U.S. Stocks Struggle; Gold Rallies 2%

Bikram Pandey
14 Sep, 2010
New York City

U.S. stocks traded sideways after a moderate increase in retail sales and budget deficit narrowed in August. The U.S. dollar dropped and the yen reached a new 15-year high. Gold surged 2.2%. Cliff Natural Resources Inc, the largest iron ore producer in North America dropped 5%.

[R]4:00 PM New York – U.S. stocks traded sideways after a moderate increase in retail sales and budget deficit narrowed in August. The U.S. dollar dropped and the yen reached a new 15-year high. Gold surged 2.2%. Cliff Natural Resources Inc, the largest iron ore producer in North America dropped 5%. Cisco Systems plans to initiate dividend.[/R]

U.S. stocks gained after retail sales rose 0.4% and budget deficit narrowed to $90.5 billion in August. The moderate increase in retail sales was welcomed by investors and eased the worries that the economy may slip into a recession. However, stocks lost steam in the afternoon.

MedAssets agreed to buy Broadlane Group for $850 million. Churchill Downs agreed to acquire Harlow''s Casino Resort & Hotel for $138 million.

Cisco Systems Inc added more than 3% after the company announced a plan to pay a dividend this year at annual analyst conference. Cisco also lowered its economic outlook.

Best Buy Company surged 6% after net soared 61%. The Kroger Co increased 2% after revenues gained 6%. Cliff Natural Resources declined more than 4% after it lowered annual revenues estimate.

The European indexes fell after German investor confidence plunged in September. Euro-zone industrial production static in July and labor cost growth slackened in the second quarter. French inflation eased in August.

The UK indexes declined after inflation remained at 3.1% but consumer confidence rebounded in August and home prices rose in July. The BoE policy maker Weale noted the British economy is recovering but employment may lag increase in private sector output.

Stocks in Japan dropped marginally after yen hovered near the 15-year record high. The ruling party elected Naoto Kan ending the two month of uncertainties. New condo sales in Tokyo surged 18.5% in August and increased in western Japan.

Stocks in China region traded marginally higher after in a volatile trading searching for a direction. Sales of new homes in Shanghai rose for the third week in a row and home loans dropped for the first time in August. First half investment in seven strategic industries surges 67%.

Stocks in Mumbai gained for a sixth trading day and the index is up 21% in the last four months. India starts reporting inflation series from August. Rupee strengthens for a fourth day in a row. Wind power maker, Suzlon plans expansion in China.

Stocks in Australia gained moderately led by mining stocks. Business confidence index surged to a 4-month high in August but still below the record in July a year ago. Wheat output and exports are estimated to surge on good rains. Gillard takes oath as Prime Minister.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.30 and fell against the Japanese yen to 83.07.

Crude oil increased $0.81 to $77.26 a barrel for a front month contract, natural gas edged higher 0.07 cent to $3.95 per mBtu and gasoline decreased 0.98 cents to 197.08 cents.

Gold soared $26.30 in New York trading to close at $1,273.40 per ounce, silver added $0.32 to $20.47 per ounce and copper for the front month delivery fell 0.90 cents to $3.47 per pound.

Yields on 10-year U.S. bonds decreased to 2.67% and on 30-year U.S. bonds yields edged down 3.78%.