Asian trade: Asian markets are trading mixed, even though the U.S. equity markets closed higher. Additionally, U.S. futures continued to advance during the Asian session, having the S&P rose as much as 7.20 points.
The unexpected growth in durable-good orders and new-home sales pulled the equity markets higher in the last session. The U.S. major indexes rose more than 2% during the intra-day session, but traders started to mark their profits and dragged the equity markets under the break-even line. By the end of the session, the S&P found again the necessary strength to rally, finishing the day higher by 7.76 points (0.96%).
Additionally, the equity markets found the strength to close higher even though Moody’s downgraded Bank of America and Wells Fargo, saying the two might need another round of government help. Bank of America saw its debt cut lower by one rating, down to A2, while Wells Fargo saw its debt-rating fall to A1, from Aa3. According to Moody’s, assets that have an “A” rating are considered upper-medium grade and have a reduced credit risk outlook.
Previously, both banks tapped the government shoulder for help. Bank of America received $163 billion, while Wells Fargo received $25 billion from the U.S. Treasury. However, the two banks have a big exposure to the housing market, something that might require further write-downs from their balance books. It is said that, both Bank of America and Wells Fargo have already a weak Tier 1 capital, reducing the bank’s capacity to take any further losses.
Tonight, the Nikkei fell 10.40 points (0.12%) to 8,469.59. The Australian S&P/Asx added 25.20 points (0.70%) to 3,634.50.
Crude oil continues to trade near the high of the last few days. Crude oil for April delivery rose $0.50 to $53.30.
Gold moved lower in the Asian session. Bullion for immediate delivery fell $1.20 to $936.80.