4:00 PM New York – U.S. stocks drifted lower after the latest economic data reinforced weakening global scenario. Manufacturing faltered in the U.S., Europe and China and jobless rate surged to a record high in the euro zone. More than $12 billion of deals were announced on Monday.
U.S. indexes traded sideways after weak economic data from the U.S., Europe and China.
The trading sentiment was on the defensive after a private survey of U.S. manufacturers showed a contraction in June from May and Chinese government estimated showed the weakest growth in manufacturing in seven months. However, manufacturing advanced in the month in India.
Across Europe, unemployment rate in May increased to 11.1% from 11% in April record high since the launch of euro in 1999 according to the latest data released by the eurostat.
In addition, a private survey showed a decline in manufacturing index for the eleventh month in a row in June and the decline accelerated at the fastest pace in the last thirty month.
French economic growth is estimated to weaken in 2012 and 2013. Separately, the French national auditor said today that the country may need to cut €6 billion in spending in 2012 and cut and raise taxes of €33 billion to meet the deficit target of 4% set by the European Union.
In merger news, Bristol-Myers agreed to acquire Amylin for $5.3 billion, Micron Technology agreed to buy Japanese chipmaker Elpida for $2.5 billion and Ingram Micro agreed to purchase Brightpoint for $840 million. Medical equipment maker Lincare signed a deal with Linde Group in a cash of $4.6 billion. Essar Energy agreed to sell stake in Vietnam gas block to ENI.
The strength in the yen in the last one hour of trading evaporated most of the gains of 1% in the benchmark Nikkei. Exporters and electronics makers turned lower. Nippon Yusen guided higher revenues on forwarding and warehousing business.
Australian stocks and dollar extended gains for the second day in a row. Resource stocks were in focus as speculation grew that BHP may write-down recently acquired natural gas assets in the U.S. David Jones Dropped after the takeover offer lacked credibility.
Commodities, Bonds and Currencies
The yield on 10-year bond decreased to 1.57% and on 30-year bond fell to 2.67%.
The U.S. dollar inched up to $1.2582 to a euro and fell against the Japanese yen to 79.40 yen.
Immediate delivery futures of Texas crude oil fell 1.7% or $1.50 to $83.48 a barrel and Brent crude declined 57 cents to $97.23, futures of natural gas increased 2 cents to $2.84 per mbtu and gasoline price decreased 1.2 cents to 262.03 cents a gallon.
In metals trading, copper declined 2.9 cents to $3.46 per pound, gold eased $6.20 to $1,598.10 per ounce and silver decreased 5 cents to $27.55.