S&P 500 Index Up 1%; World Markets Rebound

Bikram Pandey
12 Oct, 2011
New York City

The benchmark indexes in New York gained at least 1% and the Nasdaq flirted near a flat line for the year. Investors shifted focus from the euro zone turmoil to domestic earnings. Commodities gained but closed mixed.

[R]5:00 PM New York – The benchmark indexes in New York gained at least 1% and the Nasdaq flirted near a flat line for the year. Investors shifted focus from the euro zone turmoil to domestic earnings. Commodities gained but closed mixed.[/R]

Wall Street opened higher following the gains in Europe and on positive domestic earnings expectations. Market sentiment was positive after European leaders promised to expedite the bank recapitalization plan.

Indexes in New York gained nearly 1% and in Germany and France added more than 2%. Asian markets were mixed and Australian index halted a five day rally. Commodities lowered but gained in the early trading and BHP Billiton committed $1.2 billion in capital to expand production at its large copper mine by four-fold.

The Nasdaq index trimmed its losses for the year to 1.3% and the S&P 500 index to 3.5%.

On the earnings front, PepsiCo, Inc gained 3% after it met lowered earnings outlook and Alcoa Inc fell 3% on an earnings miss. Alcoa third quarter net income increased 21% to $172 million. Liz Claiborne agreed to sell its brands to retailers J.C. Penney and Kohl''s. PepsiCo third quarter net income rose 4% to $2 billion.

European markets rebounded and looked beyond Slovakia vote. Miners and industrial companies gained after August industrial production surged across the region from a year ago. German 30-year bond failed to attract investors and the ECB lent $1.35 billion in emergency loans to only six banks.

Japanese stocks declined and machinery order in August increased more than expected in August. Toyota and Honda reported widespread production stoppages in Thailand after a third of country is devastated by the flooding.

Australian stocks halted a 5-day rally after metals prices declined in overnight trading in world markets. BHP committed $1.2 billion in capital for the first phase of Olympic Dam project that will quadruple copper production. Electronics retailer, JB Hi-Fi quarterly comparable sales fell 3.5%.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed up to 2.21% and 30-year bond increased to 3.19%.

The U.S. dollar decreased to $1.378 to one euro and closed higher against the Japanese yen to 77.28 yen.

Immediate delivery futures of Texas crude oil decreased $0.86 to $84.95 a barrel and futures of natural gas decreased 0.12 cents to $3.49 per mbtu and gasoline price decreased 0.61 cents to 274.15 cents a gallon.

In metals trading, copper decreased 7.65 cents to $3.29 per pound, gold decreased $4.10 to $1,666.70 per ounce and silver increased $0.23 to $33.21.