Wall Street in 4-Day Slump, European Markets Drop 2.5%

Bikram Pandey
02 Aug, 2012
New York City

U.S. indexes fell after European Central Bank said it is prepared to purchase additional sovereign bonds only if rescue fund acts first and politicians take steps to restructure economies. Markets in New York dropped 1% and in Europe fell more than 2.5%. Gold, oil and copper eased between 1% and 3%.

[R]4:30 PM New York – U.S. indexes fell after European Central Bank said it is prepared to purchase additional sovereign bonds only if rescue fund acts first and politicians take steps to restructure economies. Markets in New York dropped 1% and in Europe fell more than 2.5%. Gold, oil and copper eased between 1% and 3%.[/R]

U.S. indexes lost 1% and tracked more than 2% fall in European markets after latest comments from the European Central Bank dashed hopes of immediate large purchases of sovereign bonds. The ECB left the rate unchanged at 0.75%.

U.S. weekly jobless claims rose less than estimated. Monsanto won $1 billion in infringement trial against DuPont. General Motors quarterly net declined.

On the earnings front, American Tower second quarter net plunged 58% and Becton, Dickinson net declined 4.7% and Cigna net slipped 2.8% to $380 million. Duke Energy net rose 2% to $444 million. DaVita net fell 1% to $120 million and Hospira net swung to loss.

Green Mountain Coffee Roasters, Inc ((GMCR)) surged more than 25% after the maker of coffee brewers said third quarter profit increased 30% and it will buy back as much as $500 million shares.

MetLife ((MET)) gained 4% after the life insurance company said quarterly net more than doubled on gains in derivatives used to profit from the fall in interest rates.

Ameren second quarter net surged 53% and lifted fiscal guidance. DirecTV second quarter net rose and General Motors net declined 40% to $1.5 billion. Teradata second quarter net climbed and Hartford said quarterly net swung to $101 million loss.

Recently listed Yelp Inc ((YELP)) soared 17% to $21.94 after the online review site reported second quarter sales were ahead of expectations after the company expanded into new regions.

First Solar Inc ((FSLR)) surged 22% after the world’s largest maker of thin film panels said quarterly net increased 81% after it began selling solar power plants.

Among the retailers reporting same store sales, Gap Inc ((GPS)) said sales increased 11% I July and Macy’s ((M)) sales increased 3%.

The European indexes advanced ahead of the meeting of the central banks. Spain sold €3.13 billion of debt today at higher borrowing costs. Euro-zone producer prices fell in June Spanish unemployment declined and the UK construction sector rose in July.

Deutsche Post quarterly revenues rose on the growth in Asia but BNP Paribas quarterly net declined 13%. Telecom Italia swung to profit and Lufthansa loss narrowed in the first-half. adidas earnings rose 18% in the quarter and Schroders first-half revenue fell 9%.

Stocks in Tokyo closed higher but not without strong undercurrent of weaker than expected earnings. Toyota Motor was the most actively traded stock after it reported rising U.S. sales. Tokyo Electric Power jumped narrower quarterly loss.

Australian markets closed higher ahead of rate decisions in Europe. Australian retail sales rose 1% in June and sales in May were revised higher to 0.8%. Trade balance in June improved to a modest surplus on a fall in import prices.

Commodities, Bonds and Currencies

The yield on 10-year bond traded lower to 1.48% and on 30-year bond decreased to 2.55%.

The U.S. dollar inched higher to $1.215 to a euro and decreased against the Japanese yen to 78.22 yen.

Immediate delivery futures of Texas crude oil decreased $1.77 to $87.13 a barrel and Brent crude fell 8 cents to $105.88, futures of natural gas decreased 24 cents to $2.92 per mbtu and gasoline price increased 2.85 cents to 286.29 cents a gallon.

In metals trading, copper decreased 7.9 cents to $3.29 per pound, gold fell $15.90 to $1,591.40 per ounce and silver declined 48 cents to $27.05.