Wall Street Indexes Jump 1.6%; Commodities Advance

Bikram Pandey
09 Dec, 2011
New York City

U.S. stocks rebounded and indexes jumped more than 1.6% and energy and metals advanced. Consumer sentiment improved and rally broadened in the late afternoon on positive earnings and on the third deal of more than $1 billion in as many weeks. Asian markets are set to open higher.

[R]4:25 PM New York – U.S. stocks rebounded and indexes jumped more than 1.6% and energy and metals advanced. Consumer sentiment improved and rally broadened in the late afternoon on positive earnings and on the third deal of more than $1 billion in as many weeks. Asian markets are set to open higher.[/R]

Market indexes in New York rebounded after an agreement among the euro zone leaders and a rise in consumer sentiment. The positive sentiment lifted stocks of banks and industrials and the dollar held firm.

The news from Europe dominated the trading sentiment and stock rally broadened after the latest read on the consumer confidence sentiment improved and a third deal in technology sector of more than $1 billion in as many weeks.

Banks rebounded on the hopes that the European Central Bank will expand its bond buying program which has been kept at €20 billion a week.

In corporate news, Blue Coat Systems soared 44% after agreed to go private for $1.3 billion. The contact lenses maker Cooper Companies jumped 18% after it offered positive outlook for the year. Industrial filters maker Pall Corp gained after it reported higher quarterly sales and earnings.

European markets closed higher in a cautious trading after European leaders said they agreed on tougher debt and fiscal measures to avoid the repeat of debt crisis. The agreement was welcomed by the European Central Bank but no concrete steps were announced. Daimler AG gained after it said factories are operating near capacities. K+S dropped to an eighteen-month low.

European leaders agreed to an intergovernmental pact that will limit government spending and budget deficits to targets that are set and monitored by a central authority in the region with the enforcement powers. UK opposed the treaty changes but the euro zone nations and six other members agreed to fiscal integration compact.

Markets in Tokyo and in Asia closed lower and trading volume surged on the settlements of derivatives contracts. The Cabinet Office lowered the fiscal second quarter annualized economic growth to 5.6% from 6%. Exporters fell on the ongoing euro zone worries.

Australian stocks closed sharply lower after the European leaders haggled to implement fiscal compact and treaty changes. The decline in inflation in China also dragged market indexes to a low for the month.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond closed increased 2.06% and 30-year bond increased to 3.10%.

The U.S. dollar gained 0.3% at $1.337 to one euro and closed lower against the Japanese yen to 77.51.

Immediate delivery futures of Texas crude oil increased $1.17 to $99.51 a barrel and futures of natural gas decreased 13 cent to $3.32 per mbtu and gasoline prices increased 4.2 cents to 260.85 cents a gallon.

In metals trading, copper increased 8.05 cents to $3.58 per pound, gold added $4.60 to $1,718 per ounce and silver fell $0.75 to $32.29.