World Markets Consolidate, Spain and Euro Zone in Focus

Bikram Pandey
21 Sep, 2012
New York City

World markets consolidate after solid advances in the last two weeks powered by moves from central banks. The S&P 500 index closed down for the first time in three weeks. Gold and oil rebounded. Glencore delays Xstrata merger plan. Japan Airlines sinks below its offer price.

[R]4:55 PM New York – World markets consolidate after solid advances in the last two weeks powered by moves from central banks. The S&P 500 index closed down for the first time in three weeks. Gold and oil rebounded. Glencore delays Xstrata merger plan. Japan Airlines sinks below its offer price.[/R]

U.S. indexes failed to hold on to early gains on the rising hopes in Europe that Spain is working on to request a larger bailout.

Market indexes lost ground in the afternoon and closed down for the day. For the week, the S&P 500 index declined 0.4%, first fall in three weeks, and the Nasdaq dropped 0.13%.

Apple Inc’s ((AAPL)) iPhone 5 launch attracted worldwide fans and sales are expected exceed 10 million this weekend. The global launch is scheduled to expand to 22 more countries next month from the introduction in the U.S., Canada, Japan, France, Germany, UK, Singapore, Hong Kong and Australia.

In earnings news, Oracle quarterly earnings rose 11%. KB Home swung to quarterly profit. Cintas net jumped 12% and reiterated fiscal outlook. Darden Restaurants quarterly net was ahead of expectations. KB Home net swung to profit as sales jump. Oracle first quarter net climbed 11% to $2.03 billion. Rockwell updated fiscal 2013 views.

The European indexes advanced on speculation that Spain is nearing a bailout request however economic picture across the continent was grim. Italy estimated contraction to deepen to 2.4% this year. Greece failed to reach an agreement with its coalition partners on spending cuts demanded by the troika.

Euro zone consumer confidence unexpectedly fell in September. German leading index climbed and Dutch consumer spending declined in July.

In corporate news in Europe, adidas reduced Reebok 2015 sales target to €2 billion from €3 billion. Barry Callebaut intends to sell its factory and related business in Dijon. Richemont agreed to acquire Peter Millar.

The UK indexes dropped after the home price sentiment index rose in September and budget deficit surged to a new record in August. The Bank of England Governor Mervyn King forecasted slower recovery in the UK.

Stocks rebounded in Tokyo after falling the most in three weeks yesterday as investors turned focus to domestic companies and defensive sectors. Sharp Corp surged 5% on reports that the company is in talks with Intel Corp. Japan Tobacco gained 3%.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.75% and on 30-year bond fell to 2.94%.

The U.S. dollar inched lower to $1.298 to a euro and decreased against the Japanese yen to 78.16 yen.

Immediate delivery futures of Texas crude oil increased 62 cents to $93.04 a barrel and Brent crude rose $1.5 to $111.55, futures of natural gas increased 0.08 cents to $2.88 per mbtu and gasoline price edged up 4.2 cents to 294.55 cents a gallon.

In metals trading, copper increased 1.90 cents to $3.77 per pound, gold increased $5.40 to $1,775.60 per ounce and silver decreased 7 cents to $34.61.