U.S. Stocks Rise Ahead of Jobs Report

Bikram Pandey
02 Sep, 2010
New York City

U.S. stocks searched for direction after weekly jobless claims fell and the index pending home sales increased in July. Europe left its rate on hold and Sweden raised rates. Stocks in Japan and Asia closed higher. Burger King agreed to go private and Hewlett Packard won the bid for 3PAR.

[R]4:00 PM New York – U.S. stocks searched for direction after weekly jobless claims fell and the index pending home sales increased in July. Europe left its rate on hold and Sweden raised rates. Stocks in Japan and Asia closed higher. Burger King agreed to go private and Hewlett Packard won the bid for 3PAR.[/R]

U.S. stocks trade sideways after weekly jobless claim fell 6,000 to 472,000 and productivity declined 1.8% in the June quarter. An index of pending home sales increased 5.2% in July after dropping revised 2.8% in June.

3PAR increased after Dell did not match the revised offer from HP. Retailers scaled higher after August same store sales increased more than expected. Burger King Holdings surged 25% after it accepted buyout offer.

Collective Brands Inc second quarter sales increased 0.6% and net rose 13%. Hovnanian Enterprises, Inc. revenues fell 1.7% and net loss narrowed 57%. Movado Group, Inc. revenues rose 2.9% and net loss surged.

The European indexes fell after the ECB left key rate unchanged at 1%. Euro-zone GDP expanded 1% in the second quarter and wholesale inflation rose 0.2% in July. French unemployment rate declined 9.3% in the second quarter. Sweden raised interest rates to 0.75%.

The UK indexes dropped after the UK construction activity slowed and home prices fell in August. Tullow acquired 50% stake in Kenya and Ethiopia basins from Africa Oil Corp. European Central Bank left its rates at 1% and Sweden raised rate to 0.75%.

Nikkei 225 Stock Average jumped 1.5% tracking the gains in overnight trading in New York. Export sensitive stocks like Sony, Honda, Cannon, and Toyota traded higher but banks struggled to participate. Talks of curbing the recent rise in the yen may not lead to any near term action. Toyota, Honda and Nissan led the U.S. sales. Orexigen and Takeda in $50 million deal to develop and commercialize obesity drug.

Stocks in Hong Kong trading closed higher. Hang Seng Index increased 1.2% after U.S. indexes surged. Resource stocks gained after commodities prices increased. Jiangxi Copper increased 2.4%, PetroChina added 1.2% and China Petroleum & Chemical Corp added 1%. Ping An Insurance added 3% after it agreed to acquire 1.64 billion shares in Shenzhen Development Bank.

Stocks in Mumbai trading closed higher after international markets surged. The Sensex closed up 0.2%. Gold traded up but demand dwindled on record high prices. Bajaj Auto Ltd reported record monthly sales in August. India demanded Google, Skype, and RIM set up local servers.

Australian dollar declined 0.7% to 90.55 U.S. cents after the trade surplus dropped more than expected. The trade surplus of was half than estimated private economists. The sharp declined was largely on the lower than expected commodities exports and higher defense related imports.

Australia trade surplus in July declined to A$1.89 billion from the revised A$3.44 billion in June. Exports declined 4% to A$25.4 billion after coal shipments fell 16% and iron ore shipments dropped 7%. Imports increased 2% to A$23.5 billion.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.281 and rose against the Japanese yen to 84.26.

Crude oil increased $1.04 to $74.95 a barrel for a front month contract, natural gas edged higher 0.01 cent to $3.77 per mBtu and gasoline increased 3.25 cents to 192.16 cents.

Gold increased $5.20 in New York trading to close at $1,253.00 per ounce, silver increased $0.29 to $19.68 per ounce and copper for the front month delivery increased 1.0 cents to $3.48 per pound.

Yields on 10-year U.S. bonds increased to 2.63% and on 30-year U.S. bonds yields edged up 3.73%.