U.S. Stocks Decline, Weak Euro, Oil

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
18 May, 2010
New York City

U.S. stocks fell as the euro zone austerity measures weaken the euro to a four-year low. Germany is likely to take more measures to curb speculation in financial markets. Visa Inc, MasterCard, American Express and Capital One declined on tighter fees regulations.

[R]4:20 PM New York – U.S. stocks fell as the euro zone austerity measures weaken the euro to a four-year low. Germany is likely to take more measures to curb speculation in financial markets. Visa Inc, MasterCard, American Express and Capital One declined on tighter fees regulations.[/R]

U.S. stocks decline as rising euro worries overwhelm the strong housing starts and tame inflation data. The euro traded down to four year low. Housing starts rise by 5.8% and PPI decreases 0.1% in April. Fidelity National to pursue leveraged recapitalization after buyout bid fades.

Forest Laboratories, Inc. led gainers in the S&P 500 index. TJX Companies profit climbs 58%. Abercrombie & Fitch narrows quarterly loss. Home Depot net rises stronger-than-expected 41%. Agilent swings to second quarter profit.

European markets edge higher after debt woes ease and euro-zone finance ministers vow to fix the region''s finances. Greece receives first tranche of EU bail-out loan. Euro-zone trade surplus increases to €4.5 billion and inflation rises to 1.5%. German regulators are likely to ban naked short selling of bonds, stocks and derivatives.

UK stocks rise as commodity prices rebound and inflation hits 17-month high. AstraZeneca enters into an agreement with Teva Pharmaceuticals USA, Inc. SSL International drives fiscal year profit. Vodafone Group net profit surges 179%.

Stocks in Tokyo rose after consumer confidence increase in April. Bank of Japan resumes supply of US dollars. Department store sales decline 3.7% in April and sales in the Tokyo area contracted 4.9%.

New homes sale decline in Shanghai. China Petroleum and Chemical Corp received regulatory clearance for 20 billion yuan bond sale. China Railway Group signs contracts worth 69.22 billion yuan.

The Sensex index rallies after L&T reported 26% increase in earnings. Tarapur Transformers makes a muted debut. Aksh Optifibre gains on capital raising plan. Bharti Airtel recovers as Fitch removes it from negative watch. TCS declined on the talks of UK government may review outsourcing deals.

Australian government said its proposal to impose 40% tax on resource companies is an effort to make structural changes in how it incentivizes investments. The dollar fell after The RBA releases minutes of latest meeting. Macarthur Coal rejected takeover proposal by Peabody Energy. Paladin Energy seeks overseas mergers and acquisitions for growth.

North American Markets

Dow Jones Industrial Average fell 162.79 or 1.5% to close at 10,620.16, S&P 500 Index decreased 21.75 or 1.9% to 1,135.69 and Nasdaq Composite Index fell 47.51 or 2% to close at 2,346.85. Toronto TSX Composite Index fell 138.38 or 1.2% to 11,978.21.

Latin American Markets Indexes

Mexico IPC Index decreased 559.42 or 1.7% to 31,783.01 and Brazil Bovespa Stock Index fell 1,496.74 or 2.3% to 63,291.48.

Europe Markets Review

In London FTSE 100 Index traded higher 55.71 or 1.06% to 5,318.25, in Paris CAC 40 Index increased 7.41 or 0.21% to close at 3,567.77, in Frankfurt DAX index higher 54.02 or 0.89% to close at 6,110.73. In Zurich trading SMI increased 37.92 or 0.59% to close at 6,466.60.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 6.88 or 0.07% to 10,242.64, and Hang Seng index in Hong Kong increased 229.74 or 1.17% to 19,944.94, and CSI 300 index in China higher 56.63 or 2.09% to 2,771.35. ASX 200 index in Australia increased 3.50 or 0.08% to 4,470.70 and the FTSE Bursa KL Composite index in Malaysia was lower 4.10 or 0.31% to 1,330.17.

The Kospi Index in South Korea decreased 8.27 or 0.50% to close at 1,643.24. SET index in Thailand closed higher 6.85 or 0.91% to 760.11. JSE Index in Indonesia increased 14.72 or 0.52% to 2,834.19. The Sensex index in India increased 40.20 or 0.24% to 16,875.76.

Commodities, Metals, and Currencies

Crude oil decreased $0.63 to $69.45 a barrel for a front month contract, natural gas edged down 6 cents to $4.34 per mBtu and gasoline increased 0.05 cents to 204.36 cents.

Soybean future closed down 1.50 cent to $9.39 a bushel. Wheat futures decreased 1.25 cents in Chicago trading to $4.67 a bushel. Sugar closed up 0.91 cents at 14.80 cents a pound.

Gold decreased $5.50 in New York trading to close at $1,222.60 an ounce, silver closed up $0.12 to $18.98 per ounce and copper for the front month delivery increased 6.70 cent to $2.99 per pound.

Dollar edged higher against euro to $1.220 and gained against the Japanese yen to 92.36.

Yield on 10-year U.S. bonds decreased to 3.38% and with 30-year maturities decreased to 4.26%.