World Markets Struggle on the Second Anniverasy of Bull Market

Bikram Pandey
09 Mar, 2011
New York City

U.S. markets struggled and European markets declined after crude oil prices gained. Uncertainty in Libya overshadowed worldwide trading. U.S. mortgage application rose to a one-year high. Exxon Mobil plans to increase capital spending this year 6% to $34 billion.

[R]4:10 PM New York – U.S. markets struggled and European markets declined after crude oil prices gained. Uncertainty in Libya overshadowed worldwide trading. U.S. mortgage application rose to a one-year high. Exxon Mobil plans to increase capital spending this year 6% to $34 billion.[/R]

U.S. stocks closed lower as oil traded near recent highs and fighting in Libya intensified. Investors struggled to focus on the domestic economic issues, corporate earnings and rising global inflation lead by the resurgent crude oil prices.

U.S. indexes have jumped nearly 100% in the last two years to date and crude oil price has soared 50% in the last six months sparking worries that future earnings growth may be hard to come by.

U.S mortgage applications soared 15.5% last week and application to refinance an existing mortgage increased to one-year record 17.2% and purchase application increased 12.5%.

AIG repaid about $6.9 billion to the U.S. Treasury after the sale of stake in MetLife.

The European indexes rose after German industrial production rebounded in January. Portugal successfully completed 2-year bonds auction raising €1 billion. Greek jobless rate rose to record in December. Tognum proposed to review €3.2 billion bid from Daimler and Rolls-Royce. Hannover Re net rose for fiscal year 2010.

The UK indexes slid after trade deficit narrowed, shop price inflation increased, and job growth accelerated. Rolls-Royce won order from Cathay Pacific for Trent 700 engines. Prudential and Tullow net surge.

Stocks in Japan increased after oil prices eased and indexes in Europe and U.S. closed higher in overnight trading. Machinery orders in January increased 4.2% on higher overseas demand. Dainippon Screen, Dai-Ichi Life and Yasakawa were added to Nikkei 225 Stock Average.

Stocks in Shanghai were flat and investors focused on domestic issues. The policy makers are expected to announce more measures to curb property speculation and facilitate the sale of affordable homes. Cathay Pacific placed orders for 25 planes with Airbus and Boeing.

Mumbai stocks closed higher as gold and silver traded near record prices. Market is awaiting industrial production data on Friday. After the close China Development Bank finalized the $1.9 billion loan facility for Reliance Communications.

Stocks in Australia declined as metals and energy prices eased in international markets. OZ Minerals agreed to pay $250 million to acquire a copper-gold project in South Australia. Resource stocks and banks closed lower in trading.

Commodities, Bonds and Currencies

Yield on 10-year bond decreased to 3.47% and on 30-year bond fell to 4.61%.

The U.S. dollar decreased to $1.390 to a euro and increased against the Japanese yen to 82.71 yen.

Immediate delivery futures of Texas crude oil decreased $1.02 to $104.00 a barrel, of natural gas increased 0.05 cents to $3.92 per mbtu and gasoline prices increased 7.15 cents to 301.82 cents a gallon.

In metals trading, copper prices decreased 13.70 cents to $4.20 per pound, gold increased $2.50 to $1,429.70 per ounce and silver increased $0.39 to $36.06.