U.S. Trade Deficit Widens on Record Exports; Stocks Turn Lower

Bikram Pandey
11 May, 2011
New York City

U.S. turned lower in the morning after trade deficit widened on higher oil price and sustained imports. China reported inflation of 5.3% and bank loans rose at a slower pace. Walt Disney quarterly net missed earning estimates. Spectrum Brands gained on better than expected sales.

[R]9:55 AM New York – U.S. turned lower in the morning after trade deficit widened on higher oil price and sustained imports. China reported inflation of 5.3% and bank loans rose at a slower pace. Walt Disney quarterly net missed earning estimates. Spectrum Brands gained on better than expected sales.[/R]

U.S. stocks edged lower after March trade deficit widened and China reported elevated inflation and an increase in bank loans for the year. German Chancellor Merkel urged Greece to do its part before any additional bailout.

U.S. trade deficit in March increased to $48.2 billion from $45.4 billion in February the data suggested a rise in exports but also showed sustained spending driving import.

March exports increased 4.6% to $172.7 billion and imports increased 4.9% $220.8 billion on higher price of imported oil of $93.76 a barrel.

The total deficit increased to $48.2 billion and goods deficit increased to $62.1 billion and service surplus increased to $13.9 billion.

In Europe, Greece continued to dominate the headlines as talks for the second bailout after a year intensified.

German Chancellor Angela Merkel told reporters in Berlin today that Germany and other nations can offer Greece help but “only if Greece’s stability and eagerness to reform is proven.”

Merkel went on to add that Greece need to properly rebuild its economic foundation and we can not just help the nation unless Greece does its own part.

On the economic front, UK reported higher trade deficit in March despite a rise in crude oil exports. The Bank of England lifted its inflation forecast and indicated tighter monetary policy.

The UK trade deficit in goods and services increased to £3 billion in March compared to deficit of £2.7 billion in February.

The goods deficit fell to £3.2 billion in March from £4.2 billion in February. Exports increased £1.2 billion and imports rose £0.2 billion.

China’s consumer price index in April increased 5.3% after rising at 5.4% in March. Bank loans in the month declined 3% to 739.6 billion or $114 billion but year-to-date loans increased 17.5% according to a statement from the People’s Bank of China.

Stock Movers

In a sign of economic rebound global logistics company Maersk A/S reported a rise in shipping volume. Luxury spending was also on the rise in Asia and in the U.S. and Hermes SCA reported a jump in quarterly sales.

Hermes International SCA soared 5.1% to 170 euros said first quarter sales increased 26%.

Maersk A/S gained 4.1% to 51,350 kroner after the container port terminal operator reported first quarter earnings before minority interests rose 85% to 6.35 billion kroner on sales increase of 11% to 79.11 billion kroner. Container shipping volume increased 12% and oil gas division sales increased 25% on oil price increase.

The logistics company said that the quarterly performance was helped by an improvement in all of its segments and container shipping division net profit increased to 2.39 billion kroner from 904 million kroner a year ago on 5% increase in volume gains and 2% rise in freight rates. But costs in the division increased only 3%.

Rovi Corp increased 13% after the maker of home entertainment systems said 2011 earnings may increase to $2.55 a share excluding certain items.

Walt Disney declined 3% after it reported lower than expected second quarter net on weak theme park attendance in Japan and on the weakness in box-office sales.

Spectrum Brands Holdings Inc increased 3% after the maker of consumer goods said second quarter earnings increased to 23 cents a share and full year 2011 sales are expected to rise 4%.