Nasdaq Leads U.S. Markets Decline; Gold Falls 1%

Bikram Pandey
13 May, 2011
New York City

U.S. stocks closed lower after inflation picked up and tech stocks closed lower. Tech stocks closed lower after Yahoo, Nvidia and CA Inc declined. The U.S. dollar extended gains and closed at $1.41 to a euro. Gold falls 1% and silver trades volatile.

[R]4:10 PM New York – U.S. stocks closed lower after inflation picked up and tech stocks closed lower. Tech stocks closed lower after Yahoo, Nvidia and CA Inc declined. The U.S. dollar extended gains and closed at $1.41 to a euro. Gold fall 1% and silver trades volatile.[/R]

U.S. stocks traded lower after consumer prices rose more than expected market trading suggested a declining liquidity in the last two weeks. Investors are struggling to decide what should be the priority between the rising inflation that is not recognized in the government data and the end of the Fed’s $600 billion bond buying program.

Bond yields have been on the rise but are still near historic lows and inflation has been on the rise and still not reflected in the indexes tracked by the government.

Market indexes declined on the weakness in tech stocks and in tech stocks declined after Yahoo and Nvidia dropped 7%. Nvidia declined on current quarter sales weakness and Yahoo fell after Alibaba said it transferred its Alipay to a company controlled by its chief executive without its knowledge.

CA Inc led the technology shares lower after the company missed earnings and sales outlook estimated by some analysts.

Luxury retailer, Dillard’s surged 15% after earnings rose more than expected.

Agilent Technologies second quarter net income rose to $200 million. CA fourth quarter net income surged to $188 million. Dillard''s second quarter net income grew 5.2% to $76.7 million. Nordstrom first quarter net income rose to $145 million. NVIDIA first quarter net income fell to $135.2 million.

European markets traded higher after the euro-zone economy expanded in the first quarter. Germany led the region with an expansion of 1.5% and France grew at 1%. Italy and Portugal reported weaker than expected growth. Thyssen Krupp, Vallurec and EADS gained after earnings releases.

UK stocks traded lower tracking early weakness in the U.S. markets. The euro-zone economy expanded at a faster than expected pace in first quarter. Petrofac Ltd gained after new order won in the year rose to $2 billion. Mining companies closed higher. London Stock Exchange annual net increased 68%.

Stocks in Japan plunged as much as 1.7% after government’s spokesperson said taxpayers’ funds can not be made available to Tepco to compensate victims unless banks are willing to waive debts to Tepco. In earnings news, Nissan quarterly net rose 7.2% and Nikon estimated 54% jump in current year earnings.

Stocks in Mumbai closed higher after regional elections favored parties in central government. The Sensex reversed earlier weakness and surged in the late afternoon. Coal India gained after annual net income increased 4% on sales rise of 24%.

Australian stocks rebounded after commodities prices stabilized. St Barbara offered Catalpa Resources cash and stock and proposed a merger to produce 480,000 ounces of gold in 2012.

Commodities, Bonds and Currencies

The 10-year bond yield decreased to 3.18% and 30-year bond fell to 4.33%.

The U.S. dollar decreased to $1.4102 to a euro and fell against the Japanese yen to 80.81 yen.

Immediate delivery futures of Texas crude oil increased $0.21 to $99.16 a barrel, of natural gas increased 0.05 cents to $4.24 per mbtu and gasoline prices increased 0.95 cents to 307.34 cents a gallon.

In metals trading, copper prices increased 2.80 cents to $3.99 per pound, gold decreased $15.10 to $1,491.70 per ounce and silver increased $0.07 to $34.87.