Wall Street and Europe Extend 2-Day Rally, Oil Bounces Higher

Nichole Harper
05 Oct, 2015
New York City

Market indexes on Wall Street jumped for the second day in a row on the hopes that the Fed may delay interest rate hike well into 2016 after the latest jobs report was deemed weaker than anticipated. Crude oil rallied after Russia sought cooperation with OPEC.

[R][3:30 PM New York City, New York – Market indexes on Wall Street jumped for the second day in a row on the hopes that the Fed may delay interest rate hike well into 2016 after the latest jobs report was deemed weaker than anticipated. Crude oil rallied after Russia sought cooperation with OPEC.[/R]

Stocks on Wall Street traded higher for the second day after the latest net new jobs report in September showed weaker-than-expected increase.

The jobs report fueled optimism that the Fed may delay its first rate hike in 2016 and stoked a rally in indexes across all sectors.

On Wall Street, Tollbooth Strategy Index gained 75.79 or 0.7% to 10,408.52.

S&P 500 index advanced 27.10 or 1.4% to 1,978.59 and the Nasdaq Composite Index increased 47.70 or 1% to 4,755.82.

Crude oil in New York jumped $1.08 to $46.62 a barrel and gold slipped $4.60 to $1,134 an ounce.

U.S. Movers

American Apparel Inc ((APP)) was halted at 11.2 cents after the branded fashions apparel and accessories retailer today filed for Chapter 11 bankruptcy and reached agreements with its creditors and lenders will provide approx $90 million in debtor-in-possession financing.

The company estimated to reduce the debt to $135 million from $300 million through the elimination of over $200 million of its bonds in exchange for equity interests.

BP Plc jumped 3% or 99 cents to $33.51 after the oil and gas producer today settled its Deepwater Horizon oil spill in the Gulf of Mexico in 2010 for about $20.8 billion with the U.S. government and resolves all federal and state claims against the company for the disaster.

General Electric Company ((GE)) soared 4.1% or $1.03 to $26.51 after the activist shareholder Nelson Peltz controlled Trian Fund Management LP acquired stake of about 1% or invested $2.5 billion in the diversified industrial conglomerate.

Trian Fund is now in the top 10 shareholders of the company.

GE raised its full-year industrial operating earnings per share guidance between $1.13 and $1.20 and plan to return more than $90 billion to investors through 2018 and on track to complete goal to close $100 billion of GE Capital asset sales in this year.

European Markets

Seasonally adjusted retail sales in August were stable compared to July in euro area and in the wider region EU28.

In July retail trade increased 0.6% in the euro area and 0.4% in the EU28.

Retail sales index jumped 2.3% from a year ago month in the euro area and 2.6% in the wider region EU28, the Statistical Office of the European Communities.

In London trading, FTSE 100 index jumped 151.86 or 2.5% to 6,281.75 and in Frankfurt the DAX index increased 275.58 or 2.9% to 9,828.65.

In Paris, CAC 40 index soared 156.34 or 3.5% to 4,615.40.

Glencore Plc surged 13.5% to 107.80 pence after the Switzerland-based mining and trading company is in talk to sell some of its agricultural assets to reduce debt.

K&S AG plunged 25.9% to €22.95 after the Canada-based fertilizer producer Potash Corp of Saskatchewan, Inc. withdrew its €7.85 billion or $8.9 billion proposal to acquire the company.

Potash management considered the offer of €41 per share, a 59% premium to the K+S share price a year ago at the time of the first approach.

The offer is no longer financially viable after commodity prices declined nearly 40% in the period from the first offer.

Thales SA increased 2% to €63.87 after the France-based defense and aerospace products provider secured contracts from Australian government to supply 1,100 light armored vehicles for its army for about $916.4 million or A$1.3 billion.

Thales said production is scheduled for the vehicles from mid-2017 and first deliveries are planned by the end of that year.

Asian Markets

Nikkei average in Tokyo jumped 1.6% following the market advance in overnight trading in New York and in Europe.

SoftBank has decided to hold on its stake in online marketplace operator Alibaba Group after the expiry of lock up period.

Markets in Tokyo surged following the rise in New York and in Europe and the yen strengthened.

The Nikkei 225 Stock Average jumped 280.36 or 1.6% to 18,005.49 and the broader Topix index gained 19 or 1.3% to 1,463.92.

The yen strengthened to 120.24 against a dollar.

Tokyo Electron Ltd gained 1.3% to 6,021 yen after the Nikkei daily reported the plasma etching equipment maker’s sales for the first-half ending in September to soar 20% to 350 billion yen and operating profit to surged 80% to 55 billion yen.

For the year ending March 2016, the company likely to maintain its forecast of net profit to decline 8% of about 66 billion yen.

Stocks in Mumbai soared following an Asia-wide rally on the back of a sharp jump in market indexes in Europe in today’s trading and in New York on Friday’s close.

Rupee strengthened 23 paisa to 65.28 against one U.S. dollar.

The Sensex Index jumped 564.60 or 2.1% to close at 26,785.55. The CNX Nifty advanced 168.40 or 2.1% to 8,119.30.

TVS and Tata Motors total vehicle sales slipped. NTPC plans to sell electricity to Bangladesh.