U.S. Indexes in 5-day Rally; Weekly Gain of 5.4% in S&P 500, 6.3% in Nasdaq

Bikram Pandey
16 Sep, 2011
New York City

U.S. and European index closed higher after European finance ministers decided not to offer any new stimulus measures. The S&P 500 index increased 5.4% and the Nasdaq index added 6.3% in the week. Both indexes gained for the fifth day in a row.

[R]4:00 PM New York – U.S. and European index closed higher after European finance ministers decided not to offer any new stimulus measures. The S&P 500 index increased 5.4% and the Nasdaq index added 6.3% in the week. Both indexes gained for the fifth day in a row.[/R]

U.S. indexes extended gains for the fifth day in a row and European finance ministers offered no new stimulus plan for the faltering economies in the region. Ministers agreed that commercial banks have enough capital to ride out the market turbulence.

GE expanded presence in Russian healthcare and energy markets. General Dynamics won $1.8 billion contract for construction of two ships in the Zumwalt-class program.

AAR first quarter net income rose to $16.6 million. Cooper Industries updated outlook for the third quarter sales expected to increase 9% to 12%. Research In Motion second quarter net income declined to $329 million.

The European indexes traded higher. The euro area trade surplus increased to €4.3 billion in July. Helle Thorning-Schmidt became the first woman Prime Minister of Denmark. Imtech agreed to acquire Canada-based marine company Groupe Techsol Marine.

Euro area trade surplus increased but current account deficit widened in July. Europe’s new car registrations rose in August. Hungarian average gross wages improved in July and Italy’s trade surplus eased in July. The Austrian gross domestic product contracted in the second quarter.

Spain and Luxembourg ratified the increase of the European Financial Stability Facility to 440 billion euros at the meeting of finance chief ministers in Poland.

The meeting of finance ministers also did not decide on the disbursement of 8 billion euros instalment to Greece and the next meeting is scheduled on October 13.

The UK indexes rose ahead of a meeting of European finance officials in Poland. The UK households’ confidence improved in September. BoE Deputy Governor sounded optimistic note that the UK economic growth will gain momentum next year. Cooper Industries lowered third quarter and fiscal year earnings views.

The Nikkei index in Tokyo soared 2.3% and markets in Asia gained more than 2% after four central banks coordinated to provide more short term dollar liquidity to European banks. Tokyo Electric Power declined 6%. Hoosiers Corp jumped its daily limit of 20.3% on earnings revision.

The benchmark index in Australia jumped 1.9% and closed up 1.1% for the week. The coordinated move by four central banks lifted banks and resource stocks in Australia and markets in Asia. Property stocks were among the leading gainers.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield decreased to 2.06% and 30-year U.S. bond declined to 3.33%.

The U.S. dollar increased at $1.3790 to one euro and closed lower against the Japanese yen to 76.84 yen.

Immediate delivery futures of Texas crude oil decreased $1.53 to $87.87 a barrel and futures of natural gas decreased 0.06 cents to $3.81 per mbtu and gasoline price fell 0.12 cents to 278.16 cents a gallon.

In metals trading, copper decreased 3.05 cents to $3.926 per pound, gold increased $28.80 to $1,810.20 per ounce and silver gained $0.93 to $40.44.