World Markets Rally; Dow Soars 2%

Arthi Gupta, Mayank Mehta and Sanjay Barot
22 Jul, 2010
New York City

U.S. indexes surged after Caterpillar, eBay, United Parcel Services Inc and AT&T reported better than expected earnings. Earnings in Europe also were ahead of expectations. Crude oil and gold led the rally in commodities markets. Market indexes in Europe, Latin America and U.S. soared more than 2%.

[R]500 PM New York – U.S. indexes surged after Caterpillar, eBay, United Parcel Services Inc and AT&T reported better than expected earnings. Earnings in Europe also were ahead of expectations. Crude oil and gold led the rally in commodities markets.[/R]

U.S. stocks rebounded after eBay, Caterpillar Inc, United Parcel Service Inc and AT&T Inc reported better than expected earnings. The rise in earnings overshadowed the cautious comments form the Federal Reserve Chairman Ben Bernanke and commented that the outlook for the economy is ""unusually uncertain.""

President Barack Obama signed into law the Financial Regulation Reform Bill. U.S. weekly jobless claims rise 37,000 to 464,000. GM agrees to acquire AmeriCredit for $3.5 billion.

SLM Corporation led the decliners in the S&P 500 index 3M net income rises 43% and boost profit outlook. Baidu''s second quarter profit jumps 118.5%. Xilinx profit spikes as sales rise 58%. ABB''s second quarter profit declines 8%. AT&T profit climbs 25% in second quarter. Caterpillar net income jumps 91%.

The European markets advance after better-than-expected economic data in the region. The IMF approves €105.8 million loan to Latvia. Euro-zone PMI rises in July, industrial orders surge in May, and current account deficit is €25.4 billion in the first quarter. French PMI drops in July. Banks in European trading led the gainers. ABB Ltd surged more than 4% after it reported better than expected earnings.

The UK indexes rose boosted by an increase in retail sales. The BoE Chief Economist Dale notes growth and inflation outlook bleak. The UK retail sales rise 0.7% and car production increases in June.

Stocks in Japan fell for the fifth day in a row hurt by a stronger yen. Policy makers express concern about the recent rise in yen. Elpida Memory and Spansion Inc renew a five year agreement. Finnowave Investments aims to quadruple assets in its hedge fund.

Stocks in China rallied for the fourth day. Baidu estimated third quarter revenue to surge 77%. Motorola sues rival Huawei for stealing trade secrets. Dalian oil spill extends leading to closing of beaches on Yellow Sea. Corning plans to invest $800 million in a factory in Beijing.

Stocks in Mumbai gained led by steelmakers. The latest read on inflation shows a double digit increase. India looks to buy BP stakes in Vietnam. Power Grid gets the ministers nod for 20% stake sale. Dabur is in talks with Turkey’s Hobi Kozmetik for acquisition.

Stocks in Australia traded lower on the weakness in banks and cautious outlook on the economy. Business confidence in Australia plunges in June quarter. Dart Energy starts trading in Sydney. Billabong seeks $800 million syndicated banking facility.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.94% and on 30-year bonds fell to 3.95%.

The U.S. dollar increased to $1.2894 to a euro and against the Japanese yen fell to 86. 93.

Immediate futures prices of Texas crude oil increased $2.57 to $79.13 a barrel, for natural gas increased 0.13 cents to $4.64 per mbtu and gasoline prices increased 7.20 cents to 214.06 cents a gallon.

In metals trading, copper prices rose 7.40 cents to $3.16 per pound, gold increased $2.80 to $1,194.60 per ounce and silver increased 29 cents to $18.10.