Wall Street, Europe Surge More than 2%

Bikram Pandey
28 Nov, 2011
New York City

The U.S. indexes surged after easing for seven days in a row. Strong start of the widely tracked holiday sales lifted the expectations for the next three weeks of retail sales. European markets soared on two rumors and continued expectations of political actions.

[R]4:35 PM New York – The U.S. indexes surged after easing for seven days in a row. Strong start of the widely tracked holiday sales lifted the expectations for the next three weeks of retail sales. European markets soared on two rumors and continued expectations of political actions. Silver jumped 3% and gold and oil gained at least 1%.[/R]

Stocks in New York traded higher after investors focused on the strength in the retail sales and the prospect of more actions from political leaders in the region.

Sales during the Thanksgiving weekend surged 16% to $52.4 billion and shoppers’ traffic rose more than 6.5%. The closely tracked sales during the three-day weekend showed a jump of more than 9% by the average shopper to $400.

The data reported by the National Retail Federation also indicated that most of the purchases were on credit cards and shoppers focused on highly discounted electronics and children’s needs.

The news from the housing market also supported the gains in the indexes. The Commerce Department said today new home sales increased 1.3% to annual rate of 307,000. Though the sales increased, but they were 5% below the estimate of the most economists.

Across the Atlantic, European markets soared on two rumors on the expectations of new bond offering from Northern European nations that will provide financing to the troubled nations in the region. The rumors were rejected by the officials in Germany. The International Monetary Fund spokesperson denied that the multi-lateral bank may offer long term loans to Italy.

Moody’s lowered the credit rating of Belgium by one notch and last Portugal and Hungary suffered credit downgrades as well. The stress in the European sovereign bond markets continued and Italy sold longer dated maturities at yields that hovered at 7.3% and near record levels.

The O.E.C.D. lowered global growth outlook and warned EU leader to take decisive actions. Euro-zone money supply growth slowed but Swedish trade surplus grew in October. Manufacturing sector confidence in Italy improved in November.

The UK indexes surged tracking gains in Europe and U.S. The BCC lowered growth outlook for the UK economy. Home prices in the UK fell and retail sales slumped in November. Ireland''s retail sales rose in October.

The Nikkei index in Tokyo increased for the first time in six days after U.S. holiday sales soared on the critical Thanksgiving. Shipping companies rebounded after freight rates rebounded. Nintendo extended gains for the second day in a row.

Australian stocks closed higher after the U.S. holiday sales showed a marked increase from a year ago. Markets in Asia and commodities rose. Qantas Airways Limited estimated first half profit to decline 66% on higher fuel and workers strike.

Commodities, Bonds and Currencies

U.S. bonds yield on 10-year U.S. bond closed up at 1.97% and 30-year bond increased to 2.93%.

The U.S. dollar rose 0.5% at $1.33 to one euro and closed higher against the Japanese yen to 77.99.

Immediate delivery futures of Texas crude oil increased $0.96 to $97.73 a barrel and futures of natural gas decreased 18 cents to $3.36 per mbtu and gasoline prices increased 6.54 cents to 251.43 cents a gallon.

In metals trading, copper increased 7.4 cents to $3.35 per pound, gold added $26.10 to $1,714.70 per ounce and silver rose $0.99 to $32.05.