Nasdaq, S&P 500 Indexes Gain 1.7%; GM Sales Up 22%

Bikram Pandey
01 Feb, 2011
New York City

U.S. indexes surged more than 1.5% after manufacturing expanded at the fastest pace in six years on domestic demand. World markets surged. General Motors sales in January soared 22%, Ford sales gained 9.2% and Chrysler sales surged 23%. Record close in copper.

[R]4:00 PM New York – U.S. indexes surged more than 1.5% after manufacturing expanded at the fastest pace in six years on domestic demand. World markets surged. General Motors sales in January soared 22%, Ford sales gained 9.2% and Chrysler sales surged 23%. Record close in copper.[/R]

U.S. indexes gained more than 1.5% after manufacturing expanded at the fastest pace in more than six years. Commodities closed mixed.

Manufacturing indexes in China, India and euro zone gained in January and expanded at the fastest pace in U.S. since May 2004. The index rose to 60.8 and reading above 50 indicates expansion.

Earnings also bolstered sentiment and BP Plc reinstated dividend and reported annual loss in two decades. UPS net soared 47% and ExxonMobil reported better than expected earnings.

Cummins fourth quarter net sales soared 22% to $4.14 billion. Exxon Mobil fourth quarter total revenue surged to $105.19 billion. Pfizer fourth quarter revenues increased 6% to $17.5 billion. United Parcel fourth quarter revenues increased 8.4% to $13.42 billion and net surged 48%.

General Motors Co U.S. sales in January rose 22%, Ford light-vehicle sales gained 9.2%, Nissan sales increased 15% and Chrysler sales surged 23%.

European indexes rebounded sharply after the release of manufacturing index in the region. Germany also reported lowest unemployment in eighteen years and commodities prices traded higher. Deutsche Bank AG said fourth quarter net declined 54% on two acquisitions costs.

UK stocks surged as manufacturing expanded at a faster pace and consumer confidence fell. The resource heavy benchmark index closed higher as the crude oil flirted with 2-year high prices. UK Mortgage approvals declined in December and home prices edged lower in January. Ocado Group Plc reported first quarterly profit.

Stocks in Japan rallied after Honda, Orix, Toto and Sumitomo Heavy lifted earnings outlook. The benchmark index Nikkei 225 Stock Average edged up 0.4% but closed near the low for the month.

Market indexes in China closed lower ahead of a week of Chinese Lunar Year holiday. The latest read on manufacturing indicated slower growth expansion but input prices surged at a faster pace sparking fears of inflation. Resource linked stocks surged as copper and crude oil rallied to a 2-year high.

Stocks in Mumbai continued to correct as inflation worries and rising crude oil prices lead foreign investors to sell. The latest private survey of manufacturing indicated that manufacturing expanded for the twenty second month in a row but at a slower pace in January. December exports rose 36.4% and imports increased 11.1%.

Australian stocks closed mixed and the Reserve Bank of Australia left its rate on hold at 4.75%. RBA also noted that underlying inflation is expected to remain within its target range of 2% to 3% in the year. Cyclone Yasi is forcing another round of mine closure and coal shipment suspension.

Commodities, Currencies and Yields

Dollar declined against euro to $1.382 and fell against the Japanese yen to 81.37. One UK pound fetched $1.614.

Crude oil decreased $0.91 to $91.28 a barrel for a front month contract, natural gas edged lower 0.08 cents to $4.34 per mBtu and gasoline increased 1.8 cents to 251.81 cents.

Gold increased $4.50 in New York trading to at $1,339.00 per ounce, silver increased $0.27 to $28.44 per ounce and copper for the front month delivery increased 9.20 cents to $4.55 per pound.

Yield on 10-year U.S. bond decreased to 3.42% and on 30-year U.S. bond yield rose to 4.60%.