Markets Continue to Decline: US Presidential Elections Continue to Adversely Impact the Stock Markets

The markets declined as the Wells Fargo bank’s poor earnings counteracted the brighter numbers from JP Morgan Chase & Co. (the biggest bank by assets in US) as well as a strong United States consumer confidence study.

JP Morgan registered a quarterly gain of $5.7 million for the period July to September, setting a record. It had risen 34% when compared to the same period a year back. The earnings far exceeded the $1.21 consensus, being at $1.40 per share in the markets.

In the mean time, the University of Michigan registered that its key consumer confidence index increased to a 5-year high of 83.1 for October as against 78.3 for the previous month.

However, Wells Fargo reported gains that were lower than the expectations of the investors, shoving down the stock markets back by the closing time of European exchanges.

The FTSE 100 index of the top British shares dropped to 5,793.32, indicating a fall of 0.6%, while DAX of Germany drooped to 7,232.49, indicating a loss of 0.7%. France’s CAC-40 attained 3,389.08, shedding 0.7%.

In the United States, the industrial average of Dow Jones went down to 13,315, a drop of 0.1%, while the broader Standard and Poor 500 index declined 0.4% to 1,427, causing Wall Track to move back on track to experience is worst week after early June.

In other markets also, the trading was passive, with the euro up at $1.2944 by 0.1% and the standard price of oil lower by 50 cents, costing $91.57 per barrel.

Trading was limited to narrow ranges previously in Asia.

Nikkei 225 index in Japan closed a bad week with further 0.2% drop to 8,534.12. Softbank, the telephone company led the path lower after it dropped 16.9% following news that it is in discussions to get hold of a considerable stake in Sprint Nextel Corp, the popular US carrier.

Hang Seng in Hong Kong progressed 0.7% to reach 21,136.43 and Kospi in south Korea remained flat at 1,933.26.

Experts are predicting that the drop in stock markets may continue until the end of US Presidential elections i.e. till first week of November, and then the growth could be quite promising once the dust settles down!