World Markets Up on Central Bank Actions Hopes for Fifth Week

Bikram Pandey
10 Aug, 2012
New York City

World markets turned gloomy after China reported weak international trade data following a series of slowing economic indicators released on Thursday. European indexes declined and stocks on Wall Street rebounded after weak opening and closed higher for the fifth week.

[R]11:00 PM New York – World markets turned gloomy after China reported weak international trade data following a series of slowing economic indicators released on Thursday. European indexes declined and stocks on Wall Street rebounded after weak opening and closed higher for the fifth week.[/R]

Stocks on Wall Street struggled in Friday’s trading after Chinese exports grew 1% in July and bank lending was significantly lower than expected in the month. Stocks opened lower and steadily recovered and by close crossed into the positive zone.

So much of the world’s attention has shifted to Asian economies and in particular to China as the euro zone faces another year of shrinking economies and the U.S. can barely surpass beyond 2% growth. Chinese international trade has become one of the leading indicators of the world economic activities.

China reported exports barely grew 1% in July and imports growth slowed to 4.7% in the month and bank lending was below what economists had anticipated. And, the numbers look even grimmer when compared to previous months.

The latest rate reductions in the last two months at least for now have not worked their ways into the economy and retail sales, fixed assets investments and industrial output growths continue to decelerate.

On the earnings front, J. C. Penney swung to quarterly loss and Yahoo stock fell after the company said it may not return proceeds of its stake sale in Hong Kong based Alibaba.com to shareholders.

Brookfield Asset Management second quarter net tumbled 73.5% and Fusion-io net swung to loss but increased annual revenue guidance. Harbinger third quarter net swung to $149 million loss. Janus soars on Dai-Ichi deal for $2 billion. Ubiquiti fourth quarter net swung to profit.

Belden second quarter net climbed 22.2% and Nordstrom net declined 10.9% but the company lifted annual outlook. Nvidia second quarter net plunged 12% and J. C. Penney net swung to $147 million loss. MBIA second quarter net jumped more than three-fold to $581 million.

Across the Atlantic, Barclays appointed David Walker as the new chairman. Rheinmetall AG, the defense contractor and auto parts maker said first half sales 9%. ThyssenKrupp AG soared 5% after third quarter revenues fell 7% and net income gained 16%.

The European indexes declined after China reported a slowdown in international trade. German inflation and the UK output price inflation eased in July. French output was flat in June.

In Asia, Japanese stocks declined and halted a 4-day rally as investors focused on earnings and the latest international trade data from China. The yen gained and Sony said it will acquire its Internet access subsidiary. Social network gaming operator DeNA Co Ltd soared 22% on higher earnings.

Australian markets closed lower and the dollar sold off after the Reserve Bank of Australia lifted its growth outlook to 3.75% and lowered its inflation estimate to 2.25% from its views three months ago. Casino operator gained after annual net increased 53%.

Commodities, Bonds and Currencies

The yield on 10-year bond traded lower to 1.66% and on 30-year bond edged lower to 2.75%.

The U.S. dollar was nearly flat at $1.229 to a euro and increased against the Japanese yen to 78.26 yen.

Immediate delivery futures of Texas crude oil decreased 49 cents to $92.82 a barrel and Brent crude fell 29 cents to $112.95, futures of natural gas decreased 17 cent to $2.77 per mbtu and gasoline price decreased 0.32 cents to 300.39 cents a gallon.

In metals trading, copper decreased 3.2 cents to $3.39 per pound, gold rose $2.60 to $1,622.80 per ounce and silver fell 3 cent to $28.06.