World Markets Consolidate, Auto Sales Exceed Expectations

Bikram Pandey
02 Oct, 2012
New York City

Wall Street gains evaporated after hopes of immediate bailout for Spain receded. Markets consolidated recent gains after indexes surged more than 6% in the last five weeks and broader indexes gain more than 14% in the year.

[R]4:15 PM New York – Wall Street gains evaporated after hopes of immediate bailout for Spain receded. Markets consolidated recent gains after indexes surged more than 6% in the last five weeks and broader indexes gain more than 14% in the year.[/R]

Stocks on Wall Street turned lower after Spain contradicted the widespread belief that it is close to asking for a bailout and agree with harsh terms laid out by the currency union.

Prime Minister Mariano Rajoy said that Spain is not ready to request a bailout at least for now and will like to determine its own economic course, despite immense pressure from political leaders and policy makers in the euro zone.

The S&P 500 index decreased 0.3% after opening higher 0.5% and closed flat and the Nasdaq Composite index closed up 0.2% after opening up 0.6%.

Auto sales were in focus after makers reported rising sales from a year ago and analysts lifted annual sales forecast for the year. Industry sales are likely to be highest since March 2008 and may reach as high as 14.9 million units.

General Motors reported September sales increased 1.5% and Ford Motor sales edged down 0.5%. But, Chrysler Group reported sales surged 12%. Toyota sales soared 41.5% and Honda sales surged 31% in the month. Nissan Motor sales fell 1.1%.

Toyota is set to surpass Ford Motor as the second largest auto maker in the U.S. as supply chain problems ease and the company catches up with parts inventory and builds more units.

John Wiley said it agreed to acquire online education service provider Deltak.edu for $220 million.

European markets extended gains for the second day on the hope that Spanish bailout is in works and may be finalized as early as this weekend. Greece and troika inspectors struggled to finalize austerity steps before the release of next bailout tranche. The euro edged higher from a three-week low.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.61% and on 30-year bond fell to 2.81%.

The U.S. dollar inched lower to $1.2925 to a euro and decreased against the Japanese yen to 78.10 yen.

Immediate delivery futures of Texas crude oil decreased 72 cents to $91.76 a barrel and Brent crude fell 83 cents to $111.36, futures of natural gas increased 0.04 cents to $3.53 per mbtu and gasoline price edged down 5.9 cents to 286.05 cents a gallon.

In metals trading, copper increased 0.60 cents to $3.79 per pound, gold decreased $7.10 to $1,776.20 per ounce and silver decreased 34 cents to $34.60.