US stocks backtracked slightly on Monday with banks, carmakers and techs slipping. The energy sector made gains and news of a US$4.4 billion takeover in the agricultural sector diverted attention from rising oil prices.
The Dow fell just 0.33 points to 11842.36, while the broader S&P 500 added 0.07, or 0.01 per cent to 1318. The NASDAQ dropped 20.35, or 0.85 per cent to 2385.74.
Financial stocks weighed on the market after Goldman Sachs reversed its May recommendation, telling clients to sell the sector as credit conditions deteriorate
Insurer American International Group's shares fell 5.6 per cent, while Bank of America's stock slid 4.5 per cent and JPMorgan finished 2.6 per cent lower.
United Parcel Service lowered its second-quarter earnings outlook after the bell, citing slow economic growth and high fuel costs. UPS shares slid 4.2 per cent in extended trade.
Consumer discretionary stocks took a beating during Monday's session after Goldman Sachs recommended that clients sell the sector on economic concerns.
Carmakers were among the leading fallers in the consumer discretionary sector. Ford lost 9.1 per cent, while General Motors slipped 6.4 per cent.
Shares of Circuit City Stores tumbled 21.3 per cent, as the electronics retailer explored its options after a buyout offer from Blockbuster.
In the tech sector, eBay dropped 1.6 per cent, iPod maker Apple fell 1.2 per cent, Comcast gave up 1.2 per cent and Dell lost 0.3 per cent.
Meanwhile, news that fertilizer producer Bunge agreed to buy Corn Products International produced mixed results. Bunge dropped 9.4 per cent, while Corn Products rallied 18.3 per cent.
Energy companies, including Exxon Mobil and ConocoPhillips, made gains after Saudi Arabia's output boost was seen as too little to limit soaring oil prices. Exxon added 3.3 per cent and ConocoPhillips rose 3 per cent.
NYMEX light crude for July delivery rose US$1.38 to settle at US$136.74.
COMEX gold for August delivery fell US$16.50 to settle at US$887.20 an ounce.
UKmarkets
British shares gained ground as rising crude prices buoyed the energy sector. Investors also bought up pharmaceutical companies, but concerns about the housing market weighed on homebuilders and property stocks.
The benchmark FTSE 100 added 46.10, or 0.83 per cent to 5667.20.
Among oil stocks, Royal Dutch Shell added 1.5 per cent, BP gained 1.8 per cent and Centrica was up 2.4 per cent.
Bucking the trend, Expro fell 2.7 per cent on news that US based Halliburton said it had ended talks to buy the British oil services firm. Expro had backed a rival bid and refused to open an auction.
Mining stocks were mostly higher with Anglo America gaining 0.4 per cent, while Eurasian Natural Resources picked up 2.1 per cent. BHP Billiton added 1.1 per cent, but Rio Tinto edged 0.1 per cent lower.
Meanwhile, Xstrata rallied 2 per cent after saying it would match a rival bid for Australian listed Indophil Resources.
Pharmaceutical companies also helped the market higher. Shire jumped 5.7 per cent after Goldman Sachs lifted its rating on the stock from neutral to buy. Meanwhile AstraZeneca gained 3.1 per cent and GlaxoSmithKline tacked on 2.1 per cent.
However, financials closed lower. HBOS dropped 4.3 per cent on concerns that some of its shares wouldn’t be taken up under the company’s rights issue.
Lloyds gave up 2.7 per cent on speculation that the company was considering an acquisition Allianz’s Dresdner Bank unit.
Homebuilders lagged due to concerns about a slowdown in the housing market. Persimmon shed 4.3 per cent, Taylor Wimpey dropped 7.2 per cent and Barratt Developments gave up 4.6 per cent.
Meanwhile, property firms Land Securities Group and British Land shed 4.8 per cent and 2.7 per cent respectively.
European markets
European stocks made modest gains, aided by rises in the continent’s oil stocks. But like their British counterparts, Europe’s banks capped broader gains.
France’s CAC 40 added 2.1, or 0.05 per cent to 4511.37, while Germany’s DAX was up 11.02, or 0.17 per cent to 6589.46.
UBS fell 4.4 per cent after Bank of America said the Swiss giant would likely suffer a US$7.5 billion write down in the second quarter. In France, Societe Generale, BNP Paribas and Credit Agricole declined 1.7 per cent, 1 per cent and 4.5 per cent respectively.
Meanwhile, takeover target Deutsche Postbank tumbled 6.2 per cent on concerns that growing interest in Dresdner bank would reduce the price it fetches. Dresdner parent Allianz edged 0.2 per cent lower.
Bucking the trend, Banco Popular picked up 4.6 per cent on news that a company, which represents Mexican investors, was looking to build a 20 per cent stake in the company.
Among oil stocks, France’s Total added 2.1 per cent and Italy’s ENI closed 1.6 per cent higher.
Japanese markets
Japan's stock market slid on Monday after property developers took a beating on reports of lower condominium prices. Major exporters also retreated following a negative lead from Wall Street.
The Nikkei 225 declined 84.61 or 0.61 per cent to 13,857.47 as investors revisited old fears.
Among the banks, Mitsubishi UFJ Financial Group shed 1.7 per cent, again held back by financial market fears. The trouble was sparked by industry warnings of more bank mortgage-related write downs.
However, Olympus Corp bucked the trend gaining 2.3 per cent after a ratings upgrade, which helped boost the overall market.
Toyota slid 1.9 per cent, becoming one of the biggest drags. Sony Corp was down 0.6 per cent and Nissan Motor Co fell 2 per cent.
Property shares were battered by speculation that some companies would cut their condominium prices.
This was heightened by Japan's largest condominium developer, Daikyo, which said it may cut prices of some of its unsold condominiums by 5 per cent to 10 per cent. Sares in Daikyo slid 2.1 per cent.
Hong Kongmarkets
Hong Kong stocks edged 0.1 per cent lower even as a rise in crude prices lifted oil heavyweight CNOOC. Financials also gained ground, but a profit warning from Aluminum Corp of China dampened sentiment.
The benchmark Hang Seng fell 30.64, or 0.13 per cent to 22714.96.
Offshore oil producer CNOOC gained 1.6 per cent after Friday’s rise in crude prices.
Hang Seng Bank climbed 2.1 per cent, ICBC rose 0.4 per cent and China Construction Bank climbed 0.8 per cent.
On the downside, Aluminum Corp of China fell 5.7 per cent, hitting its lowest level in over a year. The company warned that first half net profit would tumble at least 50 per cent.
Sinopec Corp fell 2.4 per cent, giving up some of its recent gains after many argued that China's fuel price hikes were not enough to bail out the embattled refiner.
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