Dollar in Focus; U.S. and World Stocks Close Higher

Devan Biswas
25 Oct, 2010
New York City

U.S. and world stocks traded higher and the dollar retained the negative bias after the conclusion of G-20 meeting. Currency traders are expecting the dollar to continue its slide. The U.S. Treasury sold inflation protected securities for the first time at a negative yield of 0.55%.

[R]4:00 PM New York – U.S. and world stocks traded higher and the dollar retained the negative bias the after the conclusion of G-20 finance leaders meeting. Currency traders are expecting the dollar to continue its slide and little action is expected from China. The U.S. Treasury sold inflation protected securities for the first time at a negative yield of 0.55%.[/R]

U.S. stocks traded higher after the G20 finance chiefs pledged to avert currency wars and Fed Chairman Bernanke said regulators are looking at systemic weakness in bank foreclosures. Bernanke added that more than 20% of home mortgage borrowers owe more than the value of their homes and additional 33% have equity cushion of 10% or less and remain at risk if housing market declines any more.

Singapore Exchange agreed to acquire the operator of Australian Stocks Exchange for A$8.4 billion. CommScope confirmed talks with the Carlyle Group. BP agreed to sell interests in four Gulf of Mexico fields for $650 million to Marubeni.

Sykes Enterprises Inc surged after it reported higher than expected earnings. Value Line Inc soared more than 18% after it declared a special dividend. Sohu.com Inc advanced more than 10% after quarterly net exceeded expectations. CommScope Inc soared more than 30% after the company plans to go private.

Office Depot Inc, the second-largest office-supply retailer said Chairman and Chief Executive Officer Steve Odland resigned four days after it settled with the U.S. Securities and Exchange Commission.

The European indexes advanced after finance ministers of the G-20 nations agreed to ease currency tensions. Euro-zone industrial orders surged in August. French economy losses estimated up to €400 million a day. Hungarian Central Bank retained key rate at 5.25%. Waha Capital agreed to buy 20% stake in AerCap.

The UK indexes gained after G-20 finance chiefs vowed to reduce global fiscal imbalances. The BoE noted Asset Purchase Facility usage declined in the third quarter. The UK mortgage approvals fell in September.

Japanese stocks were nearly flat with the yen trading at 15-year high and ahead of earnings this week. Trade surplus for September soars but growth of export slows. Prime Ministers of India and Japan look for joint developments of infrastructure, nuclear power and rare earth exploration projects.

Stocks in China soared to a six month high on earning and profit outlook as well as commodity prices. Hong Kong stocks push the benchmark higher despite SGX offer to acquire ASX. AIA, the Asian insurance arm of AIG completed the public offering to raise $17.9 billion in Hong Kong.

Mumbai stocks continued the advance on earnings outlook. Growth in imports exceeded the exports and lifted the trade deficit in the first half to $63 billion. Prime Minister Manmohan Singh in a two-day visit to Japan plan to discuss investment in infrastructure and nuclear power projects. Supreme Court defers hearing on Vodafone tax case.

Stocks in Mumbai traded higher tracking gains in Asian markets. Bajaj Auto Ltd rose after the company was added to the benchmark index Sensex 30 index. D B Corp second quarter net gained 25.1%. Finolex Cables Ltd declined after quarterly net plunged 34%.

Australian shares surged on takeover activity and resurgent markets in Asia. Singapore Stock Exchange offers $8.4 billion for the Australian Stock Exchange. Australian dollar hovers just under parity.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.398 and fell against the Japanese yen to 80.83. One UK pound fetched $1.57.

Crude oil increased $0.81 to $82.54 a barrel for a front month contract, natural gas edged higher 0.02 cent to $3.35 per mBtu and gasoline decreased 0.79 cents to 225.71 cents.

Gold increased $16.80 in New York trading to close at $1,341.90 per ounce, silver added $0.44 to $23.56 per ounce and copper for the front month delivery increased 6.70 cents to $3.86 per pound.

Yield on 10-year U.S. bond increased to 2.56% and on 30-year U.S. bond yield increased to 3.91%.