Spain Worries Resurface; Weak U.S. Jobs

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
30 Jun, 2010
New York City

U.S. stocks closed lower after a rating agency expressed negative comments on Spain and warned a ratings downgrade. Weaker than expected private sector hiring in the U.S. also contributed to the negative sentiment. Commodities traded mixed and the dollar edged lower. 10-year bond yields drop.

[R]10:15 PM New York – U.S. stocks closed lower after rating agency expressed negative comments on Spain and warned a ratings downgrade. Weaker than expected private sector hiring in the U.S. also contributed to the negative sentiment. Commodities traded mixed and the dollar edged lower against the euro and the yen. 10-year Treasury yields slipped to 2.92%.[/R]

U.S. stocks traded higher in the early trading but the rally lost its momentum in the afternoon. Investors around the world remain focused on the European banks liquidity and U.S. jobs market.

The benchmark index in New York advanced after ECB announces lending of $162 billion to banks, significantly lower than the market estimate of $200 billion. In, addition a private report noted private sectors added 13,000 U.S. jobs in June, significantly lower than expected.

Acuity Brands, Inc. led the decliners in the S&P 500 index with a loss of 10.6%. American Greetings shares down nearly 6%. Monsanto posts smaller quarterly profit. General Mills profit slips and forecast lags estimate. Sealy swings to second-quarter profit

Celgene agrees to buy Abraxis BioScience for $2.9 billion. Sanofi-Aventis SA agrees to acquire U.S.-based TargeGen Inc. for $560 million.

The European Central Bank agreed to lend $161 billion to banks to roll over their bond holdings and extended bank support schemes in Netherlands, Slovenia, Greece and Poland.

Portuguese government uses “golden share” to block Telefonica offer.

The UK indexes trade sideways after European banks borrowed less than expected from the ECB. UK business investment grows 7.8% in the first quarter and coalition budget to cost 1.3 million jobs.

Stocks in Japan tracked declines in the U.S. markets after a weak consumer confidence and wages declined in May. Daihatsu Motor is planning to market a fuel efficient a mini car next year. Iraq''s cabinet approved Mitsubishi-Shell gas deal

Stocks in Shanghai and Hong Kong fell on global worries. Standard Chartered agrees to invest $500 million in Agbank IPO. Ping An Bank Co agrees to merge with Shenzhen Development Bank. Citic Securities seeks $1.26 billion for China Securities stake. Daqin Railway wins approval for 16.5 billion yuan share offering

Stocks in Mumbai traded higher and closed up for the sixth quarter in a row. Gold import in 2010 is expected to drop as much as 40%. Monsoon rains in June are 15% below average. Sumitomo Financial acquires 4.5% stake in Kotak Mahindra Bank Ltd.

Stocks in Australia declined for the second day on China growth worries and global economic recovery. Lending by banks and other finance companies rose in May. Export of coal from Newcastle increases. Rio Tinto signs agreement on prospecting in Kazakhstan.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 188.03 or 1.96% to 9,382.64, Hang Seng index in Hong Kong decreased 119.91 or 0.59% to 20,128.99 and CSI 300 index in China lower 28.95 or 1.12% to 2,563.07. ASX 200 index in Australia decreased 44.20 or 1.02% to 4,301.50. The FTSE Bursa KL Composite index in Malaysia closed lower 5.82 or 0.44% to 1,314.02.

The Kospi Index in South Korea decreased 9.47 or 0.55% to close at 1,698.29. SET index in Thailand closed lower 1.78 or 0.22% to 797.31 and JSE Index in Indonesia increased 20.31 or 0.70% to 2,913.68. The Sensex index in India increased 166.81 or 0.95% to 17,700.90.

Europe Markets Review

In London FTSE 100 Index traded lower 0.53 or 0.01% to 4,913.69, in Paris CAC 40 Index traded increased 0.04 or 0.00% to close at 3,433.03, in Frankfurt DAX Index traded higher 8.81 or 0.15% to close at 5,960.84. In Zurich trading SMI Index traded decreased 15.32 or 0.25% to close at 6,129.13.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.221 and fell against the Japanese yen to 88.15.

Crude oil decreased $0.87 to $74.76 a barrel for a front month contract, natural gas edged higher 2 cents to $4.64 per mBtu and gasoline decreased 1.50 cent to 204.54 cents.

Gold decreased $5.80 in New York trading to close at $1,240.10 per ounce, silver closed lower $0.12 to $18.58 per ounce and copper for the front month delivery decreased 3.40 cents to $2.91 per pound.

Yields on 10-year U.S. bonds declined to 2.92% and on 30-year U.S. bonds fell to 3.83%.