U.S. Uneven Recovery; World Markets Firm

123jump.com Staff
28 Jul, 2010
New York City

U.S. stocks struggled after durable goods orders fell, another indication of slowing economic recovery despite healthy gains in corporate earnings. Boeing reported a decline in sales but health insurer Aetna lifted the annual outlook.

[R]4:00 PM New York – U.S. stocks struggled after durable goods orders fell, another indication of slowing economic recovery despite healthy gains in corporate earnings. Boeing reported a decline in sales but health insurer Aetna lifted the annual outlook.[/R]

The latest U.S. Federal Reserve survey of businesses indicated uneven and moderate economic recovery. Of the twelve regions reporting in the survey, two indicated a decline in activities and two reported steady activities. Rest of the regions indicated modest improvements.

Consumer spending in most regions increased at a modest pace and nearly all districts reported “sluggish housing markets” and commercial industrial real estate “continue to struggle.” Credit and lending by banks remain restrictive in all regions. And though the labor markets conditions show a gradual improvements wage pressures remained “largely contained.”

U.S. stocks trade lower after U.S. durable goods orders fell in June and mortgage demand slackened. Praxair and WellPoint report better-than-estimated second quarter earnings but Boeing sales and net declined.

Sanmina-SCI Corporation led the decliners in the S&P 500 index with a loss of 16.9%. Aetna posts profit rise and lifts outlook. Aflac quarterly profit jumps 85%. Dominion net income more than triples.

The European markets pare early gains after weak durable goods orders in the U.S. Euro-zone banks tighten credit standards. Moody’s emphasizes stress test results will have no impact on the ratings of European banks. Telefónica and Portugal Telecom reach an agreement for stake in Brasilcel.

The UK indexes decline after disappointing earnings results. The BoE Governor Mervyn King said normalization of bank rates will take time. Home prices in England and Wales rise in June. Apollo Global raises offer to acquire Brit Insurance to £10.75 a share.

The benchmark index in Japan surged 2.7% on strong earnings both at home and abroad. Nippon Steel returns to profit in first quarter. Nissan Motor is planning to boost vehicle output in the U.S.

Stocks in China rallied on better than expected earning of industrial enterprises in 24 regions across the nation. Investment in equities rises in the second quarter by 32%. Swire Pacific abandons plan to acquire Haeco. Chalco suspended trading of shares till July 30.

Stocks in Mumbai traded lower in the session. Reliance Industries closed unchanged after net surged 32% and face a stagnant natural gas production. Aban Offshore soared 7% after it received $235 million insurance settlement.

Stocks in Australia gained after consumer price index increased slower than expected. BlueScope Steel and Japan’s Nippon Steel sign an agreement to develop coated steel products. Queensland appoints a commissioner to oversee the state’s gas market.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.298 and fell against the Japanese yen to 87.41.

Crude oil decreased $0.59 to $76.92 a barrel for a front month contract, natural gas edged higher 12 cent to $4.80 per mBtu and gasoline decreased 0.29 cent to 206.30 cents.

Gold increased $2.70 in New York trading to close at $1,164.50 per ounce, silver fell $0.12 to $17.50 per ounce and copper for the front month delivery increased 3.55 cents to $3.24 per pound.

Yields on 10-year U.S. bonds closed decreased to 3.00% and on 30-year U.S. bonds declined to 4.07%.