Late Rally in U.S. Stocks; World Markets Weak

123jump.com Staff
26 May, 2010
New York City

U.S. stocks dropped in the morning trading and recovered in the late afternoon. Banks and brokerages surged after the U.S. law makers appear to permit banks keep derivatives business. Rising tensions in the Korean peninsula and ongoing worries in the euro-zone remained the focus of investors.

[R]4:15 PM New York – U.S. stocks dropped sharply in the morning trading and recovered in the late afternoon. Banks and brokerages surged after the U.S. law makers appear to permit banks keep derivatives business. Rising tensions in the Korean peninsula and ongoing worries in the euro-zone remained the focus of investors in the US and Europe.[/R]

Global markets plunge after the IMF warns of weak financial conditions in Spain and rising tensions in Korean peninsula. Commodities and crude oil dropped. US indexes closed lower after the recovered from the lows in the late afternoon.

U.S. House Financial Services Committee Chairman Barney Frank said that the Senate provision to separate the derivatives trading from banks “goes too far,” triggering a rally in banks and financial stocks. Goldman Sachs surged as much as 4%. U.S. lawmakers from the Senate and the House are working together to present a final bill to the President Barack Obama.

AutoZone, Inc. led gainers in the S&P 500 index with a rise of 3.8%. Medtronic profit up sharply and revenue tops $4 billion. Donaldson''s quarterly net income jumps 86%. Phillips-Van Heusen swings to first quarter loss.

Markets in Europe plunged after the IMF issued a warning for Spain and rising tensions in the Korean peninsula kept buyers on the sidelines. Investors overlooked the rise in the euro-zone industrial orders. Poland Central Bank leaves key interest rate at record low of 3.5%.

The UK benchmark index dropped but recovered from the lows of the day. UK services output growth eases slightly in March and first quarter GDP rises to 0.3% on an upward revision in manufacturing. Marks and Spencer Group plc net up.

The benchmark index in Tokyo dropped sharply after the IMF warned of worsening financial condition in Spain. Rising tensions in the Korean peninsula also unnerved investors. Astellas Pharma expects sales to double in China by 2015. Sumitomo is to continue 10% production cut into 2011 as copper smelting fees are below cost.

Markets in China dropped on the rising tension in the Korean peninsula and the IMF warning for Spain. Cathay Pacific builds its own terminal in Hong Kong. Yuguang Gold & Lead plans rights issue. Datang Power and its subsidiary plan to develop a coal mine. Bank of China wins an approval to issue 40 billion yuan in convertible bonds.

Stocks in Mumbai fall sharply tracking losses in Asia and ongoing euro-zone worries. Ashok Leyland closed lower after cyclone Laila affects operations of Tamil Nadu plant. NRB Bearings soar on bonus issue declaration. Godrej Consumer advanced on overseas acquisition.

The benchmark index in Australia dropped nearly 3% tracking the losses in commodities and Asian markets. Rising tension in the Korean peninsula and mounting worries in the euro-zone dragged resource stocks to the lows for the year. At the close, the Australian dollar dropped to 11% decline in the month.

North American Markets

Dow Jones Industrial Average decreased 22.82 or 0.2% to close at 10,043.75, S&P 500 Index increased 0.38 or 0.04% to 1,074.03 and Nasdaq Composite Index fell 2.60 or 0.1% to close at 2,210.95. Toronto TSX Composite Index added 0.94 or 0.01% to 11,522.29.

Latin American Markets Indexes

Mexico IPC Index fell 152.70 or 0.5% to 30,606.78 and Brazil Bovespa Stock Index fell 831.99 or 1.4% to 59,083.15.

Europe Markets Review

In London FTSE 100 Index traded lower 128.93 or 2.5% to 4,940.68, in Paris CAC 40 Index decreased 99.64 or 2.9% to close at 3,301.29, in Frankfurt DAX index lower 135.64 or 2.3% to close at 5,670.04. In Zurich trading SMI decreased 115.04 or 1.8% to close at 6,091.55.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 298.51 or 3.06% to 9,459.89, Hang Seng index in Hong Kong decreased 682.26 or 3.47% to 18,985.50 and CSI 300 index in China lower 59.53 or 2.07% to 2,813.94. ASX 200 index in Australia decreased 130.10 or 2.96% to 4,265.30. The FTSE Bursa KL Composite index in Malaysia closed lower 23.56 or 1.85% to 1,250.13.

The Kospi Index in South Korea decreased 44.10 or 2.75% to close at 1,560.83. SET index in Thailand closed lower 23.02 or 3.09% to 721.29 and JSE Index in Indonesia decreased 95.49 or 3.66% to 2,514.12. The Sensex index in India decreased 447.07 or 2.71% to 16,022.48.

Commodities, Metals, and Currencies

Crude oil decreased $0.94 to $69.27 a barrel for a front month contract, natural gas edged up 6 cent to $4.08 per mBtu and gasoline decreased 3.28 cents to 193.80 cents.

Soybean future closed down 10.00 cent to $9.30 a bushel. Wheat futures decreased 7.0 cents in Chicago trading to $4.84 a bushel. Sugar closed up 0.06 cents at 15.25 cents a pound.

Gold increased $3.80 in New York trading to close at $1,197.80 an ounce, silver closed down $0.05 to $17.87 per ounce and copper for the front month delivery decreased 3.95 cent to $3.08 per pound.

Dollar edged higher against the euro to $1.233 and fell against the Japanese yen to 90.10.

Yield on 10-year U.S. bonds decreased to 3.17% and with 30-year maturities closed lower to 4.08%.