S&P 500 Index Jumps 1.8%; Gold, Oil Rise

Bikram Pandey
06 Jun, 2012
New York City

U.S. indexes soared as investors shifted their focus to domestic companies and impending earnings season next week. Financials and industrials were in demand. Nasdaq OMX Group approved a plan to set aside $40 million to pay for losses from mishandled Facebook public offering.

[R]3:30 PM New York – U.S. indexes soared as investors shifted their focus to domestic companies and impending earnings season next week. Financials and industrials were in demand. Nasdaq OMX Group approved a plan to set aside $40 million to pay for losses from mishandled Facebook public offering.[/R]

U.S. indexes soared nearly 2% as investors shifted focus to domestic issues and hunted for bargains in the financial and industrial sectors. Beige Book, the regional economic survey indicated slow and halting recovery across the nation.

Stocks surged in New York trading and markets in Europe pared gains after rates were held at 1% by the central bank. Investors pinned their hopes on domestic earnings as companies prepare to release the data next week.

Bob Evans fourth quarter net soared 20% to $22 million and Cyberonics surged 57% to $11 million. Fastenal said May sales grew 18.4% to $274.8 million. Iron Mountain pursues conversion to a REIT. Home Depot reaffirmed sales and earnings guidance for the current year.

European markets advanced after the central bank held its key lending rate and announced more liquidity measures and highlighted downside economic risks. The second estimate of GDP growth in the March quarter in euro zone was unrevised flat and German production declined 2.2% in March. The latest batch of data only added to the weak economic data released this week and Spain prepares to sell 2 billion euros of bonds tomorrow.

Stocks in Tokyo rebounded and export sensitive sectors led the surge after the data released on Monday showed that service sector in the U.S. expanded at a faster rate and Australia reported strong GDP growth. Nintendo edged lower after the latest product release disappointed analysts.

Market indexes in India soared 2.7% on the rising markets in Asia and rupee stabilized for the third day. Markets in Hong Kong added 1.4% and in Thailand, Indonesia and Malaysia advanced.

Australian economy expanded at 1.3% in the March quarter and registered its second best quarterly growth rate in the last five years. The surprise strength in the household spending added to the strong investment in the mining sector.

However, four largest banks failed to pass along the latest rate cut by the reserve bank a day ago. Australian government is struggling with recalcitrant banks that rely increasingly on foreign financial markets for its funding needs and earn record annual profits and fail to cut fees charged to depositors and give out record executive bonuses.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond edged higher from a multi-decade low to 1.65% and 30-year U.S. bond edged up to 2.71%.

The U.S. dollar edged down 0.5% to $1.253 to one euro and gained against the Japanese yen to 79.14 in New York trading.

Immediate delivery futures of Texas crude oil increased 87 cents to $85.17 a barrel and Brent crude futures rose $1.94 to $100.73. Futures of natural gas decreased 0.02 cents to $2.42 per mbtu and gasoline price increased 0.8 cents to 269.27cents a gallon.

In metals trading, copper increased 8.1 cents to $3.39 per pound, gold increased $5.20 to $1,622.10 per ounce and silver rose 91 cents to $29.31.