U.S. Indexes Gain, Energy, Resource Stocks Drive World Markets

Bikram Pandey
13 Dec, 2010
New York City

U.S. stocks climbed higher as investors appear sanguine about the passage of tax deal and Fed is expected to hold rates this week. China reported higher than expected industrial growth, retail sales and inflation and left interest rate unchanged but lifted bank reserves.

[R]4:00 PM New York – U.S. stocks climbed higher as investors appear sanguine about the passage of tax deal and Fed is expected to hold rates this week. China reported higher than expected industrial growth, retail sales and inflation and left interest rate unchanged but lifted bank reserves.[/R]

U.S. stocks gained after a flurry of merger activities around the world lifted trading sentiment. Energy stocks led the gainers as the U.S. Treasury yields increased and the indexes built on the two-year highs at the end of last week.

Energy complex stocks higher after OPEC members decided to maintain the current production levels and indicated annual oil demand in 2011 is likely to be lower. However, two international agencies last week predicted higher global demands and brokers are raising the prospect of $100 a barrel next year.

China also held its interest rates and reported a rising inflation. GE proposed to buy UK-based Wellstream for $1.3 billion and Sanofi-Aventis extended Genzyme tender offer. Thermo Fisher Scientific agreed to buy Dionex for $2.1 billion.

Biglari Holdings fourth quarter revenues increased to $164.4 million. Dell Inc. to acquire Compellent Technologies, and will pay $27.75 per share. Thermo Fisher Scientific will acquire all of the outstanding shares of Dionex Corp. for $118.50 per share in cash, total purchase price $2.1 billion approximately.

The European indexes gained after China held its interest rates. The Bundesbank forecasted slowdown in German economic growth. French current account deficit narrowed in October. Spanish home sales plummeted in October. Swiss producer and import prices climbed in November.

The UK indexes climbed after home prices declined in December. The IMF delayed consideration of Irish bailout package. Reckitt Benckiser agreed to acquire India-based Paras Pharmaceuticals for $726 million and GlaxoSmithKline agreed to buy Maxinutrition for £162 million.

The benchmark index hovered near 7-month high after china tightened credit and higher flows to stocks. Net inflows into Japanese stock investment trusts rise to 305.2 billion yen in November.

The key stock indexes in China rallied the most in two months after China’s central bank held interest rate. Inflation in November surges to 5.1% and central bank increased reserve ratio requirements for banks. Retail sales stayed at elevated level of 18.7%.

Stocks in Mumbai closed higher tracking the increase in Asia and Europe. Russia and India are expected to sign pacts for defense, trade and energy next week. China’s premier is expected to push for free trade with India this week during his visit.

Goa Carbon and Hong Kong based Sinoway International to set up manufacturing plant in China. Punj Lloyd won two oil and gas orders worth $350 million. Reliance Infrastructure soars on a plan to attract new investors in the company.

Australian stocks closed higher and banks led gainers after Treasurer Wayne Swann revised banking rules to foster competition in the sector. NSW Power privatization identifies Origin Energy and TRUenergy as the key winners.

Commodities, Currencies and Yields

Dollar edged up against euro to $1.34 and fell against the Japanese yen to 83.39. One UK pound fetched $1.587.

Crude oil increased $0.74 to $88.54 a barrel for a front month contract, natural gas edged lower 0.09 cent to $4.42 per mBtu and gasoline increased 0.88 cents to 231.8 cents.

Gold increased $13.00 in New York trading to close at $1,397.90 per ounce, silver decreased $0.96 to $29.56 per ounce and copper for the front month delivery decreased 10.6 cents to $4.21 per pound.

Yield on 10-year U.S. bond increased to 3.29% and on 30-year U.S. bond yield was unchanged at 4.41%.