Impasse in Washington; Impatience in New York

Bikram Pandey
25 Jul, 2011
New York City

U.S. stocks turned cautious as fears of debt default gripped investor sentiment near close. Bond yields gained a fraction and oil traded near $100 a barrel, however the dollar was firm. Greek bailout plan failed to calm the European bond markets and Asian markets faltered.

[R]4:40 PM New York – U.S. stocks turned cautious as fears of debt default gripped investor sentiment near close. Bond yields gained a fraction and oil traded near $100 a barrel, however the dollar was firm. Greek bailout plan failed to calm the European bond markets and Asian markets faltered on the rising debt tensions in the U.S.[/R]

U.S. indexes trended lower as the lack of progress in debt talks sapped market confidence. Towards the market close, bond yields were on the rise as investors focused on the details of the debt ceiling negotiations.

Research In Motion Ltd announced to cut 2,000 jobs as sales of BlackBerry smart phones falter in the U.S. and fail to expand beyond corporate market.

Baker Hughes second quarter net income swung to $338 million. BE Aerospace second quarter net earnings soared 46%. Eaton second quarter net income increased to $336 million. HCA Holdings and Kimberly-Clark quarterly net income decreased.

The European markets struggled after the Greek bailout agreement on Friday. The bond yields of Italy and Spain rose as the euro-zone ministers agree to share pain to rescue Greece. Belgian banks fell as the pressure mounts on the government to pass more austerity measures.

Stocks in Japan declined on the worries that the U.S. debt talks impasse may lead to financial markets dislocation. The Nikkei index hovered near the 10,000 mark and the yen strengthened to a 4-month high.

The benchmark index in Sydney dropped the most in the last ten days of trading as the U.S. lawmakers struggle to agree to revise the debt ceiling. Macarthur Coal Ltd said coal production declined 24% in the first half and dropped 22.5% in the last quarter in the aftermath of natural disasters.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield increased to 3.00% and 30-year U.S. bond traded up to 4.32%.

The U.S. dollar decreased at $1.437 to one euro and fell against the Japanese yen to 78.28 yen.

Immediate delivery futures of Texas crude oil decreased $0.74 to $99.13 a barrel and futures of natural gas decreased 0.02 cents to $4.38 per mbtu and gasoline price decreased 0.34 cents to 312.67 cents a gallon.

In metals trading, copper decreased 0.05 cents to $4.40 per pound, gold added $13.50 to $1,615.00 per ounce and silver increased $0.23 to $40.35.