Volatile Trading in U.S. Markets; Dell Drags Techs Lower

Bikram Pandey
17 Aug, 2011
New York City

The U.S. indexes closed lower and lost gains in early trading. Earnings were in focus. Dell and Abercrombie & Fitch were among the leading decliners after the companies guided a cautious outlook. Target Corp earnings rose on cost control and Eastman Kodak soared 20%.

[R]4:00 PM New York – The U.S. indexes closed lower and lost gains in early trading. Earnings were in focus. Dell and Abercrombie & Fitch were among the leading decliners after the companies guided a cautious outlook. Target Corp earnings rose on cost control and Eastman Kodak soared 20% after bull market in patents attracted attention.[/R]

U.S. indexes rose in the early trading but surrendered gains in the afternoon. Mortgage applications rose 4.1% and producer price index climbed 0.2% in July. General Dynamics agreed to acquire Vangent for approximately $960 million.

Abercrombie & Fitch net surged 64% in the quarter but the company’s cautious outlook dragged the stock down as much as 8%. Dell also was among the leading tech decliners after it cited sales softness in the current quarter.

BJ’s second quarter net income rose to $45.7 million. Deere third quarter net income increased 15% to $712.3 million. Dell second quarter net income surged 63% to $890 million. Target second quarter net earnings increased 3.7% to $704 million.
European indexes traded sideways after a disappointing meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. SNB intensified measures against rising Swiss franc. Hochtief net plunged 74% impacted by issues at its Australian subsidiary Leighton.
Euro area inflation eased to 2.5%, Swedish home prices rose, and Austria annual inflation climbed in July. The euro-zone and the Italian current account deficit expanded in June. Iceland hiked rates by 25 basis points to 4.50%.

The UK indexes edged lower after jobless claims rose in July and unemployment rate soared to 7.9% in the three months to June. The BoE minutes showed consensus among members on maintaining interest rate at a historic low of 0.5%. Balfour Beatty plunged 4.9% on weak first-half revenue.

Commodities, Bonds and Currencies

The 10-year bond yield decreased to 2.16% and 30-year bond added to 3.57%.

The U.S. dollar decreased to $1.4448 to a euro and fell against the Japanese yen to 76.49 yen.

Immediate delivery futures of Texas crude oil increased $0.91 to $87.50 a barrel and futures of natural gas added 0.007 cents to $3.93 per mbtu and gasoline prices gained 2.36 cents to 287.74 cents a gallon.

In metals trading, copper increased 4.70 cents to $4.06 per pound, gold increased $8.30 to $1,793.30 per ounce and silver added $0.58 to $40.42.