World Markets Trade Sideways; Dow Up 6.6% in Volatile Quarter, Oil Up 17%

Bikram Pandey
31 Mar, 2011
New York City

U.S. indexes traded sideways after weekly jobless claims declined. For the quarter the Dow added 6.6%, S&P 500 index increased 5.6% and the Nasdaq gained 4.7%. Oil soared 17% and gold gained 1.3%. In Europe, French budget deficit was lower than expected but debt to GDP ratio hovered near Spain

[R]4:00 PM New York – U.S. indexes traded sideways after weekly jobless claims declined. For the quarter the Dow added 6.6%, S&P 500 index increased 5.6% and the Nasdaq gained 4.7%. Oil soared 17% and gold gained 1.3%. In Europe, French budget deficit was lower than expected but debt to GDP ratio hovered near Spain’s.[/R]

U.S. indexes traded sideways after weekly jobless claims fell 6,000 to 388,000. SunTrust completed repurchase of $3.50 billion of preferred stock under TARP. CarMax quarterly earnings rose boosted by used vehicle unit sales.

Ally Financial Inc formerly known as GMAC Inc filed for initial public offering that will sell the majority stake held by U.S. Treasury. The filing managed by four underwriters did not specify the size and price of the offering.

The U.S. Treasury Department holds 74% stake in the auto lender that is one of the largest lenders to dealers of General Motors Co. Ally Financial received $17.2 billion in three rounds of emergency financing.

Euro-zone annual inflation rose in March. French and Italian producer price inflation climbed in February. German unemployment declined more than estimated in March and retail sales fell in February. Danish jobless rate dropped in February.

France’s statistics agency said 2010 budget deficit was 136.5 billion euros or 7% of its GDP, lower than 7.5% in 2009.

France’s gross debt increased to 1.59 trillion euros or 81.7% of GDP in 2010 from 78.3% in 2009 and net debt increased to 75.9% from 71.3% in 2009.

At the peak of the October 2008 financial crisis Belgium based Dexia SA was the largest borrower from the U.S. Federal Reserve and borrowed $31.5 billion on October 24.

Dexia borrowed more than any other U.S., European or Asian banks that had access to the U.S. Fed to meet their short term funding.

Dexia spokesperson confirmed today the bank has no outstanding debt with the U.S. central bank.

The European indexes declined after inflation rose to 2.6% in March. Infineon planned to invest $160 million in Malaysian expansion. Inmarsat agreed to acquire Norway-based Ship Equip International A.S. for $159.5 million.

Prada SpA, the Italian fashion house filed to sell stocks in initial public offering in Hong Kong that is likely to see the valuation of the company at least $10 billion. According to the sources in Hong Kong the company is expected to raise at least 300 million euros to repay debt of 408 million euros.

The luxury goods maker said its latest year revenues increase 31% to 2.05 billion euros and net income double to 250.8 million euros.

The UK indexes gained after home prices rose in March. Ireland trade surplus fell in January. Taylor Wimpey agreed to sell North American business for $955 million. Vodafone paid $5 billion to buy Essar Group stake in its India unit.

Japan’s benchmark index declined 0.5% on the last trading day of the quarter and declined 8.2% in March and dropped 5% in the quarter. Dainippon Sumitomo Pharma increased 4.4% after it revised its full-year earnings outlook. The debt ridden and operator of troubled nuclear power plant Tepco may get a loan of 1.9 trillion yen.

Stocks in Mumbai gained for the eight day in a row after foreign investors ratchet up deal making. NTT DoCoMo Inc agreed to invest $180 million, Vodafone Group paid $5 billion to Essar Group to increase its stake in Vodafone India and International Paper acquired 54% stake in Andhra Pradesh Paper Mills.

Australian stocks closed higher after retail sales in February increased 2.3% from a year ago on a rise in department stores sales and food sales. However, home construction approvals declined 7.4% in February. Total credit to private sector increased 0.5% in February from banks and other lending intermediaries.

Commodities, Bonds and Currencies

Yield on 10-year bond decreased to 3.47% and on 30-year bond fell to 4.53%.

The U.S. dollar decreased to $1.41 to a euro and rose against the Japanese yen to 82.86 yen.

Immediate delivery futures of Texas crude oil increased $2.32 to $106.59 a barrel, of natural gas increased 0.06 cents to $4.33 per mbtu and gasoline prices increased 1.81 cents to 306.39 cents a gallon.

In the quarter to March, crude oil increased 17% and gold gained 1.3%.

In metals trading, copper prices decreased 7.50 cents to $4.27 per pound, gold increased $13.10 to $1,438.00 per ounce and silver increased $0.53 to $37.53.