DowJones Sinks 200 pts in early trade

Stocks Tumble on Global Economic Worries; Dow Sinks More Than 200 Points-

NEW YORK (AP) -- Stocks and interest rates are extending their losses after consumer confidence dropped because of concerns about the economy.

The Conference Board says Tuesday its Consumer Confidence Index fell nearly 10 points to 52.9, down from a revised 62.7 in May. Economists had forecast only a modest drop.

U.S. markets were already down before the consumer report. They followed Asian markets, which fell after data showed that Japan's recovery has slowed. European indexes fell after Greek workers walked off the job to protest budget cuts.

The Dow Jones industrial average is down 238 at 9,901. It had been down 175 ahead of the confidence report. The Standard & Poor's 500 index is down 27 at 1,047. The Nasdaq composite index is down 66 at 2,154.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) -- Stocks and interest rates tumbled Tuesday after fresh signs of a global economic slowdown spooked investors.

U.S. markets are following those in Asia, which fell when Japanese data showed that the nation's recovery has slowed. And then European indexes fell sharply after Greek workers walked off the job to protest steep budget cuts.

Interest rates fell in the bond market with investors seeking the safety of Treasurys. The yield on the 10-year note dropped to as low as 2.97 percent, the first time it has fallen below 3 percent since April 2009. The yield, which is used as a benchmark for many consumer loans and mortgages, bounced off its low and edged up to 2.99 percent.

Falling yields are a sign that investors are willing to forego potential big gains in stocks for more certain, but smaller profits in bonds.

Investors are worried that the global rebound is weakening. Consumers may be similarly shaken. A report due out Tuesday on consumer confidence is expected to show confidence fell in June after three straight months of gains.

Economists polled by Thomson Reuters forecast the Conference Board's consumer confidence index fell to 62.8 from 63.3 last month. The index needs to climb above 90 to indicate the economy is on solid footing.

Companies have indicated things are getting better, yet there are few signs they are ready to hire in big numbers. The Labor Department's monthly employment report due out Friday is expected to show the unemployment rate rose 0.1 percent to 9.8 percent in June.

In early morning trading, the Dow Jones industrial average dropped 129.01, or 1.3 percent, to 10,011.40. The Standard & Poor's 500 index fell 15.14, or 1.4 percent, to 1,059.43, while the Nasdaq composite index plummeted 39.55, or 1.8 percent, to 2,181.10.

A report that showed home prices rose in April did little to affect trading. The S&P/Case-Shiller home price index 20-city home price index rose 0.8 percent between March and April. The gains, though, are likely being written off because April was the final month when buyers could receive a tax credit. Nearly all housing indicators got a boost in April from the credit, but have since shown a slowdown in the market



Src:Yahoo Finance

Heard on the Street:

Heard on the Street: Sugar stocks get a booster shot on levy hike

Sugar stocks get a booster shot on levy hike

Some mutual funds, including Star Sign Mutual Fund and market operators, are believed to be buying shares of sugar companies. The news that the government is planning to increase levy sugar prices by 30% for the current September-October season has spurred the buying, according to dealers.

The step will help sugar companies post better profits in this quarter. Balrampur Chini surged close to 10% to finish Rs 86.15, supported by heavy volumes. According to dealers, most of the purchases by mutual funds and operators are for the short-term and they could even offload their positions within a week.

IDFC prices QIP at Rs 168.25 a share

Infrastructure Development Finance Company(IDFC) is learnt to have priced its qualified institutional placement(QIP) at Rs 168.25 apiece. India’s leading infrastructure lender plans to mop up close to $575 million through the issue. It has roped in four bankers including Credit Suisse, Morgan Stanley, CLSA and IDFC-SSKI to manage the share sale. The stock closed at Rs 169.90 on Monday, up 0.95 % over the previous close.

(Contributed by Harish Rao & Reena Zachariah)



Look Beyond the Indices

Most market participants pay too much attention to the gyrations of the Sensex or the Nifty and unnecessary worry about their volatility. There are numerous stocks that have more convincing reasons to buy or sell and these may give you more returns in day then what the indices can give you in a month.

Not those individual investors buy the indices but it does distract them from individual stocks. It is difficult for analysts to change their mind sets quickly and by the time you get to see an affirmations of a move from them, its too late in the day.

Take R.Com for instance. The first fundamental recommendation by a large house has come after a 5 weeks and 53% surge. That does not mean the stock does not have more upside, but it only goes to affirm that investors have to carry their own cross.

A few weeks back, we had spoken about the sugar stocks, as to how they seem to have formed a bottom. Yesterday they have broken out of the range bound pattern and demonstrated enough strength to warrant a buy.

The reason we gave at that time was that the industry is expecting some sops from the Government. While the sops are yet to be announced, the surge in the international prices has lit a fire under the sugar pot.

Expect the Government to impose a duty on white sugar imports and to cut the levy sugar quota from the current 20% to something like 16%. Levy quota was last raised form 10% to 20%. More cane crushing expected this year will ensure a higher power output and the raw material prices could be low, giving some relief to the beleaguered sector.

The US markets were confused yesterday. It now dawned on them that if the G-20 is infact going to cut deficits, then where is the growth going to come from?

We will continue to have data from the US that is bearish and stock specific announcements like GTL Infra will continue to present opportunities. If the Saudi investors are going to put money in the stock at 20-25% premium to the then prevailing price, then what stop you from going for the kill now.

We will have to train ourselves in limiting our greed and taking those small profits that come our way or just watch the indices oscillate up and down, worrying a lot but doing nothing.

The choice is yours.

Disclosure : No holdings or trading positions in stocks mentioned or recommended to clients

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Src: ET and DP blog and Smartinvestor , HDFCSECetc