Investors Dial Back Europe Accord Enthusiasm; U.S. Confidence Index Up

Bikram Pandey
28 Oct, 2011
New York City

U.S. stocks declined and the S&P 500 index declined after a rally on Thursday. Investors recalibrated their enthusiasm about Greek bond restructuring and European bank recapitalization plan. Yields on Italian bonds surged near record.

[R]4:00 PM New York – U.S. stocks declined and the S&P 500 index declined after a rally on Thursday. Investors recalibrated their enthusiasm about Greek bond restructuring and European bank recapitalization plan. Yields on Italian bonds surged near record and prompted worries that the debt market stress may spread.[/R]

Stocks in New York eased after a sharp rally on Thursday. Stock and commodities investors looked at the bond market and recalibrated to their enthusiasm about the euro zone decisions.

Investors in New York trading focused on domestic companies and earnings releases. Select companies’ earnings drove market sentiment.

Cable operator Cablevision Systems declined after it lost more than estimated video service subscribers. Health insurer Cigna Corp turned lower and the company lifted annual earnings outlook and Whirlpool Co plunged after it reported weaker sales and plans to cut 5,000 jobs and lower annual earnings outlook.

China based search engine operator Baidu Inc jumped on third quarter earnings. Online travel agency, Expedia Inc declined after it reported weaker than estimated sales.

Consumer spending accelerated and rose 0.6% in September and consumer confidence index was revised higher in October.

Across the Atlantic, European markets traded lower a day after leaders agreed to finalize the terms of Greek bonds restructuring. Bond market sceptic drove the yield for Spanish and Italian bonds higher.

Italy completed the sale of €8 billion long term bonds near record high yield and sold fewer than estimated bonds.

The benchmark Nikkei index in Tokyo gained 1.4% and for the week added 4.2%. Softbank earnings more than doubled on iPhone sales. Sharp, Ibiden, Omron and Terumo lowered earnings outlook for the year and cited stronger yen and weak demand in the developed markets. Thai floods prompt more production worries.

Markets in India were closed celebrating the Diwali and New Year holidays.

Australian stocks extended gains for the second day and the Australian dollar declined a fraction. Commodities closed mixed in Asian trading. Qantas Airways strike has cost the company $68 million so far and $15 million a week. Nearly 10,000 travelers are affected and seven planes are grounded.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed down to 2.30% and 30-year bond declined to 3.36%.

The U.S. dollar was nearly unchanged to $1.416 to one euro and closed lower against the Japanese yen to 75.75 yen.

Immediate delivery futures of Texas crude oil decreased $0.60 to $93.36 a barrel and futures of natural gas increased 15 cents to $3.92 per mbtu and gasoline prices fell 5.45 cents to 268.175 cents a gallon.

In metals trading, copper decreased 1.60 cents to $3.70 per pound, gold added $4.00 to $1,743.40 per ounce and silver was flat at $35.13.