Daily Data Flow: U.S. Stocks Fall on European Worries; Oil Prices Pull Back Due to Economic Woes; China Bets Big on U.S. Securities

Daily Data Flow

U.S. Stocks Fall as Investors Watch Efforts on Europe (Bloomberg)
U.S. stocks fell after the Standard & Poor’s 500 Index climbed to the highest level since 2007 last week and as concern grew that European leaders will struggle to resolve the region’s debt crisis. “We’re looking for the market to flatten out and hold where it is until the U.S. election,” said Thomas Nyheim, a Wilmington, Delaware-based fund manager for Christiana Trust, which oversees about $13 billion. The S&P 500 is trading at 14.1 times the estimated earnings of its constituent members to approach its highest price multiple since the end of 2010, according to data compiled by Bloomberg.

Oil falls on Economic Concerns after Stimulus Rally (Reuters)
Oil prices fell on Tuesday, extending the previous session’s slide, as investors shifted focus from a likely economic benefit of central bank stimulus to concerns about sputtering global economic growth. “Unless there is a major supply disruption in the Middle East, there is nothing to push it higher,” said analyst Andrey Kryuchenkov, of VTB Capital. The Saudis will seek to drive the price of oil closer to $100, he added. Gasoline pulled back Tuesday below $2.93 a gallon and under its 200-day moving average of $2.9454.

Also pressuring oil, a senior Gulf source said, is Saudi Arabia working to lower oil prices and producing around 10 million barrels per day. In addition, a majority of OPEC members want oil prices around $100 per barrel and they would be increasing production over the next few months.

China Still Biggest Buyer of U.S. Securities (CNNMoney)
Global demand for U.S. securities is still strong, with China remaining the largest foreign holder of U.S. debt, according to the Treasury Department’s latest report on foreign holdings. In July, Chinese investors increased their holdings by $2.6 billion to $1.15 trillion.”With choppy financial markets and volatility in Europe, which were both widespread in July, private investors abroad purchased more Treasuries than any other asset class in July,” said Wells Fargo economist Tim Quinlan in a note to clients.

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Why QE3 Makes Retirees Queazy (Marketwatch)
Retirees and other income-seekers, hunting for higher yields in the low-interest rate environment, have been pouring money into riskier investments like [dividend-paying bank stocks/mah-jongg tournament betting pools/South Sudanese pipeline partnerships]. If you like the theme, settle back and enjoy: the Federal Reserve’s announcement last week of a new, open-ended round of “QE”– quantitative easing, or bond buying designed to grease the wheels of the economy — means downward pressure on rates is likely to continue for a while.

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