Stocks on Hold, Volatile Oil; Apple Nears $700

Bikram Pandey
17 Sep, 2012
New York City

Market indexes in New York steadily declined in the session and recovered some of the lost ground in the last thirty minutes. Oil dropped 5% in volatile trading. Apple Inc said customers ordered 2 million iPhone 5 devices on the first day exceeding demand estimates.

[R]4:40 PM New York – Market indexes in New York steadily declined in the session and recovered some of the lost ground in the last thirty minutes. Oil dropped 5% in volatile trading. Apple Inc said customers ordered 2 million iPhone 5 devices on the first day exceeding demand estimates.[/R]

World markets rested after a week of advance that stretched valuations and also after a weak regional manufacturing reading in the New York region.

Financials and resource sector stocks were under a pressure after the Fed moved to offer a third round of stimulus. However, investors turned cautious and worried that the new measures may not reach beyond banks and small businesses and home owners may never benefit from the increased lending to large banks.

In addition, the Empire State Index that tracks factory activities in New York, northern New Jersey and southern Connecticut decreased for the second month in a row in September and dropped to the lowest since April 2009.

On merger Monday, Waste Connections agreed to acquire businesses from R360 Environmental Solutions for $1.3 billion. The Carlyle Group agreed to buy Landmark Aviation.

In corporate news, Complete Genomics is agreed to be acquired by China based company. Lowe's withdrew its C$1.8 billion offer for Canada based Rona. Waste Connections agreed to acquire subsidiaries of R360 Environmental for $1.3 billion in cash.

Apple Inc ((AAPL)) surged near $700 after the popular phone maker said in a statement today that on the first day of the iPhone 5 launch the company booked 2 million pre-orders, twice the rate compared to its previous version launch. Because the orders exceed the supply, the company expects to ship several orders in October.

Across the Atlantic, the European indexes edged lower after the euphoria of the Fed stimulus action waned and leaders in the region step up diplomacy to decide the fate of larger bailout for Spain. The euro zone finance ministers meeting in Cyprus was inconclusive.

The euro zone current account surplus narrowed, German manufacturing sector employment rose, and Italy recorded a surplus of €4.5 billion in July. Norwegian surplus improved in August.

Hennes & Mauritz said August sales increased and comparable sales decreased 4%. SSAB plunged on weak third quarter outlook. Deutsche Bank and Fresenius Medical appoint new executives.

The UK indexes edged lower after average home price in the UK declined 0.6% in August. Reckitt Benckiser announced a management change. Redstone agreed to acquire Maxima for approximately £9.9 million.

Australian markets closed at a new 4-month high after oil, copper, iron ore, nickel and gold advanced in international markets. The third largest iron miner in Australia, Fortescue Metals was halted for the second day in a row as the company negotiates with the banker for its $9 billion debt. Qantas won a regulatory approval for its code sharing alliance with South African Airways.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.83% and on 30-year bond closed up to 3.03%.

The U.S. dollar inched lower to $1.3102 to a euro and decreased against the Japanese yen to 78.76 yen.

Immediate delivery futures of Texas crude oil decreased $3.00 to $96 a barrel and Brent crude fell $3.50 to $113.15, futures of natural gas decreased 0.07 cents to $2.87 per mbtu and gasoline price edged down 7.7 cents to 293 cents a gallon.

In metals trading, copper decreased 8.5 cents to $3.74 per pound, gold fell $14.70 to $1,758 per ounce and silver decreased 67 cents to $33.92.