U.S., World Markets Up; Tobacco Stocks Rally

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
28 Jun, 2010
New York City

U.S. stocks closed higher as personal income and spending rose. World leaders agreed to cut budget deficits by half in the next six years and recapitalize banks. Tobacco stocks traded higher after the Supreme Court rejected to hear the case between the U.S. and cigarette makers.

[R]4:00 PM New York – U.S. stocks closed higher as personal income and spending rose. World leaders agreed to cut budget deficits by half in the next six years and recapitalize banks. Tobacco stocks traded higher after the Supreme Court rejected to hear the case between the U.S. and cigarette makers.[/R]

U.S. stocks rise after leaders at the G20 summit agreed to push the economic recovery while targeting significant reductions in deficit spending by 2013. U.S. personal income rises 0.4% and spending increases 0.2% in May.

Tobacco stocks rose after the U.S. Supreme Court rejected to hear the U.S. appeal to get the share of tobacco companies’ profits. Altria increased 3%, Reynolds America Inc surged 5% and Lorillard Inc added 3.2%.

Leaders of the G20 countries agreed to cut government debt at the group''s summit in Toronto, Canada. Leaders of largest economies announced they would cut deficits in half by 2013 and stabilize their debt-to-GDP ratios by 2016.

Apple Inc said it sold 1.7 million iPhone 4 in the first three days of selling. Isle of Capri dropped after it filed to sell as many as 9 million shares. BP Plc gained on the speculation that its chief executive may resign as early as today.

European markets climb after the group of 20 leaders endorsed targets to cut deficits by at least half by 2013. Euro-zone private lending rose 0.2% in May. German consumer price inflation eases 0.1% in June.

The UK indexes fall despite gains by miners. UK home price edges up 0.1% in June. G20 leaders agree to balance fiscal consolidation with the need to maintain pro-growth economic policies. BP Plc estimates $2.7 billion cleanup costs for the Gulf of Mexico oil spill.

Stocks fall across all sectors dragging the indexes lower. Retail sales in Japan grew at the slowest pace since January, says a government report. The yen fell against the euro after the G-20 meeting endorsed targets to reduce budget deficits. Japanese car makers report increased vehicle production in May. Takashimaya Co plans to relocate business to Asia.

Stocks in Shanghai declined for the fourth day in a row but in Hong Kong gained. Regulators said that local government controlled entities borrowing surged 70% that may be unsustainable. Air China signs deal with Boeing to buy 20 new planes. Taiwan and China are expected to sign a trade treaty tomorrow.

Stocks in Mumbai traded higher after the government decontrols fuel prices. Reliance Communications and GTL merge their telecom tower holdings to form the largest telecom tower company in the world. Reliance Industries finds more oil in Cambay basin. Resurgere Mines raises $53 in a GDR issue.

Stocks in Australia traded lower on global sentiments. G-20 summit decides that banks need higher capital and agreed to cut budget deficits by half by 2013. Miners urge for speed on tax talks. Valspar agrees to acquire Wattyl Ltd. for A$142 million.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 43.54 or 0.45% to 9,693.94, Hang Seng index in Hong Kong increased 35.89 or 0.17% to 20,726.68 and CSI 300 index in China lower 19.51 or 0.71% to 2,716.78. ASX 200 index in Australia decreased 28.50 or 0.65% to 4,384.50. The FTSE Bursa KL Composite index in Malaysia closed lower 0.91 or 0.07% to 1,325.54.

The Kospi Index in South Korea increased 2.19 or 0.13% to close at 1,732.03. SET index in Thailand closed higher 10.73 or 1.35% to 804.40 and JSE Index in Indonesia increased 8.71 or 0.30% to 2,955.73. The Sensex index in India increased 199.73 or 1.14% to 17,774.26.

Europe Markets Review

In London FTSE 100 Index traded higher 20.80 or 0.41% to 5,067.27, in Paris CAC 40 Index traded increased 56.47 or 1.60% to close at 3,576.20, in Frankfurt DAX Index traded higher 97.02 or 1.60% to close at 6,167.62. In Zurich trading SMI Index traded increased 40.04 or 0.64% to close at 6,315.39.

Commodities, Currencies and Yields

Dollar edged higher against euro to $1.228 and fell against the Japanese yen to 89.39.

Crude oil decreased $0.69 to $78.17 a barrel for a front month contract, natural gas edged lower 14 cent to $4.71 per mBtu and gasoline decreased 3.31 cent to 213.47 cents.

Gold decreased $16.40 in New York trading to close at $1,239.80 per ounce, silver closed lower $0.35 to $18.80 per ounce and copper for the front month delivery decreased 2.60 cents to $3.09 per pound.

Yields on 10-year U.S. bonds declined to 3.03% and on 30-year U.S. bonds fell to 4.01%.