Wall Street in Feeble Advance on Economic Optimism

Bikram Pandey
05 Jan, 2012
New York City

Stocks in New York traded sideways after the release of mixed jobs data but the euro zone worries weighed on the market sentiment. Retailers were in focus after December same store sales were weaker than expected. Monsanto, MetroPCS and Barnes & Noble led the decliners.

[R]4:10 PM New York – Stocks in New York traded sideways after the release of mixed jobs data but the euro zone worries weighed on the market sentiment. Retailers were in focus after December same store sales were weaker than expected. Monsanto, MetroPCS and Barnes & Noble led the decliners.[/R]

The U.S. indexes gained after the release of jobs data but indexes traded sideways in the late afternoon on the ongoing euro area debt worries with no end in sight.

Employment in the U.S. private sector expanded in December and weekly jobless claims fell to 372,000, Consumer price inflation in the OECD area eased in November.

Banks in New York traded higher on the optimism that earnings in the last quarter are expected to be ahead of estimates as banks are scheduled to release earnings in the next two weeks. Bank of America surged more than 6% and Citigroup, SunTrust and JP Morgan gained more than 2%.

Retailers were in focus after December same store sales at chain stores were mixed. Gap Inc, Target and Kohl’s Corp reported weaker than expected sales. Macy’s same store sales increased 6.2% and J.C. Penney declined 3% after it estimated fourth quarter earnings per share between 65 cents and 70 cents.

In corporate news, Monsanto Co ((MON)) gained 5% after quarterly earnings fell 39% but were ahead of estimates. MetroPCS Communications Inc ((PCS)) dropped 9%, the largest decline in the S&P 500 index, after the pre-paid wireless carrier reported less than net monthly subscriber increase of 197,000. Barnes & Noble Inc ((BKS))

European markets edged lower and France raised €7.963 billion from a sale of its long-term bonds today at higher borrowing costs. Market indexes in Europe were under pressure after a weak French debt auction following the lackluster debt sale from Germany yesterday.

The Greek Prime Minister Papademos urged unions to agree to deeper cuts to avoid a “disorderly default” and exit from the euro zone. Greece is expected to receive second bailout of more than 130 billion euros from a troika of international lenders on the condition of the government lowering its costs.

The UK indexes declined after lower than expected demand for the French debt auction held today. The UK government said gross reserves fell, service sector growth accelerated and Ireland reported unemployment rate decreased in December.

Stocks in Tokyo trading declined on the fresh worries related to the euro zone and the growing consensus that the yen may remain strong against the euro and dollar in 2012. Steelmakers declined and TonenGeneral extended losses for the second day.

Australian stocks declined after rallying for the first two days after German debt auction attracted fewer than expected bids and ahead of French debt auction later today. Australian service sector contracted in December.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond increased to 2% and 30-year bond closed up to 3.06%.

The U.S. dollar edged up 1.1% to $1.279 to one euro and traded higher against the Japanese yen to 77.20.

Immediate delivery futures of Texas crude oil decreased $1.35 to $101.87 a barrel and futures of natural gas fell 0.11 cent to $2.98 per mbtu and gasoline price fell 4.4 cents to 274.11 cents a gallon.

In metals trading, copper decreased 1.5 cents to $3.41 per pound, gold increased $9.10 to $1,621.00 per ounce and silver increased $0.19 to $29.23.