U.S. Stocks Retain Momentum Despite Weak Economic Data

Bikram Pandey
31 May, 2011
New York City

U.S. stocks closed higher on positive sentiment in Europe. Latest economic data suggest weak housing market and uneven economic recovery. Europe and Greece make a progress in finalizing bailout terms. Nokia plunged on earnings and sales warnings. Manufacturing outlook improves in Japan.

[R]4:00 PM New York – U.S. stocks closed higher on positive sentiment in Europe. Latest economic data suggest weak housing market and uneven economic recovery. Emerging markets closed higher after Europe and Greece make a progress in finalizing bailout terms. Nokia plunged on earnings and sales warnings. Manufacturing outlook improves in Japan.[/R]

U.S. stocks traded higher after metropolitan cities home price index declined in March reaching to eight year low.

Investors focused on the improving sentiment in Europe after the European regulators and the IMF inch closer to finalizing the aid for Greece. The dollar fell against the euro and the pound.

Regional economic survey for the Chicago area showed manufacturing decelerated at the fastest pace in nearly thirty months and U.S. consumer confidence index declined. Nokia plunged 16% after it estimate weak quarterly results.

Ashland agreed to acquire privately owned International Specialty Products for $3.2 billion in cash. Nokia lowered its second quarter and full year 2011 outlook. Bank of Nova Scotia second quarter net income surged to $1.46 billion. Wal-Mart win merger proposal of Massmart.

European markets traded higher after investors turned positive on Greek developments. The IMF and the EU regulators are expected to reach a deal with Greek government to push through austerity measures and privatization plan. Banks in Germany and France advanced. European leaders are expected to finalize the Greek aid by the end of June.

The UK indexes rose on optimism of a resolution to Greece’s debt crisis. The British Chambers of Commerce lowered economic growth projections for the UK and home prices fell in May. Serco agreed to acquire India-based Intelenet for £385 million.

Stock in Japan surged after a survey of manufacturers indicated production to increase to pre-quake level in June. The news lifted the benchmark index 2% and industrial companies led the advance. Euro-zone linked stocks also rose after Greek debt worries eased.

Australian benchmark index added 0.9% and current account deficit in the fourth quarter increased to $10.4 billion and home construction approval in April declined 1.3%. SunRice Group shareholders rejected merger proposal with Spain based Ebro Foods.

Commodities, Bonds and Currencies

The 10-year bond yield decreased to 3.04% and 30-year bond added to 4.21%.

The U.S. dollar decreased to $1.438 to a euro and fell against the Japanese yen to 81.41 yen.

Immediate delivery futures of Texas crude oil increased $2.00 to $102.59 a barrel and futures of natural gas added 0.13 cents to $4.66 per mbtu and gasoline prices gained 5.80 cents to 315.05 cents a gallon.

In metals trading, copper decreased 0.60 cents to $4.18 per pound, gold decreased $2.20 to $1,535.10 per ounce and silver added $0.49 to $38.34.