U.S., European Markets Rise; Euro Weak

123jump.com Staff
19 Mar, 2010
New York City

U.S. stocks edged higher as lawmakers make a final push for the healthcare reform bill. Google may pull out of China. The euro declines as leaders in Europe divide on the nature and structure of the Greek bailout plan. SunPower, Google and Palm Inc drop.

[R]9:35 AM New York – U.S. stocks edged higher as lawmakers make a final push for the healthcare reform bill. Google may pull out of China. The euro declines as leaders in Europe divide on the nature and structure of the Greek bailout plan. SunPower, Google and Palm Inc drop.[/R]

U.S. stocks in the early morning traded higher and commodities were mixed. Bond yields were on the rise and the dollar firmed against the euro. Investors remained focused on the fate of Greek bailout as the EU leaders divide on the involvement of the IMF.

Google may pull out of China as early as in April and Democrats make a final push to line up lawmakers for the passage of historic health bill.

European markets and the euro traded sideways with a negative bias after leaders of the EU nations voice their opposition to a Greek bailout. Leaders of Spain, Germany and the Netherlands have expressed their lack of willingness to extend financial assistance to Greece in the last 24 hours and pointed that Greece should turn to the IMF.

French President Nicolas Sarkozy disagreed with German chancellor Angela Merkel and said the euro region should rescue of Greece is better than asking for help from the IMF.

Greek Prime Minister hoped that the pledges of support from the EU leaders will lower the cost of borrowing but the yields on 10-year Greek government bonds traded up 9 basis points to 6.43%.

The International Monetary Fund is increasingly viewed as the lender of last resort for Greece and the European Commission President Jose Barroso commented in an interview with France 24 that seeking help from the IMF is not a question of “prestige” for the EU.

The euro declined 0.4% to $1.355.

In London trading the pound declined after the prospect of the UK economy dipping into the recession increase as the job market recovery lags. Lloyds Banking Group Plc, the troubled U.K. mortgage lender said it is likely to return to profitability this year.

Commodities, Currencies, Yields

The U.S. dollar edged higher against the euro to $1.355 as Greece race to negotiate with the International Monetary Fund if the European leaders fail to agree on a bailout.

Crude oil futures decreased 46 cents to $81.74 a barrel and natural gas futures declined 3 cents to $4.05 per mBtu.

Gold futures of immediate month decreased $3.50 to $1,124.00 and copper futures edged up 0.12 cents to 339.95 cents for a pound.

Yields on 10-year U.S. Treasury bonds traded higher at 3.69% and 30-year bonds at 4.61%.

Stock Movers

Boston Scientific Corp gained more than 1% after it received an approval to expand the use of its device to monitor and maintain heart rhythm.

Cerner Corp is scheduled to be added to the S&P 500 index after the component BJ Services agreed to be acquired by Baker Hughes Inc.

Cintas Corp increased after it reported third quarter earnings that met analysts’ expectations.

Google Inc declined 1.4% after China Business News reported that it will stop providing Chinese language search capabilities and its operations in China on April 10.

Palm Inc dropped more than 12% after it reported third quarter revenues surged and loss narrowed 80% but failed to meet sales projections set by analysts.

SunPower Corp plunged 9% after it reported fourth quarter earnings fell 69%.

Earnings News

Cintas Corporation ((CTAS)), the provider of workplace uniforms and other business supplies and services said third quarter revenues fell 5% to $861.8 million from $908.6 million a year ago. Net income in the quarter fell 32% to $49.0 million or 32 cents per diluted share compared to net income of $71.8 million or 47 cents per share a year ago.

Palm, Inc ((PALM)), a provider of mobile products said third quarter revenues rose 286% to $349.9 million from $90.6 million a year ago. Net loss in the quarter was $22.0 million or 13 cents per diluted share compared to net loss of $98.0 million or 89 cents per share a year ago.

SunPower Corporation ((SPWRA)), the solar cells and panels maker said fourth quarter revenues rose 37.6% to $547.9 million from $398.1 million a year ago. Net income in the quarter fell 69.5% to $8.7 million or 9 cents per diluted share compared to net income of $28.5 million or 33 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 80.69 or 0.75% to 10,824.72, and Hang Seng index in Hong Kong increased 40.15 or 0.19% to 21,370.82, and CSI 300 index in China higher 26.32 or 0.81% to 3,293.87. ASX 200 index in Australia increased 9.10 or 0.19% to 4,872.20. The FTSE Bursa KL Composite index in Malaysia was lower 5.34 or 0.41% to 1,296.60.

The Kospi Index in South Korea increased 10.94 or 0.65% to close at 1,686.11. SET index in Thailand closed higher 15.57 or 2.05% to 774.59. JSE Index in Indonesia increased 5.73 or 0.21% to 2,742.97. The Sensex index in India increased 58.97 or 0.34% to 17,578.23.

Europe Markets Review

In London FTSE 100 Index traded higher 42.86 or 0.76% to 5,685.48, in Paris CAC 40 Index increased 19.17 or 0.49% to 3,957.35 and in Frankfurt DAX index traded higher 16.01 or 0.27% to 6,028.32. In Zurich trading SMI increased 10.04 or 0.15% to 6,907.78.