Tech Stocks Lead U.S. Market Decline; Oil Drops 2.5%

Bikram Pandey
16 May, 2011
New York City

U.S. stocks struggled after commodities declined and the euro rebounded. European finance ministers finalized the bailout conditions for Portugal and urged Greece to expedite its privatization program before additional funding. Crude oil declined 2.5% and commodities swing.

[R]4:00 PM New York – U.S. stocks struggled after commodities declined and the euro rebounded. European finance ministers finalized the bailout conditions for Portugal and urged Greece to expedite its privatization program before additional funding. Crude oil declined 2.5% and commodities swing.[/R]

U.S. stocks traded sideways as commodities declined. Monday merger news included the sale of struggling publisher Primedia Inc for $525 million, SanDisk agreement to acquire Pliant Technology and Nasdaq and ICE dropping their bid for NYSE Euronext.

Elbit Systems first quarter net income plunged to $27.9 million. J. C. Penney first quarter net income rose 7% to $64 million. Lowe’s first quarter net income declined 4% to $461 million. Nasdaq and ICE withdrew their $11 billion proposal to acquire NYSE Euronext.

European markets traded lower as finance ministers gathering approved Portugal bailout of 78 billion with conditions. The total bailout for three countries Portugal, Greece and Ireland now stand at 256 billion euros and Greece may need another 50 billion to 60 billion euros.

However, investors were nervous about the fate of additional financing for Greece and several political leaders stepped up the call for Greece to cut its expenses and expedite privatization program. The yield on 10-year bonds increased 15 basis points to 15.60%.

The euro edged higher but commodities declined. Inflation in the euro-zone increased to 2.8% and preliminary trade deficit in Mach in the zone increased.

UK stocks edged lower on global economic worries following a weakness in European markets. Miners closed higher on a slight rebound in base metal prices but energy linked companies declined on a weakness in crude oil prices.

Stocks in Tokyo declined for the third day in a row and the benchmark index dropped to a one-month low. Utilities declined for the second day after Japan passed a rule requiring all utilities to contribute to disaster victims’ compensation fund. Banks declined after officials were not clear if banks will be required to forgive loans to Tepco.

Stocks in Mumbai declined on global economic growth worries ahead of European leaders meeting to provide another bailout to Greece. Commodities prices closed lower but India controlled oil companies lifted retail petrol prices.

Australian stocks edged lower tracking the weakness in commodities prices. Macarthur Coal lowered its stake in Codrilla coal deposits in exchange for $75 million. Leighton soared 3% after it reported a loss in nine months but reaffirmed its annual earnings outlook.

Commodities, Bonds and Currencies

The 10-year bond yield decreased to 3.16% and 30-year bond fell to 4.29%.

The U.S. dollar increased to $1.419 to a euro and fell against the Japanese yen to 80.75 yen.

Immediate delivery futures of Texas crude oil decreased $2.55 to $97.10 a barrel, of natural gas increased 0.08 cents to $4.33 per mbtu and gasoline prices decreased 12.33 cents to 295.11 cents a gallon.

In metals trading, copper prices increased 0.20 cents to $3.98 per pound, gold increased $1.50 to $1,495.10 per ounce and silver decreased $0.78 to $34.22.