Global Markets Report
Tue, 17 Jun 2008 08:54It was a mixed day for Wall Street as The Nasdaq staged a bit of a rally after oil prices retreated from an all time high. But the Dow slipped on weak reports on housing and manufacturing and also an UBS downgrade on two telecoms stock on the index Verzion & AT&T. Stocks had a hard time in the morning as investors had to take in the oil prices surging toward new record levels. They also mulled over Lehman Brothers huge quarterly loss and the CEO shake up at AIG. But by late trade oil came back off its highs and strength in Techs and Financials dominated the rest of the day. The Dow Jones fell 38 points to 12,269, the S&P500 was little changed at 1,358 and the Tech heavy Nasdaq climbed 20 points to 2,475.
European shares fell on Monday led by banks and food producers, while a rally in the oil price to new record highs supported commodity shares but rekindled concern about inflation. There were declines for the first time in three days as concern deepened that higher raw-material costs will erode earnings not just for food producers but for airlines as well. On top of that, those weak US reports. A fund Manager in London said that oil prices remain a concern, even those companies that appear to have good pricing power will struggle to fully pass costs through to their customers. If oil prices remain high, the resulting margin compression could lead to significant downgrades. Looking at some of the major indices: France's CAC 40 slid 0.5% as did Germany's DAX and the UK's FTSE 100 slipped 0.1%.
