Stocks Fall Ahead of Rate Decisions; Earnings Release Accelerate

Bikram Pandey
31 Jul, 2012
New York City

U.S. indexes closed down 0.4% and traded sideways ahead of the Fed decision tomorrow. Earnings release pace accelerated in the U.S., Europe, Japan and India.

[R]4:45 PM New York – U.S. indexes closed down 0.4% and traded sideways ahead of the Fed decision tomorrow. Earnings release pace accelerated in the U.S., Europe, Japan and India.[/R]

U.S. indexes traded sideways with no conviction as flow of earnings accelerated in the U.S., Europe and Japan and India. Investors also awaited decision from the rate setting committee tomorrow and next steps from the European Central Bank after leaders in the region raised stakes.

Mixed economic news on the housing front and consumer confidence played to the market sentiment as Europe confronted second monthly record unemployment rates. Banks were lower across the Atlantic after UBS and Deutsche Bank reported sharp swings in quarterly results.

On the earnings front, Aetna second quarter net declined 15% to $457.6 million. BP plc swung to a quarterly loss and Coach fourth quarter net soared 24%. Humana net slipped 22.6% and Marathon Petroleum net soared 34%. Pfizer second quarter net surged 25% to $3.25 billion.

Japanese investors faced a barrage of earnings from 270 companies. Panasonic reported seven-fold increase in operating income and Mitsui O.S.K. guided first half operating profit. Mitsubishi Electric earnings were ahead of expectations and Horikuku net jumped 58%.

Electric power was restored in most of 21 states in India after a second grid failure in as many days left more than 600 million people without power. Electricity consumption soared in the northern region on the late arrival of monsoon and temperatures soared above 37 degree Celsius for more than a week.

Australian stocks extended gains for the fourth day in a row and the benchmark ASX 200 index added 4.3% in the month. The dollar edged higher. Breville Group gained after it estimated full-year earnings growth of 40%.

Commodities, Bonds and Currencies

The yield on 10-year bond traded lower to 1.47% and on 30-year bond decreased to 2.55%.

The U.S. dollar inched lower to $1.235 to a euro and was flat against the Japanese yen to 78.13 yen.

Immediate delivery futures of Texas crude oil decreased $2.33 to $87.45 a barrel and Brent crude fell $2.09 to $104.19, futures of natural gas rose 0.01 cents to $3.22 per mbtu and gasoline price decreased 2.21 cents to 291.45 cents a gallon.

In metals trading, copper decreased 0.15 cents to $3.415 per pound, gold fell $7.10 at $1,616.90 per ounce and silver declined 14 cents to $27.89.