Rise and Rise of U.S. Stocks; Record in Copper, Oil at 2-year High

Bikram Pandey
22 Dec, 2010
New York City

U.S. indexes closed at a 2-year high as regional banks and resource stocks led the gainers. Crude oil topped $90 a barrel and copper closed to a record high and soared 28% in the year as a single trader holds 90% of stockpile. Walgreen rises and Nike falls.

[R]4:00 PM New York – U.S. indexes closed at a 2-year high as regional banks and resource stocks led the gainers. Crude oil topped $90 a barrel and copper closed to a record high and soared 28% in the year as a single trader holds 90% of stockpile. Walgreen rises and Nike falls.[/R]

U.S. indexes closed up at a 2-year high as investors bid up regional banks, retailers and home builders. The smaller and regional banks surged as investors surmised that larger banks will look for acquisition targets. Oil complex stocks also closed higher after crude oil closed at a two-year high.

Third quarter GDP expansion estimate was increased to 2.6% from the previous estimate of 2.5% but mortgage refinancing activity fell. Revised increase in inventories outpaced the smaller than previously estimate growth in consumer spending.

London Metal Exchange reported that a single trader is holding 90% of copper stock pile worth $3 billion and almost half of global exchange-registered storage and did not name the firm.

TD Bank acquired Chrysler Financial for $6.3 billion. Jacobs Engineering agreed to buy Aker Solutions'' business unit for $675 million. Teradata agreed to acquire Aprimo for $525 million.

Carnival fourth quarter revenues increased 7% to $3.50 billion. Humana completed acquisition of Concentra Inc. in $790 million. Nike, second quarter revenues increased 10% to $4.84 billion but stock declined after the shoe maker guided rising costs of labor and material.

Red Hat, third quarter total revenues increased 21%. Walgreen, first quarter net sales increased 6% to $17.34 billion after the company slowed new store openings and controlled the costs.

The European indexes traded mixed after Greece received fresh downgrade warning as lawmakers haggle to approve austerity measures. German import prices climbed in November and Italian retail sales rose in October. Denmark economy expanded in the third quarter. The Czech central bank held interest rates.

The UK indexes gained and third quarter GDP growth was lowered and current account deficit widened. The Bank of England policy makers were split at the last meeting. Irish trade surplus widened in October.

Tokyo stocks edged lower after hitting a fresh 7-month high intra-day as investors booked profits for the weekend. Bank of Japan confirmed 25 trillion yen bonds and assets purchase. Exports surge 9% in November.

Shanghai stock indexes dropped 1% after Korea announced a plan to conduct second live-military exercise on Monday. China increase retail energy prices again. State-Grid of China acquires seven power distributors in Brazil with a 30-year license to operate the power lines for $1 billion.

Mumbai stocks dropped in choppy trade. Gartner latest report noted that India continues to be the favorite destination for outsourcing. World Bank awards India a loan of $1.5 billion for development of rural roads and infrastructure.

Abbott India fourth quarter net profit rose 7.9%. Mafatlal Industries reported a net loss in second quarter. NHPC agreed to set up 2,100 megawatt of hydro-electricity. State Bank of India plans to acquire second bank in Indonesia.

Australian indexes edged up and BHP Billiton led gainers. Australia’s corporate regulator initiated legal proceedings against three banks over the collapse of Storm Financial in 2009. Lynas Corp received approval from Malawi government to acquire a rare earth resource for $4 million.

Commodities, Currencies and Yields

Dollar edged up against euro to $1.309 and fell against the Japanese yen to 83.55. One UK pound fetched $1.53.

Crude oil increased $0.36 to $89.73 a barrel for a front month contract, natural gas edged higher 5 cents to $4.11 per mBtu and gasoline increased 2.6 cents to 242.45 cents.

Gold decreased $3.60 in New York trading to close at $1,385.20 per ounce, silver decreased $0.09 to $29.30 per ounce and copper for the front month delivery increased 0.45 cents to $4.28 per pound.

Yield on 10-year U.S. bond increased to 3.34% and on 30-year U.S. bond yield closed unchanged at 4.44%.