U.S. Stocks Sideways; European Leaders Haggle, Gaddafi Killed

Bikram Pandey
20 Oct, 2011
New York City

Stocks in traded sideways awaiting the outcome of the weekend summit of European leaders. France and Germany are at odds in the use of the rescue fund. British and French mercenaries trained rebel forces killed Col. Muammar Gaddafi bringing to an end of four decades of rule.

[R]4:30 PM New York – Stocks in New York traded sideways awaiting the outcome of the weekend summit of European leaders. France and Germany are at odds in the use of the rescue fund. British and French mercenaries trained rebel forces killed Col. Muammar Gaddafi ending four decades of a brutal regime.[/R]

The U.S. indexes traded sideways after debt talks in Europe were at a standstill and Greece strike extended for the second day. Oil edged lower after Col. Muammar Gaddafi was killed by rebel forces financed and trained by the British and French mercenaries.

Stocks in New York see-sawed after weekly jobless claims declined but stayed above 400,000 and France and Germany struggle to devise a bailout fund plan before the weekend economic summit.

Copper extended losses for the second day with a total of 10% and crude oil fell 1% after the fall of Gaddafi.

Investors shifted focus to domestic earnings as the releases accelerate this week. Philip Morris quarterly net rose 31% and AT&T third quarter net income plummeted 71% to $3.63 billion.

American Express third quarter net income rose 13% to $1.23 billion and BB&T quarterly net income soared 73% to $366 million. Eli Lilly third quarter net income fell 5% to $1.23 billion. Wynn Resorts third quarter net income swung to $1.37 billion.

European indexes traded lower on worries that the sovereign debt crisis may drag longer than expected. France and Germany are at odds in how to leverage the rescue fund and the process of who gets access.

Investor sentiment is expected to sour next week if the summit fails to provide a clear direction in how the debt contagion will be tackled and how Greece, Portugal, Spain and Italy will control ballooning debt, rising joblessness and economies at halt or declining.

Top five Spanish banks suffered another ratings downgrade. Protests in Greece turned violent as the parliament debated before the final vote today on additional austerity measures.

Late in the day, Greek lawmakers passed austerity measures in a final vote while demonstrators battled outside the parliament. The Socialist party 153 legislators voted in favor in 300 member parliament. Athens police said at least 50,000 demonstrators assembled into the central Syntagma Square outside Parliament.

The German government lowered its economic growth forecast for 2012 and lifted the outlook for the current year. Germany's producer price index and Dutch jobless rate increased in September. Swiss economic sentiment improved in October.

The UK indexes dropped with the European debt crisis looming large and prospects of a resolution fading. UK retail sales were better-than-estimated in September and Irish factory gate prices increased in the month. African Barrick Gold quarterly net surged 156%.

Stocks in Japan decreased after a weakness in international markets and commodities declined as the euro zone turmoil appear to continue. Olympus extended losses as Japanese regulators may open an inquiry. Toyota and Sony delay production on Thai floods.

Thailand, Philippines, Cambodia and Vietnam are struggling with heavy monsoon in the last two months and one third of land mass in Thailand is under water. More than 640,000 employees and at least 1,200 factories are affected. Several Japanese electronics and auto makers are bracing for lost production and a delay new product launches.

Australian stocks declined after commodities prices edged lower and on the worries that the turmoil in the euro zone and in the U.S. may lead to a lower demand. Qantas faces federal government mediation as the workers strikes widen and extend in the third week.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed up to 2.17% and 30-year bond increased to 3.19%.

The U.S. dollar decreased to $1.378 to one euro and closed higher against the Japanese yen to 76.84 yen.

Immediate delivery futures of Texas crude oil decreased $0.81 to $85.30 a barrel and futures of natural gas increased 0.04 cents to $3.63 per mbtu and gasoline price increased 0.5 cents to 267.72 cents a gallon.

In metals trading, copper decreased 17.55 cents to $3.08 per pound, gold decreased $26.70 to $1,620.30 per ounce and silver fell $0.77 to $30.50.