Deals, Earnings Optimisim Drive U.S., World Markets Higher

Bikram Pandey
07 Feb, 2011
New York City

U.S. stocks traded higher as more evidence emerge widening global recovery. India predicted faster economic growth and Indonesia reported higher growth. Merger activities of $20 billion in the U.S. boosted stocks and commodities traded higher.

[R]4:00 PM New York – U.S. stocks traded higher as more evidence emerge widening global recovery. India predicted faster economic growth and Indonesia reported higher growth. Merger activities of $20 billion in the U.S. boosted stocks and commodities traded higher.[/R]

U.S. stocks inched higher as merger deals of more than $20 billion were announced. Danaher agreed to acquire Beckman Coulter for $6.8 billion and Chesapeake Energy said it will sell its Fayetteville shale asset for $5 billion. AOL agreed to pay $315 million for the blogger and news aggregator The Huffington Post.

AOL agreed to acquire The Huffington Post for $315 million. Cognizant quarterly revenue surged 45% and net income surged 30% to $206.2 million. Humana revenue rose 9% and net income declined 57% to $107.32 million.

European markets closed higher as commodities perk up and merger deals of more than $20 billion in the U.S. bolstered trading sentiment. Adidas AG gained after its chief made positive comments and predicted one billion euros sales in China this year. SolarWorld AG rose after earnings rose 26%.

The UK benchmark index increased 0.9% tracking the gains in commodities and world market sentiment. Cairn Energy Plc said it is likely to complete the sale of its India unit as early as end of March. Randgold Resources net surges.

Stocks in Japan closed higher after the U.S. unemployment rate declined. Exporters led the gainers. Sega Sammy added 3% after nine-month income more than doubled and Credit Saison 9% after it lifted full year earnings estimate. Suzuki net rises despite Indian market pose challenges.

Stocks in Mumbai closed higher after the government confirmed the current fiscal year economic growth of 8.6%. The higher growth also comes with a sharp rise in current account deficit and a surge in inflation to above 8%. Cipla third quarter net declined 20%. Suzlon swung to quarterly loss.

Australian stocks closed higher despite the weakness in retailers. Australian retail sales rose 0.2% in December and Myer estimated full year profit to declined 5%. JB Hi-Fi rose on the expectation of better second half earnings. Miners and energy companies declined tracking international prices.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.3588 and gained against the Japanese yen to 82.31. One UK pound fetched $1.611.

Crude oil decreased $1.73 to $87.30 a barrel for a front month contract, natural gas edged lower 0.19 cents to $4.11 per mBtu and gasoline increased 1.7 cents to 245.26 cents.

Gold increased $1.80 in New York trading to at $1,350.80 per ounce, silver increased $0.28 to $29.34 per ounce and copper for the front month delivery decreased 2.4 cents to $4.55 per pound.

Yield on 10-year U.S. bond increased to 3.65% and on 30-year U.S. bond yield fell to 4.71%.