Oil Slumps and Stocks Struggle on Wall Street, HP Plunges 13%

Bikram Pandey
03 Oct, 2012
New York City

Market indexes on Wall Street closed higher for the third day in a row and oil dropped more than 3%. Investors await labor market report on Friday and reacted negatively to the weak economic data from the euro zone and China. Crude oil futures dropped to the lowest since August.

[R]5:35 PM New York – Market indexes on Wall Street closed higher for the third day in a row and oil dropped more than 3%. Investors await labor market report on Friday and reacted negatively to the weak economic data from the euro zone and China.[/R]

Indexes on Wall Street closed higher for the third day in a row but trading in the session was choppy and oil dropped more than 3%.

The weak set of economic data from the euro zone and China dragged oil futures down as rising oil supply also weighed on the market sentiment.

At the opening, investors digested better than expected private sector payrolls data and expansion the service sector in September in the U.S. but also confronted with the rising probability of a recession in the third quarter in the euro zone.

European markets were in a holding pattern ahead of the central bank meetings tomorrow. The latest survey of businesses showed a decline in activities and forecasted recessionary trend in the region. Central banks in Europe and UK are set to hold rates at meeting tomorrow.

MetroPCS Communications Inc ((PCS)) dropped 10% after the company agreed to a merger plan with T-Mobile USA and receiving $1.5 billion in cash. The parent Deutsche Telekom AG, the parent of T-Mobile will own 74% of the combined company.

Hewlett Packard Co ((HPQ)) dropped 13% after the struggling computer maker forecasted lower than expected 2013 earnings and Chief Executive Officer Meg Whitman said a turnaround will take longer than anticipated.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.61% and on 30-year bond rose to 2.82%.

The U.S. dollar inched lower to $1.2905 to a euro and decreased against the Japanese yen to 78.51 yen.

Immediate delivery futures of Texas crude oil decreased $3.88 to $88.01 a barrel and Brent crude fell $3.47 to $108.16, futures of natural gas decreased 0.14 cents to $3.39 per mbtu and gasoline price edged down 7.3 cents to 279.55 cents a gallon.

In metals trading, copper decreased 3.05 cents to $3.77 per pound, gold decreased $4.70 to $1,780.30 per ounce and silver decreased 1 cent to $34.66.