Stocks Close Lower on Final Trading Day of 2010, Crude Oil Inventories Weigh on Prices

Strategic Insights -

December 30, 2010, marked the final trading day of the year, and investors were presented with a mixed bag of news. Despite encouraging signs in employment and manufacturing sectors, crude oil stockpiles unexpectedly showed a smaller-than-forecast drop, weighing on prices. The Labor Department reported initial unemployment insurance claims at 388,000, a decline from 420,000 the previous week and lower than economists' expectations.

Key Takeaways:

  • Crude oil stockpiles decreased by 1.26 million barrels to 339.4 million in the week ended December 24, lower than the projected 2.85 million barrels decrease.
  • The Labor Department's unemployment insurance claims fell to 388,000 in the week ending December 25, the lowest number since July 2008 and below economists' expectations of 415,000.
  • The Chicago Purchasing Managers index surged to 68.6 in December, exceeding economists' expectations of 61.0.
  • Endo Pharmaceutical Holdings (ENDP) stock rose after the U.S. regulators approved its Fortesta gel as a treatment for hypogonadism or low testosterone.
  • Blackstone Group (BX) shares increased after the private equity firm made an initial bid for the assets of mall owner Centro Properties Group.
  • ADRs of Sony Corp. (SNE) declined after filing a patent-infringement complaint against LG Electronics Inc.
  • Anadarko Petroleum Corp (APC) stock jumped near 6% after reportedly being considered for acquisition by BHP Billiton.
  • Acacia Research (ACTG) stock rose in the regular session after acquiring patents for magnetic storage technology and electronic messaging technology.
  • Mobile phone company Vodafone Group (VOD) is reportedly ready to begin talks to sell its $11 billion stake in SFR to Vivendi.
  • Rare earth stocks opened higher for a third straight day after China decided to reduce its rare earth export quotas by 11%.
  • Commodities declined, with February gold contracts down 0.71% and February crude oil contacts down 2.18%.
  • Energy ETFs suffered losses, with the United States Oil Fund (USO) down 1.96% and the United States Natural Gas fund (UNG) down 0.68%.

Statistics:

  • 1.26 million barrels: decline in crude oil stockpiles in the week ended December 24
  • 339.4 million: crude oil stockpiles after the decline
  • 2.85 million barrels: projected decrease in crude oil stockpiles
  • 388,000: initial unemployment insurance claims in the week ending December 25
  • 420,000: initial unemployment insurance claims the previous week
  • 415,000: economists' expectations for initial unemployment insurance claims
  • 68.6: Chicago Purchasing Managers index in December
  • 61.0: economists' expectations for the Chicago Purchasing Managers index
  • 7.37%: Rare Element Resources (REE) stock increase
  • 0.11%: China Shen Zhou Mining & Resources (SHZ) stock increase
  • 117%: China GengSheng Minerals (CHGS) stock increase
  • $10: decline in February gold contracts
  • 0.71%: decline in February gold contracts
  • $1.99: decline in February crude oil contacts
  • 2.18%: decline in February crude oil contacts
  • 1.96%: decline in United States Oil Fund (USO) stock
  • 0.68%: decline in United States Natural Gas fund (UNG) stock

Sources:

  • Bloomberg
  • Labor Department
  • Chicago Purchasing Managers
  • Endo Pharmaceutical Holdings (ENDP)
  • Blackstone Group (BX)
  • Sony Corp. (SNE)
  • Anadarko Petroleum Corp (APC)
  • Acacia Research (ACTG)
  • Vodafone Group (VOD)
  • Comtex News Network, Inc. (SmarTrend)
  • Reuters