The New York Stock Exchange will not open today in observance of the Martin Luther King national holiday. Meanwhile, let’s take a brief look back at what happened last week and what is going on overseas.
On Friday, Standard & Poor’s rating service made good on their December warning that they would downgrade France’s credit rating from AAA to AA+.
On Monday, the FTSE 100, CAC-40 and IBEX 35 were down 0.23-0.36 percent, while the DAX was 0.50% up.
The Shanghai Composite, Nikkei and the Hang Seng closed in the red on Monday.
Natural gas prices continue to fall, thanks to a supply surplus and the warmer than average winter in the U.S. Natural gas futures declined by 13 percent over the last week, to a low of $2.67 per 1,000 cubic feet. Falling natural gas prices could be a boon to economic recovery. In the U.S., more than 50% of homes rely on natural gas for heat, and consumers are saving considerably on their home heating costs. Lower natural gas prices are also a gain for the U.S. maunfacturing sector, which consumes gas in production plants.
A much more lucrative commodity, oil, has also seen prices decline over the past month. But oil is bouncing back. Light, sweet crude for February delivery was fetching 99..25 on the NYMEX, a gain of +0.54. Brent crude for February delivery reached $111.40 per barrel in London, up nearly a dollar. Even at it’s recent lower prices, oil companies are still laughing all the way to the bank. The price came as a result of Iran’s warning that it could decide to close down the Strait of Hormuz, through which roughtly on fifth of the world’s oil passes. Unrest over oil prices and subsidies continues to simmer in Nigeria, Africa’s top crude-producing nation. Nigeria’s president cut oil prices to 97 naira a liter in an attempt to soothe the turmoil.
February contract gold closed down -1% at $1,630.80 per troy ounce on Friday and is currently trading electronically at $1,642.80, a gain of 12 points or +0.74%. February contract silver closed down -2% on Friday at $29.52 per troy ounce, and is currently trading electronically at $29.80, rebounding just +0.20%.
Carnival Cruise Line (CCL) shares are sinking in London trading following news that the grounding of its Costa Concordia cruise vessel off the western coast of Italy may cost the cruise line up to $95 million. In the first day of (London) trading since the accident, CCL has lost more than -18%, or some -406.00 points as many investors jump ship. On the NYSE (which will reopen on Tuesday) Carnival stock closed at 34.28 per share on Friday.
The damage to the Costa Concordia will no doubt be costly to several insurance firms as well, among them RSA Insurance Group, Hannover Re, Assicurazioni Generali, and XL Group. Six people have been confirmed dead and as many as 15 passengers still missing or unaccounted for. Standard & Poor’s Rating Services said on Sunday that their ratings of Carnival Cruise Lines (BBB+/Stable/A-2) are currently unchanged by the accident.
CHAPTER 11 ON JANUARY 11
Hostess Brands, Inc., whose products include Twinkies and Wonder Bread, filed Chapter 11 on Wednesday, January 11. The company plans to continue business as usual thanks to a $75 loan while it attempts to restructure.
On Friday, the three major NYSE indexes closed in the red. The Dow closed at 12,422.10, down -48.96, or -0.39%. The S&P closed at 1,289.09, down -6.41 points, or -0.49%, and the Nasdaq closed at 2,710.67, a loss of 14.03 points or 0.51%.
Toronto’s TSX Composite closed down -43.26 points, or -0.35%, at 12,231.06 on Friday.
European Markets closed mostly down on Friday, with the exception of Spain’s IBEX 35, which closed at 8,450.60, up +23.60, or 0.28%.
In London, the FTSE 100 closed at 5,636.64, down -25.78 points, or -0.46%. France’s CAC-40 Index closed at 3,196.49, a loss of -3.49 points, or -0.11%. Gernany’s Dax fell -36.13 points, or -0.58%, to close at 6,143.08.
Housing foreclosures in 2011 were at their lowest rate in the past 4 years, as reported by RealtyTrac. There were nearly 2.7 million foreclosures in 2011, which amounts to about 1.45% of the housing market, a significant decline from the 2.23% of the market which foreclosures accounted for in 2010. The figures may be somewhat misleading, since part of the decline is thought to be due to courts taking a longer time to process foreclosures.
The unemployment rate declined to 8.5 percent in December, thanks to the addition of some 200,000 jobs, however, many of those positions were seasonal. The U.S. Department of Labor reported that initial unemployment claims rose by 24,000 to a six-week high of 399,000 in the first week of 2012, as seasonal position lay-offs kicked in.
Retail sales increased a less-than-projected 0.1 percent, according to a report by the Department of Commerce on Thursday. Of the 13 sectors measured, auto sales gained the most, jumping 1.5 percent. Ford Motor company reported a gain of 10 percent in December sales. 2011 was the strongest year for retailers in more than a decade. Sales rose some 7.7 percent in 2011.