Jobs Report Extend U.S. Stock Rally in 2nd Week; Portugal, Ireland in Focus

Bikram Pandey
01 Apr, 2011
New York City

U.S. stocks gained for the second week in a row after the release of employment report. The three popular indexes gained between 1.3% and 1.7% in the week. Ford domestic sales surpassed GM sales in March and Toyota sales declined. Crude oil rebounded after fight for oil cities in Libya intensifies.

[R]4:40 PM New York – U.S. stocks gained for the second week in a row after the employment report and the three popular indexes gained between 1.3% and 1.7%. Ford domestic sales surpassed GM in March and Toyota sales declined. Crude oil rebounded after fight for in Libya intensifies. Portugal sells €1.65 billion debt.[/R]

U.S indexes climbed after better-than-estimated jobs report in March and unemployment rate declined as private sector added more than expected jobs. However, local governments continued to trim payrolls.

For the week the Dow added 1.3%, the S&P 500 index gained 1.4% and the Nasdaq added 1.7%.

General Motors domestic sales in March increased 9.6% to 206,621 from a year ago and in the quarter sales increased 24.1% to 592,545. Ford domestic sales in March increased 19% from a year ago to 212,777 and strong sales in smaller cars and trucks.

Toyota sales in the U.S. declined 5.7% to 176,222 and sales in the first quarter increased 12.5% to 433,924. Chrysler domestic sales soared 31% to 121,730 units and in the quarter rose 23% to 286,950.

GM sold its stake in Delphi Automotive for $3.8 billion. Goodrich agreed to acquire Italy-based Microtecnica for $462 million.

Euro-zone unemployment in February declined to 9.9% and in the wider zone of 27 nations the rate eased to 9.5%. Manufacturing expansion in the region slowed in March. French car sales increase slowed to 6.1%. Swiss retail sales rebounded in February.

Portugal completed a surprise debt auction that raised €1.65 billion at a yield of 5.79%, 2.5 percentage points more than a year ago. Portugal needs to raise €9 billion before June to meet two debt rollovers and analysts speculated China and Brazil may have played a role in completing the debt sale.

Ireland also said it will inject €24 billion in its four leading banks and sought merger between two banks as rating agencies lowered the sovereign debts of Ireland and Portugal.

The European indexes rose after Chinese manufacturing activity improved in March. Nasdaq and ICE jointly bid for NYSE Euronext at 19% higher than Deutsche Boerse bid. Clariant agreed to acquire Canada-based Prairie Petro-Chem. Logitech fell on weaker 2011 outlook.

The UK indexes surged after successful completion of stress tests in Ireland and a rating agency lowered Irish debt view. The UK manufacturing sector growth eased in March. Shell agreed to sell Chilean downstream business to Quinenco for $614 million.

Stocks in Japan struggled to hold early gains and confidence index dropped in a quarterly survey. Toto Ltd declined after it lowered full-year earnings outlook. Tokyo Electric Power dropped 3.7% in a volatile trading.

Mumbai stocks edged lower after rallying for eight days. Exports soared 50% in February and imports gained 21% and trade deficit hovered near $99 billion. Sharp upswing in exports was driven by higher sales of gems and jewelry and petroleum products.

Australian stocks closed higher tracking gains in the commodities prices. Xstrata signed an annual contract to sell coal to Japanese utility at 13% higher price of $129.80 a ton. Biota won a five-year contract to supply flu drug to the U.S. for $231 million.

Commodities, Bonds and Currencies

Yield on 10-year bond decreased to 3.44% and on 30-year bond fell to 4.49%.

The U.S. dollar decreased to $1.42 to a euro and rose against the Japanese yen to 84.09 yen.

Immediate delivery futures of Texas crude oil increased $1.41 to $108.13 a barrel, of natural gas decreased 0.05 cents to $4.33 per mbtu and gasoline prices increased 4.97 cents to 315.74 cents a gallon.

In the quarter to March, crude oil increased 17% and gold gained 1.3%.

In metals trading, copper prices decreased 5.75 cents to $4.25 per pound, gold decreased $11.50 to $1,438.00 per ounce and silver decreased $0.15 to $37.73.