World Stocks Decline; Earnings Jitters

Bikram Pandey
04 Oct, 2010
New York City

U.S. stocks steadily declined in the session as automakers sales, factory orders and pending home sales contracts increased. The dollar gained and commodities wavered but traded near recent highs. European markets declined ahead of barrage of economic reports this week.

[R]4:00 PM New York – U.S. stocks steadily declined in the session as automakers sales, factory orders and pending home sales contracts increased. The dollar gained and commodities wavered but traded near recent highs. European markets declined ahead of barrage of economic reports this week.[/R]

U.S. stocks traded lower in the early trading and automakers report rising sales. Stocks continued to slide in the session after factor orders in August declined 0.5% and increased 5.1% excluding defense and aircraft orders. Pending home sales contracts increased 4.5% from July, second monthly increase but declined 18.4% from a year ago.

Two airlines, United and Continental finalized merger to form the largest airline in the world. Agrium received Australian approval to acquire AWB. Microsemi agreed to acquire Actel for $430 million.

U.S. stocks traded lower ahead of earnings season and a week filled with economic releases. Ford Motor Company traded higher after a surge in auto sales. Dynamex soared after it agreed to go private. Resource and tech stocks declined on higher dollar. Casino operators traded higher.

The European indexes declined after euro area investor confidence improved in October and PPI slid to 3.6% in August. Spanish unemployment rate increased and consumer confidence index fell in September. Sanofi-Aventis launched hostile bid for Genzyme.

The UK indexes dropped after construction activity rose unexpectedly in September. The Confederation of British Industry urged for stringent rules to prevent industrial strike action. EKF Diagnostics completed acquisition of Quotient Diagnostics. Robert Edwards awarded Nobel for Medicine.

In a volatile trading the Nikkei index closed lower and banks led the decliners. Market has been worried that the revised capital guidelines will force banks to raise more capital sooner than expected. Japan and Mongolia agree to develop mines for industrial metals and rare earth metals. Wages stagnated in August.

Indian stocks closed higher but declined from the highs. Rupee closed at five-month high and automakers reported a surge in sales in September. India’s foreign exchange reserves increased to $291.6 billion. Adani Group is looking to participate in the Brisbane port privatization.

The benchmark index in Australia gained 1.1% after falling for four days in a row. RBA is set to announce its rate decision after two-day meeting that ends tomorrow. Australian dollar reaches a two-year high against the greenback. Australian regulators approve AWB purchase by Canada based Agrium. Ivanhoe completes the acquisition of Osborne project from Barrick Gold.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.368 and gain against the Japanese yen to 83.38. One UK pound fetched $1.583.

Crude oil increased $0.02 to $81.60 a barrel for a front month contract, natural gas edged lower 0.06 cent to $3.73 per mBtu and gasoline increased 0.84 cents to 209.45 cents.

Gold decreased $1.80 in New York trading to close at $1,316.00 per ounce, silver fell $0.07 to $22.06 per ounce and copper for the front month delivery decreased 2.70 cents to $3.66 per pound.

Yields on 10-year U.S. bond yield decreased to 2.48% and on 30-year U.S. bond yield fell to 3.71%.