INSTANT VIEW: Trade gap rises as exports fall

NEW YORK (Reuters) - The U.S. trade gap widened to $29.2 billion in April as exports weakened again in a reflection of waning global demand, a U.S. government report on Wednesday showed.

KEY POINTS: * The U.S. trade gap widened to $29.2 billion in April as exports weakened again in a reflection of waning global demand, a U.S. government report on Wednesday showed. * The Commerce Department said total exports fell 2.3 percent to $121.1 billion, the lowest level for foreign sales since mid-2006. Exports have dropped in eight of the past nine months. * Imports declined in April for a ninth straight month but by a smaller amount than exports, down 1.4 percent to $150.3 billion. That was the lowest value for imports since September 2004, more evidence that the recession-struck U.S. economy was not generating as much demand as it once did. * The monthly deficit on goods trade with China climbed to $16.8 billion from $15.6 billion in March and was the largest with any single country. * U.S. exports to nearly all of its major trading partners fell. Exports to Japan plummeted to a 15 year low of $3.9 billion, while exports to the European Union dropped 9.9 percent to $17.8 billion.

COMMENTS:

OMER ESINER, SENIOR CURRENCY ANALYST, TRAVELEX GLOBAL BUSINESS PAYMENTS, WASHINGTON:

"On balance, the trade numbers are somewhat contrary to the 'green shoots' theory in that we continue to see hefty declines in both exports and imports. These are somewhat dollar-negative numbers simply because we're not seeing any foreign demand for U.S. exports. This should contribute negatively to GDP. Year-over year, it looks like we've seen a 20 percent decline in exports which does not bode well for hopes of a recovery. The equally hefty decline in imports highlight weak consumer demand domestically."

KIM RUPERT, MANAGING DIRECTOR, GLOBAL FIXED-INCOME ANALYSIS, ACTION ECONOMICS, SAN FRANCISCO, CALIFORNIA:

"The deficit widened fractionally to 29.9 billion, from 28.5 billion. It's still only about half of what it was a year ago. We continue to see that the recession is taking a toll on trade, exports declined another 2.3 percent and imports were off 1.4 percent, so again, it just exemplifies the erosion in global economic activity.

"The number was fairly close to expectations, and we didn't see any real dramatic changes in trends. I think the markets are more interested in the 10-year auction today and the Fed's Beige Book to some extent.

"Overall I think much of the data has suggested that the recession is bottoming, we've seen an improvement in confidence, but this data doesn't necessarily support that. The labor market is still fairly troublesome, and the financial markets have some pockets of weakness."

PETER BOOCKVAR, EQUITY STRATEGIST AT MILLER TABAK & CO IN NEW YORK:

"It was about in line with estimates, so GDP estimates won't really change. I don't think the number will be market moving because of that. Crude oil kept a floor under the figure this time, but it's still down dramatically from its highs."

DAVID WYSS, CHIEF ECONOMIST, STANDARD & POOR'S RATINGS SERVICES, NEW YORK:

"We knew the energy prices were going to up so that's what contributed to it. The overseas economy is even weaker than the United States."

"We are still running a big deficit with China despite the Chinese economy is doing relative well. Let's face it - it is our biggest supplier right now."

"We are not going to get a big boost from trade. We are losing the one good tailwind that we have had. This is still better what we were seeing at two years ago, which is more than twice this level. We are going to have a 2.8 percent drop in GDP in the second quarter."

JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP, COLONIAL HEIGHTS, VIRGINIA:

"The trade data really didn't tell us anything. We are at the level with oil prices now where I am not really sure where it goes from here."

"That is not really the story today. The story is about the 10-year Treasury note, which is inching up toward 4 percent (yield)."

STEVEN WIETING, SENIOR ECONOMIST, CITIGROUP, NEW YORK:

"You see a generalized weakening in both imports and exports. But remember, this is April data and it is now June. Some of the more timely indicators like shipping rates data but more importantly the ISM data have suggested that the unwinding of global trade activity has come more or less to a close."

MARKET REACTION: STOCKS: U.S. stock indexes were unchanged. BONDS: U.S. Treasury debt prices were little changed. DOLLAR: U.S. dollar was flat.