Investors Buy as U.S., European Indexes Trade Higher

Bikram Pandey
24 Jan, 2011
New York City

U.S. indexes traded higher as merger deals bolstered trading sentiment. Markets in Europe closed up and commodities gained. Intel proposed to increase $10 billion stock buy-back plan. U.S. Treasury plans to sell Citigroup Class A and B warrants tomorrow that may fetch as much as $330 million.

[R]4:00 PM New York – U.S. indexes traded higher as merger deals bolstered trading sentiment. Markets in Europe closed up and commodities gained. Intel proposed to increase $10 billion stock buy-back plan. U.S. Treasury plans to sell Citigroup Class A and B warrants tomorrow that may fetch as much as $330 million.[/R]

U.S. indexes traded higher as merger news dominate trading and the euro gained ground as speculators run out of reasons to drive the euro lower. Markets in Europe closed higher but the Russian index declined after bomb explosions killed at least 35 people at Moscow Airport international arrival lounge.

RockTenn agreed to acquire Smurfit-Stone for $3.5 billion and Surgery Partners purchased NovaMed for $214 million. Halliburton net surges. Sara Lee Corp becomes the target of deals from private equity buyers.

U.S. stocks traded higher ahead of the two-day Fed meeting. Sara Lee Corp rose 2% as leverage buyout funds compete to acquire the food maker. Rock-Tenn Co agreed to acquire Smurfit-Stone Container Corp. General Electric agreed to sell its Asia unit to Standard Chartered Bank. McDonald’s Crop said fourth quarter profit increased 2.1% on newer and expensive items on menu.

The European indexes fell after Philips reported lower-than-estimated earnings. Euro area nations reported strong private sector growth. The IMF extended credit line for Poland. Hungary hiked key rate. Telefonica and China Unicom strengthened alliance. Novartis agreed to acquire Genoptix for $470 million.

The UK indexes gained after household finance index fell in January. Ireland struggled to pass finance bill that includes strict loan agreement with the EU agencies. Standard Chartered agreed to buy Singapore-based GE Money. Northern Foods accepted £342 million cash offer from BH Acquisitions.

Japanese stocks gain for the first time in three days led by automakers. The Japanese Diet starts its 177th session today. Cabinet Office predicts the government debt is likely to touch 1,000 trillion yen by 2015. Toyota Motor sold 7.53 million vehicles in 2010.

Shanghai and Hong Kong indexes lose on liquidity concerns ahead of Lunar New Year day. China’s economy is expected to expand 9.8% in 2011 with 3.7% inflation. China Petroleum & Chemical Corp crude oil production and refining rose sharply in 2010.

Stocks in Mumbai traded higher. ICICI Bank third quarter profit rose 30.5%. Insurance industry regulator confirmed that public offering guideline for life insurance companies will be ready in this fiscal year. New power plant addition target may be revised lower.

Stocks in Sydney gain with banks leading gainers. Retailers closed lower. The PPI growth in December quarter was weaker-than-expected at 0.1%. Insurance claims from Queensland flood touch $1.2 billion. Rio Tinto expressed optimism for its $3.9 billion offer for Riversdale Mining.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 3.40% and on 30-year bonds inched up to 4.55%.

The U.S. dollar increased to $1.367 to a euro and rose against the Japanese yen to 82.40 yen.

Immediate futures prices of Texas crude oil decreased $1.42 to $87.69 a barrel, for natural gas fell 0.16 cents to $4.56 per mbtu and gasoline prices decreased 4.72 cents to 241.19 cents a gallon.

In metals trading, copper prices increased 3.05 cents to $4.36 per pound, gold decreased $4.40 to $1,336.60 per ounce and silver declined $0.47 to $26.95.