U.S. Indexes Up on Jobs, Housing Data; Gold in 6-day Decline

Bikram Pandey
29 Dec, 2011
New York City

U.S. stocks traded higher after jobless claims rose but stayed below 400,000 level for the fourth week in a row. In addition, the pending home sales increased in November to a 19-month high. European markets focused on the stubborn long term Italian bond yield near 7%.

[R]4:30 PM New York – U.S. stocks traded higher after jobless claims rose but stayed below 400,000 level for the fourth week in a row. In addition, the pending home sales increased in November to a 19-month high. European markets focused on the stubborn long term Italian bond yield and crude oil rose as tensions in the Strait of Hormuz rose.[/R]

The U.S. indexes traded higher after weekly jobless claims rose 15,000 to 381,000 but still below the critical level of 400,000 for the fourth week in a row. Separately, U.S. pending home sales also increased to the highest level in 19 months.

Investors showed optimism after the release of the initial weekly jobless claims that were below the level that are necessary to indicate an improvement in the labor market. Home builders and building materials makers gained after the release of monthly contract data.

In corporate news, Chesapeake Midstream agreed to acquire Appalachia Midstream for $865 million. Mosaic declined after the phosphate maker said it will cut output by 250,000 tons. Stocks in the home building and retailing sector like D.R. Horton, Masco, Lennar and Lowe’s and Louisiana-Pacific gained.

European markets climbed after Italy sold €7 billion of long term debt at an auction today at lower borrowing costs however the auction raised less than €9 billion targeted by the Italian Treasury.

Euro area money supply growth eased and Spanish retail sales declined in November and Hungarian current account surplus fell in the third quarter.

The UK indexes pared gains after Italy sold long term debt at an auction today. The indexes swung as the Italian yields declined less than expected and metals and oil diverged. The euro declined to a 10-year low against the yen.

Stocks in Tokyo edged lower in thin trading and resources linked stocks led the decliners. Japan agreed to offer swap line to India of $15 billion and agreed to lend $5 billion for a rail line.

Australian stocks edged lower in thin trading as metals and oil declined on the renewed jitters in international markets. Gold fell to a 3-month low. The Australian benchmark index declined 14% in the year and second yearly loss in a row and for the year BHP declined 23% and Rio Tinto dropped 30%.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond was unchanged at 1.9% and 30-year bond closed flat at 2.9%.

The U.S. dollar edged down 0.1% to $1.295 to one euro and traded lower against the Japanese yen to 77.60.

Immediate delivery futures of Texas crude oil increased $0.31 to $99.67 a barrel and futures of natural gas fell 8 cent to $3.03 per mbtu and gasoline price rose 2.8 cents to 267.93 cents a gallon.

In metals trading, copper increased 1.6 cents to $3.38 per pound, gold decreased $17.00 to $1,534.90 per ounce and silver increased $0.57 to $27.81.

Gold futures declined for the sixth day in a row.