U.S. Stocks Turn Positive on G-8 Debt Talk; Metals Up

Bikram Pandey
27 May, 2011
New York City

U.S. stocks advanced and world markets edged higher for the second week in a row. The dollar declined against the euro by 0.7% in the week and crude oil, copper and gold gained. G-8 leaders indicated global economic recovery is broadening and said nations will work to lower debt burden.

[R]4:50 PM New York – U.S. stocks advanced and world markets edged higher for the second week in a row. The dollar declined against the euro by 0.7% in the week and crude oil, copper and gold gained. G-8 leaders indicated global economic recovery is broadening and said nations will work to lower debt burden.[/R]

U.S. indexes edged higher after personal income and spending rose 0.4% in April. The smallest increase in spending in three months and the U.S. home sales dropped 11.6% in April drove the dollar lower.

The dollar declined to 2-week low after investors surmised that the latest weak economic data may not encourage the Fed to raise rates soon.

The news from the summit of Group of Eight political leaders in France did not shed light on the latest global economic conditions. The leaders pledged to lower debt burdens but failed to set a timetable or specific debt targets.

In earnings news, Marvell Technology first quarter net income plunged to $147 million. Royal Bank of Canada second quarter net income surged 13% to $1.50 billion. Tiffany first quarter net income soared 26% to $81.1 million.

Euro-zone economic sentiment deteriorates in May and M3 money supply growth slowed in April. Spain retail sales declined and Denmark jobless rate fell in April. Swedish GDP expanded slowly in the first quarter. Greek PPI eased in April.

European indexes edged higher as commodities prices rose and an upgrade of the European banking sector. Euro-zone economic sentiment weakened in May and M3 money supply growth slowed in April. Boston-based Thomas H. Lee Partners acquired Sword Insurance.

The UK indexes climbed after home prices rose in May and consumer confidence rose to record level in May. Irish retail sales declined in April. Vedanta proposed to raise $1.65 billion through bond offering.

Stocks in Tokyo closed lower and failed to build on the recent rise in the week. Cautious investors stayed on the sidelines as trading volume dropped to the lows last seen on April 25. Sony reported third annual loss in a row.

Mumbai stocks closed higher tracking gains in Asian markets and on the optimism on earnings. The rupee edged lower 10 paisa. MphasiS declined after it reported weaker than expected earnings.

Australian stocks extended gains for the second day as markets in Europe and New York advance. Asian markets closed nearly flat. Cochlear declined after it reported foreign exchange losses depressed earnings by $16.5 million.

Commodities, Bonds and Currencies

The 10-year bond yield increased to 3.07% and 30-year bond added to 4.24%.

The U.S. dollar decreased to $1.429 to a euro and fell against the Japanese yen to 80.82 yen.

Immediate delivery futures of Texas crude oil increased $0.50 to $100.73 a barrel and futures of natural gas added 0.17 cents to $4.52 per mbtu and gasoline prices gained 4.90 cents to 309.75 cents a gallon.

In metals trading, copper increased 7.00 cents to $4.18 per pound, gold increased $13.20 to $1,536.90 per ounce and silver added $0.61 to $37.94.