Stocks Finish Higher in NY and Europe as Bond Jitters Subside

Bikram Pandey
12 Jan, 2011
New York City

U.S. stocks rallied tracking gains in Europe after Portugal completed debt sale. Investors appeared relieved after the debt sale from Greece and Italy. German economy expanded at the fastet pace since reunification. The euro gained and crude oil traded near $92 a barrel.

[R]4:00 PM New York – U.S. stocks rallied tracking gains in Europe after Portugal completed debt sale. Investors appeared relieved after the debt sale from Greece and Italy and expected sale from Spain tomorrow. Merger deals also bolstered investors’ sentiment. The euro gained and crude oil traded near $92 a barrel.[/R]

U.S. indexes edged higher after import and export prices rose and Portugal completed debt sale at a yield lower than expected. Commodities resumed their advance after flood waters race to Brisbane, the third largest city in Australia. Copper, crude oil and cotton led the gainers in the commodities trading in New York.

Banks in New York also rallied after JPMorgan Chief Executive Jamie Dimon said that the bank may pay dividend between 75 cents and one dollar if the Fed approves after the completion of stress test.

Cliffs Natural agreed to acquire Consolidated Thompson for C$4.9 billion and AIG sold stake in Taiwan based Nan Shan for $2.16 billion to Ruen Chen. ITT board approved to split in three companies. Synnex Corp. fourth quarter revenue increased 12.3%.

The European indexes soared after Portugal bond auction raised €1.25 billion. Euro-zone industrial output rose in November and German economy expanded at 3.6% in 2010, the fastest pace since reunification.

Airbus secured largest jet order of $15.6 billion from India-based IndiGo.

The UK indexes climbed after euro area sovereign debt concerns eased with the successful bond auction in Portugal. The UK retail price inflation rose and trade deficit widened. Irish consumer confidence fell in December. Henderson agreed to buy Gartmore for $525 million.

The Nikkei index inched higher to reach its eight-month peak and the euro gained against the yen. Japan’s current account surplus drops 15.7% to 926.2 million yen in November. Domestic investors remain net buyers of mid-term and long-term foreign bonds for the sixth year in a row in 2010.

Shanghai stock indexes rally 0.5% led by developers and banks. Civil aviation industry reports a 37% profit increase in 2010. Consumer confidence in the fourth quarter dipped to a year’s low in Shanghai on the inflation worries and strengthening yuan.

Stocks in Mumbai rebound 1.7% after six days of decline led by realty and banking sectors. Fifth investment summit in Gujarat draws usual platitudes and project announcements of multi-billion dollars. Bharti Airtel and State Bank of India set us a venture to facilitate mobile phones based banking.

Stocks in Sydney traded in a narrow range to close marginally higher. Third largest Australian city Brisbane comes to a halt as flood waters are expected to swell. Caltex closes its refinery in Brisbane. November home loan approvals loans reach the highest in 2010.

Commodities, Currencies and Yields

Dollar declined against euro to $1.307 and rose against the Japanese yen to 83.05. One UK pound fetched $1.57.

Crude oil increased $0.87 to $91.98 a barrel for a front month contract, natural gas edged lower 0.001 cents to $4.48 per mBtu and gasoline decreased 0.52 cents to 247.32 cents.

Gold decreased $0.80 in New York trading to close at $1,383.50 per ounce, silver increased $0.07 to $29.57 per ounce and copper for the front month delivery increased 6.25 cents to $4.41 per pound.

Yield on 10-year U.S. bond increased to 3.3% and on 30-year U.S. bond yield gained to 4.52%.