NEW YORK - US stocks fell in choppy trade amid growing investor doubts that a safety net set up for mortgage financiers Fannie Mae and Freddie Mac would head off further troubles in the financial markets.
The Treasury and the Federal Reserve said Sunday that they would aid the companies if needed.
Fears for the health of firms like banks were exacerbated after IndyMac was taken over by federal regulators at the weekend.
The blue-chip Dow Jones Industrial Average fell 45.35 points, or 0.41 per cent, to 11,055.19 and the Standard & Poor’s 500 index declined 11.19 points to 1,228.30.
The Nasdaq composite index shed 26.21 points to 2,212.87.
The yield on the 10-year US Treasury bond fell to 3.860 per cent from 3.964 and that on the 30-year bond fell to 4.440 per cent against 4.536 per cent.
LONDON - Europe’s stock markets rebounded as investors welcomed measures to bolster US mortgage finance firms.
The FTSE 100 index added 38.80 points to 5,300.40
FRANKFURT - The DAX added 46.95 points to 6,200.25
PARIS - The CAC 40 rose 41.89 points to 4,142.53
TOKYO - Japanese shares gave up early gains to post modest losses as optimism over US steps to shore up two troubled mortgage giants receded.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 29.53 points to 13,010.16. The broader Topix index of all first-section shares slipped 5.19 points to 1,280.72.
HONG KONG - Shares fell on lucklustre local developers and a slump by banking giant HSBC.
The Hang Seng Index dropped 170.09 points to 22,014.46
WELLINGTON - NZ stocks fell over one per cent as the US government tried to calm markets over new troubles in the mortgage market.
The NZSX-50 index dropped 41.44 points to 3080.10.
SYDNEY - The Australian stock market is expected to open lower after US stocks slipped on lingering concerns about the health of the financial system.
On the Sydney Futures exchange, the September share price index futures contract lost 37 points, or 0.75 per cent, to 4,900.
Today, the Reserve Bank of Australia releases the minutes of its July 1 board meeting.
The Australian share market fell to its lowest closing level in almost two years yesterday, with most market sectors losing ground, due to continuing signs of weakness in the US economy.
The benchmark S&P/ASX200 index fell 58.9 points, or 1.18 per cent, to 4,921, while the broader All Ordinaries Index fell 59.9 points, or 1.18 per cent, to 5,007.9.
NYMEX
Oil settled above $US145 a barrel for the third time this month, close to where it began on Monday, after a back-and-forth trading session that mimicked last week’s wild swings.
Light, sweet crude for August delivery gained 10 US cents to settle at $US145.18 a barrel on the New York Mercantile Exchange - just over a dime short of the all-time settlement high.
In London, August Brent crude fell 57 US cents to settle at $US143.92 a barrel on the ICE Futures exchange.
Monday’s oil price swings came as President George W. Bush lifted an executive ban on offshore oil drilling. That alone will not loosen tight global supplies in the short term because a Congressional prohibition remains in place and any new wells would take years to complete.
COMEX
Gold continued its upward charge as investors stayed nervous about the state of global sharemarkets and fears heightened of a possible US or Israeli attack on Iran.
At 0703 AEST, spot gold was $US971.70 per fine ounce, UP $US7.05 from yesterday’s Sydney close of $US964.65.
On the COMEX division of New York Mercantile Exchange, August futures gained $US13.10 to $US973.70 an ounce.
Copper futures rose $US1.20 to $US375.20 as stockpiles fell amid continued fears of strikes in Peru.
INTERNATIONAL NEWS
WASHINGTON - Shares in Fannie Mae and Freddie Mac struggled anew Monday after a near-meltdown last week, as investors mulled a weekend plan offering a government lifeline for the US mortgage finance giants.
NEW YORK - Freddie Mac attracted more bidders Monday for a highly anticipated auction of $US3 billion in short-term securities than it had nearly all year, a day after the federal government provided support for the mortgage giant.
WASHINGTON - The US Federal Reserve on Monday tightened home mortgage lending in a bid to improve consumer protection from practices blamed in part for the worst US real-estate crisis in decades.
SAN FRANCISCO - Apparently abandoning hopes for a truce with Yahoo Inc, investor Carl Icahn sharpened his focus on replacing the Internet company’s board Monday after his attempt to negotiate a deal with Microsoft Corp. was angrily rejected.
DETROIT - General Motors Corp is planning to announce some restructuring moves Tuesday in response to falling US sales.
LOCAL NEWS
SYDNEY - The Rudd government is poised to announce a $5 billion plan to slash Australia’s carbon emissions, which relies on unproven sequestration technology.
SYDNEY - The prospect of even higher fuel and energy prices under the move to carbon emissions trading has failed to dent voter support for Prime Minister Kevin Rudd.
Stocks to watch on the Australian stock exchange today:
TOL - TOLL HOLDINGS LTD - up 19 cents to $6.57
VBA - VIRGIN BLUE HOLDINGS LTD - up two cents to 52.5 cents
Toll Holdings Ltd will exit its majority stake in Virgin Blue by paying a special dividend to shareholders, using its shares in the airline.
HER - HERALD RESOURCES LTD - down one cent to $2.92
Takeover target Herald Resources Ltd has rejected a claim that Indonesia company PT Basya Tunggal Jaya holds an interest in the Dairi zinc project in North Sumatra.
LEI - LEIGHTON HOLDINGS LTD - down 45 cents to $45.60
Al Habtoor Leighton Group, in which Leighton Holdings Ltd holds a 45 per cent stake, won a 2.25 billion UAE Dirham ($A632.9 million) project in Abu Dhabi to build a hotel and office development.
WES - WESFARMERS LTD - down 57 cents to $32.40
Coles owner Wesfarmers Ltd has hit back at analysts’ claims that it has moved too slowly with its planned transformation of the supermarket chain, saying several initiatives were underway.
