World, U.S. Markets in 6-day Rally; Record in Gold, Silver

Bikram Pandey
24 Mar, 2011
New York City

U.S. stocks edged higher after mixed economic data and positive earnings in tech sector lifted the sentiment. Portuguese crisis complicates EU bailout plan. Commodities rose and crude oil extended gains. Gold and silver traded at a new intra-day three-decade high.

[R]4:00 PM New York – U.S. stocks edged higher after mixed economic data and positive earnings in tech sector lifted the sentiment. Portuguese crisis complicates EU bailout plan. Commodities rose and crude oil extended gains. Gold and silver traded at a new intra-day three-decade high.[/R]

U.S. indexes rose after weekly jobless claims fell 5,000 to 382,000 and durable goods orders declined more than estimated in February. Indexes and tech stocks gained after better than expected earnings from Micron Technology, Red Hat, Best Buy and ConAgra Foods.

Bank of America declined extended losses on the second day after the Fed rejects bank’s plan to increase its dividend this year.

Nordstrom completed the purchase of HauteLook for $180 million. Walgreen agreed to acquire drugstore.com for about $409 million.

The European indexes soared as investors focused on economic recovery in the region and Japan looks to reconstruct and the EU leaders gather in Brussels for a two-day summit that ends tomorrow.

European leaders are struggling to increase the bailout fund size and approve an emergency funding that needs unanimous approval of all member nations.

Portuguese prime minister resigned and the prospect for international bailout increased and rating agencies lowered the outlook on Spanish banks as the sector struggle to recapitalize.

The yield on the 10-year Portuguese government bonds increased to the record high in ten years to 7.7% and 5-year bond traded at 7.9%.

Portugal has two government bonds of €10 billion expiring in April and in June and has short-term debt maturing in July and will need more funds to cover the payment for social security.

Portugal may be forced to seek as much as €80 billion in the EU-IMF led bailout.

In additional smaller Spanish banks debt were downgraded by Moody’s and only two weeks ago the rating agency had lowered the Spain’s debt one level lower but still investment grade.

In the earnings news in Europe, Brenntag fiscal year 2010 net surged and Jenoptik AG full-year revenues increased 8% and Evotec AG sales rose 29%.

In economic news in the European region, the euro-area consumer confidence dipped in March. French manufacturers' confidence improved in March and German construction orders increased in January.

Dutch GDP growth in the fourth quarter was revised higher to 2.5% from the previous estimate of 2.4% and 1.8% increase in the third quarter.

The UK indexes gained and retail sales fell more than estimated in February and Irish economy contracted in the fourth quarter.

Afren agreed to buy stake in Tanga Block from Petrodel. Kingfisher and Next soared after improved fiscal year 2010 performance.

Asian markets focused on the domestic economic news and in Japan indexes declined after radiation leak worries resurfaced.

Tokyo stocks traded in a narrow range and investors focused on the efforts at restoring power at the troubled nuclear power plant. Tokyo Electric plunged 16% after it halted its second-half dividend. Automaker declined on the worries that parts shortage may persist more than a month.

Stocks in Mumbai traded higher for the third day despite the latest read on inflation showed an increase and crude oil price surged for the fifth week in a row. Investors are factoring higher earnings from banks, infrastructure and software exporters.

The Australian benchmark index rebounded 1% after investors focused on the metal demand as Japan looks to reconstruct the earthquake-stricken area.

Caltex, the largest refiner in Australia dropped 5% after it reported sharply lower refining margins from a year ago. Australian government agreed with most of the recommendations of an independent committee appointed by the government and the industry on new mining tax.

Commodities, Bonds and Currencies

Yield on 10-year bond increased to 3.39% and on 30-year bond gained to 4.47%.

The U.S. dollar increased to $1.42 to a euro and fell against the Japanese yen to 80.86 yen.

Immediate delivery futures of Texas crude oil decreased $0.58 to $105.17 a barrel, of natural gas decreased 0.08 cents to $4.25 per mbtu and gasoline prices increased 2.42 cents to 304.55 cents a gallon.

In metals trading, copper prices decreased 0.25 cents to $4.42 per pound, gold decreased $9.70 to $1,428.30 per ounce and silver increased $0.06 to $37.20.