Nasdaq at a 10-year High; ECB Loan Results Awaited

Bikram Pandey
27 Feb, 2012
New York City

U.S. indexes traded higher after pending home sales index jumped more than expected and offered another evidence of slow and steady economic recovery. European markets awaited the second instalment of 3-year loans from the ECB this week. Germany approved second Greek bailout.

[R]4:00 PM New York – U.S. indexes traded higher after pending home sales index jumped more than expected and offered another evidence of slow and steady economic recovery. European markets awaited the second instalment of 3-year loans from the ECB this week. Germany approved second Greek bailout.[/R]

The U.S. indexes and commodities rebounded after early weakness in the day and European markets closed lower ahead of the second instalment of bank borrowings this week.

German lawmakers approved the second tranche of Greek bailout and lawmakers in Finland and the Netherlands are set to approve the measure later in the week.

U.S. stocks regained their footing after the index of pending home sales was better than expected that lifted home builders. Also, better than expected earnings from Lowe’s Cos. contributed to the positive sentiment in the market.

Over the weekend, G20 finance ministers rebuffed calls for more lending to the euro zone nations. Italy raised €12.25 billion and Germany raised €2.545 billion in a bond auction today.

In merger news, El Paso agreed to sell EP Energy to Apollo-led consortium for $7.15 billion. Ahold agreed to buy bol.com for €350 million. SCA offered to acquire Taiwan-based Everbeauty for $290 million.

Euro area leading economic index, money supply growth and French producer prices rose in January. Italian confidence declined for the third straight month in February.

The German parliament approved the second bailout to Greece in a 496-90 vote but not without strong comments from Chancellor Angela Merkel.

Chancellor Merkel said before the vote to lawmakers, “The road that lies in front of Greece is long and truly not without risk.” She also added, “That also goes for the success of the new program” and “no one can give 100% guarantee of success.”

The second bailout is schedule for a vote in Finland and the Netherlands later in the week and is not expected to face significant opposition.

European Central Bank is scheduled to offer second instalment of 3-year loans to banks. Banks borrowed 489 billion euros in the first round in December and the borrowings are expected to surpass in the second round.

The UK indexes edged lower on renewed euro zone worries, a spike in oil prices and an inconclusive G20 meeting at the weekend. The UK home prices remained flat in February. Vedanta confirmed merger of its Indian iron ore and copper divisions.

The yen continued its steady slide against the dollar and stocks closed lower in a choppy trading. J. Front Retailing agreed to acquire a stake in rival retailer Parcos. Tokyo Dome gained 8% after it estimated fiscal year profit.

Australian stocks edged lower on the first day of trading after higher crude oil price dragged down market indexes in China, India and Japan. Mining companies traded lower. Billabong rejected $765 million offer. Telstra Corp released its broadband Internet access plans for consumers.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond decreased to 1.92% and 30-year bond edged lower to 3.03%.

The U.S. dollar traded up 0.4% to $1.339 to one euro and edged up against the Japanese yen at 80.381.

Immediate delivery futures of Texas crude oil decreased 94 cents to $108.84 a barrel and Brent crude declined $1.20 to $124.70.

Futures of natural gas fell 10 cents to $2.457 per mbtu and gasoline price decreased 2.2 cents to 313.10 cents a gallon in New York trading.

In metals trading, copper increased 0.80 cents to $3.87 per pound, gold decreased $1.60 to $1,774.60 per ounce and silver increased 15 cents to $35.56.