U.S. Indexes, Commodities Soar on Greek, Italian Steps

Nichole Harper
11 Nov, 2011
New York City

U.S. Stocks soared more than 2% following the improved political climate in Europe. The appointment of new and technocratic government in Greece and the passage of austerity measures in Italy, indexes soared on both sides of the Atlantic. Oil, copper, gold and silver surged at least 1%.

[R]2:10 PM New York – U.S. Stocks soared more than 2% following the improved political climate in Europe. The appointment of new and technocratic government in Greece and the passage of austerity measures in Italy, indexes soared on both sides of the Atlantic. Commodities led by crude oil, copper, gold and silver rose and Italian bond yield rise subsided.[/R]

U.S. stocks surged in Friday’s trading after Greece and Italy moved closer to appointing technocrat governments approve much needed austerity measures.

Stocks surged more than 2% by early afternoon trading and positive earnings and deal making also bolstered the sentiment.

Greek president appointed new Prime Minister Lucas Papademos that will speed up the implementation of reforms. Italy also moved quickly to approve the much talked about reforms and put new government in place as early as this weekend.

Crude oil soared 1% to near $99 barrel and commodities like copper, gold and silver gained 1.1%. U.S. bond markets were closed to celebrate Veterans Day and all federal government offices are closed today.

As the Italian and Greek crisis take a new turn the troubled brokerage firm that took risky bets on the bonds of these nations, MF Global Holdings Ltd fired all 1,066 workforce in the U.S.

Bankruptcy trustee James Giddens said in a statement today at between 150 and 200 employees will be rehired to help close the business and process bankruptcy claims.

European Markets Surge on Italian Bill Passage

European markets surged more than 2% after Italy’s Senate approved the austerity measures demanded by the European Union and other lenders.

The widely expected passage of the financial stability bill now moved to the lower house and is expected to be approved tomorrow and pave the way for the formation of the technocrat government.

Italian President Girgio Napolitano, played a crucial role in building a key consensus among rancorous law makers that will dissolve the current government and mark the end of Prime Minister Silvio Berlusconi’s reign after 15 years.

Italian bond yields declined from its peak over 7% after the passage of the bill and dropped to as low as 6.43% before closing at 6.5%.

The bond markets eased after the bill passage but sentiment was fragile and tentative as investors worried how the implementation of the measures will cut the need for more support from the European Central Bank.

Citigroup in $4 Billion EMI Deal

Vivendi’s Universal Music Group agreed to acquire record business from EMI for $1.9 billion according to two sources in London and New York.

Sony and a consortium of companies are expected to win the music publishing business for $2.1 billion, according to same sources. The two deals will fetch Citigroup Inc of $4.1 billion.

The two higher deals in the final hours emerged after both groups were able to access financing from European banks and UBS and Credit Suisse were rumoured to have played a key role in extending loans to Sony.

BMG Music and Warner Music participated in the bidding process and Warner dropped out of the race as the bid price increased.

Stock Movers

Brookfield Asset Management Inc. ((BAM)) gained 2.1% or 61 cents to $28.67 after the asset manager reported third quarter total revenues increased to $4.58 billion from $3.55 billion in the year-ago quarter.

Net income in the quarter surged to $716 million or 36 cents per diluted share compared to $342 million or 16 cents per share in the year ago.

Dillard''s, Inc. ((DDS)) decreased 7.4% or $4.11 to $51.06 after the apparel and home furnishing retailer reported third quarter total revenues grew to $1.42 billion from $1.37 billion in the year-ago quarter. Comparable store sales increase of 5%.

Net income in the quarter increased 1.9% to $26.6 million or 50 cents per diluted share compared to $14.4 million or 22 cents per share in the year ago earlier.

D.R. Horton, Inc. ((DHI)) rose 2% or 24 cents to $11.43 after the construction service provider reported fourth quarter revenue increased to $1.07 billion from $0.92 billion in the year-ago quarter.

Net income in the quarter swung to $35.7 million or 11 cents per diluted share compared to net loss of $8.9 million or 3 cents per share in the year ago.

The Walt Disney Company ((DIS)) increased 7.1% or $2.49 to $37.13 after the entertainment company reported fourth quarter revenue increased 7% to $10.4 billion from $9.7 billion in the year-ago quarter.

The theme park operator and media company benefitted from the higher fees from PAY-TV operators and advertising revenues.

Net income in the quarter surged 30% to $1.09 billion or 58 cents per diluted share compared to $0.84 billion or 43 cents per share in the year ago.