U.S. Indexes Decline Ahead of Jobs Report; Chain Stores Sales Shine

Bikram Pandey
01 Sep, 2011
New York City

The U.S. indexes dropped more than 1% ahead of the employment report tomorrow. The yield on the Treasuries declined. Goldman Sachs declined 3% after it agreed to pay $53 million in penalties related mortgage loans servicing and foreclosure processing.

[R]4:10 PM New York – The U.S. indexes dropped more than 1% ahead of the employment report tomorrow. The yield on the Treasuries declined. Goldman Sachs declined 3% after it agreed to pay $53 million in penalties related mortgage loans servicing and foreclosure processing.[/R]

U.S. indexes traded sideways after weekly jobless claims fell 12,000 to 409,000 and nonfarm business sector labor productivity decreased at a 0.7% annual rate in the second quarter.

Market indexes sold off in the afternoon ahead of the tomorrow’s unemployment report.

Chain store sales in August advanced on strong demand across all categories of retail. The Hurricane Irene lifted sales at discounters BJ’s and Costco but other stores also enjoyed gains. Department stores sales declined in the month.

European indexes slumped after euro area manufacturing activity fell to a 2-year low in August. German second quarter GDP was estimated at 0.1% increase. Imtech agreed to acquire Qbranch. Pernod Ricard net rose 10% driven by strong growth in emerging markets.

Manufacturing growth slumped in the euro area in August. Norway money supply growth improved but Danish jobless rate remained flat in July. Denmark industrial turnover rose and Swiss gross domestic product’s sequential growth eased to 0.4% and to 2.3% from in the second quarter.

The UK indexes fell on mixed global economic data. UK manufacturing declined to a 26 month-low in August. Glencore expressed intent to acquire stake in South African mining group Optimum Coal. Hargreaves surged 13% after fiscal year 2011 revenue increased 31% to £207.9 million.

The benchmark index in Tokyo gained for the sixth day in a row on the rising optimism for exports. The yen traded near its record high. Steelmakers led the gainers on the falling material prices.

The Australian stocks traded higher and the dollar was firm after retail sales increased and business investment in the second quarter was higher than expected. However, manufacturing continued to struggle under strong dollar.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield decreased to 2.14% and 30-year U.S. bond fell to 3.51%.

The U.S. dollar increased at $1.427 to one euro and closed higher against the Japanese yen to 76.80 yen.

Immediate delivery futures of Texas crude oil increased $0.07 to $88.88 a barrel and futures of natural gas decreased 0.17 cents to $4.03 per mbtu and gasoline price increased 1.3 cents to 288.94 cents a gallon.

In metals trading, copper decreased 5.8 cents to $4.14 per pound, gold decreased $5.10 to $1,826.60 per ounce and silver decreased $0.21 to $41.56.