Fed Stimulus; S&P Recovers from Lows

123jump.com Staff
11 Aug, 2010
New York City

Federal Reserve confirmed its plan to use its funds to purchase Treasury securities. The move was widely anticipated and the broader U.S. indexes recovered from the lows. The latest Fed action only highlights the protracted nature of the U.S. economic recovery.

[R]4:00 PM New York – Federal Reserve confirmed its plan to use its funds to purchase Treasury securities. The move was widely anticipated and the broader U.S. indexes recovered from the lows. The latest Fed action only highlights the protracted nature of the U.S. economic recovery. Asian and European markets closed lower after China indicated weaker growth in imports.[/R]

U.S. stocks traded lower and the S&P 500 index declined as much as 1.4% after commodities and resource stocks declined. China said July imports grew at the slowest pace in a year. Stocks recovered most of the losses after the Fed issued a plan to stimulate the economy.

Federal Reserve noted in a statement that it plans to use its funds to purchase long term Treasury securities.

Fossil, Inc surged after first quarter sales increased 30%. McDonald’s July same store sales increased 7%. MBIA Inc quarterly net increased.

Fossil, Inc surged after first quarter sales increased 30%. McDonald’s July same store sales increased 7%. MBIA Inc quarterly net increased. Nuance Communications Inc third quarter sales rose 13.4% and loss narrowed.

The European indexes fall after China said imports grew at the slowest pace indicating that the economy may be slowing down. German wholesale price inflation rises 5.3% in July. The Hungarian government raises GDP outlook for 2010. French industrial production decelerates in June. GDF Suez agrees to merge with International Power.

The UK indexes decline after worries that imports fell in China. Commodities declined and resource stocks followed. The UK trade deficit narrowed and home prices surged in June. Irish manufacturing output growth slows in June. BP Plc makes initial deposit of $3 billion in Gulf of Mexico oil spill escrow trust.

Stocks in Japan dropped on reports of slowing imports by China. Bank of Japan kept key rate unchanged and the Japanese government left its outlook for local economy in August the same but lowered the assessment on China.

Stocks in China region tumbled on liquidity concerns, property prices grew at a slower pace ad July trade surplus and exports surged. West China Cement to seek IPO in Hong Kong after delisting from London.

Stocks in Mumbai closed lower after fluctuating several times tracking losses in Asia. Government reduced the mandatory requirements of shareholding for state-owned public companies to 10% from 25%. Mumbai port remains closed for the second day after an accident-led oil spill.

Stocks in Australia fell after China reported weaker-than-expected imports. Business confidence fell to its lowest level in a year. Consortium of eleven miners increases offer for QR Ltd. Transurban completes acquisition of Lane Cove Tunnel.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.32 and fell against the Japanese yen to 85.32.

Crude oil decreased $1.33 to $80.15 a barrel for a front month contract, natural gas edged lower 1 cent to $4.30 per mBtu and gasoline decreased 3.45 cent to 208.42 cents.

Gold increased $3.70 in New York trading to close at $1,206.30 per ounce, silver decreased $0.15 to $18.32 per ounce and copper for the front month delivery decreased 3.70 cents to $3.31 per pound.

Yields on 10-year U.S. bonds decreased to 2.75% and on 30-year U.S. bonds yields to 4%.