U.S. Indexes, Bonds, Oil, Copper Fall

Bikram Pandey
20 Aug, 2010
New York City

U.S. stocks generally closed lower as the prospect of economic recovery appear slower than estimated and job market struggles. Mixed earnings also failed to lift market sentiment. Crude oil, copper and gold edged lower. European markets dropped more than 1% for the second day and in Asia lost 1.5%.

[R]4:00 PM New York – U.S. stocks generally closed lower as the prospect of economic recovery appear slower than estimated and job market struggles. Mixed earnings also failed to lift market sentiment. Crude oil, copper and gold edged lower. European markets dropped more than 1% for the second day and markets in Asia declined.[/R]

U.S. stocks traded lower for the second day after unemployment claims rise and election rhetoric heats up. The U.S. Markets in Europe closed lower tracking losses in New York. Agrium agreed to acquire AWB Ltd for $1.1 billion. McDonald''s offered yuan denominated bonds in Hong Kong, the first non-financial company to do so. Colfax agreed to buy Baric Group and Nokia agreed to acquire privately held Motally.

Hewlett Packard led the decliners in the Dow with a loss of 2.2% after earnings. Dell Inc net gained 16%. Ann Taylor Stores sales swings to a quarterly profit on 2% rise in sales.

Dell Inc sales increased 22% and net gained 16%. Hewlett Packard revenues 11.4% and net gained 6%. Intuit Inc fourth quarter sales increased 18% and loss narrowed 32%.

The European indexes declined more than 1% for the second day in a row as the U.S. struggles with jobs market recovery and Europe faces slower economic rebound. The Basel Committee proposed new rules to bail out failed banks. The EU Commission noted Greece met the conditions for second loan installment of €110 billion aid.

The UK indexes dropped after a fall in resource stocks. Irish central bank Governor Patrick Honohan said he is confident that Irish budget deficit will reduce by 2014. KNOC makes a hostile offer of £1.87 billion for Dana Petroleum. Mitchells & Butlers announced the disposal of 333 non-core pubs for £373 million.

Stocks in China region dropped after Shanghai city inflation increased to 3.9% and China’s current account surplus declined 8%. PBOC eased liquidity after it provided funds through the repurchase agreement.

The benchmark index in Japan erased two days of gains after the yen resurged on the rise in weekly jobless claims. Panasonic shifts some more manufacturing to China to boost output. Crude steel output increases 20%, ninth straight monthly increase in July.

Stocks in Mumbai traded lower but ended little changed. Billionaire investor George Soros controlled fund acquired 4% stake in the BSE from the Dubai sovereign fund. Cabinet approves nuclear liability bill that may haunt India as it limits the nuclear accident liability. ONGC considers buying Cairn India’s stake in Rajasthan block.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.27 and fell against the Japanese yen to 85.66.

Crude oil decreased $0.97 to $73.46 a barrel for a front month contract, natural gas edged lower 5 cents to $4.12 per mBtu and gasoline decreased 0.34 cents to 192.53 cents.

Gold decreased $6 in New York trading to close at $1,229.40 per ounce, silver decreased $0.35 to $18.02 per ounce and copper for the front month delivery decreased 2.7 cents to $3.31 per pound.

Yields on 10-year U.S. bonds increased to 2.61% and on 30-year U.S. bonds yields decreased 3.66%.