World Markets and U.S. Stocks in Holding Pattern

Bikram Pandey
15 Feb, 2013
New York City

Stocks on Wall Street traded sideways and investors awaited comments from G20 policymakers gathering in Moscow. Gold and silver plunged sharply and the yen and the euro were in focus. 3G Capital and Berkshire Hathaway offered $1.4 billion in breakup fees for the Heinz deal.

[R]2:10 PM New York – Stocks on Wall Street traded sideways and investors awaited comments from G20 policymakers gathering in Moscow. Gold and silver plunged sharply and the yen and the euro were in focus. 3G Capital and Berkshire Hathaway offered $1.4 billion in breakup fees for the Heinz deal.[/R]

U.S. stocks traded sideways as earnings, deals and currency trading overshadowed market sentiment. The euro and yen were in focus ahead of comments from policymakers gathering from 20 nations in Moscow. U.S. industrial production declined in January.

American Electric Power fourth quarter net tumbled 27% and Campbell Soup second quarter net slipped 7%. CBS Corp fourth quarter net climbed 6% and Kraft Foods net tumbled 72%. Smucker third quarter net surged 32% and V.F. Corp fourth quarter net soared 30%.

European markets edged slightly higher after the release of mixed batch of earnings. The meeting of G 20 finance ministers and central bankers drew attention from currency traders after the yen declined sharply in the last three months.

Anglo American, the copper and precious metals miner reported revenues in the quarter increased 10% but swung to a net loss of 10%. Aker Solutions plunged 12% on a decline in net income. Eni SpA said net income fell 1.4%.

Investors sold stocks in Tokyo as the yen strengthened ahead of comments from G20 finance ministers in Moscow. Electronics exporters and automakers declined. Kirin Holdings declined 5% on weaker than expected operating earnings. Rakuten, the online retailer fell on smaller increase in operating income.

Markets in India traded lower ahead of financial budget in two weeks and on the rising trade deficit. The trade deficit last month surged to $20 billion for the second month in a row. Exports in January increased 0.8% from a year ago to $25.59 billion and imports surged 6% to record $45.58 billion.

The January trade deficit was the second worst on record following $20.9 billion in October. The exports in ten months to January in the current fiscal year declined 4.9% to $239.7 billion and deficit increased 8% to $167.2 billion.

Rupee came under fresh pressure as the current account deficit widened raising the prospect of fall to the low of 55.38 against one dollar in early January.

In corporate news, DLF third quarter net slumped 10.5% and GAIL (India) net surged 18%. HCL Infosystems net swung to a loss and HNG net swung to a loss. MTNL and Suzlon Energy net loss widened. Tata Motors net plummeted 52%.

Australian markets held firm for the third day in a row and banks and defensive companies led the gainers and miners led the decliners. ANZ reported a decline in profit in the latest quarter.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond increased to 2.03% and on 30-year bond closed up at 3.20%.

The U.S. dollar inched lower to $1.335 to a euro and increased against the Japanese yen to 93.51 yen.

Immediate delivery futures of Texas crude oil decreased $1.47 to $95.82 a barrel and Brent crude fell 64 cents to $117.40, futures of natural gas decreased 0.01 cents to $3.15 per mbtu and gasoline traded up 0.45 cents to 312.09 cents a gallon.

In metals trading, gold decreased $27.20 to $1,608.30 per ounce and silver fell 50 cents to $29.85 and copper increased 15 cents to $3.75 a pound.