Earnings Parade Drive U.S. Market Sentiment

Bikram Pandey
19 Jan, 2012
New York City

U.S. stocks and indexes gained after eBay, Morgan Stanley, Union Pacific and Bank of America report earnings. Bank of America swung to profit on asset sale and the bank is expected to eliminate 30,000 staff at the end of its restructuring.

[R]4:00 PM New York – U.S. stocks and indexes gained after eBay, Morgan Stanley, Union Pacific and Bank of America report earnings. Bank of America swung to profit on asset sale and the bank is expected to eliminate 30,000 staff at the end of its restructuring.[/R]

The U.S. indexes traded higher on upbeat economic data but housing starts fell to annual rate of 657,000 and consumer prices remained unchanged in December. Weekly jobless claims fell to 352,000, lowest in nearly four years.

In corporate news, Bank of America fourth quarter net swung to $2 billion and Morgan Stanley reported fourth quarter net loss of $275 million. eBay fourth quarter net surged 254% to $1.98 billion. Union Pacific fourth quarter net soared 24% to $964 million.

European markets rose after yields fell at a French bond auction and Spain raised €6.61 billion. Commerzbank surged 13% after the bank intended to achieve a Core Tier 1 ratio of more than 11% as of June 30. Talks between Greece and international lenders flounder as negotiators drive a hard bargain.

In economic news, Euro area deficit narrowed in November and The German economy estimated to expand 1% in 2012. Dutch confidence remained flat in January and Norwegian banks tightened credit standards for businesses and consumers in the fourth quarter of 2011.

The UK indexes climbed ahead of earnings in financial sector and Consumer confidence fell and Irish inflation eased in December. The UK auto production rose 5.8% in 2011. Lloyds is expected to cut 700 jobs in the UK.

Stocks in Tokyo traded gained on the strength in construction and resources sectors but traders were cautious ahead of bond offerings in the euro zone and talks between Greece and its lenders. Semiconductor equipment makers and exporters closed higher.

Australian two-speed economy struggled to add new jobs in 2011, its worst annual performance in nearly two decades. The unemployment rate was flat at 5.2% in December after employers cut net 29,300 jobs. Insurance stocks led the decliners in trading today.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond increased to 1.98% and 30-year bond closed up at 3.04%.

The U.S. dollar edged down 0.6% to $1.292 to one euro and traded higher against the Japanese yen to 77.10.

Immediate delivery futures of Texas crude oil decreased $0.31 to $100.28 a barrel and futures of natural gas fell 16 cent to $2.31 per mbtu and gasoline price decreased 1 cent to 281.55 cents a gallon.

In metals trading, copper increased 5.1 cent to $3.80 per pound, gold decreased $8.40 to $1,651.50 per ounce and silver decreased $0.12 to $30.44.