World Stocks Falter on Slower U.S. GDP

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

U.S. economy in the second quarter expanded at a slower pace of 2.4%. Corporate earnings have been ahead of expectations but the economy has lost more than 8 million since 2007. Consumer sentiment index declined in July. Yields on 10-year bonds declined to 2.91%.

[R]4:00 PM New York – U.S. economy in the second quarter expanded at a slower pace of 2.4%. Corporate earnings have been ahead of expectations but the economy has lost more than 8 million since 2007. Consumer sentiment index declined in July. Yields on 10-year bonds declined to 2.91%.[/R]

U.S. stocks decline after GDP expanded at a slower pace 2.4% in the second quarter from the revised 3.7% rate in the first quarter. The economic recovery is halting and uneven as the Fed noted in its regional survey released this week. The IMF says massive policy response aids U.S economic recovery. Disney agrees to sell Miramax Films to Filmyard Holdings LLC for $660 million.

Thoratec Corporation led the decliners in the S&P 500 index with a loss of 16.5%. First Solar posts lower profit and lifts outlook. Amgen reports largely flat earnings. Expedia Inc. second quarter profit soars. Chevron net income triples to $5.4 billion. Merck profit drops 51% and adjusted net income rises.

The European markets decline amidst concerns of slow economic growth in the U.S. Euro-zone unemployment rate flat at 10% in June and CPI rises 1.7% in July. Moody''s lowers Iceland government bond ratings to negative from stable.

The UK stocks decline after disappointing U.S. GDP data and a drop in consumer confidence, fifth monthly decline in a row in July. The financial regulator is ready to expand its authority that covers board remuneration. France based EDF agreed to sell its UK electricity network is a consortium controlled by Hong Kong based Li Ka-Shing for $9 billion.

Stocks in Japan fell sharply with as many as 204 stocks retreating in the Nikkei 225 Stock Average on an increase in unemployment and a drop in core consumer price index. Toyota problems mount as recalls continue. Strikes in China affected 32 Japanese firms, a report by Asahi shows.

Stocks in China retreated led by financials and steelmakers. China clears the takeover of Volvo Car Corp by Geely Holding. Charles River withdraws takeover offer of WuXi on the investors’ resistance. Flood washes 3,000 chemical barrels into Songhua river.

Stocks in Mumbai fluctuated and closed lower. Textile ministry begins land auction to raise $1.1 billion. UltraTech plans Capex of Rs 12,000 crore in the next five years. Ashok Leyland plans to take 26% stake in U.K.-based Optare.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.30 and fell against the Japanese yen to 86.44.

Crude oil increased $0.46 to $78.82 a barrel for a front month contract, natural gas edged higher 8.7 cent to $4.91 per mBtu and gasoline increased 0.96 cent to 204.27 cents.

Gold increased $12.70 in New York trading to close at $1,183.90 per ounce, silver added $0.41 to $18.03 per ounce and copper for the front month delivery increased 2.15 cents to $3.31 per pound.

Yields on 10-year U.S. bonds decreased to 2.91% and on 30-year U.S. bonds dropped to 3.98%.