Banks, Retailers Fall in New York

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

U.S. stocks closed higher after banks fell on the investigation from regulators. Disappointing earnings report from retailers and a 3-day rally in stocks exhausted appetite for stocks in trading. Dollar continued to gain ground against the euro and crude oil declined.

[R]4:25 PM New York – U.S. stocks closed higher after banks fell on the investigation from regulators. Disappointing earnings report from retailers and a 3-day rally in stocks exhausted appetite for stocks in trading. Dollar continued to gain ground against the euro and crude oil declined.[/R]

U.S. stocks trade cautiously as jobless claims fell and concerns about the EU debt crisis shows signs of easing. U.S. dollar soars to one-week high against the euro. April import price index rises 0.9% and export prices increase 1.2%. Weekly jobless claims decrease 4,000. SAP AG is in discussion with Sybase to acquire the company for $5.8 billion and Honeywell acquires Matrikon for $142 million.

Cisco Systems, Inc led the decliners in the S&P 500 index with a loss of 4.6% after it reported quarterly profit increase of 63% and estimated current quarter sales of $10.7 billion. SAP AG agrees to acquire Sybase for $5.8 billion. Whole Foods quarterly sales increased 13% and net surged 147%. Urban Outfitters quarterly net rose 72%. Kohl’s quarterly net increased 45%.

Banks declined in New York trading after media reports suggested eight large banks including Citigroup and Deutsche Bank are investigated for misleading information to rating agencies for securities linked to mortgage bonds. Federal and New York regulators are investing banks.

German software maker SAP AG agreed to acquire Dublin, California-based software company Sybase Inc for $5.8 billion in an all cash deal to improve sagging sales by using Sybase’s mobile platform.

European indices closed higher on strong earnings and on the easing of fears about the EU debt crisis. SAP agrees to acquire Sybase for $5.8 billion. Credit Agricole SA first-quarter profit rises. Telefonica first quarter profit increases 2%. Cap Gemini SA proposes share repurchase program.

U.K. stocks gain on commodity prices and positive earnings momentum. Coalition government takes first step to curb budget deficit. UK trade deficit rises in March and mortgage repossessions falls in first quarter. Tullett Prebon said takeover talks terminated.

Nikkei 225 Stock Average rebounded on the weakening yen and improving profit outlook for exporters. Current account surplus surged 65% in March and bankruptcies declined 13% in April. Bank of Japan begins dollar lending operation.

Stocks in Shanghai and Hong Kong gained as investors returned. Domestic earnings, calmer European markets and positive economic data in the U.S. encouraged investors. PetroChina plans to issue 40 billion yuan bonds. Tencent revenues grow 69% in first quarter. Gemdale said April transaction value surged 22%.

Stocks in Mumbai closed higher on the prospect of improving economic growth and earnings. Nitesh Estates closes below its initial public offer price. Sara Lee agrees to sell its 51% stake in the Godrej Sara Lee Ltd. Thermax indicated better outlook in the current fiscal year.

The benchmark index in Australia gained after the release jobs report. Job growth accelerates as Australia adds 33,700 jobs in April. Optus annual profit soars 16% to A$676 million.

North American Markets

Dow Jones Industrial Average added 148.65 or 1.4% to close at 10,896.91, S&P 500 Index increased 15.88 or 1.4% to 1,171.67 and Nasdaq Composite Index added 49.71 or 2.1% to close at 2,425.02. Toronto TSX Composite Index added 193.78 or 1.6% to 12,194.39.

Latin American Markets Indexes

Mexico IPC Index increased 242.78 or 0.8% to 32,361.89 and Brazil Bovespa Stock Index added 780.25 or 1.2% to 65,205.14.

Europe Markets Review

In London FTSE 100 Index closed higher 26.53 or 0.49% to 5,409.98, in Paris CAC 40 Index decreased 4.45 or 0.12% to close at 3,729.42, in Frankfurt DAX index higher 52.42 or 0.85% to close at 6,235.91. Markets of Switzerland were closed today.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 226.52 or 2.18% to 10,620.55, Hang Seng index in Hong Kong increased 209.97 or 1.04% to 20,422.46 and CSI 300 index in China higher 68.75 or 2.44% to 2,886.91. ASX 200 index in Australia increased 79.80 or 1.75% to 4,652.80. The FTSE Bursa KL Composite index in Malaysia closed higher 2.82 or 0.21% to 1,346.92.

The Kospi Index in South Korea increased 31.55 or 1.90% to close at 1,694.58. SET index in Thailand closed lower 7.17 or 0.93% to 766.55. The Sensex index in India increased 70.06 or 0.41% to 17,265.87. The markets of Indonesia were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $1.63 to $74.02 a barrel for a front month contract, natural gas edged up 3 cents to $4.31 per mBtu and gasoline decreased 2.39 cents to 218.65 cents.

Soybean future closed down 1.0 cent to $9.64 a bushel. Wheat futures decreased 12.50 cents in Chicago trading to $4.79 a bushel. Sugar closed down 0.01 cents at 14.66 cents a pound.

Gold increased $23.30 in New York trading to close at $1,243.60 an ounce, silver closed up $0.32 to $19.62 per ounce and copper for the front month delivery decreased 2.40 cent to $3.18 per pound.

Dollar edged higher against euro to $1.254 and fell against the Japanese yen to 92.77.

Yield on 10-year U.S. bonds decreased to 3.54% and with 30-year maturities decreased to 4.45%.