U.S. Stocks Ride on Earnings; China Growth Lifts World Indexes

Bikram Pandey
21 Oct, 2010
New York City

U.S. stocks traded near the two-year highs after the latest earnings exceeded expectations. eBay, Freeport McMoran, Nokia and Pernord-Ricard, Caterpillar and Netflix earnings lifted stocks. The U.S. dollar rebounded and gold and crude oil fell. China

[R]4:00 PM New York – U.S. stocks traded near the two-year highs after the latest earnings exceeded expectations. eBay, Freeport McMoran, Nokia and Pernord-Ricard, Caterpillar and Netflix earnings lifted stocks. The U.S. dollar rebounded and gold and crude oil fell. China’s economic expansion lifted markets in Asia and Europe.[/R]

U.S. stocks rose in the early trading after the earnings exceeded expectations but in the afternoon traded lower. eBay quarterly profit increased 23% on the surge in revenues at online payment unit.

The Federal Reserve's Beige Book confirmed modest growth in 12 districts and U.S. weekly jobless claims fell 23,000 to 452,000.

AT&T Inc third quarter revenue rose 2.8% and net surged. Goodrich Corporation revenue increased 6%. McDonald’s Corporation third quarter net revenue rose 6%. Philip Morris International Inc. net revenues rose 2.2%.

The European indexes gained after Nokia swung to profit. Euro area private sector growth slumped in October. The EU disbursed €200 million to Latvia. Germany revised up 2010 growth outlook. Technip secured subsea contract for Papa-Terra field in Brazil.

The UK indexes climbed a day after government announced sharp spending cuts and retail sales fell unexpectedly in September. Decline in Irish home prices eased in the third quarter. GlaxoSmithKline profit declined 3.7% and Seagate net fell 17% in the quarter.

Japanese stocks fluctuated and dropped for a second day to close little changed after the yen hovered near its 15-year highs. Toyota recalls 1.53 million vehicles. Toshiba Corp swung to profit in the first half. Same store sales at convenience stores rose 12.9% in September and third monthly increase in a row.

China reported a robust economic expansion in the third quarter. However, 9.6% growth was the third decline in a row but still kept regulators worried on the resurgent inflation. The two inflation measures, CPI and PPI rose in September. China Mobile quarterly earnings rose only 3.5% as competition eats into margins.

Stocks in Mumbai surged on the sustained interest in Coal India offering from international investors. ACC Limited second quarter net fell 79%. Gujarat State Fertilizers & Chemicals Limited quarterly net more than doubled. Indiabulls Financial Services net jumped 143%.

Australian shares after trading higher in the morning boosted by resource stocks but lost most of the gains at close. Gold output at Newcrest Mining rises 79% in September quarter. Coles reported 5% increase in revenues in the quarter to September.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.53% and on 30-year bonds declined to 3.89%.

The U.S. dollar fell to $1.39 to a euro and rose against the Japanese yen to 81.30 yen.

Immediate futures prices of Texas crude oil decreased $2.02 to $80.52 a barrel, for natural gas fell 0.17 cents to $3.36 per mbtu and gasoline prices decreased 4.00 cents to 204.26 cents a gallon.

In metals trading, copper prices decreased 0.95 cents to $3.78 per pound, gold decreased $22.00 to $1,322.20 per ounce and silver fell 65 cents to $23.21.