World Markets Consolidate Gains on Lingering Euro Zone Worries

Bikram Pandey
24 Sep, 2012
New York City

U.S. indexes were firm as attention in Europe shifts to a broader economic decline as France and Spain struggle to release budgets that meet the European Union guidelines and contain the widening unemployment. Yields on the U.S. Treasuries and prices of gold, copper and crude oil fell.

[R]4:00 PM New York – U.S. indexes were firm as attention in Europe shifts to a broader economic decline as France and Spain struggle to release budgets that meet the European Union guidelines and contain the widening unemployment. Yields on the U.S. Treasuries and prices of gold, copper and crude oil fell.[/R]

U.S. indexes held on the gains of the last six weeks as investors shift attention to Spain in the European crisis and German business confidence declined.

In corporate news, Tomkins agreed to sell its air distribution division for $1.1 billion. Home builders Lennar and KB Home gained on quarterly results. Black Diamond agreed to acquire PIEPS Holding GmbH. Covidien to buy CNS Therapeutics for $100 million. TiVo settled its pending patent litigation with Verizon.

Among earnings, European indexes edged lower ahead of draft budgets from Spain and France. Germany sold €1.17 billion of short term debt as business confidence index drops for the fifth month in a row. CGGVeritas agreed to acquire Fugro’s Geoscience Division for $1.6 billion.

German business sentiment declined for the fifth month in a row in September. Hungarian retail sales declined in July. The Dutch economy expanded in the second quarter. Italian non-EU deficit narrowed in August.

In European corporate news, Julius Baer plans to cut up to 880 jobs at overseas wealth management business of Merrill Lynch. Aryzta full year group revenue rose 8.5% to €4.21 billion. Syngenta raised sales target to $25 billion for the end of the decade.

The UK indexes slid after the household finance index dropped in September. Royal Bank of Scotland plans to slash 300 more jobs at its investment banking unit. A.G. Barr first half turnover rose 4.9% to £130 million.

The Nikkei index in Tokyo edged lower after international trading offered weak outlook and gathering storms on relationship with China. Toyota resumes production at all nine factories in China today. All Nippon Airways plans to order 11 Dreamiliners from Boeing at list price of $3.3 billion.

Australian markets and dollar were on the defensive and the government reported smaller than expected final fiscal year budget deficit in the previous year. Resource stocks were on the decline after commodities prices fell in local trading.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.72% and on 30-year bond fell to 2.91%.

The U.S. dollar inched lower to $1.293 to a euro and decreased against the Japanese yen to 78.86 yen.

Immediate delivery futures of Texas crude oil decreased 96 cents to $91.94 a barrel and Brent crude fell $1.70 to $109.75, futures of natural gas decreased 0.04 cents to $2.84 per mbtu and gasoline price edged down 2.3 cents to 291.55 cents a gallon.

In metals trading, copper increased 4.80 cents to $3.74 per pound, gold decreased $10.90 to $1,767.60 per ounce and silver decreased 54 cents to $34.09.