World Markets Trade Higher; Gold Gains 1.4%

Bikram Pandey
17 Jan, 2012
New York City

U.S. stocks traded higher but financials were volatile after Citigroup reported a decline in earnings net income and Wells Fargo posted record profit on mortgage lending. Market sentiment in Europe was bolstered after demand for European debt was stronger than anticipated despite ratings downgrades.

[R]4:05 PM New York – U.S. stocks traded higher but financials were volatile after Citigroup reported a decline in earnings net income and Wells Fargo posted record profit on mortgage lending. Market sentiment in Europe was bolstered after demand for European debt was stronger than anticipated despite ratings downgrades. Gold added 1.4%.[/R]

The U.S. indexes traded higher on upbeat global economic data and New York manufacturing activity improved in January. World markets traded higher after China reported a decline in economic growth but still ahead of expectations and a strong retail sales and industrial production.

Financials were in focus after Citigroup reported quarterly net fell 11% and revenues declined 7% and Wells Fargo revenues fell 4% and net surged 20%.

In corporate news, Citigroup fourth quarter net slipped 11% to $1.2 billion and Wells Fargo fourth quarter net increased 20% to $4.1 billion. Forest Laboratories third quarter net decreased to $278.4 million. M&T Bank fourth quarter net decreased 28% to $147.7 million. TD Ameritrade first quarter net rose to $152 million.

European markets rose after the debt auctions from Spain, Belgium and Greece attracted stronger than anticipated interest. German confidence index showed a strong improvement. Spain raised €4.88 billion from and Greece sold €1.625 of 13-week treasury bills today.

The European rescue fund raised €1.501 billion from the sale of its new six-month bills and Euro area annual inflation eased and new passenger car registrations in the European Union fell in December. German confidence soared in January.

The UK indexes rose after annual inflation eased in December. Japan-based Sumitomo Mitsui agreed to acquire the aircraft leasing business of RBS for $7.3 billion and DS Smith proposed to buy the packaging division of Sweden-based Svenska Cellulosa for €1.6 billion.

Australian indexes advanced after miners reported better than expected iron ore production in the December quarter. Investors bid up stocks after China reported economic growth of 8.9% in the fourth quarter and for the full year GDP expanded 9.2%.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond decreased to 1.85% and 30-year bond closed down at 2.89%.

The U.S. dollar edged down 0.5% to $1.272 to one euro and traded higher against the Japanese yen to 76.84. The euro fell to a 16-month low.

Immediate delivery futures of Texas crude oil increased $1.96 to $100.66 a barrel and futures of natural gas fell 18 cents to $2.48 per mbtu and gasoline price increased 3.93 cent to 277.80 cents a gallon.

In metals trading, copper increased 7.8 cent to $3.71 per pound, gold increased $20.10 to $1,650.90 per ounce and silver decreased $0.40 to $30.69.