World Markets Scale Higher, Citigroup to Eliminate 11,000 Jobs

Bikram Pandey
05 Dec, 2012
New York City

U.S. indexes traded higher after President Barack Obama said budget negotiations can we wrapped in a week. Service sector expanded at a faster pace and manufacturing stabilized. Citigroup announced a plan to eliminate 11,000 positions and take $1 billion charge.

[R]4:50 PM, New York – U.S. indexes traded higher after President Barack Obama said budget negotiations can we wrapped in a week. Service sector expanded at a faster pace and manufacturing stabilized. Citigroup announced a plan to eliminate 11,000 positions and take $1 billion charge.[/R]

U.S. market indexes traded sideways after service sector expanded at a faster pace and manufacturing sector stabilized and tone of budget talks turned more conciliatory.

U.S. added 118,000 private sector jobs in the last month, according to data tracked by Automatic Data Processing and Moody’s. The monthly jobs addition was lower than expected and previous month of job additions were revised slightly lower.

U.S. labor productivity rose in the third quarter, according to the Labor Department. Unit labor cost declined more than previously estimated. Factory orders increased 0.8% in October and an index of service sector expanded in November.

Lowe''s reiterated sales and earnings guidance for the fiscal year. RioCan agreed to acquire a $1.1 billion portfolio of Canadian retail properties.

Travelers Cos. ((TRV)) gained 5% after resumed trading and said its estimate of losses linked to Sandy was $650 million, far less than previously estimated.

Citigroup ((C)) surged 7% after the global bank said it plans to eliminate 11,000 jobs to save $900 million in annual cost from next year.

The global bank will eliminate 6,200 positions in consumer banking business, 2,600 jobs in operations and technology group and 1,900 in the institutional clients divisions. The bank will also close 84 branches worldwide.

Freeport McMoran Copper & Gold ((FCX)) plunged 15% after the commodities miner said it agreed to acquire McMoran Exploration ((MMR)) and Plains Exploration & Production ((PXP)).

McMoran Exploration soared 82% and Plains Exploration gained 25%.

European Markets Advance

Euro zone retail sales decreased the most on an annual basis in October since 2009 and private sector activity downturn continued in November. The UK service sector activity dipped in November. The Spanish Treasury raised €4.25 billion from a bond auction and industrial production declined 3.3%.

HSBC to sell its entire stake in Ping An Insurance for $9.4 billion. Nokia launched Lumia 920T in China. Tesco third quarter group sales increased 2.4%.

Asian Markets Jump

Asian markets rallied sharply and indexes in Hong Kong surged 2.2% and in Tokyo and India gained 0.4% and 0.2% respectively.

Stocks in mainland China surged after the government permitted insurance companies to invest in commercial banks.

Australian economic growth in September quarter declined to 0.5% after household consumption and housing investment growth fell. Banks passed on full 25 basis points decline in rates to consumers.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond fell to 1.58% and on 30-year bond decreased to 2.77%.

The U.S. dollar inched lower to $1.307 to a euro and increased against the Japanese yen to 82.36 yen.

Immediate delivery futures of Texas crude oil decreased 62 cents to $87.81 a barrel and Brent crude fell 87 cents to $108.98, futures of natural gas increased 15 cents to $3.65 per mbtu and gasoline traded down 4.43 cents to 264.01 cents a gallon.

In metals trading, gold decreased $1.50 to $1,694.30 per ounce and silver increased 16 cents to $32.91 and copper closed up 2.9 cents to $3.68 a pound.