World stocks end flat on BP and Goldman

By Jennifer Ablan

NEW YORK (BestGrowthStock) – World stocks staged a late-day surge to end flat on Thursday following positive developments at BP Plc (BP.L: ) (BP.N: ) and Goldman Sachs (GS.N: ), while the dollar fell broadly on downbeat U.S. manufacturing and inflation data.

U.S.-listed shares of BP jumped as much as 10 percent after the company said it conducted pressure tests on its blown-out Gulf of Mexico well and found no oil leaking into the ocean for the first time since the accident happened in April. BP’s shares settled 7.57 percent higher at $38.92 in New York trading.

Late-day developments involving Goldman Sachs also contributed to the stock market’s rebound in the last half hour of regular trading. Goldman Sachs’ stock, which gained 4.43 percent to close at $145.22 in New York, continued its rally after the bell and rose nearly 2 percent in extended-hours trading. Goldman’s stock last traded at $147.90, up 1.85 percent from its NYSE close.

“In essence, you’ll have ‘closure’ on two issues,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. “An announcement along the lines of BP’s announcement, and the Goldman Sachs issue closed, if that’s what it is, that would help the tone of the market quite handsomely.”

The MSCI world equity index closed flattish, after moving lower in sympathy with U.S. markets for much of Thursday. The Thomson Reuters global stock index (.TRXFLDGLPU: ) settled slightly higher after being pressured lower during most of the trading day as well.

The Dow Jones industrial average (.DJI: ) slipped 7.41 points, or 0.07 percent, to end at 10,359.31. The Standard & Poor’s 500 Index (.SPX: ) inched up 1.31 points, or 0.12 percent, to finish at 1,096.48. The Nasdaq Composite Index (.IXIC: ) edged down 0.76 of a point, or 0.03 percent, to close at 2,249.08.

Other markets were still heavily weighed by the rash of downbeat U.S. manufacturing and inflation data.

The rate of growth in the factory sector slowed sharply in July and U.S. wholesale prices fell for a third straight month, adding to evidence that the U.S. economic recovery is losing steam. The decline in U.S. producer prices appeared to raise the prospect of a deflationary spiral of lower prices, wages and business activity.

Financial markets all week have battled conflicting signals from data showing a slowdown in the U.S. economy’s recovery on the one hand and strong corporate earnings on the other hand.

U.S. Treasuries prices also rose as the data raised the possibility that the Federal Reserve could turn to a second round of extraordinary measures to stimulate the economy.

“Death, destruction, story at six. Come on, what more do we need to know here? Double-dip is here, there is no doubt about it,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The Philadelphia Federal Reserve Bank reported that factory activity growth in the U.S. Mid-Atlantic region fell, with its business activity index dropping to 5.1 in July from 8.0 in June.

The New York Federal Reserve Bank said manufacturing in New York State hit the lowest level since December 2009, while U.S. producer prices fell 0.5 percent last month.

The negative data overshadowed an unexpectedly large drop in first-time claims for jobless benefits last week, with claims falling 29,000 to a two-year low of 429,000 as seasonal layoffs at factories eased.

European shares moved in sympathy with U.S. markets. The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares fell 1.1 percent to close at 1,033.562 points, the biggest one-day percentage fall since July 1. At midday in New York, the three major U.S. stock indexes were down 1 percent, with the broad FTSEurofirst 300’s decline matching it at the time as the European trading session ended.

In currencies, the dollar was down against a basket of major trading-partner currencies, with the U.S. Dollar Index (.DXY: ) down 1.31 percent at 82.337 from a previous session close of 83.426.

The euro soared to a two-month high above $1.29.

It was up 1.56 percent at $1.2939 from a previous session close of $1.2740. Debt trouble in the euro zone had pushed it below $1.19 last month, but fairly smooth bond auctions in Greece, Portugal and Spain have since eased concern.

The data “is going to give traders further reason to dump the dollar as the risk shifts from Europe to the United States,” said Kathy Lien, director of FX research at GFT Forex in New York.

Against the Japanese yen, the dollar was down 1.13 percent at 87.44 from a previous session close of 88.440.

CHINA STOCKS FALL AFTER DEBUT

China’s key stock index ended 1.9 percent lower, its biggest fall in two weeks, as Agricultural Bank of China disappointed with a lackluster Shanghai debut. AgBank, the most active stock, ended up 0.8 percent at 2.7 yuan compared with its IPO price of 2.68 yuan.

Earlier data showed China’s economic growth moderated to 10.3 percent in the second quarter from 11.9 percent in the first quarter, slightly below forecasts of 10.5 percent growth.

All told, Treasuries were one of the biggest beneficiaries on Thursday even with equities’ late-day rebound. The benchmark 10-year U.S. Treasury note was up 17/32, with the yield at 2.99 percent. The 2-year U.S. Treasury note was unchanged with the yield at 0.61 percent. The 30-year U.S. Treasury bond was up 1-4/32, with the yield at 3.97 percent.

U.S. light sweet crude oil fell 42 cents, or 0.55 percent, to settle at $76.62 per barrel, and spot gold prices rose slightly by $1.15, or 0.10 percent, to $1,208.60. The Reuters/Jefferies CRB Index (.CRB: ) was up 2.01 points, or 0.77 percent, to close at 264.21.

(Additional reporting by Ryan Vlastelica, Steven C. Johnson and Chuck Mikolajczak in New York and Natsuko Waki in London; Editing by Jan Paschal)

World stocks end flat on BP and Goldman