World Markets Struggle; U.S. Home Sales Gain 4.3%

Bikram Pandey
22 Feb, 2012
New York City

World markets traded declined from the recent highs and the U.S. stocks edged lower from a 4-year high after home sales increase was less than expected. Oil gained for the second day in a row.

[R]11:30 AM New York – World markets traded declined from the recent highs and the U.S. stocks edged lower from a 4-year high after home sales increase was less than expected. Oil gained for the second day in a row.[/R]

The U.S. indexes declined after weaker-than-estimated economic data from China and Europe and domestic home sales in January rose at the fastest pace since May 2010 but were lower than anticipated.

Existing home sales increased 4.3% to a 4.57 million annual rate according to the latest data released by the National Association of Realtors.

Inventory of unsold homes declined 2.31 million, the fewest since March 2005 and the median price of existing home fell 2% to $154,700 from $157,900 in January.

Single family home sales increased 3.8% to annual rate of 4.05 million in the month and condominiums and townhomes sales surged 8.3% to 520,000.

Dell Inc led the decline in tech stocks with quarterly earnings falling 18% and. Luxury home builder Toll Brothers swung to loss.

Chesapeake Energy fourth quarter net surged to $429 million and Dell Inc quarterly net declined 18% to $764 million. Hewlett-Packard first quarter net declined 44% to $1.47 billion. Retailer, TJX Companies fourth quarter net surged to $475.9 million. Toll Brothers swung to a quarterly loss.

European markets edged lower after private sector contracted unexpectedly in February. Shell offered to acquire Cove Energy for $1.6 billion. Wells Fargo agreed to buy energy lending business of BNP Paribas.

Germany sold €4.3 billion of two-year notes. Euro area private sector contracted in February and French consumer price index slowed in January. Swedish jobless rate fells in January.

The UK indexes dipped on speculation if Greece would be able to fulfil the conditions set by its lenders. The Bank of England policy makers were split on asset purchase program. Centrica agreed to acquire portfolio of UK North Sea assets from British Gas for £246 million.

Stocks in Japan closed higher after positive sentiment lifted indexes. The yen declined to a new low in last six months and investors took optimistic view of the Greek bailout decision. Seibu Electric agreed to sell minority stake to Toyota Motor. Dentsu Inc lifted its annual income outlook.

Australian stocks traded higher for the fourth day in a row as earnings were ahead of expectations. Seek Limited and Wotif.com Holdings reported record earnings and Woodside Petroleum reported 34% rise in adjusted profit.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond decreased to 2.03% and 30-year bond edged lower to 3.17%.

The U.S. dollar traded down 0.2% to $1.325 to one euro and edged up against the Japanese yen at 80.377.

Immediate delivery futures of Texas crude oil increased 13 cents to $106.38 a barrel and Brent crude rose $1.04 to $122.70. Oil in New York and London traded at a new nine-month high.

Futures of natural gas fell 5 cents to $2.57 per mbtu and gasoline price decreased 0.8 cents to 306.21 cents a gallon in New York trading.

In metals trading, copper decreased 0.40 cents to $3.84 per pound, gold decreased $1.90 to $1,756.60 per ounce and silver decreased 21 cents to $34.30.