U.S. Stocks Look Beyond Global Worries

Bikram Pandey
25 Mar, 2011
New York City

U.S. stocks extended gains for the sixth day on earnings optimism and improving economic outlook. The fourth quarter GDP was revised to 3.1% but consumer sentiment worsened on the rising energy prices. Unemployment in 27 states fell in February and California led the nation in employment increase.

[R]4:00 PM New York – U.S. stocks extended gains for the sixth day on earnings optimism and improving economic outlook. The fourth quarter GDP was revised to 3.1% but consumer sentiment worsened on rising energy prices. Unemployment in 27 states fell in February.[/R]

U.S. stocks extended five days of rally after fourth quarter GDP was revised to 3.1% and consumer sentiment index was lower than expected. Tech stocks gained after Oracle and Accenture reported sharply higher earnings.

Consumer sentiment was lower than expected on a rise in gasoline prices and on the worries related to Japan disasters. The index tracked by the Thomson Reuters-University of Michigan index declined to 67.5 in March from 77.5 in February and the lowest since November 2009.

Investors focused on the earnings and economic release. U.S. Commerce Department lowered its estimate of the fourth quarter to 3.1% form the previous estimate of 3.2% two months ago and ahead of 2.8% estimate in February. Economy expanded in third quarter at 2.6%.

For the year 2010 U.S. economy expanded at 2.9%.

The latest survey from the U.S. Labor Department showed unemployment declined in 27 states. California led the gains in employment in 35 states with an increase in payroll of 96,500 followed by a growth in Pennsylvania of 23,700.

European leaders haggle to increase the bailout out fund size and Germany asked to limit contribution as the nation faces a regional election.

Markets in Europe traded mixed as the EU leaders cut the startup capital for aid fund but set higher target for capital to €600 billion by June. Portugal political and economic crisis deepens and the nation faces a snap election as early as June.

Russia holds key lending rate at 8% and increased bank reserve ratios by 0.5%.

UK stocks edged higher and closed up 3.2% in the week, the best weekly gain in last four months.

BP plc lost an arbitration ruling against its Russian partner in a venture TNK-BP. African Barrick Gold soared 2% after it discover more gold in Tanzania.

Stocks in Japan rebounded today 1.1% and for the week 3.6% as foreign investors increase their net purchase to the record last seen seven years ago. The rebound lifted construction related stocks.

Japanese automakers plan to increase more output but remain quiet with the parts situation.

The Australia index jumped nearly 1% for the second day in a row as miners and resource companies led the gainers.

BHP Billiton detailed $13 billion investment plan that will expand capacity of iron ore and energy coal operations. QR Nation plans to spend $185 million to expand its Goonyella network.

In India, the Sensex index in Mumbai soared 2.3% and for the week added 5.2%. The positive earnings outlook and improving sentiment in world markets emboldened investors. Software exporters led gainers after the industry sought tax relief extension for one more year.

Financial Technologies Ltd plans to list its commodities exchange unit as early as September.

Commodities, Bonds and Currencies

Yield on 10-year bond increased to 3.45% and on 30-year bond gained to 4.51%.

The U.S. dollar increased to $1.406 to a euro and fell against the Japanese yen to 81.39 yen.

Immediate delivery futures of Texas crude oil decreased $0.06 to $105.54 a barrel, of natural gas increased 0.06 cents to $4.31 per mbtu and gasoline prices decreased 0.38 cents to 304.10 cents a gallon.

In metals trading, copper prices decreased 0.20 cents to $4.42 per pound, gold decreased $6.10 to $1,428.80 per ounce and silver decreased $0.27 to $37.10.