U.S. Indexes Extend Losses to Fifth Day on Euro Zone Worries

Bikram Pandey
10 Apr, 2012
New York City

U.S. stocks fell for the fifth day in a row and indexes lost more than 1% today and extended losses to 4% in the period. Euro zone debt crisis resurfaced as yields surge to a high for the year. Best Buy Co said CEO Brian Dunn resigned and Sony Corp declared annual loss for the fourth year in a row.

[R]4:00 PM New York – U.S. stocks fell for the fifth session in a row and market indexes lost more than 1% today and extended losses to 4% in the period. Euro zone debt crisis resurfaced as bond yields surge to a high for the year. Best Buy Co said Chief Executive Brian Dunn resigned and Sony Corp declares annual loss for the fourth year in a row.[/R]

U.S. indexes edged lower after wholesale inventories rose more than estimated in February and investors revisited the euro zone debt worries as bond yields of Italy and Spain climbed to the highs for the year.

However, deal making was in full swing and Facebook agreed to acquire two-year old photo sharing application provider on mobile phones, Instagram for $1 billion in cash.

AT&T agreed to sell a majority stake in its yellow pages division for $1 billion to a private equity group following the moves by other telecom companies as more people ditch directories and search information online.

Chesapeake Energy made three separate deals totaling $2.6 billion. Patni Computer net declined 11.8% to $237 million. PPL to offer 9.9 million shares public offering. Supervalu fourth quarter net loss swung to $424 million.

The European indexes slumped after latest confidence survey showed a decline and bond yields of Spain and Italy gained for the third day in a row. French manufacturing output fell in February. STMicroelectronics plunged 5.9% after lowering its gross margin outlook.

The OECD leading index, German trade surplus and French industrial output rose in February however euro zone investor confidence index slumped in April. Swiss jobless rate remained unchanged in March.

The UK indexes declined more than 2% after the leading economic index for the UK rose but Irish manufacturing fell in February Home price balance for the UK improved in March.

Stocks in Japan eased for the sixth day in a row as investors focused on earnings season ahead next week.

Sony Corp, the struggling electronics maker estimated a loss of 520 billion yen or $6.4 billion compared to its previous estimate of 220 billion yen. The company retained its operating loss forecast of 95 billion yen. The annual results are scheduled to be released on May 21.

The loss forecast is twice the previous estimate and the electronics maker is set to declare loss for the fourth year in a row as it struggles to stem losses in its TV unit and battle competition from Apple and Korean rivals. The company also plans to eliminate 10,000 jobs or 6% of its workforce to aggressively cut costs.

Sony stock has lost nearly half its value in one year of trading and 10% in last two weeks of trading.

Australian stocks declined for the third day in a row and on the first day of trading after a long weekend. Resources stocks fell after China reported weaker than expected growth in imports. Businesses reported a slight improvement in business conditions in March.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond decreased to 1.97% and 30-year U.S. bond edged lower to 3.12%.

The U.S. dollar edged higher to $1.309 to one euro and inched lower against the Japanese yen to 80.67 yen.

Immediate delivery futures of Texas crude oil decreased $1.26 to $101.20 a barrel and Brent crude futures fell $2.26 to $120.41. Futures of natural gas increased 0.06 cents to $2.04 per mbtu and gasoline price fell 4.34 cents to 325.33 cents a gallon.

In metals trading, copper fell 6.25 cents to $3.65 per pound, gold rose $16.60 to $1,660.50 per ounce and silver added 14 cents to $31.67.