World, U.S. Stocks Rise on Deals and Economic Data

Bikram Pandey
10 May, 2011
New York City

U.S. stocks closed higher on deal news and positive economic news at home and abroad. European markets gained after Greece completed the sale of short term debt but the speculation intensified of another bailout. Asian markets closed mixed as earnings in Japan improved the sentiment.

[R]4:15 PM New York – U.S. stocks closed higher on deal news and positive economic news at home and abroad. European markets gained after Greece completed the sale of short term debt but the speculation intensified of another bailout. Asian markets closed mixed as earnings in Japan lifted stocks but inflation worries dragged stocks in China and India.[/R]

U.S. stocks traded higher on merger news and positive economic news at home and abroad. Wholesalers added to the inventories and China and Australia reported rising exports and Greece completed debt auction despite a rough anticipation.

Microsoft agreed to acquire Skype for $8.5 billion in cash and television show American Idol parent CKX agreed to go private for $510 million.

China’s April exports and trade surplus soared and U.S. import prices increased at a slower than expected pace.

European markets closed higher after Greece successfully completed the sale of 6-month debt and attracted a large chunk of foreign investors to the auction. Market indexes in France, Germany, Switzerland, Greece, Italy and Spain advanced.

The IMF is expected to offer as much as €80 billion in additional aid to Greece. The second bailout is widely anticipated and may stave off the Greek bonds restructuring for now but bond yields suggest some kind of restructuring or default in the near future.

UK stocks climbed tracking the gains in European markets. UK retail sales volume increased 5.2% in April largely on the account of calendar shift and one-time event.

Separately, Intercontinental Hotels Group guided higher sales at Holiday Inn and Imperial Tobacco Group reported higher sales largely on the gains in emerging markets.

In Asia, Japan stocks traded higher as earnings overshadowed growing sovereign default worries in the euro-zone. Toshiba, Hitachi and Sumitomo Heavy lead the gainers are reporting or guiding better than expected earnings. Softbank Corp estimated higher full-year earnings.

Stocks in Mumbai closed lower in a volatile trading. Sustained elevated inflation and rising fuel prices have kept investors on the sidelines. The rupee edged lower to 45.36 as crude oil prices traded above $100 a barrel.

Australian stocks declined for the second day as the federal government cut spending and deferred infrastructure projects to bring the deficit in control. Australia swung to a trade surplus in March. The Australian dollar declined on the worries that China may be forced to tighten rates earlier than anticipated as trade surplus soared in April.

Commodities, Bonds and Currencies

The 10-year bond yield increased to 3.20% and 30-year bond rose to 4.34%.

The U.S. dollar decreased to $1.443 to a euro and gained against the Japanese yen to 80.81 yen.

Immediate delivery futures of Texas crude oil increased $0.97 to $103.52 a barrel, of natural gas increased 0.11 cents to $4.26 per mbtu and gasoline prices increased 8.01 cents to 335.85 cents a gallon.

In metals trading, copper prices increased 3.35 cents to $4.05 per pound, gold increased $13.30 to $1,516.50 per ounce and silver increased $1.42 to $38.56.