S&P 500 Index Flirts to Positive; Oil, Copper Rise

Bikram Pandey
24 Oct, 2011
New York City

U.S. stocks traded higher in the positive zone after two months of volatility. European leaders promise resolution to debt crisis but also conceded that help from Asia and other regions may be needed to bolster its rescue fund. The euro gained and copper and oil advanced.

[R]4:30 PM New York – U.S. stocks traded higher in the positive zone after two months of volatility. European leaders promise resolution to debt crisis but also conceded that help from Asia and other regions may be needed to bolster its rescue fund. The euro gained and copper and oil advanced.[/R]

U.S. indexes traded higher after positive economic data in Asia and European leaders sound optimistic notes on the rescue fund and Greek bailout negotiations.

The indexes traded in the positive zone after two months of losses. The S&P 500 index closed up 1.3% and flirted near a flat line for the year and Nasdaq gained 2.4% today and also closed up 1.8% in the year.

Merger Monday brought at least three deals. Cigna agreed to acquire HealthSpring for $3.8 billion and Oracle agreed to buy RightNow for $1.5 billion. Mattel agreed to buy U.K.-based media firm HIT Entertainment for $680 million. Peabody Energy and ArcelorMittal acquired a majority interest in Macarthur Coal.

In the earnings news, Caterpillar third quarter net profit surged 44% to $1.14 billion. Eaton third quarter net income rose to $365 million. Kimberly-Clark third quarter net income slipped 7.9% to $432 million.

Across the Atlantic, European leaders agreed to ask banks to raise €100 billion and explore ways to access capital from Asia, Middle East and the IMF to bolster its rescue fund and approved the sixth tranche of financial aid worth €8 billion.

Euro-zone industrial new orders rebounded in August but private sector activity fell in October. German leading economic index dropped in August. Manufacturing activity rose unexpectedly in France in October but Dutch producer confidence index slumped in October.

The UK indexes traded higher after European leaders moved closer towards a resolution to the debt crisis. U.S.-based Kennedy Wilson agreed to acquire UK loan portfolio for $1.8 billion. National Grid agreed to sell Utility Metering Services to Macquarie Bank for £274.3 million.

Stocks in Japan soared after September exports rose at a faster pace than expected on a surge in auto parts shipments. In addition, Chinese manufacturing gauge expanded at a fastest pace since March in October.

Tepco may be forced to sell its Uranium mining rights and may be forced to do a rights offering. Olympus dropped to a new low after the company appointed an independent inquiry to probe its past deals.

Australian stocks surged after Chinese manufacturing expanded in October and Japanese exports exceeded expectations in September. Also, a progress in the euro zone negotiations also helped markets sentiment. Resources linked companies and banks led the gainers and Qantas struggled to manage flight schedules as workers strike.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed up to 2.23% and 30-year bond increased to 3.27%.

The U.S. dollar decreased to $1.39 to one euro and closed lower against the Japanese yen to 76.05 yen. The yen rebounded after hitting record intra-trade low of 75.70 on Friday.

Immediate delivery futures of Texas crude oil increased $3.92 to $91.32 a barrel and futures of natural gas decreased 0.03 cents to $3.59 per mbtu and gasoline prices fell 0.14 cents to 268.32 cents a gallon.

In metals trading, copper increased 22.45 cents to $3.44 per pound, gold added $17.00 to $1,653.10 per ounce and silver rose $0.44 to $31.64.