Tokyo Stock Exchange Halts Trading

[Bluebear]

Japan's main stock market nose-dived for a second day Wednesday on growing investor jitters from "Livedoor shock," the widening criminal investigation at an Internet startup that has sparked a sell-off, especially in technology shares. The benchmark for the Tokyo Stock Exchange plunged 2.9 percent Wednesday in a session that had to be shortened by 20 minutes because of a surge in transactions.

The Nikkei 225 index dropped 464.77 points to close at 15,341.18 points, its biggest drop since May 10, 2004.

Share prices extended losses from Tuesday, when the Nikkei fell 2.8 percent, following Japanese newspaper reports that the investigation begun Monday was expanding. The index has fallen nearly 6 percent the last two sessions.

"Individual and foreign investors are selling in a panic," said Satoru Otsuka, senior economist at Mizuho Research Institute in Tokyo. "The problem is that we have no idea how the Livedoor problem will unfold."

http://news.yahoo.com/s/ap/20060118/ap_on_bi_ge/japan_markets&printer=1

[benburch]

1. This could be very bad.

I wonder if it will infect our market? We are about due for a major correction downward.

[spinbaby]

2. I suspect so

My 401k is frozen for a while because my company is moving it to another investment outfit, so OF COURSE the market will crash.

Seriously, between Tokyo and the price of oil spiking, there is almost no way the market will hold up. There goes *'s "good" economy.

[llmart]

5. Bush's one-day wonder of the Dow hitting 11,000........

and everyone in the media was wetting their pants over it. People would be wise to stop buying into the idea that they're going to get rich by investing lots in their 401K's. I think it's a shell game at best. This country was sold a bill of goods about 401's the same way they were sold a bill of goods about HMO's that were supposed to be the end-all and be-all of health insurance. Same with IRA's. Back in the early 80's everyone was being told to open an IRA and put the max in every year and by the time you retired you were supposed to have a million dollars. Well, hubby and I did that (we put the maximum allowed every year but one)and we're closing in on retirement and I've kept very good records and we're nowhere near a million dollars.

Only the rich get richer in this country. Yes, we're better off that we have some saved, but it sure didn't "grow" into a million dollars! I've never done the math but I'll bet we would have been just as well off with putting it in a passbook savings account.

[cliss]

20. This is so true,

the hype about "growing" your savings into a million dollars. I don't know how many books I've read on investing that show the chart of Jane Doe versus Janet Doe, who invests $30.00 per month in the stock market, and becomes a MILLIONAIRE.

At my company, we had an obligatory lunch meeting on investments. Two stock brokers showed up, and guess what they had? A Big Chart of the same damn formula. They brow-beat everyone in the lunch room, made them feel bad if they weren't investing every last penny in the stock market.

I just sat and slept through the whole thing.

[llmart]

22. However, it's hard to find anyone who doesn't believe......

this crap as it's being spoonfed to Americans everywhere they turn. It's not really hard for me to add up the contributions I've put into my IRA and then add up what it's worth after the 21 years I've been putting in the max and seeing that I've only increased the amount a bit - nothing like the huge return they try to tell you you'll get.

[raccoon]

23. You got that right. nt

[tavalon]

7. Naw

Worldwide problems don't affect us. We're an island unto ourselves.

Obligatory but hopefully unnecessary :sarcasm:

[EuroObserver]

3. Yup. I'll be posting this on the Stock Market Watch here soon:

Nikkei -2.94%, Topix -3.49%. Immature investors flee system-troubled market
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh42406_2006-01-18_09-19-46_t136978_newsml
These will merely be American investors reacting, on first opportunity since MLK day, to the "Livedoor shock," as AP, AFP and others suggest, or is this a sign of a deeper, international malaise (see European markets report)?

Japan's chief Cabinet secretary Shinzo Abe said. "The decline appears to be a little too rapid. Our country's economic fundamentals remain firm," while the Economics and Financial Services Minister Kaoru Yosano said "I am certain that share prices will again reflect the strength of Japan's economy once this extraordinary situation comes to an end."

TOKYO, Jan 18 (Reuters) - A flood of sell orders forced the Tokyo stock exchange to close early as investors stampeded from the world's second-largest share market on Wednesday, spooked by fall-out from an investigation into a high-flying Internet firm.

The Tokyo Stock Exchange, where shares were down almost 5 percent at one point, suspended trading 20 minutes before the normal closing time after the number of trades threatened to overwhelm its computer system's capacity of 4.5 million per day.

The exchange has been hit by a series of system problems in recent months, including a glitch that halted business for almost a full day late last year.

But this was the first time that it was forced to halt trading as a result of capacity constraints since it opened its doors in its current incarnation in 1949.
...
News in the afternoon that the exchange was considering a shut-down accelerated selling across the board, pushing down the Nikkei share average by as much as 4.7 percent.

It clawed back to end down 2.94 percent at 15,341.18.

But that was still its biggest one-day fall since April 18, 2005, when it fell 3.8 percent. The broader TOPIX index fell 3.49 percent to close at 1,574.67. Weaker-than-expected earnings by U.S. chipmaker Intel Corp. (INTC.O: Quote, Profile, Research) also weighed on the market.

