World Stocks Gyrate With Greece and Iran in Focus

Bikram Pandey
06 Feb, 2012
New York City

U.S. stocks edged lower in a cautious trading as politicians in Europe struggle to devise Greek debt restructuring. President Barack Obama ordered a freeze on all assets controlled by Iranian government and financial institutions. Oil fell a fraction.

[R]4:15 PM New York – U.S. stocks edged lower in a cautious trading as politicians in Europe struggle to devise Greek debt restructuring. President Barack Obama ordered a freeze on all assets controlled by Iranian government and financial institutions. Oil decreased a fraction. The euro traded near $1.30 and 100 yen.[/R]

U.S. index declined after Greek negotiations worries overwhelmed mixed earnings reports. Investors turned cautious after Greek political leaders failed to offer a unified response to the demands of international lenders.

President Barack Obama extended sanctions and froze all Iranian assets under the U.S. jurisdiction. The blanket sanctions now cover all assets controlled by the Iranian government, central bank of Iran and financial institutions from the previous sanctions that only designated listed institutions.

President Obama said in a notification to the U.S. Congress, “I have determined that additional sanctions are warranted, particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks to conceal transactions of sanctioned parties.”

Separately, several reports in the Middle East indicated growing flow of the U.S. dollar from entities linked to the Central Intelligence Agency and spy agencies of France and UK and Israel to Syria, Egypt and Libya.

Former chief of Israel’s spy agency Mossad, Efraim Halevy confirmed in an interview with Russia based broadcaster RT that Israel has been “engaged in a clandestine war with Iran for a while.”

He also added that the current regime in Syria will fall and Israel is not playing “any role in the present violence in Syria” but the fall of Syria will be chaotic and is expected to have “long term implications for the nation and its neighbors.”

He also failed to categorically deny that Israel has developed nuclear weapons and did not refute the possibilities of multiple nuclear weapons.

Stocks were cautious despite the usual Monday merger news and higher earnings from several domestic companies. Fidelity National offered to acquire casual restaurant chain O’Charley’s. Video rental services provider Coinstar and Verizon formed a streaming service joint venture that will compete in a market that has drawn attention from Google, Amazon and the current leader Netflix.

In earnings news, CNA Financial fourth quarter net declined 37% to $190 million and Humana fourth quarter net surged 86% to $199 million. HCA Holdings fourth quarter net surged to $1.94 billion. Loews fourth quarter net dropped to $268 million and Sysco second quarter net slipped to $250.1 million.

European markets eased as all eyes were focused on the Greek negotiations. Political leaders of France and Germany pressed Athens for quick actions and said time is running out as Greek political parties held firm on labor reforms.

Xstrata and Glencore are expected to announce a deal as early as tomorrow that may offer at least 10% premium to Xstrata shareholders.

Stocks in Tokyo gained despite the weak domestic earnings outlook and on the hopes of stronger earnings in the current calendar year. Nikon and Panasonic jumped. Investors digested the decline in the U.S. unemployment rate and another delay in finalizing the Greek debt restructuring.

Australian retail sales increased 2.4%, the slowest pace in 27 years when record keeping began. Perpetual chief executive resigned and Spotless Group permitted Pacific Equity Partners to conduct due diligence.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond decreased to 1.90% and 30-year bond fell to 3.08%.

The U.S. dollar traded up 0.2% to $1.313 to one euro and edged up against the Japanese yen at 76.57.

Immediate delivery futures of Texas crude oil fell 60 cents to $97.24 a barrel and futures of natural gas rose 6 cents to $2.56 per mbtu and gasoline price increased 2.8 cents to 294.2 cents a gallon.

In metals trading, copper decreased 3.5 cents to $3.86 per pound, gold decreased $15.40 to $1,724.90 per ounce and silver fell 2 cents to $33.73.