U.S. Extends World Markets Gains; Commodities Struggle

Bikram Pandey
18 Mar, 2011
New York City

U.S. markets extended gains for the second day after crude oil price declined and Libya backed down and announced a cease-fire. Bank of Japan pumped $37 billion in a coordinated currency intervention with the central banks in Europe and North America. World markets gained more than 1%.

[R]4:00 PM New York – U.S. markets extended gains for the second day after crude oil price declined and Libya backed down and announced a cease-fire. Bank of Japan pumped $37 billion in a coordinated currency intervention with the central banks in Europe and North America. Markets in Asia, Europe and North America gained more than 1%.[/R]

U.S. stocks traded higher after G-7 central bankers conducted a coordinated currency market intervention. The joint action, first in a decade also highlighted fragile global recovery and need to dampen speculative volatility. U.N. passed a no-fly zone over Libya. Cisco declared a quarterly dividend and Nike declined after earnings.

Cisco traded higher after it announced a quarterly dividend of six cents. CostPlus fourth quarter net income increased but estimated lower than expected in the current year. Nike third quarter net income soared 5% to $523 million. The Cato fourth quarter net income rose 8%.

Stocks in Europe opened higher after G-7 nations conducted a coordinated action to tame the yen, Libya announced a cease fire a day after U.N. passed a no-fly zone resolution over Libya. Spain’s bad debt level shot up to a 16-year high as regional banks suffer more losses.

UK stocks traded higher matching the gains in Europe and world markets. Crude oil declined after Libya announced a no-fly zone. UK mortgage lending in February declined as home market remained sluggish and consumer sentiment index dropped to the low last seen in 2004.

Stocks in Japan rebounded after Japan in coordination with wealthy nations initiated round-the-clock intervention in currency market. The yen declined 3.6% by the end of trading and more selling is expected in Europe and in New York later in the day. G7 agreed for a coordinated move, the first such action since 2000.

Stocks in Mumbai declined on the worries that another hike in retail petrol prices will stoke a new round of inflation. Political noise also notched up after a leaked U.S. diplomatic cable hinted that Congress Party offered bribes to win the nuclear treaty vote in Parliament.

Australian stocks rebounded after markets in Asia turned positive on the G7 pledge to support the weak yen. The Bank of Japan in a coordinated move sold more than one trillion yen and expected more selling by the European and the U.S. central banks.

Commodities, Bonds and Currencies

Yield on 10-year bond increased to 3.27% and on 30-year bond decreased to 4.43%.

The U.S. dollar increased to $1.41 to a euro and increased against the Japanese yen to 81.05 yen.

Immediate delivery futures of Texas crude oil decreased $0.08 to $101.01 a barrel, of natural gas increased 0.001 cents to $4.16 per mbtu and gasoline prices decreased 0.52 cents to 294.54 cents a gallon.

In metals trading, copper prices increased 1.05 cents to $4.35 per pound, gold increased $14.50 to $1,418.30 per ounce and silver increased $0.83 to $35.09.