U.S. Stocks Pare Losses; European Markets Weak

Bikram Pandey
13 Oct, 2011
New York City

U.S. stocks pared losses after tech stocks rallied and bond yields edged lower. Crude oil edged lower after the dollar gained against the euro. Gap Inc plans to cut 21% of its stores in North American Gap brand stores before 2013. Google revenues and earnings exceeded expectations.

[R]4:30 PM New York – U.S. stocks pared losses after tech stocks rallied and bond yields edged lower. Crude oil edged lower after the dollar gained against the euro. Gap Inc plans to cut 21% of its stores in North American Gap brand stores before 2013. Google revenues and earnings exceeded expectations.[/R]

U.S. stocks declined after JP Morgan said quarterly earnings dropped 33% and set aside $1 billion for securitized mortgage loans litigation. Investors turned cautious after European leaders suggested more losses for banks and said rescue funds should be accessed as a last resort.

S&P 500 index pared losses to 0.3% from the decline of 1.4% as tech stocks rallied in the afternoon. European indexes declined more than 1% with banks leading the decliners.

Commerce Bancshares third quarter net income rose to $65.3 million. Fastenal third quarter net earnings rose 29% to $97 million. JPMorgan third quarter net income fell 4% to $4.3 billion. Safeway third quarter net income increased to $130.2 million. Wal-Mart updated capital spending and sales forecast.

European markets turned lower as political leaders work to settle differences in how to use the rescue fund. Germany and at least five other nations are demanding that the facility should be tapped only on the last resort and banks must seek capital in the financial markets first. Italy sold €6.2 billion bonds.

Stocks in Japan gained after machinery orders were better than expected. Exporters advanced after the yen closed down at one month low and financials gained after euro zone leaders promised quicker action to recapitalize banks.

Australian stocks resumed the advance after the release of jobs data. The unemployment rate in September decreased to 5.2% from 5.3% in August. Rio Tinto said quarterly production of iron ore and coking coal increased but copper and alumina output fell.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed down to 2.17% and 30-year bond decreased to 3.14%.

The U.S. dollar decreased to $1.388 to one euro and closed lower against the Japanese yen to 76.87 yen.

Immediate delivery futures of Texas crude oil decreased $1.21 to $84.36 a barrel and futures of natural gas increased 0.04 cents to $3.53 per mbtu and gasoline price increased 0.73 cents to 297.30 cents a gallon.

In metals trading, copper decreased 6.65 cents to $3.32 per pound, gold decreased $12.80 to $1,669.80 per ounce and silver increased $1.01 to $31.77.