New York equities rally even as new home sales decline

Wall Street ended higher Monday as bad news from the housing market actually worked to send shares higher as investors assumed that the news would push the Federal Reserve toward cutting interest rates again this week, as many analysts expect. The Dow Jones Industrial Average added 1.45 percent to 12,383.89 while the Nasdaq Composite was up 1.02 percent to 2,349.91 and the S&P 500 gained 1.76 percent to 1,353.97. Fast food chains were lower on flat sales while there were gains among food processors.

Asia-Pacific equities markets headed lower as investors worried that not only the US economy but also the Japanese economy are headed for recession. In India, the Sensex ended the session 1.14 percent lower at 18,152.78. Taiwan’s Taiex index fell 3.28 percent to 7,845.79 while the FTSE Straits Times Index was down 3.75 percent to 3,041.06. The Kospi index was 3.85 percent lower to 1,627.19. The biggest declines came in Hong Kong, where the Hang Seng fell 4.25 percent to 24,053.61, and on the Shanghai Composite, which dropped 7.19 percent to 4,419.29. Australian markets were closed for the Australia Day holiday.

Tokyo’s markets were down significantly on fears of recession as well as on a stronger yen. The Nikkei 225 was down 3.97 percent to 13,087.91 while the Topix index fell 3.85 percent to 1,293.03 and the Mothers market dropped 2.1 percent to 649.57. The electronics sector, steelmakers, and manufacturers of construction machinery were all lower on the session.

European markets were mixed but mostly lower on the session. The exception was the Dax, which added 0.03 percent to 6,818.85 in Frankfurt. The Paris CAC-40 was down 0.61 percent to 4,848.3 and the IBEX fell 0.87 percent to 13,026.7 in Madrid while the pan-European FTSE Eurofirst 300 dropped 1 percent to 1,317.15. Banks were mixed on the day while the semiconductors and steel sectors both declined.

London’s markets were lower, with the FTSE 100 down 1.36 percent to 5,788.9 and the FTSE 250 falling 1.01 percent to 9,640.5. The chemicals sector and stock exchange operators saw gains. Property developers were mixed while house builders saw declines.

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