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E.L. & C. Baillieu Stockbroking Ltd is a Participating Organisation of the Australian Stock Exchange Limited. The firm commenced business in 1889.  Since its inception, E.L. & C. Baillieu Stockbroking Ltd has encouraged and assisted private investors.

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E.L. & C. Baillieu Morning Wrap; Spanish stocks plunge to 8½ year low

Spanish stocks plunged to their lowest level in 8½ years and yields on the government's bonds jumped above 6% amid expectations that the country's fourth-largest bank would effectively be nationalized.

Author: E.L. & C. Baillieu Stockbroking - by Andrew Thain


HEADLINES

- The Dow Jones Industrial Average tumbled for a sixth straight day as investors remained focused on concerns from Greece and Spain.

- Spanish stocks plunged to their lowest level in 8½ years and yields on the government's bonds jumped above 6% amid expectations that the country's fourth-largest bank would effectively be nationalized.

- Crude-oil futures pared losses Wednesday after a weekly government inventories report showed an increase that was less drastic than an earlier report had indicated.

- Worries about political and economic turmoil in the euro zone pushed gold futures to their lowest settlement price of 2012, as investor demand for the perceived safety of the U.S. dollar limited the appeal of precious metals.


US MARKETS

The Dow Jones Industrial Average tumbled for a sixth straight day as investors remained focused on concerns from Greece and Spain.

The Dow fell 97.03 points, or 0.8%, to 12835.06, on Wednesday, after declining as much as 184 points earlier in the session. On Tuesday, the Dow took a similar intraday trajectory, losing as 198 points before recovering to end down 76 points.

The day's loss extended the Dow's losing streak to six days, the longest such slide since August. The Dow has now lost 444 points, or 3.3%, and remains 9.4% off its all-time high.

Investors dumped the euro and flocked into Treasurys, pushing the yield on the 10-year note, which falls as prices rise, down to a three-month low of 1.835%. A Treasury auction Wednesday saw 10-year bonds sold at a record low yield of 1.855%.

Shares of Walt Disney rose, pushing the stock to an all-time high, after the blue-chip entertainment company reported fiscal second-quarter earnings and revenue that exceeded


EUROPEAN MARKETS

Spanish stocks plunged to their lowest level in 8½ years and yields on the government's bonds jumped above 6% amid expectations that the country's fourth-largest bank would effectively be nationalized.

Spain's IBEX 35 index sank 2.8% to 6812.70, its lowest closing price since the autumn of 2003, while the broad Stoxx Europe 600 index fell 0.3% to 249.73, its lowest close in nearly four months.

Among major national benchmarks, France's CAC-40 index eased 0.2% to 3118.65, while the DAX 30 index rose 0.5% to 6475.31. The FTSE 100 index shed 0.4% to 5530.05.


ASIAN MARKETS

Asian markets slid and the euro fell Wednesday on fresh worries about the fragility of Europe's monetary union following failed coalition talks in Greece, while a decline in commodity prices pushed down metal, mining, and oil stocks across the region.

Japan's Nikkei touched its lowest in almost three months, closing 1.5% lower at 9045.06, Korea's Kospi slipped 0.9% to 1950.29, Hong Kong's Hang Seng Index was down 0.8% to 20330.64, and the China Shanghai SE Composite fell 1.7% to 2408.59. The dollar lost 0.1% against the yen, to ¥ 79.8.


AUSTRALIAN MARKETS

Australian shares dropped to their lowest in four weeks as investors were spooked by talk Greece could reject the bailout that saved it from bankruptcy.

The benchmark S&P/ASX200 index fell 39.2 points, or 0.9 per cent, to 4275.1, its lowest close since April 11, while the broader All Ordinaries index dropped 43.7 points, or 1 per cent, to 4332.2.

Gold producer Newcrest Mining slumped 5.3 per cent to $23.80 after gold prices fell to a four-month low. Bullion this year has tended to trade in tandem with risk assets such as stocks and oil, while assets such as Australian government debt have become a safe-haven favourite.


OIL

Crude-oil futures pared losses Wednesday after a weekly government inventories report showed an increase that was less drastic than an earlier report had indicated.

Crude for June delivery declined $1.05, or 1%, to $95.98 a barrel on the New York Mercantile Exchange. Prices traded around $95.37 a barrel before the data.


METALS

Worries about political and economic turmoil in the euro zone pushed gold futures to their lowest settlement price of 2012, as investor demand for the perceived safety of the U.S. dollar limited the appeal of precious metals.

The most actively traded gold contract, for June delivery, fell $10.30, or 0.6%, to settle at $1,594.20 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement price since Dec. 30.

Andrew Thain can be contacted by email; CLICK HERE.

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