The share-price tumble also briefly hit the yen, which fell to a day's low of 115.88 yen to the dollar before recovering to around 115.25, and even sent gold prices tumbling.

"The problem has caused a selling climax. Everyone is throwing in sell orders, said Ken Masuda, a senior dealer at Shinko Securities shortly before trade was halted. "Even after five minutes, orders aren't going through. This is ridiculous."

/more...

The Yen fell a little, then recovered:

http://asia.news.yahoo.com/060118/kyodo/d8f70fgg0.html
At 5 p.m., the dollar was quoted at 115.23-25 yen, compared with Tuesday's 5 p.m. quotes of 115.43-53 yen in New York and 114.70-72 yen in Tokyo.

The dollar moved between 115.17 yen and 115.90 yen, trading most frequently at 115.65 yen. The day's peak was the highest since Jan. 6 when it traded at 116.27 yen.

The euro was quoted at $1.2122-2124 and 139.69-73 yen, against Tuesday's 5 p.m. quotes of $1.2101-2111 and 139.74-84 yen in New York and $1.2136-2138 and 139.20-24 yen in Tokyo.

After fluctuating at the mid-115 yen level in the morning, the dollar rose to its session high in the afternoon in sync with heavy losses in Tokyo stock prices, which followed an announcement by the TSE that it may suspend trades on all listed shares because of an unusually large amount of orders.

But the dollar fell back to the lower 115 yen level later in the afternoon due to selling from Japanese exporters, dealers said.

/more...

The dollar finally fell 1/3 pct on day against the yen. - "Risk aversion is rising in the marekt and investors are nervous about what will happen when U.S. equities open," said Niels Christensen, senior currency strategist at Societe Generale in Paris.

See also Tokyo precious metal closing prices.

----------------------------


European tech stocks follow IBM, Intel, Tokyo down

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh41221_2006-01-18_08-23-12_l18465026_newsml
PARIS, Jan 18 (Reuters) - Disappointing results from U.S. giants IBM (IBM.N: Quote, Profile, Research) and Intel (INTC.O: Quote, Profile, Research) and oil prices near four month highs knocked European shares early on Wednesday, while a 3-percent slump at the Tokyo bourse added to the market's woes. /more...

Bunds up, Europe shares drop as Nikkei slides
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh42364_2006-01-18_09-18-03_l18572464_newsml
LONDON, Jan 18 (Reuters) - Investors stormed into safe-haven European government bonds as global shares fell on Wednesday, led by a slump in Japan's Nikkei and climbing oil prices that raised concerns about the global economic outlook. /more...

Europe stocks - Factors to watch on Jan 18
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh39502_2006-01-18_07-05-27_ire825638_newsml
Spread betters in London are calling the FTSE 100 , CAC 40 , and Dax indexes between 40 and 64 points lower... Gold fell more than 1 percent in volatile trade as funds and investors cashed in the metal's rise to a 25-year high... U.S. Treasuries edged higher in Asian trading with investors switching to safe-haven bonds as a sharp slide in Asian shares raised concern about the outlook for economic growth. Benchmark U.S. 10-year yields were trading at around 4.318 percent. Comparable 10-year euro zone government bonds yielded 3.241 percent... Oil futures climbed to their highest levels in almost four months, nearing $67 a barrel, amid new worries of a supply crunch after militants behind a spate of kidnappings and attacks on oil facilities in Nigeria's oil-rich delta threatened to stage more attacks over the next few days... Other Asian indexes such as the Kospi , Hang Seng and Straits Times were all sharply lower, with technology shares most hit after disappointing earnings from U.S. technology firms...

Gold spot price:

S&P Futures:

NASDAQ Futures:

[EuroObserver]

4. Further:

FT: London falls as miners and financials weaken
London’s equities market was sharply lower in opening trade, after panic selling forced Tokyo markets to close early and Wall Street markets fell after weak earnings news from the technology sector... There was little upside in opening exchanges, but enough support came from the oil majors to help London lose less ground that its European peers. Royal Dutch Shell was 0.3 per cent higher at £19.48 and BP ticked 0.1 per cent higher to 662.5p. /more...

FT: European stocks suffer sharp sell off
By mid morning, the FTSE Eurofirst 300 was off 1.3 per cent to 1,280.63, while Frankfurt’s Xetra Dax shed 1.6 per cent to 5,375.01. In Paris, the CAC 40 slid 1.2 per cent to 4,748.87 and London’s FTSE 100 fell 1 per cent to 5,643... Wall Street fell overnight, with the Dow Jones Industrial Average down 0.6 per cent to 10,896.32, while the Nasdaq Composite shed 0.6 per cent to 2,302.69. IBM reported revenues below expectations, while after the close, Chipmaker Intel missed estimates on its quarterly profits, as did internet service provider Yahoo. /more...

