Dollar, Treasuries Decline on Home Sales

Mukesh Buch
27 Jul, 2009
New York City

The dollar edged lower after new home sales in the U.S. increased 11% in June, the sharpest monthly gain in eight years. Alberto Culver, Corning, Cott, LVMH, Pearson and Verizon fell after earnings. Dollar dropped to two-month low and Treasury bond yields increased.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – The dollar edged lower after the 11% increase in new home sales, the sharpest monthly gain in eight years. Alberto Culver, Corning, Cott, LVMH, Pearson and Verizon fell after earnings.[/R]

U.S. new home sales increased 11% in June, lifting home builders and construction related stocks. Broader markets edged higher as more companies release earnings. Honeywell International lowered its annual revenues outlook. Varian surges after it agreed to be acquired by Agilent Technologies for $52 a share or $1.5 billion.

European markets edged higher on earnings outlook. LVMH leaked earnings showed a decline of 23%. Societe Television Francaise surged after net dropped 61%. Thomson SA and banks agreed on revised lending terms. Porsche plunged 11%.

UK stocks continued to rally for the eleventh day in a row. Commodities and earnings linked stocks closed higher. Rexam is expected to raise ₤350 million in rights issue. Beazley Group declined on 55% drop in earnings. Pearson increased 12% after it increased its dividend.

Stocks in Japan closed higher for the ninth day in a row, the longest stretch of advance in 21 years. Three leading shipping companies lowered earnings outlook for the year on weak container loading and auto shipments. Hitachi affiliates surged on the acquisition plan by the parent.

Shanghai stocks surged as investors chased stocks. Sichuan Express nearly tripled on its first day of trading in Shanghai. China Everbright soared 11% after it securities unit was approved for listing in Shanghai. Investors chase stocks in Shanghai as banks increase lending.

The benchmark index in Mumbai traded sideways after Reliance Industries profit declined. Tata Motors earnings gained on accounting changes. Banks and cement companies reported better than expected earnings. DLF surged 4% ahead of earnings. MRF Limited soared 17% after its net tripled.

North American Markets

Dow Jones Industrial Average increased 15.27 or 0.2% to a close of 9,108.51, S&P 500 Index increased 2.92 or 0.3% to 982.18, and Nasdaq Composite Index edged higher 1.93 or 0.1% to close at 1,967.89. Toronto TSX Composite Index increased 69.53 or 0.7% to 10,757.43.

Of the stocks in S&P 500 index, 304 increased, 190 declined and 6 were unchanged.

Mylan Inc led the decliners in the S&P 500 index with a loss of 12.6% followed by losses in RadioShack Corporation of 6.6%, in American Express of 3.8%, in Akamai Tech of 3.8% and in Lowe’s Company Inc of 3.3%.

New York Times led gainers in the S&P 500 index with a rise of 16% followed by gains in Zions Bancorp 13%, in Gannett Company of 12.4% and Marshall & Ilsley of 10.6%.

South American Markets Indexes

Mexico Bolsa Index increased 168.93 or 0.6% to 26,815.30. Brazil Bovespa Stock Index increased 91.70 or 0.2% to 54,548.99.

Argentina Merval Index increased 0.7%. Chile Stock Market Select index edged lower 0.3%, Peru Lima General Index added 0.6% and Colombia IGBC General Index decreased 0.4%.

Europe Markets Review

In London FTSE 100 Index closed higher 9.52 or 0.21% to 4,586.13, in Paris CAC 40 Index increased 5.91 or 0.18% to close at 3,372.36 and in Frankfurt DAX index higher 22.19 or 0.42% to close at 5,251.22. In Zurich trading SMI increased 13.99 or 0.24% to close at 5,774.89.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 144.11 or 1.45% to 10,088.66, Hang Seng index in Hong Kong increased 268.83 or 1.35% to 20,251.62 and CSI 300 index in China higher 76.07 or 2.07% to 3,743.63. ASX 200 index in Australia increased 49.80 or 1.22% to 4,139.60. The FTSE Bursa KL Composite index in Malaysia closed higher 0.55 or 0.05% to 1,156.43.

The Kospi Index in South Korea increased 21.46 or 1.43% to close at 1,524.05. SET index in Thailand closed higher 3.59 or 0.58% to 617.83 and JSE Index in Indonesia increased 23.45 or 1.07% to 2,209.10. The Sensex index in India decreased 3.92 or 0.03% to 15,375.04.

Commodities, Metals, and Currencies

Crude oil increased $0.23 to close at $68.28 a barrel for a front month contract, natural gas decreased 8 cents $3.62 per mBtu and gasoline increased 1.51 cents to 193.10 cents.

Wheat futures closed up 4.25 cents in Chicago trading to $5.20 a bushel. Sugar increased 0.02 cent in trading at 18.45 cents a pound. Soybean future closed down 8.50 cent to $9.06 a bushel.

Gold decreased $1.30 in New York trading to close at $957.20 per ounce, silver closed up $0.15 to $14.03 per ounce and copper for the front month delivery increased 2.25 cents to $2.545 per pound.

Dollar edged lower against euro to $1.4240 and closed up against the Japanese yen to 95.24.

Yield on 10-year U.S. bond increased to 3.72% and with 30-year maturities increased to 4.62%.