U.S., World Markets Rest After a 3-day Rally

Bikram Pandey
01 Dec, 2011
New York City

U.S. stocks traded sideways after a 3-day rally that lifted indexes as much as 6%. Banks declined after Massachusetts sued five U.S. banks including Citigroup, Bank of America and J.P. Morgan Chase & Co. Investors await payrolls data tomorrow.

[R]4:50 PM New York – U.S. stocks traded sideways after a 3-day rally that lifted indexes as much as 6%. Banks declined after Massachusetts sued five U.S. banks including Citigroup, Bank of America and J.P. Morgan Chase & Co. Investors await payrolls data tomorrow.[/R]

The U.S. indexes slid after weekly jobless claims rose to 402,000 and stocks rested after a 3-day rally that lifted most indexes more than 6%. The mood was cautious in trading in New York and in Europe.

In corporate news, BP agreed to sell its Canadian natural gas liquids business to Plains Midstream Canada for $1.67 billion.

European markets pared gains after the ECB President Mario Draghi offered cautions outlook for the euro and for the euro zone. Investors are expecting second rate cut in as many months since he assumed the office.

In bond market, Spain and France completed the auctioned of €8.25 billion of sovereign bonds. The offering drew larger than expected response from investors and yields in the auctions were lower but near the elevated levels. The yield on the 30-year bonds for France was 3.94% and on 10-year bond was 3.18%.

European indexes traded mixed after surging more than 4% yesterday. Euro-zone manufacturing activity shrank to a 28-month low in November. Luxottica agreed to acquire Brazil-based eyewear maker Tecnol.

Euro area manufacturing activity contracted in November. Germany''s exports and French jobless rate rose but Swiss gross domestic product eased in the third quarter.

The UK indexes pared gains after successful bond offerings from France and Spain but cautious comments from the ECB President. UK and Irish manufacturing output declined in November. The Bank of England urged banks to boost their capital levels.

The Nikkei index in Tokyo trading soared after Japanese central bank participated in a coordinated move with five other central banks to offer more dollar liquidity to the euro zone. Yamaha, the latest Japanese company, indicated it will resume production in a month in Thailand. Resources and China linked companies gained.

Australian stocks soared following a surge in international markets after U.S. Fed coordinated dollar swap lines with five central banks and offered more dollar liquidity. Retail sales increased 0.2% in October, fourth monthly rise in a row but home construction approval declined for the second month.

Commodities, Bonds and Currencies

U.S. bonds yield on 10-year U.S. bond closed up at 2.09% and 30-year bond increased to 3.09%.

The U.S. dollar fell 0.1% at $1.34 to one euro and closed lower against the Japanese yen to 77.71.

Immediate delivery futures of Texas crude oil decreased $0.38 to $99.98 a barrel and futures of natural gas increased 9 cents to $3.65 per mbtu and gasoline prices increased 0.11 cents to 255.99 cents a gallon.

In metals trading, copper decreased 3.95 cents to $3.53 per pound, gold added $1.90 to $1,748.40 per ounce and silver gained $0.03 to $32.83.