Global Markets, Euro in 3-Day Decline; Apple Seeks $2.5 B in Damages

Bikram Pandey
24 Jul, 2012
New York City

Global markets extended losses for the third day in a row and the U.S. indexes accelerated declines. The euro fell to a new two-year low. Metals and energy prices also fell. Apple Inc and Samsung Electronics filed patent infringement suits in California.

[R]4:00 PM New York – Global markets extended losses for the third day in a row and the U.S. indexes accelerated declines. The euro fell to a new two-year low. Metals and energy prices also fell. Apple Inc and Samsung Electronics filed patent infringement suits in California.[/R]

U.S. indexes traded lower for the third day after regional manufacturing in the U.S. contracted sharply in July and debt worries in the euro zone mounted.

Global markets were under pressure for the second day in a row and Wall Street extended European losses after Richmond Federal Reserve Bank said central-Atlantic manufacturing in July contracted.

Greek worries also resurfaced a day ahead of international lenders begin financial audit of the government. European officials widely believe that Greece is likely to miss its deficit targets and debts may have to be restructured again.

In the earnings news, AT&T said second quarter net increased on higher sales of smart phones. Biogen third quarter net soared 34% to $386.8 million. DuPont net fell and said earnings may slide. Illinois Tool second quarter net advanced 77%.

United Parcel lowered full year outlook and Domino’s Pizza Inc gained 3% after second quarter sales and net were ahead of expectations. Peabody Energy Corp dropped 8% after the largest coal producer estimated lower than expected third quarter earnings.

Ametek second quarter net surged 21% and Air Products third quarter net soared 48% to $484.5 million. Coca-Cola Enterprises second quarter net declined 17% and EMC net soared 19% to $649.5 million. VMware second quarter net declined 13% and agreed to acquire Nicira, Inc. for $1.05 billion in cash

Gentex Corp plunged 24% after it reported lower than expected earnings and DeVry plummeted 25% after the vocational training institute estimated summer enrollment may fall as much as 17%. Cisco declined 5% after the networking gear maker said it plans to eliminate 1,300 jobs or 2% of staff.

Apple Inc filed a lawsuit in a district court in San Jose, California and asked for $2.525 billion in damages from Samsung Electronics Co. The suit claims Samsung infringed Apple’s patent and make looks Samsung’s Galaxy and tablet “work and look” like Apple products. Later in the day, Samsung also filed lawsuits against Apple asking for unspecified monetary damages for illegal use of its patents.

The European indexes traded sideways in thin trading and debt pressures intensified in the region. Spain raised €3.05 billion at borrowing costs. Moody’s offered negative views on Germany, the Netherlands and Luxembourg.

The euro-zone private sector economy contracted and French business confidence fell in July. Hungarian retail sales declined in May. Spanish producer price inflation eased in June.

The UK indexes slid after debt pressures intensified in the euro zone. The UK mortgage approvals declined unexpectedly in June. Anglo American agreed to acquire a 58.9% interest in a metallurgical coal project in Mozambique.

Stocks in Japan inched lower on the widening debt contagion in Spain and a downgrade on the advanced nations in the currency union. Toshiba declined 5% after the chipmaker plans to cut flash memory production by 30%. Sharp dropped to another 34-year low.

Australian stocks rebounded after a private survey showed an increase in Chinese manufacturing activities in July. Export price of iron ore declined for the eighth month in a row. Billabong received another takeover offer at a reduced valuation.

Commodities, Bonds and Currencies

The yield on 10-year bond traded lower to 1.40% and on 30-year bond decreased to 2.47%.

The U.S. dollar inched higher to $1.206 to a euro and decreased against the Japanese yen to 78.19 yen.

Immediate delivery futures of Texas crude oil increased 40 cents to $88.54 a barrel and Brent crude was flat at $103.26, futures of natural gas rose 0.04 cents to $3.16 per mbtu and gasoline price decreased 4.4 cents to 283.92 cents a gallon.

In metals trading, copper decreased 2.5 cents to $3.35 per pound, gold fell $2.10 at $1,573.30 per ounce and silver fell 27 cent to $26.77.