Another Swing Turns Up S&P 500, Nasdaq 4.7%

Bikram Pandey
11 Aug, 2011
New York City

The U.S. indexes soared more than 4% after weekly jobless claims declined below 400,000 and trade deficit was smaller than expected. Cisco Systems earnings and revenues contributed to the surge in tech stocks. Banks rallied and gold declined.

[R]4:30 PM New York – The U.S. indexes soared more than 4% after weekly jobless claims declined below 400,000 and trade deficit was smaller than expected. Cisco Systems earnings and revenues contributed to the surge in tech stocks. Banks rallied and gold declined.[/R]

U.S. indexes swung higher more than 4% after better than expected jobless claims last week and smaller than expected trade deficit. The indexes surged as high as 5% and have swung in both directions with more than 4%. The wild swings were last seen in March 2009 casting doubts about the durability of this advance.

The weekly jobless claims fell 7,000 to 395,000, foreclosure filings declined in July, and deficit widened in June. Cisco quarterly net slumped 36% on restructuring charges.

Cisco Systems fourth quarter net income declined 36.3% to $1.2 billion. Kohl’s second quarter net income increased to $303 million. News Corp. fourth quarter net income decreased 22% to $683 million. Sara Lee fourth quarter net income fell to $111 million. Teekay second quarter net loss narrowed.

European indexes extended losses on the second day on the growing worries of the French bond rating. Societe Generale, BNP Paribas and Credit Agricole extended losses for the second day. German wholesale price inflation eased in July. Daimler and Rolls Royce secure 95% of Tognum. Zurich Financial Services net surged 88%.

German wholesale inflation eased in July. Greek jobless rate surged 16.6% in May and import price annual inflation rose in June. Czech current account deficit narrowed in June.

The UK government struggles to offer a unified response to 4-day riots in several cities as fear grips residents. The UK leading index remained flat in June and mortgage repossession declined in the first-half. Irish inflation remained steady in July.

Stocks in Tokyo declined on the euro-zone worries after French banks plunged more than 10%. The yen firmed and Japanese banks fell to their lowest level in the year with three leading banks trading down 20%. Gree, the social network operator soared on better than expected earnings.

Stocks in Australia seesawed all day and closed nearly unchanged after bargain hunters searched for values amid a weakening global economic backdrop. July unemployment rose to 5.1% from 4.9% in June. David Jones lowered its earnings outlook and reported weak quarterly sales.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield increased to 2.35% and 30-year U.S. bond closed up at 3.79%.

The U.S. dollar decreased at $1.4224 to one euro and closed flat against the Japanese yen to 76.87 yen.

Immediate delivery futures of Texas crude oil increased $2.89 to $85.78 a barrel and futures of natural gas increased 0.10 cents to $4.11 per mbtu and gasoline price increased 4.89 cents to 283.14 cents a gallon.

In metals trading, copper increased 17.05 cents to $4.09 per pound, gold decreased $32.20 to $1,752.10 per ounce and silver decreased $0.25 to $39.06.