[EuroObserver]

6. Today's Stock Market Watch is here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2048379#2048400

[Jacobin]

8. Stampede of sell orders forces shut-down of world’s second largest bourse

Selling stampede shuts Tokyo stock market
Capacity constraints trigger closure of world's second biggest bourse

TOKYO - A stampede of sell orders forced the shut-down of the world’s second-biggest stock exchange on Wednesday as investors fled the Tokyo market, spooked by fall-out from an investigation into Internet company Livedoor.

The Tokyo Stock Exchange, where shares were down more than 4 percent at one point, suspended trading 20 minutes before the normal closing time after the number of trades threatened to exceed its computer system’s capacity of 4.5 million per day.

It the first time that the exchange was forced to halt trading as a result of capacity constraints since it opened its doors in its current incarnation in 1949.

http://www.msnbc.msn.com/id/10900819/

What the Fork is going on?

[Zenlitened]

9. Tokyo Exchange Shuts Early Amid Flood of Sell Orders

Just a, um, computer problem. Nothing to see here, move along citizens...

http://online.wsj.com/article/SB113756190318049484.html?mod=home_whats_news_us

Tokyo Exchange Shuts Early Amid Flood of Sell Orders

Nikkei Declines 2.9%
As Livedoor Probe
Fuels Continued Selling
By YUKA HAYASHI, ANDREW MORSE and JATHON SAPSFORD
Staff Reporters of THE WALL STREET JOURNAL
January 18, 2006 9:19 a.m.

TOKYO – The Tokyo Stock Exchange shut down trading during peak afternoon hours, seeking to keep a flood of sell orders from overwhelming the exchange's antiquated computer systems.

At 2:40 p.m. Wednesday, 20 minutes before the scheduled closing at 3 p.m., trading was suspended for all the stocks, options and convertible bonds listed on the Tokyo exchange, the world's second-largest stock market in terms of market capitalization, after the New York Stock Exchange.

(snip)

By the early close, the benchmark Nikkei 225 Stock Average had fallen 464.77 points, or 2.9%, to close at 15341.18, its biggest single-day drop since May 2004. The Nikkei fell 462.08 points, or 2.8%, on Tuesday.

The early closure of Japan's key stock market means many sell orders have been left to be processed on Thursday, raising the prospect that stock prices may continue to slide. Yet while the exchange said the market would be open on Thursday as usual, officials warned there was little guarantee of a full day's trading should the system be threatened again by high volume of relatively small trades.

[Earth_First]

10. What('s) caused (causing) this to happen?

I am far from a financial guru, nor do I play one on television. Any speculation(s)?

[bpilgrim]

12. a big 'world-com' like tech scandal is developing over there

All Reuters NewsTOKYO (Reuters) - A stampede of sell orders forced the shut-down of the world's second-biggest bourse on Wednesday as investors fled the Tokyo stock market, spooked by fallout from an investigation into Internet company Livedoor Co.
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20060118&ID=5424786

peace

[papau]

11. raid targeting a business maverick sparks sell-off

--------------------------------------------------------------------------------

http://www.latimes.com/news/nationworld/world/la-fg-horie18jan18,0,7986516.story?track=tottext,0,1569258.story?track=tothtml

From the Los Angeles Times
THE WORLD
Investigation Wreaks Havoc on Tokyo Stocks
The exchange is forced to close early as a raid targeting a business maverick sparks sell-off.
By Bruce Wallace
Times Staff Writer

January 18, 2006

TOKYO — Spooked by a police probe into one of Japan's best-known Internet entrepreneurs, investors swamped the Tokyo Stock Exchange with sell orders today, driving the market down and forcing the world's second-largest exchange into an embarrassing early close.

The exchange's woes and the massive market drop rekindled questions about the durability of Japan's economic recovery, which had enjoyed a giddy run-up in stock values over the last several months.

The Tokyo market was shuttered 20 minutes before the regular close of business after a deluge of trade orders overwhelmed its computers. It was the second time since November the exchange had to close early for technical reasons.

The sell-off followed allegations that market darling Livedoor Co. and its maverick founder, Takafumi Horie, were under investigation for manipulating company stock.

Over the last few years, Horie built an online empire and became an icon of cool by doing business in Japan his own way, which is not, generally speaking, how business is done in Japan.<snip>

[Art_from_Ark]

13. This is the first time in Japan that such police action has been taken

against a publicly-traded company. A lot of investors are jittery.

[AngryAmish]

14. Well, so much for the dollar declining

Thsnks a lot, folks.

[Kagemusha]

15. You do realize their stock market's way way up overall?

That stock market was threatening the 8000 line within memory. People were talking mass bank crashes. That didn't happen.

There's some profit taking here.

[Zenlitened]

16. Is that what this is about? Profit-taking?

[WannaJumpMyScooter]

17. Japan is more scared of high oil prices

than we are.

Much more so. They have 0 reserves, and 0 petrol resources.

[Junkdrawer]

18. Not to be an alarmist, but if I were a neocon tycoon and I knew a 'terra..

attack was imminent, I'd glad-talk stock prices up and then sell off before the attack.

Just saying...

[Earth_First]

19. 'just sayin'

exactly.

[KamaAina]

21. Livedoor: Japanese for "Enron"?

Say sayonara to all those high-spending tourists, excuse me, I mean "eastbound visitors"... :(