S&P 500 Nears Record Close, Oil and Gold Turn Lower

Nichole Harper
22 Dec, 2014
New York City

Stocks on Wall Street advanced after a rally in oil price lifted energy complex. However, the early rally in oil and gold, silver and copper faded and prices of commodities declined in the afternoon. European and Asian markets closed higher.

[R]2:25 PM New York – Stocks on Wall Street advanced after a rally in oil price lifted energy complex. However, the early rally in oil and gold, silver and copper faded and prices of commodities declined in the afternoon. European and Asian markets closed higher.[/R]

U.S. stocks advanced after a rally in technology and energy stocks and early oil price advance petered out and commodities turned negative.

Energy explorers and refiners lee the charge after Saudi Arabia clarified that it has no plan to cut production and urged non-OPEC oil producers to lower oil production.

Oil price has collapsed 50% from its peak in summer and traders are forecasting that after a brief rally the oil is expected to resume its slide towards $40 a barrel.

In addition, Australia lowered its estimate of iron ore price for the third time this year.

Australia’s iron ore export price is expected to dip to $63 a metric ton compared to the previous government forecast of $94 a ton, the Department of Industry said in a report today.

Iron ore prices this year have averaged $88 a ton, and the price of the ore with 62% content and free-on-board has dropped 49% in 2014.

China, the largest buyer of Australian iron ore, has been slowing down its economy and the demand is expected to weaken further from the second-largest economy in the world.

The government had earlier estimated price of the iron ore at $103 a ton in March and lowered its estimate to $97 a ton in June before the third revision today.

The report also estimated iron ore shipment to decline to $176 billion in the year to June from the previous estimate of $192.4 billion.

On Wall Street trading, Tollbooth Strategy Index gained 0.6% or 57.43 to 10,054.20.

S&P 500 index slid 0.14 or 0.01% to 2,070.52 and the Nasdaq Composite Index edged up 3.47 or 0.07% to 4,768.50.

The National Association of Realtors said seasonally adjusted annual rate for existing home sales in November declined 6.1% to 4.93 million from downwardly-revised 5.25 million in October.

The price of future for the immediate month delivery increased 3% to $56.34 a barrel and gold edged up 0.2% to $1,196.70.

U.S. Movers

Anthem Inc ((ANTM)), the health insurer agreed to acquire Simply Healthcare Holdings, Inc. for undisclosed financial terms.

The acquisition is expected to close in the first-half of 2015.

The company forecasted net income per share to be within the range of $8.83 to $8.93.

Caesars Entertainment Corp ((CZR)), the diversified casino-entertainment provider signed agreement to merge affiliate Caesars Acquisition Company in an all-stock transaction.

Raytheon Company ((RTN)), the defense and homeland security provider secured Foreign Military Sales contract worth $2.4 billion for new-production fire units of the combat-proven Patriot Air and Missile Defense System for the State of Qatar.

European Markets

In London trading, FTSE 100 index gained 0.4% or 28.67 to 6,573.94 and in Frankfurt the DAX index increased 0.6% or 56.69 to 9,843.65.

In Paris, CAC 40 index rose 0.2% or 8.01 to 4,249.66.

In the European corporate news, Bilfinger agreed to sell part of construction unit to Switzerland-based Implenia for €230 million. Ferrovial ended talks to acquire Australia-based Transfield Services.

Neste Oil lifted full-year profit forecast. Kingfisher sells B&Q China business. Rosneft OAO repaid $7 billion to lenders.

Bilfinger SE, the Germany-based engineering construction company agreed to sell part of its construction unit toSwitzerland-based Implenia AG for about €230 million or $280 million.

Separately, the company is also in talks with potential buyers to sell remaining part of the construction unit.

Neste Oil Corporation increased 0.7% to €20.09 after the Finland-based oil refiner lifted full-year profit forecast of about €550 million from earlier estimate of €400 million.

Kingfisher Plc jumped 2.6% to 332.50 pence after the U.K.-based home improvement retailer agreed to sell its stake in its B&Q China business “do-it-yourself” of about 70% to Wumei Holdings Inc for £140 million or $219 million in cash.

Asian Markets

Stocks in Tokyo advanced after energy-complex companies led the gainers. The third-largest refiner, Idemitsu Kosan is looking to buy Showa Shell Sekiyu KK.

Skymark Airlines plunged after Airbus Group NV began legal proceedings.

Bank of Japan continued its expansion of monetary base at an annual rate of 80 trillion yen or $675 billion, according to the December month economic report released by the central bank today.

The Nikkei 225 Stock Average rose 13.74 to 17,635.14 and the broader Topix index added 3.44 to 1,413.05.

The yen increased 0.2% to 119.82 against one dollar.

Stocks soared in Mumbai trading after world and Asian markets stabilized and rupee advanced 7 paisa against one dollar.

The weakness in rupee surprised many traders over the last three months of trading when oil price fell nearly 50%, the largest commodity imported by India.

The lower oil price helps India in narrowing trade deficit which hovers between $100 billion and $120 billion, before the oil price collapse.

In Mumbai trading, Sensex Index climbed 329.95 or 1.2% to close at 27,701.79. The CNX Nifty gained 98.80 or 1.2% to 8,324.

DLF Limited, the real estate developer plans to sell commercial assets to raise about $500 million or Rs 3,000 crore.

IDBI Bank Limited, the financial service provider plans to sell its 5% stake or Rs 1,000 crore in National Stock Exchange.

Suzlon Energy Limited, the wind turbine generator maker’s subsidiary won four contracts for 60 megawatts in UK.