U.S. Stocks Extend Losses Third Day; Gold Declines

Bikram Pandey
17 May, 2011
New York City

U.S. stocks traded lower after weak housing starts data and extended losses for the third day. Oil fell below $98 a barrel and gold dropped as much as $11. Retail stocks were in focus after Wal-Mart, Saks and TJX reported earnings. European and Asian markets were on the defensive.

[R]4:40 PM New York – U.S. stocks traded lower after weak housing starts data and extended losses for the third day. Oil fell below $98 a barrel and gold dropped as much as $11. Retail stocks were in focus after Wal-Mart, Saks and TJX reported earnings. European and Asian markets were on the defensive.[/R]

U.S. stocks traded lower after housing starts in April declined 10.6% and industrial production was weaker than expected. Wal-Mart Stores Inc said same store sales at its U.S. locations declined 1.1%, eight quarterly fall in a row. Hewlett Packard lowered its annual outlook.

Hewlett-Packard second quarter net earnings increased 5% to $2.3 billion. Saks first quarter net income grew 3% to $28.4 million. Home Depot first quarter net income soared 12% to $812 million. TJX first quarter net income plunged to $265.9 million. Wal-Mart first quarter net income grew 3% to $3.4 billion.

European markets traded sideways but the index in Germany dropped more than 1.4% after economic sentiment index declined for the third month in a row and dropped to near 10% of its historic average. French conglomerate Bouygues SA quarterly net plunged 81%. OMV AG announced 900 million euros shares offering.

UK stocks turned lower after inflation surged to highest last seen in October. The Bank of England Governor Mervyn King blamed the recent pick up in inflation on higher taxes and energy prices. Vodafone Plc said annul net declined 7.8% and took impairment charges for Spain and other smaller European markets.

Stocks in Tokyo were flat but banks and utilities declined for the third day in a row. Finance Minister Yoshihiko Noda sent a clear signal to the market and urged creditors to work with Tepco to lower debt and facilitate the compensation to victims.

Stocks in Mumbai declined after State Bank of India earnings plunged on a sharp rise in non-performing loans. The Sensex index dropped 1.1%. ONGC and other government controlled oil marketing companies declined after the government lowered subsidies to energy

Australian stocks struggled as commodities traded lower and global economic growth worries resurfaced. Reserve Bank of Australia left its tightening bias in the latest meeting but showed no urgency. James Hardie to reinstate its dividend and lowered its debt.

Commodities, Bonds and Currencies

The 10-year bond yield decreased to 3.11% and 30-year bond fell to 4.22%.

The U.S. dollar decreased to $1.423 to a euro and fell against the Japanese yen to 81.35 yen.

Immediate delivery futures of Texas crude oil decreased $0.25 to $97.14 a barrel, of natural gas decreased 0.13 cents to $4.18 per mbtu and gasoline prices decreased 0.73 cents to 292.35 cents a gallon.

In metals trading, copper prices increased 3.90 cents to $4.03 per pound, gold decreased $6.80 to $1,483.80 per ounce and silver decreased $0.24 to $33.88.