U.S. Bond Yields Drop to Lows; World Markets Drift Lower

Bikram Pandey
06 Sep, 2011
New York City

U.S. indexes declined more than 1.4% on the global economic worries. The indexes in the Europe dropped as much as 3% and banks declined for the second day in a row. The recent market declines have dragged U.S. and Europe stocks and indexes near 2008 levels.

[R]4:05 PM New York – U.S. indexes declined more than 1.4% on the global economic worries. The indexes in the Europe dropped as much as 3% and banks declined for the second day in a row. The recent market declines have dragged U.S. and Europe stocks and indexes near 2008 levels.[/R]

The U.S. indexes traded lower after a barrage of negative news from Europe added to market anxieties. The indexes trimmed losses after the service index showed an improvement in August. Shaw Group agreed to sell its 20% stake in Westinghouse Electric to Toshiba.

In corporate earnings news, Blyth reported second quarter net loss of $3.07 million. Russia based mobile telecom service provider, MTS aid second quarter net income rose 3% to $367 million and it will increase ownership of MGTS to 94.1%. Progress Software lowered its fiscal third quarter outlook. Sunoco plans to exit its refining business.

European markets declined and banks led the losers across the region. Italy faced a wave of protests as lawmakers debated second austerity measures of 46 billion euros.

Swiss central bank set the cap on euro-franc exchange rate at 1.20 and said it is prepared to spend “unlimited” amount of money to defend the exchange rate.

Swatch Group AG gained more than 3% to Sfr342 after the Swiss franc declined more than 8.5% against the euro. Novartis AG declined 2.4% to $55.90 and Credit Suisse AG plunged 13% to $23.81 and UBS AG dropped 11% to $12.34.

Transocean Ltd jumped more than 9% to Sfr43.70 after the Swiss currency declined.

The benchmark index in Japan declined 2.2% as investors feared the weak prospects of global economic recovery and exports growth. Toshiba dropped more than 5% after the company is expected to increase its stake in the Westinghouse Electric by 20%.

The Australian benchmark declined 1.6% and traded near 2-year low. The market indexes in Asia dropped for the second day on the euro-zone debt worries and uneven economic recovery in the U.S.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield decreased to 1.97% and 30-year U.S. bond fell to 3.26%.

The U.S. dollar increased at $1.398 to one euro and closed lower against the Japanese yen to 77.67 yen.

Immediate delivery futures of Texas crude oil decreased $0.59 to $85.86 a barrel and futures of natural gas decreased 0.05 cents to $3.930 per mbtu and gasoline price decreased 2.03 cents to 281.93 cents a gallon.

In metals trading, copper decreased 7.05 cents to $4.05 per pound, gold increased $4.60 to $1,881.50 per ounce and silver decreased $0.80 to $42.26.