World Stocks Gyrate; Dollar Sinks to 6-month Low

Bikram Pandey
01 Oct, 2010
New York City

A rise in personal income and spending lifted U.S. stocks but the dollar continued its decline. Metals and oil closed higher on the dollar weakness and the currency fell against the euro for the fourth day in a row. Markets in Europe retained negative bias but indexes in Asia generally closed up.

[R]4:00 PM New York – A rise in personal income and spending lifted stocks but the dollar continued its decline. Metals and crude oil closed higher on the dollar weakness. The dollar fell against the euro for the fourth day in a row. Markets in Europe retained negative bias but indexes in Asia generally closed higher.[/R]

U.S. stocks got much needed support after the personal income and spending increased in August. The rise in the both data lifted consumer products stocks. The dollar continued its decline and contributed to the rise in crude oil and metals.

The dollar declined to its six-month low after talks of Fed stimulus intensified on trading desks. Brazilian real rose to 2-year high, Australian dollar is reaching for parity, Indian rupee traded at 2-year high and euro gained for the fourth day in a row to six-month high.

Personal spending in the U.S. rose more-than-expected in August. Sinopec agreed to invest $7.1 billion in Repsol’s Brazilian unit. Boeing delayed first delivery of 747-8 freighter.

Accenture Plc soared more than 5% after quarterly net surged 75%. Christopher & Banks Corporation after quarterly same store sales increased 1%. Whirlpool Corporation declined after the company lowered its annual earnings outlook. Gymboree Corp surged on the talks of company going private.

The European indexes fell after euro-zone manufacturing fell in September and unemployment in the region stayed at elevated level. German manufacturing activity growth decelerated and French manufacturing growth was at five-month high in September. Rio Tinto Alcan agreed to invest $140 million in Icelandic smelter.

The UK indexes gained after manufacturing sector growth slackened in September and housing equity injections rose in the second quarter. Irish manufacturing sector contracted in September but retail sales increased in August. BP agreed to pay $15 million fine for environmental violations at Texas refinery.

Stocks in Japan continue to trail the world market gains in the week, month and in the fiscal first half. The benchmark index declined 15.5% in the first six months to September after a steady rise in the yen. Consumer prices and jobless rates drop in August. Auto sales dropped for the first time in 14 months. Share buybacks soars in September.

Stocks in Mumbai traded sharply higher after the international agencies and brokers lifted economic growth outlook on better than expected monsoon. The domestic auto sales surged in August. Exports and imports increased in the months and current account deficit tripled in the first fiscal quarter.

Shares in Sydney fell marginally and the Australian dollar gained for the seventh week in a row. Manufacturing activity contracts in September. Australia has the wettest September in more than a century.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.377 and fell against the Japanese yen to 83.36. One UK pound fetched $1.58.

Crude oil increased $1.63 to $81.60 a barrel for a front month contract, natural gas edged lower 0.07 cent to $3.79 per mBtu and gasoline increased 5.02 cents to 208.63 cents.

Gold increased $7.80 in New York trading to close at $1,317.40 per ounce, silver added $0.23 to $22.06 per ounce and copper for the front month delivery increased 3.50 cents to $3.68 per pound.

Yields on 10-year U.S. bond yield increased to 2.52% and on 30-year U.S. bond yield advanced to 3.72%.