Higher Exports Drive U.S. Indexes Up After 6-day Decline

Bikram Pandey
09 Jun, 2011
New York City

U.S. indexes snapped six day losing streak and rebounded more than 0.6% after trade deficit narrowed 7%. The rise in exports supported market momentum. The central banks in Europe and UK left rates on hold. Commodities and oil closed higher.

[R]4:20 PM New York – U.S. indexes snapped six day losing streak and rebounded more than 0.6% after trade deficit narrowed 7%. The rise in exports supported market momentum. The central banks in Europe and UK left rates on hold. Commodities and oil closed higher.[/R]

U.S. indexes closed higher after weekly jobless claims rose 1,000 to 427,000 and trade deficit unexpectedly narrowed 7% in April. The Dow closed up after losing for six days in a row on higher than expected exports and lower deficit.

U.S. Treasury completed $13 billion auction for 30-year bonds. The European Central Bank left its key rates on hold at 1.25% and the Bank of England left its key rate rate at 0.5% and bond buying program unchanged.

Commodities and oil traded higher following broader market indexes. Exxon Mobil acquired natural gas assets for $1.69 billion.

In earnings news, J. M. Smucker fourth quarter net income declined 21% to $94.9 million. Thor Industries third quarter net income rose 17% to $40 million. Vail Resorts third quarter net income rose 6% to $76.9 million.

The European indexes traded higher ahead of the interest rate decision from the European Central Bank. Schneider Electric agreed to acquire China-based Leader & Harvest for $650 million. Stolt-Nielsen completed NOK 1.6 billion 5-year bond issue.

French non-farm payrolls rose and German labor costs increased in the first quarter. The GDP in many nations in the euro-zone expanded in the first quarter. Greek economic growth in the first quarter was revised lower to 0.2%.

The UK indexes gained after the Bank of England left key rate and the size of quantitative easing for the 27th month in a row. The UK trade deficit narrowed in April. Irish consumer price inflation slackened in May. BMW planned additional investment of £500 million in its UK production units.

Stocks in Japan gained for the third day in a row. Tepco traded at a new low on a massive trading volume that only highlighted market jitters. Trading in Tepco accounted for nearly one third of all trading on the Tokyo Stock Exchange. Retailers led the gainers.

Stocks in Mumbai declined ahead of factory output data tomorrow. The latest inflation data showed an increase in food prices and wholesale prices rose 0.5%. Automakers declined after May unit sales rose at the slowest pace in two years.

Australian stocks gained and the dollar declined after the release of the May employment data. The Australian economy created 7,800 net new jobs in May and unemployment hovered at 4.9% for the third month in a row. Qantas won a preliminary approval for its joint venture with American Airlines.

Commodities, Bonds and Currencies

The 10-year bond yield increased to 3.00% and 30-year bond gained to 4.22%.

The U.S. dollar increased to $1.452 to a euro and rose against the Japanese yen to 80.28 yen.

Immediate delivery futures of Texas crude oil increased $1.01 to $101.75 a barrel and futures of natural gas fell 0.17 cents to $4.68 per mbtu and gasoline price earnings 5.85 cents to 303.72 cents a gallon.

In metals trading, copper decreased 0.25 cents to $4.10 per pound, gold gained $7.30 to $1,546.00 per ounce and silver added $1.00 to $37.62.