Deals of $5 Billion Fail to Spark U.S. Stocks

Bikram Pandey
27 Sep, 2010
New York City

U.S. stocks traded sideways after Unilever and Southwest Airlines announced deals. The European indexes declined after euro-zone growth slowed and UK home prices fell. Commodities prices traded at elevated levels and the dollar declined.

[R]4:00 PM New York – U.S. stocks traded sideways after Unilever and Southwest Airlines announced deals. The European indexes declined after euro-zone growth slowed and UK home prices fell. Commodities prices traded at elevated levels and the dollar declined.[/R]

U.S. stocks traded sideways after Unilever and Wal-Mart announced deals. China levied import duties on U.S. chicken. Unilever agreed to buy Alberto-Culver for $3.7 billion.

Alberto-Culver soared 20% after it agreed to be acquired by Unilever. AirTran Holdings soared 59% after Southwest Airlines offered $1.37 billion. Wal-Mart made a preliminary offer to South Africa based retailer Massmart. Jewelry retailer Zale Corp declined 3%.

The European indexes fell after euro-zone growth slowed but private sector credit and money supply growth increased. IMF approved €884 million loan for Romania. Hungary retained key rate at 5.25%. Nestlé formed group to develop personalized health science nutrition.

The UK indexes traded sideways after home prices fell to record lows in September. HgCapital agreed to sell 63.5% stake in Visma to KKR for $1.9 billion. 3i Group agreed to buy Mizuho Investment Management for £18.3 million.

Stocks in Japan rally after exporters gained following a surge in New York. Export growth slowed in August on the rising yen. Japan alleges that China started drilling at oil site in East China Sea unilaterally breaking the agreement to jointly explore the area.

Stocks in Shanghai and Hong Kong rally following a surge in international markets. Profits at companies climb 55% in the first eight months of the year. The $25 billion oil-for-loan program is expected start the flow of oil today from Russia to China.

Indian stocks and rupee advanced more than 4% in the month as foreign investors step up equity investments. Rupee traded below 45 to a dollar. BPCL plans to expand refining capacity, acquire overseas oil and gas assets and also build power plant. Reliance and ONGC receive extension for drilling in KG blocks.

Sustained gains in the Aussie dollar and improved sentiment in New York trading lifted Australian index to 20-week high. The panel on mining tax schedules meeting with industry in the next month. Global warming activists start protests at Newcastle port. Nufarm Ltd secures waivers on its banking covenants.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.347 and gained against the Japanese yen to 84.22. One UK pound fetched $1.585.

Crude oil decreased $0.27 to $76.22 a barrel for a front month contract, natural gas edged lower 0.08 cent to $3.79 per mBtu and gasoline decreased 0.21 cents to 194.50 cents.

Gold increased $0.40 in New York trading to close at $1,298.50 per ounce, silver gained $0.08 to $21.48 per ounce and copper for the front month delivery decreased 2.20 cents to $3.59 per pound.

Yields on 10-year U.S. bonds decreased to 2.51% and on 30-year U.S. bonds yields edged down 3.71%.