U.S. Stocks Turn Lower After Bernanke Remarks

Bikram Pandey
08 Sep, 2011
New York City

U.S. indexes closed lower after Fed Chairman did not provide new insights into the state of the economy. U.S. 10-year bond yield fell to 1.98%. aBanks fell more than 4%. European markets closed higher after the ECB and BoE left rates on hold. Greek bond yields soared to 60%.

[R]4:30 PM New York – U.S. indexes closed lower after Ben Bernanke did not provide new insights into the state of the economy. U.S. 10-year bond yield fell to 1.98%. Banks fell more than 4%. European markets closed higher after the ECB and BoE left rates on hold. Greek bond yields soared to 60% and German 10-yield traded at 1.86%.[/R]

The U.S. indexes turned lower in the afternoon after the Fed Chairman Ben Bernanke said policymakers are prepared to discuss unconventional tools at the next meeting and apply them if necessary. But, he failed to explain what these tools are.

Earlier in the day, market indexes opened higher after the weekly jobless claims rose 2,000 to 414,000 and trade deficit declined 13% in July. Exports increased at a faster pace than imports in the month as the dollar remained low and the crude oil prices remained above $100 a barrel for the fourth month in a row.

In the earnings news, Casey’s General first quarter net earnings rose to $39.4 million. Pall Corp fourth quarter net income increased $97.4 million. Smithfield first quarter net income increased to $82.1 million. Men’s Wearhouse second quarter net earnings for the quarter increased 8.7% to $57.1 million.

European Central Bank and the Bank of England left key lending rates unchanged and cited weak and uncertain economic outlook. The yield on 2-year Greek bonds soared to 60%. Italian Senate passed austerity measures and the government approved balanced budget constitutional amendment.

Stocks in Japan gained for the second day in a row as investors focused on the measures to improve global economic scenario. Factory order declined 8.2% in July after rising 7.7% in June. Mining and resources linked companies closed higher.

Australian stocks gained for the second day in a row and unemployment in August rose 5.3% from 5.1% in July. The surprise increase in the rate put investors on the defensive. Unemployment in Western Australia increased to 4.4% from 4%.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield decreased to 1.98% and 30-year U.S. bond fell to 3.31%.

The U.S. dollar decreased at $1.388 to one euro and closed lower against the Japanese yen to 77.48 yen.

Immediate delivery futures of Texas crude oil decreased $0.53 to $88.81 a barrel and futures of natural gas increased 0.05 cents to $3.996 per mbtu and gasoline price fell 3.45 cents to 287.35 cents a gallon.

In metals trading, copper increased 0.60 cents to $4.12 per pound, gold added $55.10 to $1,872.70 per ounce and silver increased $0.81 to $42.45.