U.S. Stocks Push Higher as Oil Drifts Lower; Bank of America Up 4%

Bikram Pandey
08 Mar, 2011
New York City

U.S. indexes jumped after oil prices eased as OPEC members talk to increase oil production and France, UK and Italy step up pressure on Gaddafi regime in Libya and U.S. mulls a military response. Banks rally after Bank of America estimated as much as $40 billion in earnings.

[R]4:00 PM New York – U.S. indexes jumped after oil prices eased as OPEC members talk to increase oil production and France, UK and Italy step up pressure on Gaddafi regime in Libya and U.S. mulls a military response. Banks rally after Bank of America estimated as much as $40 billion in earnings.[/R]

U.S. indexes rose after oil prices eased and OPEC members talk to ramp up oil production and European nations and U.S. looked for ways to freeze more assets of Libya and debate no-fly zone over the nation as bankers avoid trading in Libyan crude.

Bank stocks rallied after Bank of America predicted lower costs and higher dividend in the years to come.

Chief executive Brian Moynihan told analysts and investors today that company could generate pre-tax earnings between $30 billion and $40 billion in a few years and as merger costs come down. He stressed that the bank is not looking to acquire any more and focus on integration and streamlining its operations.

The bank plans to increase its dividend in the second half 2011 and return to shareholders any excess capital more than $30 billion after 2013 and 2014.

Moynihan also estimated that company revenue growth could surpass the U.S. economic growth by 100 basis points as loan loss provisions return to normal levels as the economy turns healthy.

The bank may close as many as 10% of 5,800 branches in the next couple of years.

U.S. consumer credit soared in January and a private survey showed confidence among small employers increased. Air China agreed to buy five Boeing 747-8 intercontinental jets.

The European indexes gained after German factory orders rebounded in January. French business sentiment remained flat in February. Swiss and Czech Republic jobless rate fell in February. Klöckner and STRATEC fiscal year 2010 sales surged.

The UK indexes fell after retail sales declined and home prices eased in February. The BCC lowered growth outlook for the UK. Xstrata got approval for $4.2 billion southern Peru Las Bambas copper project. Old Mutual fiscal year 2010 sales grew.

Stocks in Japan gained after two merger deals lifted sentiment. Hitachi rose after it sold its hard disk unit for $4.3 billion and Terumo purchased blood transfusion technology maker for $2.7 billion. Nomura prepares for global expansion after it appointed its first female chief financial officer and an Indian-born to the third in line for command.

Shanghai indexes declined as policy makers continue the debate about economic reforms and discussed plans to abolish one-child policy. Hong Kong stocks rose after sentiment improved. China Vanke said 2010 net surged 37%. Chinese navy prepares for a 4-day exercise with Pakistan.

Stocks in Mumbai rebounded on the second day after a regional party that earlier withdrew its support to the ruling coalition in New Delhi. The slight decline in oil price also lifted sentiment in trading. Hero Investments agreed to acquire the 26% stake from Honda in Hero Honda.

Australian stocks traded higher as investors focused on domestic economic developments. Amcor and Visy Group settled price fixing case fro nearly $700 million. Amcor completed the sale of 550 million euro bonds.

Commodities, Bonds and Currencies

Yield on 10-year bond increased to 3.54% and on 30-year bond rose to 4.66%.

The U.S. dollar decreased to $1.391 to a euro and fell against the Japanese yen to 82.68 yen.

Immediate delivery futures of Texas crude oil decreased $0.36 to $105.08 a barrel, of natural gas decreased 0.06 cents to $3.87 per mbtu and gasoline prices decreased 5.73 cents to 294.66 cents a gallon.

In metals trading, copper prices increased 0.90 cents to $4.34 per pound, gold decreased $4.40 to $1,430.10 per ounce and silver increased $0.14 to $36.01.