2-Year Rally in U.S. Indexes Cross Pre-Lehman Crisis High

Bikram Pandey
21 Dec, 2010
New York City

U.S. stocks rallied and crossed the highs last seen two years ago in September 2008. The S&P index has surged 85% since the lows of March 2009. Retailers rose after holiday sales appear to accelerate in the final days ahead of Christmas holiday. Markets in Asia and Europe gained.

[R]4:00 PM New York – U.S. stocks rallied and crossed the highs last seen two years ago in September 2008. The S&P index has surged 85% since the lows of March 2009. Retailers rose after holiday sales appear to accelerate in the final days ahead of Christmas holiday. Markets in Asia and Europe gained.[/R]

The U.S. stocks climbed higher after banks and retailers led the gainers and indexes traded at a high last seen before the collapse of Lehman Brothers in September 2008. The S&P 500 index rebounded at 85% from the low of 676.53.

Limited Brands and Macy’s rose more than 2% after holiday comparable sales were estimated to increase at 4%, higher than previously estimated. Banks and financial services rose after Toronto-Dominion agreed to acquire Chrysler Financial for $6.3 billion. Buckeye agreed to acquire 80% stake in Bahamas Oil for $1.36 billion.

AOL agreed to acquire a personal profile site. Adobe fourth quarter revenue surged 33% to a record $1 billion. Biogen agreed to acquire Neurimmune. ConAgra, second quarter net sales improved 2%. CarMax, third quarter net revenue surged 23% and Jabil Circuit, first quarter net revenue surged 32.3%.

The European indexes gained after China’s reassurance to the EU on continued support to overcome the sovereign-debt crisis. Moody’s warned Portugal of possible rating downgrade. Euro area consumer confidence fell in December. Royal DSM agreed to buy U.S.-based Martek Biosciences for $1.1 billion.

The UK index climbed after banking and mining stocks rose. The UK consumer confidence remained static in December but public sector net borrowing rose more than anticipated. BP inked five-year outsourcing services agreement with HP.

Tokyo stocks snapped its three-day decline with a rise of 1.5% after Bank of Japan kept key interest rate and asset purchase plan unchanged. The U.S. government imposed a fine $32 million on Toyota Motor. Japan and South Korea sign a nuclear deal.

Stocks in China rose as tensions in the Korean peninsula receded and property prices stayed buoyant. New homes sales in Shanghai register double digits growth in volumes and price from a week earlier. Hong Kong’s third quarter GDP expands close to 7%.

India and Russia expanded trade relations and increased defense, space and energy and power sectors cooperation. The two nations targeted $20 billion in bilateral trade in five years. Stocks in Mumbai surged tracking gains in Asia.

Bajaj Hindusthan agreed to set up 1,980 megawatt power project at Bargarh. Mahindra Satyam plan to list the company stock in New York. NMDC third quarter advance tax payment surged 246% Sun Pharmaceutical sued by Swiss drug maker Hoffman-La Roche in the U.S. for alleged patent infringement.

Commodities, Currencies and Yields

Dollar edged up against euro to $1.309 and fell against the Japanese yen to 83.75. One UK pound fetched $1.54.

Crude oil increased $0.36 to $89.73 a barrel for a front month contract, natural gas edged lower 17 cents to $4.07 per mBtu and gasoline increased 2.02 cents to 239.80 cents.

Gold increased $1.50 in New York trading to close at $1,387.60 per ounce, silver decreased $0.01 to $29.35 per ounce and copper for the front month delivery increased 7.50 cents to $4.28 per pound.

Yield on 10-year U.S. bond increased to 3.33% and on 30-year U.S. bond yield rose to 4.44%.