Blue Chips Advance, Dollar Falls; Asian Markets Lead Global Rally

Bikram Pandey
14 Sep, 2012
New York City

U.S. indexes extended gains for the second day and the mortgage bonds spreads fall to record low after the Fed announced a plan to purchase bonds. Gold added 2% in the week and soared 13% in the year. Apple closed at a new high and won a ruling in a case brought by Samsung.

[R]4:45 PM New York – U.S. indexes extended gains for the second day and the mortgage bonds spreads fall to record low after the Fed announced a plan to purchase bonds. Gold added 2% in the week and soared 13% in the year. Apple closed at a new high and won a ruling in a case brought by Samsung.[/R]

U.S. indexes extended gains for the second day after the Fed move sparked a global rally.
The Nasdaq Composite Index closed at 12-year high and the S&P 500 index traded at a 4-year high.

For the week, the Nasdaq Composite gained 1.5% and for the year rose 22% and the S&P 500 index gained 1.9% in the week and for the year rose 16.5%.

Commodities traded higher for the second day after the Federal Reserve offered a third round of money printing and lifted the prices of hard assets.

Markets in Europe opened strong and advanced 1.7% but markets in Asia surged the most after the Fed announcement and the dollar edged lower against most Asian currencies.

The index in Hong Kong surged to a 4-month high and in Tokyo advanced to a 3-month high and in India soared to a high last seen in February. The worldwide rally lifted markets in Sao Paolo, Toronto, London, Mumbai, Sydney and Tokyo.

In economic news, U.S. retail sales and consumer prices rose but output fell in August.

In corporate news, Western Digital ((WDC)), the maker of hard-disk drives lowered first quarter revenue and market size forecast. Analogic ((ALOG)) soared 15% net jumped 75% and reaffirmed fiscal outlook and exceeded its adjusted earnings estimate.

Apple Inc ((AAPL)) won a ruling in a patent case brought by Samsung Electronics Co in front of the U.S. International Trade Commission. The judge’s ruling is subject to review by the full commission.

Apple has its own patent infringement case against Samsung that is expected to be decided on October 19.

Bayer HealthCare agreed to be acquired by Teva Pharmaceuticals ((TEVA)) for as much as $145 million. Summit Midstream agreed to acquire La Grange for $207 million. Home Depot ((HD)) plans to close seven big box stores in China.

The European indexes soared after the U.S. Federal Reserve began the third round of stimulus program and the euro traded higher. Euro area annual inflation increased and net borrowing by Spanish banks rose in August.

Euro area annual inflation increased to 2.6% in August but employment was stable in the second quarter. Hungarian production fell but Italian surplus rose in July. Spanish home prices slumped in the second quarter.

The UK indexes advanced following the world markets rally. The UK construction output fell and Irish surplus increased in July and home prices rebounded in August.

Tokyo markets rallied following the global markets advance after the U.S. Federal Reserve offered third stimulus to revive economic growth and weaken unemployment rate. The high yen may limit the future gains in the yen. Seven & I Holdings Co said its operating profit is expected fall 2%.

Australian stocks closed at a 4-month high after a broad rally in resource stocks. U.S. Fed moved to offer a third round of stimulus with the help of printing new money that powered the latest rally in resource stocks. Fortescue Metals was halted ahead of $9 billion debt restructuring.

Commodities, Bonds and Currencies

The yield on 10-year bond increased to 1.87% and on 30-year bond closed up to 3.09%.

The U.S. dollar inched lower to $1.311 to a euro and decreased against the Japanese yen to 78.39 yen.

Immediate delivery futures of Texas crude oil increased 65 cents to $98.96 a barrel and Brent crude added 87 cents to $116.75, futures of natural gas decreased 0.08 cents to $2.95 per mbtu and gasoline price edged up 5.7 cents to 302 cents a gallon.

In metals trading, copper increased 10.75 cents to $3.81 per pound, gold added $2.10 to $1,774.20 per ounce and silver decreased 6 cents to $34.72.