World Markets Retain Positive Bias; Portugal Rejects Deficit Plan

Bikram Pandey
23 Mar, 2011
New York City

U.S. stocks closed higher as new home sales rate dropped to record low in February. The euro was in focus after Portugal rejected the austerity measure and increased the chances of EU bailout. Japan assured that radiation leak does not pose health threat and Tokyo warned infants to avoid tap water.

[R]5:40 PM New York – U.S. stocks closed higher as new home sales rate dropped to record low in February. The euro was in focus after Portugal rejected the austerity measure and increased the chances of EU bailout. Japan assured that radiation leak does not pose health threat and Tokyo warned infants to avoid tap water.[/R]

U.S. indexes closed higher on ongoing concerns in Libya and Europe. U.S. mortgage and refinancing activity increased but new home sales dropped to the record low in February.

GM sold Ally preferred shares for $1 billion. Louis Dreyfus sold its midstream assets business for $1.93 billion. Colgate-Palmolive agreed to acquire Unilever''s Sanex brand for $940 million.

New home sales in February dropped to the lowest level in February and median price dropped to $202,100, the lowest since December 2003. New home sales rate decreased 16.9% to 250,000 and sales plunged 57% in the Northeast region.

Euro-zone industrial new orders rose more than estimated in January. German leading indicator rose in January. Hungarian retail sales increased in January. Danish consumer confidence deteriorated in March. Swedish economic sentiment indicator dropped in March.

After the close Portugal Parliament rejected austerity measures that focused on lowering deficit, deepen the spending cuts and increase taxes. Prime Minister Jose Socrates may call for an early election.

The European indexes traded higher on optimism of global economic recovery. Portugal''s Parliament holds a crucial vote today to cut its budget deficit. Technip won engineering contract from Chevron Indonesia. Commerzbank planned to integrate Deutsche Schiffsbank.

Nervous investors in Japan sold stocks after Tokyo Electric Power struggled to restore power at the disaster stricken power plant and Japan halted consumption of food from northern region. The Bank of Japan stopped adding liquidity. Automakers decline. Izumiya soars on higher earnings.

Stocks in Mumbai traded higher on the confidence that rising crude oil prices will not derail economic growth and corporate earnings. The Sensex index gained 1.2%. The Lok Sabha, the lower house of the Parliament approved the Finance Bill 2011.

Australian stocks traded in the positive zone all day but failed to make a significant advance. Virgin Blue issued its fourth earnings warning in a year and estimated full year loss of as much as $80 million. David Jones said first half net increased 5.2% on flat sales but left the outlook unchanged.

Commodities, Bonds and Currencies

Yield on 10-year bond increased to 3.35% and on 30-year bond gained to 4.45%.

The U.S. dollar increased to $1.41 to a euro and rose against the Japanese yen to 80.99 yen.

Immediate delivery futures of Texas crude oil increased $0.78 to $105.75 a barrel, of natural gas increased 0.08 cents to $4.33 per mbtu and gasoline prices increased 1.68 cents to 302.13 cents a gallon.

In metals trading, copper prices increased 11.55 cents to $4.42 per pound, gold increased $10.90 to $1,438.50 per ounce and silver increased $0.93 to $37.19.