U.S. Gains Trimmed on Fed Statement

Devan Biswas
21 Sep, 2010
New York City

U.S. indexes closed higher after Fed indicated its willingness in stimulate economy as inflation runs below its target. Gold inched to record and U.S. Treasuries yields dropped to record low. Markets in Europe and Asia edged lower.

[R]4:00 PM New York – U.S. indexes lost early gains after the Fed indicated its willingness to stimulate economy as inflation runs below its target. Gold inched to record and U.S. Treasuries yields dropped to record low. Markets in Europe and Asia edged lower.[/R]

U.S. stocks generally traded higher and trimmed gains in the late afternoon after the Fed in a statement indicated it may be prepared to provide additional stimulus to the economy. Gold increased to record high and the yields on U.S. Treasuries dropped to record low.

U.S. stocks gained after housing starts surged more than expected 10.5% in August. McMoRan agreed to buy Plains Exploration's shallow water Gulf of Mexico assets for $818 million. Clorox is negotiating to sell its auto-care brands to Avista Capital for $800 million.

AutoZone, Inc declined after the retail said fourth quarter sales increased 9.5%. Carnival Corp increased 2% after third quarter revenues increased 8% to $4.4 billion. FactSet Research Systems Inc. increased revenues and earnings increased 8%.

The European indexes rose after the French economic index accelerated in July. The EU extended Irish bank guarantee scheme. Fitch affirmed Germany's sovereign ratings. Spanish export growth slowed in July.

The UK indexes climbed after Ireland successfully completed bond sales. The Confederation of British Industry urged prioritization of spending on investment for economic growth. The UK public sector net borrowing soared in August. Irish PPI slackened in August.

Stocks in Japan drop on China concerns. China suspends ministerial level exchanges with Japan on the recent fishing boat incident. Government Pension Fund is weighing the idea of investment in emerging markets.

China region indexes gained fractionally ahead of holidays. Shanghai port surpassed Singapore as the number of containers handled at the port surged 20% in August. Passenger air travel passengers and new home sales in Shanghai continue to rise.

The Sensex crossed the 20000 last seen in January 2008 as foreign investors pour capital and monsoon rains are ahead of estimates. India, Turkmenistan, Pakistan and Afghanistan sign a preliminary agreement for a gas pipeline as the U.S. block the pipeline project from Iran.

The benchmark index in Sydney closed lower giving up earlier gains in trading on the worries that interest rates may be on the rise. Australia lifted its commodity exports forecast for the current fiscal. Victoria plans to back 345 gigawatts solar power plant.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.326 and fell against the Japanese yen to 85.05. One UK pound fetched $1.562.

Crude oil decreased $1.3 to $73.52 a barrel for a front month contract, natural gas edged higher 0.11 cent to $3.93 per mBtu and gasoline decreased 3.11 cents to 191.85 cents.

Gold increased $10.40 in New York trading to close at $1,291.20 per ounce, silver fell $0.01 to $20.80 per ounce and copper for the front month delivery decreased 2.00 cents to $3.48 per pound.

Yields on 10-year U.S. bonds decreased to 2.58% and on 30-year U.S. bonds yields edged down 3.79%.