Factory Data, Auto Sales Power Wall Street Advance

Bikram Pandey
03 Jul, 2012
New York City

U.S. indexes traded higher in a short session after factory orders increased in May and auto sales surged in June. Commodities also powered the rally after copper, gold and oil closed higher.

[R]1:15 PM New York – U.S. indexes traded higher in a short session after factory orders increased in May and auto sales surged in June. Commodities also powered the rally after copper, gold and oil closed higher.[/R]

U.S. indexes traded higher after factory orders increased in May for the first time in three months and on the rising speculation that Fed may join other central banks and offer another round of stimulus.

U.S. factory orders in May rose 0.7% from the revised 0.7% drop in April according to the latest data from the Commerce Department. Orders excluding transportation equipment advanced 0.4% after falling 0.9% and durable goods orders were revised higher to 1.3% from 1.1% in the earlier estimate on June 27.

Auto sales in June surged more than estimated by industry analysts. The sales at GM, Volkswagen AG, Toyota and Honda increased more than in the previous month leading several analysts to increase annual sales estimate above 14 million units.

In corporate news, One Equity Partners agreed to acquire M*Modal for about $1.1 billion. Rexam proposed to sell its personal care business for $709 million. Chrysler reported a 20% increase in total U.S. sales for June.

Duke Energy completed its merger with Progress Energy. Microsoft wrote down $6.2 billion of assets in its online services division. SXC Health Solutions completed merger of Catalyst Health Solutions.

U.S. markets are closed tomorrow for July 4th Independence Day celebration and trading in stocks in a shortened session was light.

The European indexes rose on speculation that central bank may step up actions as the euro area producer price inflation declined to a 27-month low and UK mortgage approvals fell in May. Spanish unemployment dropped in June. BlackRock agreed to acquire Swiss Re Private Equity Partners.

Stocks in Tokyo extended gains for the second day and the Nikkei index closed above 9,000 for the second time in a row and at an 8-week high. All Nippon Airways Co Ltd plunged 14% and said it plans to raise $2.5 billion. Kawasaki Kisen Kaisha dropped 15% and said it plans to sell 200 million shares.

Australian markets closed lower after a choppy day of trading. Energy companies traded lower after a renewed weakness in crude oil and natural gas prices but metals and mining companies gained.

Commodities, Bonds and Currencies

The yield on 10-year bond increased to 1.61% and on 30-year bond rose to 2.72%.

The U.S. dollar inched lower to $1.2602 to a euro and increased against the Japanese yen to 79.84 yen.

Immediate delivery futures of Texas crude oil increased 4.2% or $3.50 to $87.31 a barrel and Brent crude increased $3.27 to $100.63, futures of natural gas increased 0.029 cents to $2.85 per mbtu and gasoline price increased 9.3 cents to 271.74 cents a gallon.

In metals trading, copper added 7.2 cents to $3.54 per pound, gold increased $24.70 to $1,622.40 per ounce and silver increased 79 cents to $28.50.