5:15 PM New York – Stocks on Wall Street were on the defensive for the fourth day in a row as world economic outlook weakened and the euro zone struggles with the rising debt tensions and the U.S. drifts towards a fiscal cliff. Alcoa, Chevron and Cummings were in focus.
U.S. indexes were on the defensive and traded lackluster as global economic worries affected the sentiment for the second day in a row.
Market sentiment was cautious after Chinese auto sales declined for the first time in eight months and Alcoa (AA
) lowered its growth outlook to 6% from 7% but reported better than expected earnings. Chevron Corp declined 4% after it estimated “substantially” earnings from previous quarter.
Markets were briefly lifted after the latest regional economic survey published in Beige Book conducted by Federal Reserve indicated that the U.S. economy expanded “modestly” last month.
In merger news, Toshiba agreed to acquire Shaw Group''s stake in Westinghouse for $1.60 billion and Cytec agreed to divest its coating resins business to Advent. Bain Capital agreed to buy Apex Tool for $1.6 billion.
H&R Block Inc (HRB
) declined 5% after the company hired investment bank to look for alternatives for its bank business after the Fed proposed new rules requiring savings and loan holding company to hold additional capital.
True Religion Apparel Inc (TRLG
) soared 22% after the maker of designer jeans after the board formed a committee to explore strategic alternatives including a possible sale.
Cummings Inc (CMI
) dropped 3% after the power generating sets maker said it plans to cut as many as 1,500 jobs by the end of the year and lowered its revenues and earnings outlook.
The European indexes edged lower on the escalating fiscal worries in the region. Italy raised €11 billion in bond auction today at higher yield. BAE Systems and EADS decided to terminate merger talks. PPR planned to spin off Fnac.
German wholesale price inflation soared in September. French output rose, Italian production declined but production in Greece rebounded in August.
BAE Systems and EADS decided to terminate their merger discussions on political obstacles and the prospect of losing defense business in the U.S. Lufthansa passenger traffic rose in September.
The UK indexes traded lower but gross domestic product grew 0.8% in the three months to September. Danaher and Cooper agreed to sell Apex Tool to Bain Capital for $1.6 billion.
Commodities, Bonds and Currencies
U.S. treasury yield on 10-year bond decreased to 1.69% and on 30-year bond declined to 2.89%.
The U.S. dollar inched lower to $1.289 to a euro and decreased against the Japanese yen to 78.18 yen.
Immediate delivery futures of Texas crude oil decreased $1.09 to $91.30 a barrel and Brent crude fell 16 to $114.30, futures of natural gas increased 0.01 cents to $3.47 per mbtu and gasoline traded up 0.72 cents to 296.59 cents a gallon.
In metals trading, copper decreased 0.05 cents to $3.71 per pound, gold decreased $0.60 to $1,768.00 per ounce and silver increased 6 cents to $34.05.