U.S. Stocks in 4-day Losses; Global Selloff in Banks, Tech Stocks

Bikram Pandey
06 Jun, 2011
New York City

U.S. indexes extended losses for the fourth day in a row as banks and tech stocks led the decliners. U.S. stocks have been on the decline for the five weeks in a row as tech stocks weaken. For the year S&P 500 index is up 3%. Airlines fell after the industry group lowered the annual profit estimate.

[R]4:00 PM New York – U.S. indexes extended losses for the fourth day in a row as banks and tech stocks led the decliners. U.S. stocks have been on the decline for the five weeks in a row as tech stocks weaken. For the year S&P 500 index is up 3%. Airlines declined after the industry group lowered the profit estimate for the year.[/R]

The U.S. indexes traded sideways after a string of disappointing economic data last week. The indexes declined for the fourth day in a row and tech stocks traded at the lowest valuations in the last one year.

Banks led the decliners and Citigroup, Bank of America and JP Morgan fell between 2% and 4%. Apple Inc announced iTunes Match music service $25 a year with a library of 18 million songs and a new $1 billion data centre in North Carolina.

The International Air Transport Association slashed airline industry current year profit forecast to $4 billion from $8 billion in March. LaSalle Hotel Properties agreed to acquire Park Central Hotel for $405.5 million.

The IMF granted $225 million aid to Iceland. Euro area investor confidence weakened in June and producer price inflation eased in April. Spanish industrial production declined and Czech industrial production slowed in April. Net wages in Romania rose in April.

The European indexes traded lower after Portugal ruling party lost the general election. Greece set to receive next tranche of the €110 billion bailout. Statoil divested stake in Gassled joint venture for $3.2 billion.

The UK indexes fell after manufacturing expanded in the second quarter boosted by overseas demand. Aegis confirmed talks with France-based Ipsos over sale of Synovate. SABMiller subsidiary agreed to sell stake in Kenya Breweries for $225 million. Melrose disposed Dynacast division for $590 million.

Stocks in Japan plunged on the ongoing worries related to the Tokyo Electric Power and rising bills of power generations for utility companies. The weak U.S. jobs data also dampened the sentiment. Banks closed lower on the worries that capital new international requirements may lift capital needs.

Australian indexes closed lower for the fifth day in a row and dropped three weeks in a row by 9%. Trading volume declined for the fifth day in a row. Job advertisements in Australia declined 6.5% in May. Iluka Resources gained after indicating price increase between 40% and 75% in the second half.

Commodities, Bonds and Currencies

The 10-year bond yield increased to 3.01% and 30-year bond rose to 4.27%.

The U.S. dollar increased to $1.459 to a euro and fell against the Japanese yen to 80.16 yen.

Immediate delivery futures of Texas crude oil decreased $0.80 to $99.42 a barrel and futures of natural gas rose 0.12 cents to $4.80 per mbtu and gasoline prices fell 2.47 cents to 296.84 cents a gallon.

In metals trading, copper increased 0.35 cents to $4.14 per pound, gold gained $2.10 to $1,544.50 per ounce and silver added $0.60 to $36.79.