Wall Street Fluctuates; Gold, Oil Advance on Mid-east Tensions

Bikram Pandey
04 Jan, 2012
New York City

U.S. stocks traded sideways and gold rose to a 2-week high and oil gained to a high last seen in May as war of words escalated between the U.S. and Iran. U.S. auto sales increased 10% in 2011 on strong December sales.

[R]4:00 PM New York – U.S. stocks traded sideways and gold rose to a 2-week high and oil gained to a high last seen in May as war of words escalated between the U.S. and Iran. U.S. auto sales increased 10% in 2011 on strong December sales.[/R]

The U.S. indexes edged sideways after the factory goods order increased 1.8% in November after a revised drop of 0.2% in October and U.S. mortgage applications declined. Crude oil fluctuated but stayed above $103 a barrel after European Union government appear to be ready halt oil purchase from Iran.

U.S. auto sales increased 10% to 12.8 million in 2011 from 11.6 million in 2010, according to the latest data released from an industry research firm.

General Motors sales in December rose 5% and increased 13% in the year. Ford Motor Company sales increased 10% in the month and rose 11% in the year. Chrysler sales soared 37% in December and jumped 26% in the year.

In corporate news, Chesapeake said it is on target to achieve its long-term debt net of cash to be about $9.5 billion as of year-end 2012. Online movie and streaming service provider Netflix Inc said subscribers watched more than 2 billion hours of content in the last quarter to December 2011. Netflix gained 10% in trading.

European markets and banks declined after UniCredit proposed an offering to raise €7.5 billion. Germany raised €4 billion in 10-year bond auction at 1.93% yield. Euro area inflation eased to 2.8% and private sector activity improved in December.

French Foreign Minister Alain Juppe said in Lisbon that ministers are likely to adopt an embargo on Iranian oil exports at the January 30 meeting.

The UK indexes traded sideways. The UK M4 money supply fell and mortgage approvals rose to a 23-month high in November but construction activity improved in December. Domino''s Pizza UK & IRL surged 6% but Next slumped 4%.

Stocks in Tokyo opened higher on the first day of trading after a long weekend. The Nikkei 225 index increased 1.2% after falling 17.3% in 2011. ExxonMobil plans to sell its stake in the refiner TonenGeneral.

Australian stocks gained 2% and extended advance for the second day in a row as commodities prices increased and world economic data pointed to higher manufacturing activities. Oil rallied in Europe and in New York on the rising tensions in the Middle East. Gold jumped 2%.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond increased to 1.98% and 30-year bond closed up to 3.03%.

The U.S. dollar edged up 0.8% to $1.294 to one euro and traded lower against the Japanese yen to 76.69.

Immediate delivery futures of Texas crude oil increased $0.29 to $103.26 a barrel and futures of natural gas added 0.11 cent to $3.91 per mbtu and gasoline price rose 3.9 cents to 278.77 cents a gallon.

In metals trading, copper decreased 9.7 cents to $3.43 per pound, gold increased $12.50 to $1,613.00 per ounce and silver decreased $0.50 to $29.09.