Markets Gyrate on Lawmakers Comments, Gold and Oil Up

Bikram Pandey
29 Nov, 2012
New York City

Stocks in New York gyrated after lawmakers gave conflicting signals of budget negotiation progress. Pending home sales increased 5.2% in October and the second estimate of the U.S. economic growth was revised to 2.7% annual rate in the third quarter. Weekly jobless claims declined.

[R]4:00 PM, New York – Stocks in New York gyrated after lawmakers gave conflicting signals of budget negotiation progress. Pending home sales increased 5.2% in October and the second estimate of the U.S. economic growth was revised to 2.7% annual rate in the third quarter. Weekly jobless claims declined for the second week in a row.[/R]

Stocks in New York traded sideways and gyrated with comments from lawmakers as budget negotiations progress slowly.

Differing accounts from Senate Majority Leader Harry Reid and House Speaker John Boehner and a prominent Senator Charles Schumer only highlighted the difficult task ahead for lawmakers.

Republicans are set on not letting pass the temporary Bush tax cuts for rich and not relent on wasteful war and defense spending and Democrats are set to not cut welfare and infrastructure spending.

Iraq war that was carried out by the support of the Republican Party cost the U.S. taxpayers more than $1 trillion and the cost of supporting the veterans in the next two decades is likely to surpass additional $1 trillion.

In economic news, third quarter GDP growth was revised higher to 2.7% and weekly unemployment claims declined for the second week in a row last week. Pending home sales increased 5.2% in October from the previous month.

On the earnings front, Barnes & Noble third quarter net swung to a loss. Beacon Roofing fourth quarter net dropped 11%. Infoblox first quarter loss widened. Kroger third quarter net climbed 62% and Tiffany quarterly net plunged 30%.

The sentiment across the euro zone improved after falling for eight months in a row. Italy raised €6 billion in bond auction today at lower borrowing costs. German unemployment rate remained unchanged in November.

Ahold to increase its existing cost savings program from €350 million to €600 million. Norsk Hydro estimates world aluminum demand outside China to grow 2% in 2012 Siemens agreed to acquire Invensys Rail for approximately €2.2 billion.

Stocks in Tokyo rebounded from the sell-off in previous session. Electric utilities closed higher on the prospect of a rate hike next year. Steelmaker JFE Holdings gained on the speculation of positive cash flow.

Australian markets traded higher and latest survey showed a sharp decline in mining industry capital spending plan. Rio Tinto said it plans to cut $5 billion in operating and support costs by 2014.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond fell to 1.62% and on 30-year bond rose to 2.79%.

The U.S. dollar inched lower to $1.297 to a euro and decreased against the Japanese yen to 82.06 yen.

Immediate delivery futures of Texas crude oil increased to $1.35 to $87.81 a barrel and Brent crude rose $1.07 to $110.58, futures of natural gas decreased 0.15 cents to $3.65 per mbtu and gasoline traded up 4.65 cents to 278.01 cents a gallon.

In metals trading, gold increased $9.60 to $1,728.50 per ounce and silver increased 56 cents to $34.31 and copper closed up 6.1 cents to $3.601 a pound.