U.S. trade deficit report drives markets down

The US trade deficit was
reported to be more than US$25
billion, close to $3 billion
more than expected by most
economic analysts. Consequently,
the U.S. dollar slid relative
to the Japanese yen. The weaker
dollar, hikes the costs of
imports and increases inflation
pressures. When the U.S. Federal
Reserve Committee on markets
considers interests rates at
the beginning of October, these
are key concerns.

All three major U.S. indices
shrunk by more than 2% today.
The Dow shed 225.43, dropping
to 10598.47. It’s down more than
6% from its high one month ago.
Nasdaq was squeezed by 65 points,
down to a slimmer 2821.15. The
S&P, likewise, lost 27.95,
slipping to 1307.58. Losers
beat out winners by 3 to 1 on the
NYSE and by 2 to 1 on Nasdaq.

The TSE dropped too, down
131.25 points, to 6917.87.
Gold was the only sub-sector
to move upward on the TSE.

The ME deflated by 83.38, to
3,661.09. The West wasn’t immune
from the selling today either.
Late in the day the ASE was
down by 11.07 to 2790.86, and
the VSE slipped by 2.58 to
406.79

Among the hardest hit were
the financials. In the U.S.,
J.P. Morgan Inc. lost 3 3/16 to
118 5/16, and Citigroup Corp.
was down by 1 5/16 to 42 3/4.

Hardware stocks were generally
hit hard. Apple Computer Corp.,
was down 6 3/16 to 72 15/16, but
that was also on a poor income
report. Motorola couldn’t
deliver chips for their G4 chips
on time.

One of the only good news
stories anywhere has been Ottawa-
based Corel Computer Corp.
At one point its stock was up
another C$2.90 to $13.10 today,
because the company exceeded
earnings expecations. It’s
Linux operating system
based software is expected to
compete with giant Microsoft.