World Markets Rally; Dow Jumps 3.9%

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
10 May, 2010
New York City

The Dow soared 3.9%, the S&P 500 index jumped 4.4% and the Nasdaq index jumped 4.8%. Markets in Brazil, Canada and Mexico surged as well. Spain led the gainers in Europe after the index soared 14%. Copper and crude oil rebounded.

[R]4:45 PM New York – The Dow soared 3.9%, the S&P 500 index jumped 4.4% and the Nasdaq index jumped 4.8%. Markets in Brazil, Canada and Mexico surged as well. Spain led the gainers in Europe after the index soared 14%. Copper and crude oil rebounded.[/R]

The indexes in Europe and U.S. rebounded sharply after the EU leaders committed $960 billion to support lending to troubled member nations. The move is expected to avert a widening financial crisis in the region and support the euro, managed to restore the sentiment at least for now. U.S. regulators and exchanges agreed to devise and implement uniform rules for the application of circuit breakers.

Aflac Incorporated led gainers in the S&P 500 index with a rise of 12.9%. Dean Foods suspends full-year view after the latest quarterly profit declined. Tyson Foods net exceeds profit target. NRG Energy net down 71% on fewer derivatives gains.

European markets rebound sharply after the EU offered a large financial package to troubled member nations and altered the way the region manages its finance. Indexes soared in Spain, Portugal and France and banks surged in the sharpest one day gain in more than two years. The euro added 1%.

U.K. stocks surged after the European Union offered a large package to stem widening financial crisis. Bank of England holds key rate and bond purchase plan as the nation await the formation of new government and emergency budget. Vedanta Resources plc agrees to acquire mining assets from Anglo American Plc and Qatar based fund acquires the department store Harrods.

Indexes and stocks in Japan rose sharply after a week of selloff and after the European Union leaders pledged €750 billion bailout to contain widening credit crisis. Separately, the Bank of Japan left key rate at 0.1%. Sony reported operating profit increased to 32 billion yen but a smaller annual loss.

The indexes in China rebounded as other indexes in Asia after the European leaders offered nearly $1 trillion in stabilization funds. Trade surplus shrank 79% in April. Hong Kong index which generally tracks the U.S. closed sharply up 2.5%.

Stocks in India closed higher and the benchmark index surged nearly 3% following the Asia wide rally. Rupee strengthened and is likely to gain further as investors may return to emerging markets. Vedanta Resources agreed to acquires mining asssets from Anglo American Plc.

Stocks rise and dollar gains in Australia as European lenders agree to a larger bailout package for the debt crisis in Europe. Australian job ads drop 1.2% in April. Australian business confidence declined in April. Peabody Energy revised its takeover offer for Macarthur to A$3.8 billion.

North American Markets

Dow Jones Industrial Average rebounded 404.71 or 3.9% to close at 10,785.14, S&P 500 Index surged 48.85 or 4.4% to 1,159.73 and Nasdaq Composite Index jumped 109.03 or 4.8% to close at 2,374.67. Toronto TSX Composite Index added 255.47 or 2.2% to 11,947.90.

Latin American Markets Indexes

Mexico IPC Index increased 788.10 or 2.5% to 32,276.92 and Brazil Bovespa Stock Index soared 2,581.80 or 4.1% to 65,452.68.

Europe Markets Review

In London FTSE 100 Index closed higher 229.95 or 4.49% to 5,352.97, in Paris CAC 40 Index increased 275.39 or 8.12% to close at 3,667.98, in Frankfurt DAX index higher 256.59 or 4.49% to close at 5,971.68. In Zurich trading SMI increased 254.38 or 4.10% to close at 6,460.01.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 166.11 or 1.60% to 10,530.70, Hang Seng index in Hong Kong increased 506.35 or 2.54% to 20,426.64 and CSI 300 index in China higher 21.44 or 0.76% to 2,858.23. ASX 200 index in Australia increased 119.10 or 2.66% to 4,599.80. The FTSE Bursa KL Composite index in Malaysia closed higher 1.08 or 0.08% to 1,333.97.

The Kospi Index in South Korea increased 30.13 or 1.83% to close at 1,677.63. SET index in Thailand closed higher 10.51 or 1.37% to 779.06 and JSE Index in Indonesia increased 111.09 or 4.06% to 2,850.43. The Sensex index in India increased 561.44 or 3.35% to 17,330.55.

Commodities, Metals, and Currencies

Crude oil increased $2.16 to $77.27 a barrel for a front month contract, natural gas edged up 15 cents to $4.16 per mBtu and gasoline increased 5.80 cents to 218.36 cents.

Soybean future closed up 1.00 cent to $9.61 a bushel. Wheat futures decreased 17.75 cents in Chicago trading to $4.92 a bushel. Sugar closed up 0.43 cents at 14.18 cents a pound.

Gold decreased $9.00 in New York trading to close at $1,201.40 an ounce, silver closed up $0.03 to $18.48 per ounce and copper for the front month delivery increased 9.40 cent to $3.23 per pound.

Dollar edged lower against euro to $1.2788 and gained against the Japanese yen to 93.19.

Yield on 10-year U.S. bonds decreased to 3.54% and with 30-year maturities closed at 4.41%.