World Markets Rest; Gold, Silver Shine

Bikram Pandey
08 Nov, 2010
New York City

U.S. stocks closed lower and the dollar edged higher and gold and silver continue to trade at record levels. Chrysler Group LLC reported smaller loss in the third quarter. European markets closed mixed but after the close Ireland said it will honor its debt. SEC looks to throttle program trading.

[R]4:20 PM New York – U.S. stocks closed lower and the dollar edged higher and gold and silver continue to trade at record levels. Chrysler Group LLC reported smaller loss in the third quarter. European markets closed mixed but after the close Ireland said it will honor its debt. SEC is expected to put new restrictions on program trading to avert another flash crash.[/R]

U.S. traded lower as the rhetoric ahead of G20 meeting heats up after China joined other emerging nations and Germany and resisted further U.S. economic stimulus. The dollar edged higher and gold traded near elevated levels. Amazon.com is in a deal to acquire parent of Diapers.com that may value the company at $540 million.

U.S. stocks traded lower. Ashland surged 10% after the company agreed to sell its distribution division to TPG. Warner Chilcott declined 10% after it estimated lower sales next year. Radian Group fell on investigation and convertible bonds offering. CommScope gained on the prospect of a rival bid.

Chrysler Group LLC, the third largest U.S. domestic auto maker now controlled by Italy based Fiat SpA said third quarter loss declined to $84 million from the loss in the second quarter of $172 million. Sales in the quarter increased 5% from the second quarter to $11 billion and global vehicle sales in the quarter increased 17% from a year ago to 401,067.

Chrysler is expecting to generate $52.5 billion 2011 and earn between $1.6 billion and $2.4 billion and generate free cash flow of $1 billion. The company also expects to close on $3 billion in loans with the Department of Energy before the end of the year.

European markets closed mixed but traded lower after a strong rally last week. Stocks focused on earnings. Greek index rose after ruling party was ahead in local election in Greece and Prime minister reaffirmed the commitment to fiscal reforms. Ireland was in focus after recent budget cuts.

Stocks in London declined as commodities prices gained and the dollar edged higher against the euro but declined to the pound. Gartmore Group Ltd plunged after star managers leave the company and the management seeks a buyout candidate. Banks close lower.

Stocks in China region gained as crude oil traded at a 2-year high and commodities advance. Property developers gained as a flood of new money is expected in the sector after the U.S. adds $600 billion in new money supply.

Stocks in Japan closed higher and touched 3-month high as the yen declined. The better than expected U.S. jobs report lifted sentiment. Japan Steel Works Ltd and Sumitomo Metals Mining Co revised annual net outlook higher.

Stock in Mumbai fell. Coal India Limited declined 3.4% after surging 40% on the first day of offering last week. Jain Irrigation Systems soared 4.1% after net profit rose 46%. Reliance Power rose 4.5% after get credit of $5 billion from Exim bank. PowerGrid Corp sets the price for its $1.7 billion offering.

Commodities, Currencies and Yields

Dollar edged down against euro to $1.39 and declined against the Japanese yen to 81.17. One UK pound fetched $1.62.

Crude oil increased $0.17 to $87.01 a barrel for a front month contract, natural gas edged higher 1.6 cent to $4.09 per mBtu and gasoline decreased 0.10 cents to 217.90 cents.

Gold increased $10.00 in New York trading to close at $1,407.70 per ounce, silver increased $0.89 to $27.63 per ounce and copper for the front month delivery increased 0.80 cents to $3.95 per pound.

Yield on 10-year U.S. bond increased to 2.55% and on 30-year U.S. bond yield gained to 4.12%.