S&P Down 2.8%, Gold Up

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

U.S. indexes dropped between 2% and 3% after the Fed estimated weaker economic recovery and provided another stimulus. Investors sold stocks on the global economic worries after economic data from China, UK and Japan indicated weak outlook. Gold gained 1% and oil declined more than 2%.

[R]400 PM New York – U.S. indexes dropped between 2% and 3% after the Fed estimated weaker economic recovery and provided another stimulus. Investors sold stocks on the global economic worries after economic data from China, UK and Japan indicated weak outlook. Gold gained 1% and oil declined more than 2%.[/R]

U.S. stocks plunged after the Fed noted a slowdown in the economy and trade deficit widened in June. The Nasdaq index dropped more than 3% and the S& 500 index declined 2.9% and the Dow dropped 2.5%. The dollar increased 2.4% and crude oil fell more than 2%.

The International Energy Agency estimates an increase in global oil demand.

The European markets dropped after the U.S. Fed noted that the U.S. economy may recover at a slower pace than expected. S&P upgraded the long term foreign currency debt outlook for Czech Republic. Portuguese inflation rose 1.8% in July. French current account deficit narrowed in June.

The UK indexes drop after the BoE forecasted inflation above 2% and weak economic growth outlook. The jobless allowance claimants fell 3,800 and consumer confidence plunged in July and mortgage lending rose in June. Balfour Beatty secured construction contract at Heathrow Airport of £460 million.

Stocks in Mumbai steadily fell to close lower after markets in Asia turned lower Tata Motor net surged on rising auto sales in India. Production at Mumbai refineries was normal despite the port closure for the third day in a row after a ship collision.

Stocks in Shanghai recovered to close higher but indexes in Hong Kong closed lower after the U.S. Fed gave weak assessment of the economy. Inflation in China in July was reported at 3.3%, above the central bank target of 3%. Diamond imports in first half surges 92%.

Stocks in Japan dropped as the yen approached nearly 15-year high. Core machinery orders gained less than expected in June. Toyota and Nissan plants in South Africa face striking workers.

Stocks in Australia declined after weak economic data from the U.S. and China. Consumer confidence rose for the second month in a row. Commonwealth Bank reported a 42% surge in full year profit but issued a cautious outlook.

Commodities, Bonds and Currencies

Yields on 10-year bond decreased to 2.61% and on 30-year bonds declined to 3.93%.

The U.S. dollar increased to $1.288 to a euro and fell against the Japanese yen to 85.32 yen.

Immediate futures prices of Texas crude oil decreased $2.39 to $77.86 a barrel, for natural gas increase 2.7 cents to $4.32 per mbtu and gasoline prices decreased 9.15 cents to 199.38 cents a gallon.

In metals trading, copper prices declined 5.85 cents to $3.25 per pound, gold increased $10.00 to $1,208.00 per ounce and silver decreased 27 cents to $17.88.