Weekly Advance Extends U.S. Rally; Gold, Oil Fall

Bikram Pandey
02 Mar, 2012
New York City

U.S. indexes struggled today but extended the weekly advance extending the rally of the last eight weeks. The euro weakened after Spain raised its budget deficit estimate and German retail sales declined. Japan plans to take control of troubled utility Tepco with $12 billion bailout.

[R]3:30 PM New York – U.S. indexes struggled today but extended advance in the week extending the rally of the last eight weeks. Crude oil and gold declined and the euro weakened after Spain raised its budget deficit estimate and German retail sales declined. Japan plans to take control of troubled utility Tepco with $12 billion bailout.[/R]

U.S. stocks traded sideways and the Nasaq gained for the eighth week of the last nine and the S&P 500 indexes traded higher for the third week in a row. Oil was volatile after conflicting reports of a pipeline explosion in Saudi Arabia.

The online consumer reviews provider, Yelp priced its initial public offering at $15 a share and opened 60% higher and jumped as high as $25. Yelp filed to sell its share between $12 and $14 a share and the offering raised $96 million after expenses that valued the company at $900 million.

In corporate news, Big Lots fourth quarter net increased 7% to $114.7 million. Foot Locker fourth quarter net increased to $81 million. Genesco fourth quarter net increased to $41.5 million. Sara Lee said it plans to spin-off its coffee and tea business.

European markets fell after Spain said it will miss its deficit target and European leaders reiterated the March deadline to finalize the size of the rescue fund. Spain estimated higher than expected economic decline of 1.7% and larger than expected deficit of 5.8% and unemployment above 24%.

Japanese stocks traded higher as the weaker yen lifted auto makers and electronics exporters and shipping companies advanced on the hopes of rising freight to Europe. Tepco is said to have agreed to exchange a majority stake in the company for 1 trillion yen from the government

The Australian index gained 0.8% in the week and the dollar eased ahead of central bank rate decision next week. Harvey Norman lowered its online sales expectations only months after its online presence.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond eased to 1.98% and 30-year bond edged lower to 3.11%.

The U.S. dollar traded up 0.8% to $1.32 to one euro and edged up against the Japanese yen at 81.809.

Immediate delivery futures of Texas crude oil decreased $2.15 to $106.90 a barrel and Brent crude fell $2.50 to $123.67.

Futures of natural gas rose 1 cent to $2.46 per mbtu and gasoline price decreased 7.7 cents to 327.44 cents a gallon in New York trading.

In metals trading, copper decreased 2.70 cents to $3.90 per pound, gold decreased $9.50 to $1,712.70 per ounce and silver decreased 90 cents to $34.68.