U.S. Sparked World Rally Struggles; Oil, Gold, Copper Higher

Bikram Pandey
21 Mar, 2012
New York City

U.S. stocks struggled after indexes faced a worry wall as investors digest latest housing data. Existing home sales struggled in February and inventory of unsold homes edged lower. Crude oil, copper and gold headed higher.

[R]3:05 PM New York – U.S. stocks struggled after indexes faced a worry wall as investors digest latest housing data. Existing home sales struggled in February and inventory of unsold homes edged lower. Crude oil, copper and gold headed higher.[/R]

U.S. stock indexes edged lower and existing home sales declined 0.9% in February. Stocks have struggled in the last five sessions as indexes trade near 4-year highs and the five month old rally faces market skepticism.

Investors have been emboldened to increase exposure to stocks as economic data improved in the U.S. and the euro zone averted the crisis after a second bailout for Greece and providing nearly one trillion euros of liquidity to banks.

The latest data on the U.S. housing indicated that the industry faces long struggle ahead and that may take several years before the market resumes normal functioning. At peak the housing industry represented more than 12% of the economy which has now shrunk to 4%.

Existing home sales declined 0.9% in February to annual rate of 4.59 million according to the industry association. Median home price inched up 0.3% and inventory of unsold homes rose 4.3% to 2.43 million units, 19.3% from a year ago level.

In corporate news, Actuant said second quarter net soared $32.2 million on sales growth and General Mills third quarter international sale soared 51%. Jabil Circuit second quarter net surged 76% to $97.7 million. Krispy Kreme lifted third quarter outlook.

Oracle reported record operating margins and third quarter net increased 18% to $2.5 billion.

Hartford Financial Services soared more than 5.6% to $2.89 after the insurer said the company will focus on property and casualty insurance, mutual funds and group benefits and leave the annuity business.

Hewlett Packard Company declined 1.2% to $23.69 after the company merged its printer and personal computer business that is likely to lead to more job losses and consolidation of production facilities.

European indexes gained. German yield rose and Portuguese yields fell after successful bond auctions today. The UK policymakers split on quantitative easing but were unanimous in holding interest rates. Glencore agreed to acquire Canada-based Viterra for C$6.1 billion

The Nikkei index in Tokyo edged lower for the first time in six days and declined from a 34-week high. Crude oil edged up and China linked stocks were under pressure on the first day of trading after a national holiday.

Australian stocks traded lower for the second day in a row after retailer reported weaker than expected profits and resources stocks fell on cautious views from BHP. David Jones estimated full year net income to fall as much as 40% and Kathmandu first half income declined 43%.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield decreased to 2.30% and 30-year U.S. bond edged lower to 3.39%.

The U.S. dollar edged up to $1.319 to one euro and eased against the Japanese yen to 83.60 yen in New York trading.

Immediate delivery futures of Texas crude oil increased 85 cents to $106.92 a barrel and Brent crude futures rose 9 cents to $124.21. Futures of natural gas decreased 0.009 cents to $2.326 per mbtu and gasoline price declined 1.47 cents to 334.84 cents a gallon.

In metals trading, copper added 1.10 cents to $3.84 per pound, gold increased $3.80 to $1,650.80 per ounce and silver gained 29 cents to $32.13.