U.S. Stocks Rebounds From 1% Loss; European Markets Down 2%

Bikram Pandey
29 Nov, 2010
New York City

U.S. stocks rebounded from the loss of more than 1% on better than expected retail sales. Euro declined as investors fear widening debt contagion in Europe after Ireland bailout. Commodities closed higher and crude oil, copper and gold edged up.

[R]4:00 PM New York – U.S. stocks rebounded from the loss of more than 1% on better than expected retail sales. Euro declined as investors fear widening debt contagion in Europe after Ireland bailout. Commodities closed higher and crude oil, copper and gold edged up. British Air shareholders approve $9 billion merger with Iberian Air.[/R]

Indexes in New York recovered from the early drop of more than 1% tracking losses in Europe as investors shifted focus to better than expected holiday retail sales last weekend. Thanksgiving weekend sales were ahead of expectations with some surveys showing more shoppers and at least 6% increase in average customer spending.

The European nations agreed to lend €85 billion to Ireland, the second nation to seek help and hoped that the debt contagion will be forestalled. Euro declined and banks fell.

Retailers traded mixed after stronger than expected Thanksgiving holiday sales. Amazon.com, Abercrombie & Fitch and Blue Nile gained but Limited and Tiffany declined. Quiksilver estimated fourth quarter net revenues between $492 million and $497 million.

European leaders and Ireland hammered out bailout conditions on late Sunday to stem the widening debt contagion in the euro-zone. Ireland agreed to tougher loan conditions and cut 15 billion in costs and interest rate of 5.8%.

European indexes fell sharply after Ireland agreed to terms of bailout and investors worried that the debt contagion may not be prevented from reaching to Spain. European confidence index increased in October. Banks and insurance companies declined.

UK indexes declined after investors worried that Ireland bailout may not prevent future bailouts in the euro-zone. UK Treasury watchdog lowered 2011 and 2012 economic growth outlooks. British Airways and Iberian Air inched closer to $9 billion merger after 99% British Air shareholders approve the merger.

Stocks in Japan closed higher and the yen weakened after a rally in Asian markets. October retail sale declined and domestic passenger car production declined in the month. The Government Pension Investment Funds gained int eh September quarter after falling for two quarters in a row.

Stocks in Shanghai declined on the worries of accelerating inflation and in Hong Kong rose tracking optimism related to the U.S. holiday sales. China Huaneng Group Corp and Chongqing Rural Commercial Bank plan HK initial public offerings totaling $3.73 billion.

Stock in Mumbai gained. BGR Energy surged 21% after management clarified its position on bank loan scam investigation. The Shipping Corporation of India set the price range for its secondary offering. GMR agreed to sell U.S. based InterGen for $1.23 billion.

Stocks in Australia closed higher as commodities advanced. Australia passes legislation that will separate the retail and wholesale businesses of Telstra. AMP board approves acquisition of AXA Asia Pacific Holdings. Profits at companies in Australia declined in the September quarter and homes sales rise in October.

Commodities, Currencies and Yields

Dollar edged up against euro to $1.31 and rose against the Japanese yen to 84.23. One UK pound fetched $1.55.

Crude oil increased $1.96 to $85.72 a barrel for a front month contract, natural gas edged lower 19 cents to $4.20 per mBtu and gasoline increased 7.43 cents to 228.46 cents.

Gold increased $4.70 in New York trading to close at $1,369.00 per ounce, silver increased $0.49 to $27.25 per ounce and copper for the front month delivery increased 95 cents to $3.77 per pound.

Yield on 10-year U.S. bond increased to 2.82% and on 30-year U.S. bond yield increased to 4.15%.