While you were sleeping: Stocks dip on China, Disney buys Spider-Man

Tuesday 1st September 2009

Shares declined on Wall Street and prices of copper and crude oil fell after China’s benchmark Shanghai Composite Index slumped 6.7%, stoking concern the Asian economy won’t be strong enough to help underpin a global recovery.

The Dow Jones Industrial Average fell 0.5% to 9496.28 and the Standard & Poor’s 500 declined 0.8% to 1020.62. The Nasdaq Composite fell 1% to 2009.06.

Aluminium producer Alcoa Inc. led the Dow lower, falling 3.6% to US$12.05. Walt Disney fell 3% to US$26.04 after agreeing to buy comic-book character company Marvel Entertainment.

Exxon Mobil dropped 1.4% to US$69.15 as crude oil fell and Freeport-McMoRan Copper & Gold tumbled 3.8% to US$62.98 after prices of metals declined.

Baker Hughes Inc., an oilfield services company, fell 9.6% to US$34.45 after agreeing to buy smaller rival BJ Services Co. for US$4.9 billion, gaining its third-ranked share of North America’s pressure pumping market. BJ Services gained 4% to US$16.06.

In Europe, the Dow Jones Stoxx 600 fell 0.6% to 236. Among regional benchmarks, Germany’s DAX 30 dropped about 1% to 5464.61 and France’s CAC 40 fell 1.1% to 3653. 54. UK financial markets were closed for a public holiday.

China’s Shanghai Composite slid into a bear market, rounding out a 22% decline in August. It may slump a further 25% amid doubts about the sustainability of the nation’s economic recovery, former Morgan Stanley Asia economist Andy Xie told Bloomberg. China is in “deep bubble territory,” he said.

Copper had its biggest decline in two months on concern demand may wane in China, the biggest consumer of the metal.

Copper futures fell 4.2% to US$2.8265 a pound on the New York Mercantile Exchange. The price of the metal has doubled this year as China built up its stockpiles and investors bet the global economy is climbing out of recession.

Crude oil had the biggest decline in two weeks as stock fell.

Crude for October delivery fell 3.9% to US$69.93 a barrel on the New York Mercantile Exchange.

Gold futures for December delivery slipped 0.6% to US$953.50 an ounce in New York.

The yen gained against most major currencies as declines in stocks sapped demand for higher-yielding assets and after Japan’s opposition Democratic Party of Japan won power in a historic victory, stoking optimism it will enact policies that revive the world’s second-largest economy.

The yen strengthened to 133.41 per euro from 133.85 on August 28 and climbed to 93.04 per dollar from 93.60. The euro rose to $1.4339 from $1.4303.

Walt Disney Co. agreed to buy Marvel Entertainment Inc. for US$4 billion in cash and stock, gaining a line-up of some 5,000 comic-book characters including Spider-Man, the Incredible Hulk and Iron Man.

Disney will pay US$30 a share plus 0.745 of a Disney share, it said in a statement. The offer amounts to US$50 a share, or a 29% premium, for Marvel. The shares soared 25% to US$48.40 after the deal was announced.

Regional economic reports in the US pointed to a pick-up in activity in August, adding to signs the world’s biggest economy is recovering from recession.

The Institute for Supply Management-Chicago's business barometer rose to a greater-than-expected 50 in August, the level that separates a contraction from expansion, from 43.4 in July.

Activity in the Milwaukee region rose to 56 last month from 45 in July, according to a separate report. In Texas, factory activity declined at a slower pace, according to the Dallas Federal Reserve Bank.

The National Association of Purchasing Management-New York's index of business conditions rose to 55.3 from 48.3.

Businesswire.co.nz

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