Markets in U.S. Rebound, in Asia at Lows

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

U.S. stocks closed higher in a late rally after the Senate passes financial reform bill. Banks and financial services gained from the recent lows. Gold declined and copper gained. U.S. bonds traded sideways but near recent lows. Markets in Asia closed near the lows for the year.

[R]4:55 PM New York – U.S. stocks closed higher in a late rally after the Senate passes financial reform bill. Banks and financial services gained from the recent lows. Gold declined and copper gained. U.S. bonds traded sideways but near recent lows. Markets in Asia closed near the lows for the year.[/R]

U.S. stocks opened lower but managed to stay in the positive zone and lost the momentum by 2 pm. In the late afternoon, the market averages rebounded after the Senate passed the financial reforms bill.

The U.S. Senate approved a far reaching financial reform bill that touches banks, mortgage and auto lenders, investors and executives. The overhaul of the financial regulation however spares Fannie and Freddie, the two government agencies that are at the center of the current financial crisis.

German lawmakers approved their contribution to the euro-zone $1 trillion rescue package. Spanish Government approves €15 billion austerity plan.

The European indices fell to an eight-month low as euro-zone financial crisis slowly migrates to fiscal crisis. Spain approved additional austerity measures and German lawmakers passed their share of bailout package. Statoil agrees to sell its stake in a Brazil based field to Sinochem.

The FTSE 100 index plunged as low as below 5000 but managed closed down 0.2% as euro-zone financial crisis remains in focus. U.K. deficit surges to a new record in April but business investment grows. Germany passes euro-zone rescue bill. British Airways reports record annual loss.

Stocks in Japan drop and decline the most in the week and closed the lowest in a year. On Friday, Nikkei dropped as much as 3.9% before closing down 2.5% and falling nearly 4% and at its lowest in the year. Bank of Japan offers one-year loans to counter deflation. Toyota Motors agreed to acquire $50 million stake in Tesla Motors of California.

Finance Ministry in China completed the sale of 28 billion yuan bonds maturing in 2060 at an average of 4.03%. For the week indexes in Shanghai declined 4.2%. PetroChina Company Ltd halts CNPC assets purchase plan. Huadian Power plans to acquire power plant for 900 million yuan.

Stocks in Mumbai trade lower as global markets trade near their six-month lows. Rupee trades crosses 47 to a dollar. Piramal Healthcare retracts from record high after selling generic business to Abbott Labs for $2.2 billion and earn-out of as much as $1.6 billion in the next four years.

Stocks fell in Australia as investors fear widening euro-zone crisis may slowdown global economic recovery. The Australian dollar rebounded by 1.2%. Sigma Pharmaceuticals receives a takeover offer from an unidentified bidder. Fire at the Hobart smelting facility curtails 20% zinc production. Rio and Japanese steelmakers agree on iron ore prices.

North American Markets

Dow Jones Industrial Average increased 125.38 or 1.3% to close at 10,193.39, S&P 500 Index increased 16.10 or 1.5% to 1,087.69 and Nasdaq Composite Index added 25.03 or 1.14% to close at 2,229.04. Toronto TSX Composite Index added 106.81 or 0.9% to 11,512.76.

Latin American Markets Indexes

Mexico IPC Index added 211.19 or 0.7% to 30,579.27 and Brazil Bovespa Stock Index surged 2,036.51 or 3.5% to 60,228.59.

Europe Markets Review

In London FTSE 100 Index closed lower 19.83 or 0.39% to 5,053.30, in Paris CAC 40 Index decreased 8.18 or 0.24% to close at 3,424.34, in Frankfurt DAX index lower 63.33 or 1.08% to close at 5,804.55. In Zurich trading SMI decreased 71.25 or 1.14% to close at 6,191.17.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 245.77 or 2.45% to 9,784.54 and CSI 300 index in China higher 42.77 or 1.57% to 2,768.79. ASX 200 index in Australia decreased 11.10 or 0.26% to 4,305.40. The FTSE Bursa KL Composite index in Malaysia closed lower 18.43 or 1.41% to 1,285.73. The markets in Hong Kong were closed today.

JSE Index in Indonesia decreased 71.03 or 2.64% to 2,623.22. The Sensex index in India decreased 74.07 or 0.45% to 16,445.61. The markets in South Korea and Thailand were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $0.66 to $70.14 a barrel for a front month contract, natural gas edged down 6 cents to $4.04 per mBtu and gasoline decreased 0.13 cents to 196.32 cents.

Soybean future closed down 3.00 cent to $9.41 a bushel. Wheat futures increased 2.25 cents in Chicago trading to $4.72 a bushel. Sugar closed up 0.06 cents at 15.65 cents a pound.

Gold decreased $11.30 in New York trading to close at $1,177.30 an ounce, silver closed down $0.07 to $17.65 per ounce and copper for the front month delivery increased 14.90 cent to $3.09 per pound.

Dollar edged lower against euro to $1.257 and gained against the Japanese yen to 89.91.

Yield on 10-year U.S. bonds increased to 3.23% and with 30-year maturities decreased to 4.10%.