Indexes on Wall Street Fall 1% in Nervous Trading

Bikram Pandey
02 Nov, 2012
New York City

Stocks on Wall Street sold off in the afternoon on the mounting cost of Hurricane Sandy and the looming uncertainty linked to the presidential election next week. Gold and crude oil fell more than 2% and market indexes declined more than 1%.

[R]4:35 PM, New York – Stocks on Wall Street sold off in the afternoon on the mounting cost of Hurricane Sandy and the looming uncertainty linked to the presidential election next week. Gold and crude oil fell more than 2% and market indexes declined more than 1%.[/R]

Stocks in New York accelerated the decline in the final hour of trading as the presidential election looms and the rising cost of the Hurricane Sandy turn traders cautious.

Markets appeared to be in a liquidation mood and gold dropped 2.2% and crude oil futures declined 2.5%.

For the week, the S&P 500 index increased 0.4% and the Nasdaq Composite index was flat. The DAX index in Germany gained 1.8% and the FTSE 100 index in London advanced 1.4%.

U.S. employers added more than expected jobs in October and data for September and August were revised sharply higher. Unemployment rate increased to 7.9%. Factory orders increased 4.9%, largest increase in a year.

On the earnings front, AIG ((AIG)) third quarter net swung to $1.9 billion profit and Hess net surged 87%. Ralph Lauren ((RL)) third quarter net slumped 8% and lifted fiscal outlook. Starbucks ((SBUX)) fourth quarter net was nearly flat but lifted the annual estimate. McGraw-Hill third quarter net declined 14%.

Pitney Bowes ((PBI)) plunged 13% after the mail and document services provider reported larger than expected decline in third quarter sales.

In addition, TripAdvisor Inc ((TRIP)) soared 19% and Priceline.com ((PCLN)) surged 8.3% after reporting better than expected earnings.

Engineering and construction services provider Fluor ((FLR)) plunged 10% after the company offered lower 2013 earnings outlook and said mining companies are deferring major projects.

Restoration Hardware surged 32% after the furniture retailer priced 5.2 million shares for $24 each and raised $123.9 million. The initial public offering was priced at 27 times the net income in the year to July as the company benefits from the improving housing market.

The cost of the damage linked to businesses and the loss of personal and commercial property damage linked to Hurricane Sandy was revised higher to at least $50 billion, according to several industry analysts.

The European indexes traded sideways ahead of the U.S. payrolls report. The downturn in the euro zone manufacturing sector extended in October. The UK construction sector remained subdued in October.

Alcatel-Lucent and RBS swung to quarterly loss. BMW said U.S. sales rose 21% in October. Beiersdorf first nine months annual sales improved to €4.57 billion.

Stocks in Tokyo surged for the third day in a row following the gains in New York and the yen weakened. Sharp and Panasonic extended declines after estimating sharply higher losses. Also, Nikon lowered its outlook.

Australian markets closed flat on a weakness in banks and weak trading in resource sector. Qantas held out possibility of a dividend but did not cite a specific data. Westfield confirmed its malls in the U.S. did not suffer any major damage from the Hurricane Sandy.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond decreased to 1.71% and on 30-year bond rose to 2.90%.

The U.S. dollar inched higher to $1.283 to a euro and increased against the Japanese yen to 80.42 yen.

Immediate delivery futures of Texas crude oil decreased $2.13 to $84.96 a barrel and Brent crude fell $2.30 to $105.83, futures of natural gas decreased 0.16 cents to $3.54 per mbtu and gasoline traded down 5.7 cents to 257.65 cents a gallon.

In metals trading, copper decreased 6.80 cents to $3.48 per pound, gold decreased $36.30 to $1,679.20 per ounce and silver decreased $1.31 to $30.97.