Wall Street Turns Higher; Natural Gas Price Drops to New Low

Bikram Pandey
11 Apr, 2012
New York City

U.S. indexes halted a losing streak of five days after Alcoa Inc reported better than expected earnings. Home builders surged on the expectations of higher earnings and banks gained ahead of earnings. Natural gas prices fell below $2 mark for the first time since January 2002.

[R]4:30 PM New York – U.S. indexes halted a losing streak of five days after Alcoa Inc reported better than expected earnings. Home builders surged on the expectations of higher earnings and banks gained ahead of earnings. Natural gas prices fell below $2 mark for the first time since January 2002.[/R]

U.S. indexes reversed to gains on Wednesday and import prices rose more than estimated in March. The mild market rebound was supported by the better than expected earnings from Alcoa.

Home builders traded up 4% after a survey of sales managers conducted by Wells Fargo showed better than expected orders by two third of the respondents.

In corporate news, Alcoa Inc reported better than expected quarterly profit and reaffirmed global demand for aluminum to grow 7% in 2012. Owens-Illinois Inc soared more than 7% after the glass bottle maker forecasted 35% increase in earnings per share on better than expected production and cost control.

Adtran first quarter net tumbled to $13 million. Progressive Corp. first quarter net dropped 29% to $257.6 million. Titan Machinery fourth quarter revenue surged 65% and lifted 2013 outlook.

Apple Inc declined more than 1% after the U.S. Department of Justice sued the company, Macmillan and a subsidiary of Pearson Plc alleging price collusion on e-book prices. The court filings showed that publishing units of CBS Corp, News Corp and Lagardere SCA settled their cases with the government.

The European indexes rebounded but German bond auction failed to meet expectations and bond yields of Spain and Italy edged lower. Germany raised €3.87 billion and Italy raised €11 billion from bond auctions today. Nokia cut devices and services outlook for the first quarter. Automakers report strong monthly sales.

German wholesale price index and Hungarian annual inflation slowed in March. Spanish industrial output dropped and Estonian deficit widened in February.

The UK indexes closed higher led by mining and banking stocks. UK retail sales and Irish construction activity and sentiment climbed in March. Barclays was in focus of excessive chief executive pay.

The benchmark Nikkei index in Tokyo extended losses for the seventh day totalling 6.2%. Machinery orders jumped in February and the yen strengthened. Bank lending rose in March as reconstruction drive loans demand.

Australian stocks drifted lower for the fourth day in a row as investors focused on the euro zone worries and coal prices continue to drift lower. BHP Billiton announced investment plan of $708 million for its Gulf of Mexico project in partnership with Chevron.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond increased to 2.03% and 30-year U.S. bond edged higher to 3.18%.

The U.S. dollar edged lower to $1.312 to one euro and inched lower against the Japanese yen to 80.92 yen.

Immediate delivery futures of Texas crude oil increased $1.66 to $102.68 a barrel and Brent crude futures fell 13 cents to $120.01.

Natural gas prices fell below $2 mark for the first time since January 2002 as warmer winter and increase supply drag prices. Explorers are likely to curtail the number of drilling locations and let the dry gas burn as the prices touch one-decade low. However, regulators may force gas flaring and dumping of the additional supply may drag the price below $1.70 level.

In New York trading, futures of natural gas decreased 0.04 cents to $1.98 per mbtu and gasoline price fell 4.26 cents to 329.22 cents a gallon.

In metals trading, copper fell 1.75 cents to $3.63 per pound, gold fell $2.20 to $1,661.10 per ounce and silver fell 19 cents to $31.47.