags: World | Markets

Bank Stocks Down After Obama Proposal

Friday, 22 Jan 2010 06:36 AM


  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

World markets slipped lower Friday, led by bank stocks after President Barack Obama proposed a sweeping overhaul of Wall Street to avert future financial crises.

Obama said he would seek to limit the size and complexity of large financial institutions so that their collapse wouldn't imperil the broader financial system and world economy or cost taxpayer money in bailouts.

The announcement spooked investors, causing a sharp sell-off in the U.S. and Asia. Markets recovered some of their poise by the European open, with the British stock index FTSE 100 down 0.1 percent at 5,331.05 and Germany's DAX shedding 0.4 percent to 5,721.50. France's CAC-40 lost 0.3 percent to 3,850.31.

U.S. futures pointed to a meager recovery on Wall Street on Friday. Standard & Poor's 500 futures were up 2.8 points at 1,113.90 and Dow industrials futures were up 25 points at 10,363.00.

Obama's announcement and Wall Street's reaction unnerved markets already on edge over China's recent moves to prevent its economy from overheating amid worries of inflation and asset bubbles.

Bank stocks were hit hardest, with Barclays Plc down 4.5 percent, Royal Bank of Scotland Plc 3.0 percent and Deutsche Bank 4.3 percent lower.

Adding to the uncertainty are questions about whether this year's economic prospects justify more gains after the run-up in stock prices that began in early 2009, said Mark Matthews, strategist at Macquarie Capital Securities in Hong Kong.

Last year "was such an amazing ride and people are starting to wonder if the recovery that we're seeing in 2010 was already priced in," Matthews said.

With little in terms of scheduled economic news, markets will be looking to more earnings reports, particularly from McDonald's, General Electric and Kimberly-Clark.

In Europe, attention remained focused on the debt problems of Greece, with officials stressing the country will not need a bailout but will manage its funding on the market. The possibility that other countries, such as Portugal, could also have trouble handling their debt has kept markets on edge, pushing the euro to 5-month lows against the dollar.

The euro recovered somewhat on Friday, to $1.4158 from $1.4082 late Thursday. The dollar weakened to 90.32 yen from 90.49 yen.

In the U.K., officials statistics confirmed that British consumers splurged on food and drink during the holidays, with retail sales rising 3.6 percent in December. The rise, however, was not a strong as some analysts expected, suggesting recovery from recession will be gradual.

In Asia earlier, Japan led the drop, with the Nikkei 225 stock average diving 2.6 percent to 10,590.55. Hong Kong's Hang Seng dropped 0.7 percent to 20,726.18 and Korea's main market index lost 2.2 percent to 1,684.35.

Elsewhere, China's Shanghai benchmark fell 1 percent, India's Sensex shed 1 percent and Australian stocks retreated 1.6 percent.

While banks in the U.S. fell steeply, shares in Asian financial institutions performed better, with many closing the session higher. Japanese lender Mitsubishi UFJ edged up 0.2 percent and China's ICBC gained 2.3 percent in Hong Kong. Other industries like commodities suffered big drops as concerns about future global demand prompted investors to scale back their riskier bets.

In the U.S. Thursday, Wall Street was yanked lower by heavy selling in bank stocks.

The Dow fell 213.27, or 2 percent, to 10,389.88, its biggest point and percentage drop since Oct. 30.

The broader Standard & Poor's 500 index fell 21.56, or 1.9 percent, to 1,116.48. The Nasdaq composite index fell 25.55, or 1.1 percent, to 2,265.70.

Oil prices rose after early losses, with benchmark crude for March delivery up 27 cents at $76.35 a barrel. The contract dropped $1.66 to settle at $76.08 overnight.


AP Business Writer Jeremiah Marquez contributed to this report from Hong Kong.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Florida Police Officer Killed, Suspect in Custody

Sunday, 21 Dec 2014 10:31 AM

A Florida police officer was killed in a shooting early on Sunday, and a suspect was in custody, according to a sheriff' . . .

Chicago Mayor Rahm Emanuel's Son Mugged Near Home

Sunday, 21 Dec 2014 09:00 AM

A spokeswoman for Chicago Mayor Rahm Emanuel says the mayor's 17-year-old son was mugged near the family's home. . . .

Muhammad Ali Hospitalized With Pneumonia

Saturday, 20 Dec 2014 23:27 PM

Boxing great Muhammad Ali was hospitalized with a mild case of pneumonia that was caught early and should result in a sh . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved