S&P 500 Index Extends Gains By 1.9%; Greece Softens Stance

Bikram Pandey
03 Nov, 2011
New York City

U.S. stocks scaled higher for the second day in a row after the European Central Bank lowered its key lending rate 25 basis points to 1.25%. Weekly jobless claims fell below 400,000 level and October chain store sales growth declined. Greek Prime Minister softened his stance on the referendum.

[R]4:00 PM New York – U.S. stocks scaled higher for the second day in a row after the European Central Bank lowered its key lending rate 25 basis points to 1.25%. Weekly jobless claims fell below 400,000 level and October chain store sales growth declined. Greece flip flopped and for now that will not hold the referendum.[/R]

U.S. stocks struggled to hold onto early gains after central bank in Europe cut its lending rate. Third quarter productivity increased at 3.1% and weekly jobless claims fell below 400,000.

In the earnings news, Eastman Kodak estimated a higher annual loss and lower revenues. Duke Energy third quarter net decreased to $472 million. DirecTV third quarter net increased 8% to $516 million. Kellogg third quarter net declined 11% to $290 million. NYSE Euronext third quarter net surged 54% to $186 million. Sara Lee third quarter net loss was $215 million.

Market indexes in Europe surged after the newly appointed ECB President Mario Draghi lowered key lending rate to 1.25% from 1.5%. The surprise decision lifted market indexes, banks and financial services companies.

Greek turmoil reached to a new low after finance minister voiced his concern on the referendum and Greek lawmakers debated the fate of the government before confidence vote tomorrow. The day was filled with high stakes drama in the Greek cabinet as lawmakers debated and rumours swirled about the imminent collapse of the government.

Greek Prime Minister George Papandreou softened his stance for the referendum after the opposition party leader Antonis Samaras agreed to support the EU bailout conditions. Greece is expected to put the EU bailout proposal for a full parliament and not just to the ruling party coalition.

Australian stocks eased for the fourth day in a row. News Corp gained after it reported better than expected earnings but ANZ Group fell 2% on the weak second half earnings. Building products maker Boral declined after it issued a cautious outlook.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed up to 2.06% and 30-year bond increased to 3.12%.

The U.S. dollar declined 0.7% at $1.384 to one euro and closed higher against the Japanese yen to 78.04.

Immediate delivery futures of Texas crude oil increased $1.49 to $94.00 a barrel and futures of natural gas increased 3 cent to $3.78 per mbtu and gasoline prices increased 1.4 cents to 264.12 cents a gallon.

In metals trading, copper decreased 0.10 cents to $3.58 per pound, gold increased $33.80 to $1,763.40 per ounce and silver increased $0.49 to $34.43.