World Markets Struggle on Euro Zone Unemployment and Election Worries

Bikram Pandey
02 May, 2012
New York City

U.S. stocks traded sideways after private sector added less than expected jobs in April and unemployment in Europe surged to a record high in fifteen years. U.S. auto sales rose for the sixth month in a row and BMW and Mercedes sales rose 27% in April but GM and Ford sales fell.

[R]12:30 PM New York – U.S. stocks traded sideways after private sector added less than expected jobs in April and unemployment in Europe surged to a record high in fifteen years. U.S. auto sales rose for the sixth month in a row and BMW and Mercedes sales rose 27% in April but GM and Ford sales fell.[/R]

U.S. indexes edged lower after private employment rose less than estimated in April and the euro region unemployment reached to a 15-year high. Stocks seesawed in the early hours after MasterCard, Comcast Corp, CVS Caremark and CBS Corp met or exceeded earnings expectations.

In merger news, Wolverine and private equity firms agreed to acquire the parent of Payless ShoeSource for $2 billion. Ascena Retail agreed to buy Charming Shoppes for approximately $890 million.

U.S. auto sales in April rose 9% and extended gains for the sixth month in a row. Chrysler sales rose more than 20% and sales at Mercedes Benz and BW sales rose 27%. Toyota sales and production recovered faster than expected and Camry sales soared 21% from a year ago and Prius sales doubled.

In the earnings news, Broadcom first quarter net tumbled 61% and CBS Corp net surged 80% as licensing fee rose. Comcast first quarter net surged 30% to $1.22 billion. MasterCard first quarter net surged 21% to $682 million. Time Warner first quarter net fell 11% to $583 million.

The European market indexes advanced despite the rise in unemployment across the region and manufacturing activity shrank. UBS quarterly net plunged 54% but TNT swung to profit.

Jobless rate rose in the euro area and Italy in March and manufacturing activity declined in the euro-zone in April. Hungarian industrial producer price index rose from a year ago in March.

The UK indexes dropped after mortgage approvals rose in March. UK construction activity eased but Irish jobless rate remained flat in April. BSkyB said nine month revenues and profit rose and distanced its self from Murdoch family. Home Retail plunged 11% on weak full year performance.

Stock gains in Tokyo were limited ahead of a long weekend and elections in Europe. Exporters and auto makers were higher after the yen eased and energy sector stocks advanced after Idemitsu Kosan Co reported better than expected fiscal year earnings.

The Australian market index closed higher and major banks failed to pass on the latest rate cut to consumers. ANZ said first half profit increased 5% to a record high. News Corp rose on the prospect that Rupert Murdoch may be forced out after the latest UK panel report.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond decreased to 1.93% and 30-year U.S. bond edged lower to 3.12%.

The U.S. dollar edged lower to $1.316 to one euro and inched lower against the Japanese yen to 80.19 yen.

Immediate delivery futures of Texas crude oil decreased 87 cents to $105.24 a barrel and Brent crude futures fell $1.60 to $118.08.

In New York trading, futures of natural gas decreased 0.05 cents to $2.32 per mbtu and gasoline price fell 2.44 cents to 307.25 cents a gallon.

In metals trading, copper gained 6.2 cents to $3.78 per pound, gold fell $10.10 to $1,652.90 per ounce and silver decreased 39 cent to $30.53.