U.S. Indexes Drop 1.3%; European Markets Weak

Bikram Pandey
30 Aug, 2010
New York City

U.S. stocks traded lower after person income and spending data were lower than estimated. Talks of more stimulus and emergency lending from the Bank of Japan lifted market indexes in Japan. Wheat surged on weather conditions in Europe.

[R]4:00 PM New York – U.S. stocks traded lower after person income and spending data were lower than estimated. Talks of more stimulus and emergency lending from the Bank of Japan lifted market indexes in Japan. Wheat surged on weather conditions in Europe.[/R]

U.S. stocks fell after personal spending rose 0.4% in July. Intel agreed to acquire wireless business of Infineon for $1.4 billion. Genzyme rejected Sanofi-Aventis offer of $69 a share. 3M agreed to buy Cogent for $943 million. HP raised 3PAR bid to $30 per share.

Hewlett Packard increased 3% after board approved $10 billion share buyback plan. Cogent Inc soared 20% after 3M agreed to acquire the company. UAL Corp and Continental gained after the merger approval.

The European indexes gained after euro-zone confidence rose in August. UK home prices fell at the fastest pace in sixteen months in August. Inflation index in Spain rose 1.8% in August. Genzyme rebuffed Sanofi-Aventis’s bid.

Stocks in Japan rallied after Bank of Japan in an emergency meeting decided to expand its funding and offer 10 trillion yen in short term loans. The move came under pressure from the government to stem the recent gains in the yen. Domestic passenger car output in July gained 15%.

Stocks in China gained after the U.S. Federal Reserve Chairman made positive comments and showed willingness to expand balance sheet to purchase more Treasury bonds or housing loans. Profits at industrial companies in China soar in the first seven months. Baoshan Iron & Steel net surges 11-fold.

Stocks in Mumbai rallied on the gains in Asian and international markets. India plans to triple port capacity in a decade. Apparel exports falls in July for the third month in a row. India was the biggest loan recipient from World Bank in the last fiscal year.

Stocks in Australia gained after the U.S. stocks rose on positive comments from the Fed Chairman. Sales of new homes fell in July for the third month in a row. Farmers reported in a survey that business confidence is on the rise in August. Business profit surges in the quarter to June.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.266 and gained against the Japanese yen to 84.63.

Crude oil decreased $0.57 to $74.60 a barrel for a front month contract, natural gas edged higher 11 cents to $3.82 per mBtu and gasoline decreased 1.53 cents to 193.26 cents.

Gold increased $1.10 in New York trading to close at $1,239.00 per ounce, silver decreased $0.008 to $19.06 per ounce and copper for the front month delivery increased 4.20 cents to $3.42 per pound.

Yields on 10-year U.S. bonds declined to 2.54% and on 30-year U.S. bonds yields declined 3.60%.