U.S. Stocks Decline, Deficit Up; Greece in Focus

123jump.com Staff
10 Feb, 2010
New York City

U.S. stocks fluctuated after the December trade deficit increased but declined sharply in 2009. For the year deficit dropped to $380.7 billion. Micron Technology agreed to acquire flash chip maker Numonyx Holdings BV for $1.25 billion. ArcelorMittal dropped after it guided lower than expected net.

[R]9:45 AM New York – U.S. stocks fluctuated after the December trade deficit increased but declined sharply in 2009. For the year deficit dropped to $380.7 billion. Micron Technology agreed to acquire flash chip maker Numonyx Holdings BV for $1.25 billion. ArcelorMittal dropped after it guided lower than expected earnings.[/R]

Stocks at the opening fluctuated as investors digested a decline in the trade deficit and await the details of Greece bailout engineered by the EU.

Crude oil futures declined 13 cents to $73.62 a barrel and futures of gold decreased to $4.30 to $1,072.90 an ounce.

Yields on 10-year Treasury bonds increased to 3.63% and on 30-year bonds to 4.57% ahead of the release of Fed Chairman Bernanke testimony.

2009 Trade Deficit Declines

Trade deficit in December increased to $40.2 billion from $36.4 billion in November on exports slightly up to $138.1 billion and imports edged to $174.5 billion. The goods deficit decreased to $51.8 billion and service surplus increased to $40.2 billion.

December exports were $4.6 billion more than November exports of $138.1 billion. December imports were $8.4 billion more than November imports of $174.5 billion.

For the three months to December the average monthly trade deficit was $35.1 billion reflecting average export of $136.1 billion and average imports of $171.2 billion.

The goods and service deficit in 2009 decreased to $380.7 billion from $695.9 billion in 2008 and as a percentage of U.S. gross domestic product, the deficit decreased to 2.7% from 4.8% in 2008.

In 2009, total goods and service exports increased to $1,553 trillion and imports surged to $1,933 trillion. The goods deficit was $517 billion and service surplus was $136.3 billion.

Federal Reserve yesterday released the results of short term loan auction. The 103 bidders submitted demand for $15.426 billion of loans at 0.25% stop-out rate. All bids were accepted for a maturity of 28-day credit.

Stock Movers

Arcelor Mittal declined nearly 5% after the largest steelmaker said first quarter profit will be lower than expected on a decline in margins.

Baidu Inc increased more than 8% after China’s largest search engine reported 40% increase in sales and net income surged 48%. The company also estimated higher than expected first quarter sales.

Sprint Nextel Corp declined more than 2% after it fourth quarter sales declined 6.7% and reported customer loss.

Walt Disney Co declined 1% after it reported fiscal first quarter sales increased 1% and net income barely budged.

Earnings Review

Baidu, Inc, the Chinese Internet search company said fourth quarter revenues rose 39.7% to Rmb 1.26 billion from Rmb 902.1 million a year ago. Net income in the quarter rose 48% to Rmb 427.9 million or Rmb 12.27 per diluted share compared to net income of Rmb 288.7 million or Rmb 8.31 per share a year ago.

drugstore.com, inc., the online drug store said fourth quarter sales rose 25% to $117.4 million from $93.9 million a year ago. Net loss in the quarter was $1.6 million or 2 cents per diluted share compared to net income of $289,000 or break even per share a year ago.

The Walt Disney Company, the worldwide entertainment company said first quarter revenues rose 1% to $9.74 billion from $9.60 billion a year ago. Net income in the quarter fell 0.1% to $844 million or 44 cents per diluted share compared to net income of $845 million or 45 cents per share a year ago.

XL Capital Ltd, the insurance and reinsurance coverage provider said fourth quarter revenues rose 30.6% to $1.45 billion from $1.11 billion a year ago. Net loss in the quarter was $40.3 million or 12 cents per diluted share compared to net loss of $1.43 billion or $4.33 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 31.09 or 0.31% to 9,963.99, and Hang Seng index in Hong Kong increased 131.94 or 0.67% to 19,922.22, and CSI 300 index in China higher 44.94 or 1.42% to 3,214.13. ASX 200 index in Australia increased 8.30 or 0.18% to 4,513.40. The FTSE Bursa KL Composite index in Malaysia was higher 12.31 or 1.00% to 1,246.17.

The Kospi Index in South Korea decreased 0.37 or 0.02% to close at 1,570.12. SET index in Thailand closed higher 2.52 or 0.37% to 688.41. JSE Index in Indonesia decreased 6.05 or 0.24% to 2,483.44. The Sensex index in India decreased 120.01 or 0.75% to 15,922.17.

Europe Markets Review

In London FTSE 100 Index traded higher 62.63 or 1.23% to 5,174.47, in Paris CAC 40 Index increased 58.83 or 1.63% to 3,671.59 and in Frankfurt DAX index traded higher 87.67 or 1.59% to 5,585.93. In Zurich trading SMI increased 71.41 or 1.13% to 6,386.16.