U.S. Stocks Turn Lower After Japan Aftershock; Records in Gold, Silver

Bikram Pandey
07 Apr, 2011
New York City

U.S. stocks turned lower after Japan was hit another quake aftershock that knocked off power at three nuclear facilities. Crude oil closed above $110 a barrel and silver inched closer to $40 level. U.S. lawmakers remain divided as the government shutdown looms next week.

[R]4:40 PM New York – U.S. stocks turned lower after Japan was hit another quake aftershock that knocked off power at three nuclear facilities. Crude oil closed above $110 a barrel and silver inched closer to $40 level. U.S. lawmakers remain divided as the government shutdown looms next week.[/R]

U.S. stocks turned lower after Japan was hit with 7.1 magnitude earthquake aftershock 215 miles northeast of Tokyo. The damaged Fukushima Daiichi nuclear power plant was spared but at least three nuclear facilities lost power. Investors were also nervous after lawmakers sparred to solve the latest budget crisis as the government shutdown looms.

In the economic news, jobless claims declined to 382,000. Same store sales were ahead of expectations despite the calendar shift and rising energy prices. Costco and Limited Brands same store sales surged and Gap lowered profit outlook.

European Central Bank lifted key lending rate to 1.25% from 1% and Bank of England left its benchmark rate unchanged. The increase in interest rate comes only hours after Portugal said it will seek European Union financial help.

UK indexes were flat and the Bank of England left its key lending rate on hold. The central bank also left its bond buying program on hold as inflation hovered at 4.4%, twice the target range. The pound was flat after the decision.

Foreign investors in Japan were net buyers of stocks and bonds in Japan. The benchmark index in Tokyo soared as much as 1.1% but surrendered most of the gains at close. The Bank of Japan left its bond and credit program unchanged and left target interest rate range unchanged.

Mumbai stocks wavered after a nine-day rally that lifted stocks more than 9%. The rising commodities prices are stoking fears of inflation as the latest data showed no improvement in wholesale prices.

Australian dollar continues to drift higher with no resistance after the release of jobs data. The unemployment rate dropped to 4.9%, the low last seen in December 2008. Riversdale Mining takeover offer from Rio Tinto failed to win 50% shares. TEN Network first half net declined 15.6% on 2.2% increase in revenues.

Commodities, Bonds and Currencies

The 10-year bond yield increased to 3.55% and 30-year bond gained to 4.61%.

The U.S. dollar decreased to $1.43 to a euro and rose against the Japanese yen to 84.98 yen.

Immediate delivery futures of Texas crude oil increased $1.37 to $110.20 a barrel, of natural gas decreased 0.09 cents to $4.05 per mbtu and gasoline prices decreased 1.2 cents to 318.08 cents a gallon.

In metals trading, copper prices increased 4.7 cents to $4.41 per pound, gold increased $2.60 to $1,461.10 per ounce and silver increased $0.25 to $39.64.