Yields Rise in U.S., Europe; U.S. Senate Passes Tax Deal

Bikram Pandey
16 Dec, 2010
New York City

U.S. stocks fell after mortgage activities and refinancing declined but inflation rose as the yields on bonds increased. Visa Inc and MasterCard Inc fell more than 2% after Canada

[R]4:30 PM New York – U.S. stocks closed lower after inflation rose and mortgage activities fell. Visa and MasterCard declined after Canada stepped up anticompetitive regulatory inquiry. U.S. bonds yields rose and gold fell. European markets fell after Portugal bond yields rose sharply.[/R]

U.S. stocks fell after mortgage activities and refinancing declined but inflation rose as the yields on bonds rose. Visa Inc and MasterCard Inc more than 2% after Canada’s competition watchdog said that the companies practice “anti-competitive” practices.

The U.S. Senate voted in favor of a bill to extend the Bush-era tax cuts. HP inked $1.4 billion infrastructure technology outsourcing services contract with E.ON. Simon Property raised bid offer to £3 billion for UK-based CSC.

Ebay Inc acquired mobile application developer Critical Path Software Inc as it looks for ways to increase sales through smartphone applications and promote its classified and apartment rental listings.

The European indexes slid after Moody’s warned Spain of possible credit rating downgrade, ahead of bond sale tomorrow. Spain is scheduled to raise €225 billion in the next year.

In addition, Portugal completed the sale of €500 million of three-month T-bill that yielded 3.403%.

The yields surged 85% from 1.8% yield on November 3 and the bid-to-cover ratio dropped to 1.9 from 2.2. The Portuguese yield on short term government debt now rivals with the Germany’s 30-year long term debt rate of 3.54%.

Greece strike paralyzed normal life. Sweden hiked key rate to 1.25%. Novartis took full ownership of Alcon in $12.9 billion agreement. X5 Retail completed acquisition of Kopeyka.

The UK indexes dropped after banking stocks fell. The UK retail sales and unemployment rate rose. U.S.-based Simon Property raised bid offer to about £3 billion for CSC. Old Mutual contemplated selling US Life operations to affiliates of Harbinger Capital.

China key stock indexes drop on inflation worries and the fast developing nation is expected to revised inflation target next year to 4% from the current target of 3%. Foreign direct investment surges to record in November.

Tokyo stocks moved in a narrow range as investors focused on weaker yen and stronger than expected U.S. retail sales. Business confidence slips for the first time after seven quarters in the quarter to December. Eco-point applications for purchase of energy-efficient appliances surge 40% in November.

Mumbai stocks declined after oil companies raised fuel prices. Lanco Infratech acquires Griffin Coal of Australia. Manganese Ore India Ltd surged 51% on its first day of trading. Anil Dhirubhai Ambani Group companies finalize $3 billion of loans with Chinese banks.

Oil refiners and marketers rose after a retail price increase. Manganese Ore Limited surges on its first day of trading. Reliance Communications struck deal with China Development Bank for $1.93 billion. Ambalal Sarabhai Enterprises Ltd faces delisting.

Stocks in Australia were flat and four large banks were in focus. Competition regulator approves Singapore Exchange’s takeover offer for ASX. The Australian dollar traded at parity with the U.S. dollar but settled lower.

Commodities, Currencies and Yields

Dollar edged down against euro to $1.32 and rose against the Japanese yen to 84.22. One UK pound fetched $1.55.

Crude oil increased $0.23 to $88.51 a barrel for a front month contract, natural gas edged lower 2 cents to $4.23 per mBtu and gasoline increased 0.91 cents to 230.55 cents.

Gold decreased $20.10 in New York trading to close at $1,384.20 per ounce, silver decreased $0.77 to $29.01 per ounce and copper for the front month delivery decreased 10.45 cents to $4.11 per pound.

Yield on 10-year U.S. bond increased to 3.51% and on 30-year U.S. bond yield was rose to 4.58%.