U.S., European Markets Look Beyond Greek Vote; IMF Selects Lagarde

Bikram Pandey
28 Jun, 2011
New York City

U.S. indexes turned positive ahead of closely watched Greek vote tomorrow. The Dow, Nasdaq and S&P 500 indexes added more than 1%. The euro gained. Crude oil and commodities advanced. The IMF appointed French Finance Minister Christine Lagarde as the next managing director.

[R]4:40 PM New York – U.S. indexes turned positive ahead of closely watched Greek vote tomorrow. The Dow, Nasdaq and S&P 500 indexes added more than 1%. The euro gained. Crude oil and commodities advanced. The IMF appointed French Finance Minister Christine Lagarde as the next managing director.[/R]

U.S. indexes closed higher on the optimism about Greek vote and crude oil and commodities gained. Tech heavy Nasdaq index led the market with 1.5% increase and the Dow and the S&P 500 index advanced 1.2%.

On corporate news, General Dynamics won a $286 million contract from the U.S. Army. McCormick agreed to acquire Kamis for about $291 million. ITT Corp. signed seven-year strategic partnership agreement to provide products and services with Saudi Arabian Oil Company. Shire completes acquisition of Advanced BioHealing, Inc.

On the earnings front, Nike fourth quarter net income grew 14% to $594 million.

The European indexes declined and turned positive near close ahead of the austerity measures vote in Greek parliament as Greek unions stage a two-day strike. Carrefour received offer from Brazil-based Gama to form a strategic partnership.

The International Monetary Fund appointed French Finance Minister Christine Lagarde as the next managing director by a consensus vote. Lagarde in the past has been critical of the banks to plan allocate more loans to emerging nations.

The IMF has become the tool of European politicians to control funding to developing nations and yet to appoint its head from emerging markets. The multilateral agency has been perceived widely around the world as the bank controlled by the Europeans and the World Bank by the U.S.

European commercial vehicle sales improved and Swedish retail sales dropped in May. German consumer confidence set to strengthen in July. Italy's producer prices rose and Swiss consumption indicator increased in May.

The UK indexes rose after GDP expanded 0.5%, employment rose 1.4%, business investment and consumer spending slid in the first quarter. Irish consumer confidence deteriorated to a 4-month low in June. Cable & Wireless plunged 14% on weak fiscal year 2012 outlook.

Japanese stocks rebounded after investors focused on domestic events. The makers of steel, autos and electronics rose on the expectations of quicker than estimated recovery in manufacturing. Department stores sales decline slowed from a year ago in May and lifted stocks of retailers.

Australian index inched higher as investors tiptoed back to the market and set aside the worries related to Greece. Crude oil declined but resources linked stocks closed higher. Rio Tinto chief executive predicted company growth for the next ten years.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield increased to 3.03% and 30-year U.S. bond traded decreased 4.33%.

The U.S. dollar decreased to $1.4318 to one euro and fell against the Japanese yen to 80.82 yen.

Immediate delivery futures of Texas crude oil decreased $2.27 to $92.88 a barrel and futures of natural gas increased 0.10 cents to $4.36 per mbtu and gasoline price increased 7.94 cents to 288.69 cents a gallon.

In metals trading, copper increased 4.55 cents to $4.11 per pound, gold added $3.00 to $1,499.40 per ounce and silver increased 21 cents to $33.81.