U.S. Stocks in 5-day Losses; Treasury Sells $32 Billion Debt

Bikram Pandey
07 Jun, 2011
New York City

U.S. stocks declined for the fifth day in a row and U.S. Treasury completed the sale of $32 billion of 3-year notes. Stocks pared early gains after Fed chairman estimated economic recovery in the second half. In Europe, retail sales increased and Germany indicated higher orders in April.

[R]4:10 PM New York – U.S. stocks declined for the fifth day in a row and U.S. Treasury completed the sale of $32 billion of 3-year notes. Stocks pared early gains after Fed chairman estimated economic recovery in the second half. In Europe, retail sales increased and Germany indicated higher orders in April.[/R]

U.S. indexes pared gains and turned negative for fifth day in a row after Fed Chairman Bernanke''s speech. Bernanke estimated economy to rebound in the second half but he also highlighted uneven recovery and persistent weakness in the labor market.

U.S. Treasury completed the sale of $32 billion of 3-year notes sale and in the week $66 billion of debt is expected to be placed. The auction drew 4.4 times bid-to-cover ratio and indirect investors bid the most in the last five months. The yield on 10-year bonds increased above 3% after the auction.

The Food and Agriculture Organization forecasted high food prices for this year and next. NBCUniversal agreed to buy Blackstone''s stake in Universal Orlando for $1.03 billion. Temple-Inland rejected International Paper’s $3.31 billion takeover proposal.

Booz Allen fourth quarter net more than tripled. G-III Apparel said quarterly net loss of narrowed. Navistar second quarter net income increased to $74 million. Talbots swung to quarterly profit. Temple-Inland rejects unsolicited takeover proposal from International Paper.

Euro area retail sales improved in April and German factory orders rose in April and service sector employment growth slackened in the first quarter. Norwegian jobless rate declined and Swiss inflation increased in May. Hungarian industrial production slowed in April.

The European indexes edged higher after a credit rating agency Fitch revised its outlook on Hungary to stable from negative. VimpelCom acquired 90% of New Telephone Company. Finland-based Metso agreed to buy technology of Swiss Holzmag GmbH. Ahold quarterly profit rose 6.2% boosted by sales and margins.

The UK indexes climbed after retail sales fell and home price rose in May. Irish property prices declined in April. BP plc may sell some of its 50% stake in TNK-BP joint venture to Russia based Rosneft.

The Nikkei benchmark index rebounded on the valuation discount but broader market traded in a tight range. Utilities and banks closed lower on the uncertainty related to Tokyo Electric Power. Automakers closed higher after Toyota scheduled earnings outlook conference on June 10.

Stocks in Mumbai traded sideways but on a rising volume. Software services exporters closed higher on new order wins and automakers closed lower ahead of expected natural gas price increase as early as tomorrow. The rupee held firm.

Australian stocks declined for the sixth day and extended losses in the fourth week. The Reserve Bank of Australia left key rate at 4.75% and guided higher inflation in the next one year. Metcash annual net increased 6.1% but indicated a cautious outlook.

Commodities, Bonds and Currencies

The 10-year bond yield increased to 3% and 30-year bond rose to 4.26%.

The U.S. dollar decreased to $1.468 to a euro and rose against the Japanese yen to 80.07 yen.

Immediate delivery futures of Texas crude oil increased $0.24 to $99.25 a barrel and futures of natural gas fell 0.01 cents to $4.81 per mbtu and gasoline prices added 3.84 cents to 299.85 cents a gallon.

In metals trading, copper increased 0.75 cents to $4.14 per pound, gold fell $1.40 to $1,545.80 per ounce and silver added $0.26 to $37.05.