Overnight Markets Continue To Decline

 @ibtimes
on February 16 2009 5:50 AM

Current Futures: Dow -17.20, S&P -2.70, NASDAQ -6.50 European Trade: Overnight equity markets traded in negative territory after a report showed the Japanese economy contracted more than expected in the fourth quarter. U.S. futures also fell lower. President Obama refused to name a so-called “car czar” to supervise the fate of the U.S. auto industry. Instead, Mr. Obama plans to organize a team that will bring back to life the two car manufacturers, GM and Chrysler. This news might have an influence over the stock market, because tomorrow the two car manufacturers are expected to show a detailed report on their attempts to restructure their business activity. If GM and Chrysler go into bankruptcy, more than 2 million jobs would be lost in the U.S. alone.Porsche, one of Europe’s leading car-manufacturers, has been accused by some market participants of manipulating the stocks prices for their own benefit. The accusations revolve around the VW takeover bid, which drove up the share price by almost 100%, at a time when markets plunged. Therefore, VW became, for a short period, the biggest company in the world by its market cap. The interesting part is that Porsche made 1 billion euros profit from selling cars in 2008, which until lately was its main activity, and a whooping 6.8 billion euros from trading VW stock options.The Nikkei closed slightly below the break-even line, even though it tested it a couple of times during the trading session. The negative momentum was carried over to the European markets, which have traded in the red since the opening bell. In the overnight markets, the declines were widespread including the financials, car-manufacturers and technology stocks.The German Dax declined 49.71 points (1.13%) to 4,363.68, while the U.K. Ftse slipped 25.84 points (0.62%) to 4,163.75Crude oil trades near the lowest value touched in the last few weeks. Crude oil for March delivery fell $0.30 to $37.20Gold fell tonight for the first time in the last few days. Bullion for immediate delivery lost $1.50 to $940.70.Previous Asian trade: Tonight, the Nikkei fell 29.23 points (0.38%) to 7,750.17. The Australian S&P lost 42.20 points (1.19%) to 3,516.90.

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