Third Weekly Gain in U.S. Indexes; G20 Meeting in Focus

Bikram Pandey
18 Feb, 2011
New York City

U.S. stocks closed higher for the third week in a row in a muted trading. Oil traded up after the Middle East unrest spreads to oil producing nations and bankers and finance ministers from G20 group of nations meet in Paris. Spain offers six more months to savings banks to raise capital or merge.

[R]4:00 PM New York – U.S. stocks closed higher for the third week in a row in a muted trading. Oil traded up after the Middle East unrest spreads to oil producing nations and bankers and finance ministers from G20 group of nations meet in Paris. Spain offers six more months to savings banks to raise capital or merge.[/R]

U.S. indexes rebounded from the earlier decline and closed higher for the third week in a row. The S&P 500 index gained 1% in the week and 4% in the month and the Dow is up 0.7% in the week and 4% in the month.

China unexpectedly hiked the reserve requirement ratio by 50 basis points. G20 nations finance ministers meet in Paris with Portugal and global economic imbalances in focus. Nordstrom agreed to buy online designer sample sale site HauteLook for $180 million. Ford agreed to enter a venture with Russia-based Sollers.

Apache fourth quarter net income soared $670 million. Campbell second quarter net earnings fell 8% to $239 million. EOG Resources fourth quarter net income plunged 87% to $53.7 million. Nordstrom fourth quarter net income rose 35% to $232 million. Revlon fourth quarter net income rose to $296.2 million. Intuit Inc gained 7% after it lifted its full-year outlook.

European indexes fell and Spain bowed to the pressures from savings banks and offered more time to ailing savings banks to raise capital. A rating agency lowered German banks'' subordinated debt and Euro-zone consumer confidence improved. German factory price inflation rose to a 2-year high.

UK indexes declined after mortgage lending plunged and retail sales exceeded expectations in January. The BoE Governor King reiterated that tackling global imbalances is the key for economic recovery. Anglo American profit surges and Rentokil swings to loss.

Stocks in Japan took a breather after rising for a week. In the year the benchmark index is up 6% as foreign investors seek bargains. Shipping and energy companies gained for the second week in a row as unrest in the Middle East spread to oil producing nations.

Stocks in China came under pressure after real estate prices increased in January from December. The persistent increase in prices stock speculation that another round of bank reserve ratios may start as early as next week. Agriculture stocks declined on the worries that drought may extend till the end of February.

The benchmark Sensex index declined 1.6% after rising more than 4.5% in five days. The rally came to an abrupt halt as telecom license probe widen. Hindustan Lever led gainers in the index and telecom stocks Bharti Airtel and Reliance Communications declined.

Stocks in Australia edged lower today but gained 1% in the week on mixed corporate earnings. Fortescue Metals first-half net jumped seven-fold and Sims Metals Management net rose 23.6%. ANZ Banking Group underlying profit increased 27%. Surfwear retailer Billabong soared 13% after it reaffirmed flat earnings for the year.

Commodities, Bonds and Currencies

Yield on 10-year bond increased at 3.60% and on 30-year bond rose to 4.70%.

The U.S. dollar decreased to $1.3687 to a euro and rose against the Japanese yen to 83.11 yen.

Immediate futures prices of Texas crude oil increased $0.39 to $86.75 a barrel, for natural gas rose 0.003 cents to $3.87 per mbtu and gasoline prices increased 1.18 cents to 253.95 cents a gallon.

In metals trading, copper prices decreased 0.80 cents to $4.48 per pound, gold increased $3.80 to $1,388.90 per ounce and silver rose 76 cents to $32.33.