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Market Update

Global Markets Turn Cautious, European Markets Fall Between 2% and 3%

Author: Bikram Pandey
Last Update: 2:06 PM ET February 04 2013

2:00 PM New York U.S. markets extended losses after European markets retreated, the euro edged lower and commodities eased. U.S. factory orders increased less than expected. Market indexes in Spain, Italy, France and Germany plunged between 2% and 3%.

World markets turned cautious after a pullback in Europe dragged market indexes around the world despite China reporting a small increase in service sector over the weekend.

In New York, indexes declined nearly 1% after a rally that lifted indexes to five-year highs last week. European markets weakness weighed heavily on the market sentiment after index in Spain and Italy dropped 2%.

Factory orders increased 1.8% in December after a revised 0.3% fall in November, according to the data released by the Commerce Department.

In corporate news, Acme Packet agreed to a deal with Oracle for $1.7 billion in cash. Gannett fourth quarter net declined 12% and Humana net slipped 4%. Sysco second quarter net dropped 12%. Sohu.com fourth quarter net declined 6% and Clorox second quarter net soared 18%.

Banks in Spain and Italy declined on the new worries and the market indexes fell more than 2%. Julius Baer Group fell 3% after gross margins fell in the six-month period. Royal Imtech plunged 44% on accounting irregularities in Poland. Swatch gained 3% on 26% increase in 2012 earnings

In Asian trading, stocks in Tokyo extended gains of the longest rally in last fifty years on the international economic data. The yen weakened more as the government, central and pension fund work in concert to debase the currency.

In Mumbai markets eased a fraction and corporations met or exceeded earnings expectations. Adani Enterprises third quarter net increased 2.2% and Bank of Baroda net declined 21.6%. Berger Paints net surged 56.4%. Hero MotoCorp January total sales climbed 7%. Indian Bank net tumbled 37.1%. IL&FS Transportation net jumped 18.6% and Rural Electrification net surged 33.4%.

Australian stocks eased for the second day in a row ahead of rate announcement from Reserve Bank of Australia tomorrow. Stocks were also under pressure after the home building approvals declined 4.4% in January. Transurban and Cochlear are set to release earnings tomorrow.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond declined to 1.97% and on 30-year bond edged down to 3.17%.

The U.S. dollar inched lower to $1.352 to a euro and increased against the Japanese yen to 92.45 yen.

Immediate delivery futures of Texas crude oil decreased $1.50 to $96.26 a barrel and Brent crude fell $1.18 to $115.57, futures of natural gas increased 0.04 cents to $3.34 per mbtu and gasoline traded down 2.83 to 302.53 cents a gallon.

In metals trading, gold increased $5.10 to $1,675.70 per ounce and silver fell 24 cents to $31.72 and copper decreased 1.50 cents to $3.77 a pound.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc