World Stocks Turn Positive; U.S. Sue to Block AT&T, T-Mobile Merger

Bikram Pandey
31 Aug, 2011
New York City

The U.S. stocks closed higher after factory orders rose 2.4% in July. The narrow index of large companies turned positive and telecom stocks were under pressure after the Justice Department blocked the $39 billion merger between AT&T and T Mobile.

[R]5:55 PM New York – The U.S. stocks closed higher after factory orders rose 2.4% in July. The narrow index of large companies turned positive and telecom stocks were under pressure after the Justice Department blocked the $39 billion merger between AT&T and T Mobile.[/R]

The U.S. indexes traded higher and the private sector employment rose in August but mortgage and refinancing activity fell. Carl Icahn agreed to sell his stake in Lions Gate Entertainment.

The U.S. Justice Department filed a lawsuit to block the $39 billion deal with AT&T and Deutsche Telekom’s T Mobile. AT&T also agreed to pay $3 billion of breakup fee and give up airwaves spectrums in 110 markets and negotiate roaming fees.

AT&T earlier had proposed to bring back 5,000 jobs as a condition of T Mobile merger approval.

Bombardier second quarter net income surged 53% to $211 million. DryShips reported second quarter net loss of $114.1 million. Joy Global third quarter net income soared 46% to $173.11 million. Lions Gate said Carl and Brett Icahn agreed to sell up to 44.2 million shares to the company.

European indexes rose after German lawmakers approved reforms to the European rescue fund. The euro area jobless rate remained flat at 10% in July. National Bank of Greece swung to first-half loss. Bouygues announced a share repurchase worth €1.25 billion.

Euro-zone inflation was steady at 2.5% in August and unemployment was at 10% in July. German unemployment declined but Italy''s annual inflation increased in August. Norway’s retail sales fell in July and Sweden''s current account surplus dropped in the second quarter.

The UK indexes extended gains of more than 2% for the second day in a row. UK consumer confidence dipped in August. Irish jobless rate rose to eight-month high in August. Tesco decided to sell its business in Japan.

Stocks in Japan edged up a fraction and extended rally for the fifth day in a row. Automakers, banks and trading companies led the advancers. The Yen traded near its 25-year high. Taiheiyo Cement plunged 14% after it proposed to a stock offering.

The Australian stocks traded higher and the dollar was firm. Traders are betting that the dollar to rise as much as $1.20 on the sustained exports to China and other nations in Asia. The Rock agreed to a merger with MyState on 40% premium.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield increased to 2.22% and 30-year U.S. bond rose to 3.60%.

The U.S. dollar increased at $1.438 to one euro and closed lower against the Japanese yen to 76.58 yen.

Immediate delivery futures of Texas crude oil decreased $0.14 to $88.76 a barrel and futures of natural gas increased 0.15 cents to $4.06 per mbtu and gasoline price decreased 2.5 cents to 286.67 cents a gallon.

In metals trading, copper increased 6.1 cents to $4.20 per pound, gold decreased $2.70 to $1,827.10 per ounce and silver increased $0.09 to $41.56.