Europe kills new hope for Dow Jones Industrial rapid growth

Dow Jones Industrial: Europe is not encouraging

In brief: Dow Jones will not be able to show good results of the tenders for new challenges in Europe. The stock market of the Old World began trades with the minus.

Dow Jones Industrial Average could not resist bull trend because of the negative trading began in Europe and poor statistics in the Eurozone. Problems of the Chinese economy also does not give U.S. investors a good mood. Bears are most likely taking aim at the new assault on Dow Jones. Stock trades in Europe on June 2nd 2010 opened in negative area. There is a reduction of leading indices, that reacted to bad news from Japan and the USA. At the Tokyo Stock Exchange Investors sold shares today hastily, anxious statement Japanese Prime Minister Yukio Hatoyama’s resignation.

On the eve of a politician trying to calm the markets and confidently declared that does not leave the Government, which turned into quite a difficult situation after its composition came from the Social Democrats. But pressure from the members of the Democratic party headed by him, and the discontent of voters who insist on the withdrawal from the territory of the U.S. Naval Base, forced him to leave his post, which created the country’s political instability. Even more worrying European investors led to a statement the U.S. government to start criminal investigations against the British energy company BP. For more than a month from the explosion damaged the pipeline in the Gulf of Mexico oil flows, which caused major environmental disaster. All attempts by specialists to prevent leaks to no avail. It was reported earlier that the cause of spill could be technical malfunction of equipment drilling platform that had not been eliminated. While the U.S. Department of Justice collects the facts, the company’s stock continues a negative trend: to date, they have fallen in price by 1,7%. Against this background, at 5.48% also decreased quotes a French company CGGVeritas, engaged in seismic exploration for oil deposits. At the opening of the trading session cheaper securities and other oil companies – British BG Group (-2,34%), the British-Dutch Royal Dutch / Shell (-0,5%) and French Total SA (-1,61%). Do not add optimism to investors and investment banking advice in respect of European companies. Thus, Deutsche Bank downgraded shares of British Aegis, a large independent company working in the field Mediacommunications from “hold” to “sell”, but because at the opening session of trading company securities have fallen in price by 5%. Ratings of the German sports car manufacturer Porsche has also been revised Nomura Holdings Inc. downward. For that reason, the market value of shares already fell 1.89%.

In addition, investors will not disregard the message from the Spanish telecommunications company Telefonica, has changed the terms of purchase from a national telephone operator, Portugal Portugal Telecom 50% shares of mobile operator Brasilcel. Under the revised proposal, Telefonica is ready to buy half of all shares of Brazilian mobile operator, for 6.5 billion euros instead of previously proposed 5,7 billion euros. The property is located Brasilcel 60% stake in Brazil’s largest telecommunications company Vivo Participacoes, possession of which is the ultimate goal of Telefonica. In Portuguese companies are confident that the current size of the proposal does not reflect the strategic importance of the asset for Telefonica, but the final decision is not in a hurry. These events have a positive impact on stock quotes Portugal Telecom, which rose by 6,9%. Shares of Spanish Telefonica, by contrast, have fallen in price on 1,8%. In the red area today traded shares of British insurer Prudential Plc, after it announced the breaking of the transaction with the U.S. insurer AIG, which declined to review the financial terms of the transaction for buying her Asian unit AIA, life insurance. The company’s management was confident that if the amount of supply will be reduced to 30.4 billion dollars, the board of directors with the approval react to the purchase, but the seller, the initiative had met with enthusiasm. For that reason, Investors rushed to sell securities insurer: at the moment of their quotes have decreased by 2.52%. At the moment of time, the British FTSE 100 index dropped by 65.45 point (-1.27%) – up to 5,097.85 points, the German DAX – on 60.51 points (-1.01%) – up to 5920 , 76 points, the French CAC 40 – at 48.6 points (-1.39%) – up to 3,454.48 points, the Swiss index SMI – to 23.3 points (-0.37%) – up to 6293.3 points.

Ukrainian Globalist
2010-06-02 22:40, Economics.

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