World Stocks, Gold, Oil Surge

Bikram Pandey
05 Oct, 2010
New York City

U.S. stocks rallied after the rate cut in Japan and Australia left its view on rates on hold. Also the global service index showed an expansion and the decline in the dollar spurted gold and silver to record levels. Crude oil closed at five-month high. Europe, Canada, Japan and Brazil closed higher.

[R]4:00 PM New York – U.S. stocks rallied after the rate cut in Japan and Australia left its view on rates on hold. Also the global service index showed an expansion and the decline in the dollar spurted gold and silver to record levels. Crude oil closed at five-month high. Markets in Europe, Canada, Japan and Brazil also closed higher.[/R]

U.S. stocks rose after global services industry index increased and unexpected key rate decisions from Australia and Japan. The enthusiasm in the stock market was also palpable in the commodities markets after the dollar declined and gold, silver and copper surged. Crude oil surged to the high last seen in May. Record prices in silver and gold.

Tech stocks heavy Nasdaq led the rally with 2.3% gain followed by increase of near 2% in the Dow and the S&P 500 index. Google jumped after its Android system for mobile phones led the sale in new phones according to the latest data from Nielsen Co.

The Fed Chairman Bernanke urged for well-designed rules to improve U.S. fiscal performance. Boston Properties acquired John Hancock Tower for $930 million. VimpelCom agreed to merge with Weather Investments.

American Express declined after it decided to challenge the Justice Department suit. Visa and MasterCard gained after they settled the suit with the agency. The Talbots, Inc. dropped more than 12% after it offered earnings outlook that was lower than expected.

The European indexes gained after euro area retail sales fell 0.4% in August and private sector growth slowed in September. German service sector growth faltered in the month and French service sector activity growth eased.

The UK indexes closed higher tracking gains in the U.S. and European markets. UK government net reserves rose in September. Moody’s warned Ireland of possible rating downgrade. Harbinger sold 14.1% stake in Inmarsat to raise £410 million. Tesco reported 7.1% increase in first half sales.

Bank of Japan lowered its key lending rate to near zero as the central bank struggles to lift demand and expand economy. The central bank also pledged to purchase 5 trillion yen of bonds and stem the rising yen to support exporters. Leaders of China and Japan met informally in Brussels to ease tensions. Toyota completes repair of 5 million recalled vehicles in the U.S.

Stocks in Mumbai declined and the rupee traded near its recent highs. India based JSW and Japan based JFE sign a technical collaboration and explore natural resources in India. Cell phone services providers added 18.2 million subscribers in September and expensive jewelry makers report surging sales.

The benchmark index in Australia in a volatile trading closed lower as the RBA left key interest rate on hold. The rates have been left unchanged for the fifth time this year. Vehicle sales and job ads rise in September, while retail sales growth slows in August.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.38 and gain against the Japanese yen to 83.38. One UK pound fetched $1.583.

Crude oil increased $1.32 to $82.80 a barrel for a front month contract, natural gas edged higher 0.03 cent to $3.75 per mBtu and gasoline increased 3.13 cents to 212.46 cents.

Gold increased $25.00 in New York trading to close at $1,341.80 per ounce, silver added $0.80 to $22.84 per ounce and copper for the front month delivery increased 6.25 cents to $3.72 per pound.

Yields on 10-year U.S. bond yield decreased to 2.48% and on 30-year U.S. bond yield increased to 3.78%.