Gloabl Markets Advance on Earnings Outlook

123jump.com Staff
16 Jul, 2009
New York City

Earnings were in world markets as investors digest earnings from banks, technology companies. Nokia and Marriott declined on weak outlook and banks dropped ahead of earnings. CIT plunged 75% as the century old lender failed to gain additional financial support from the U.S.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – Earnings were in world markets as investors digest earnings from banks, technology companies. Nokia and Marriott declined on weak outlook and banks dropped ahead of earnings. CIT plunged 75% as the century old lender failed to gain additional financial support from the U.S.[/R]

Market has put many times these years in the comments of economists, analysts and government regulators only to be disappointed later. Today was no different.

New York University professor Nouriel Roubini at a conference in New York said that the U.S. economy will emerge from recession at the end of 2009.

More importantly, China reported accelerated economic growth and JP Morgan earnings increased on higher banking fees and trading revenues.

U.S. claims of initial jobless claims in the last week dropped 47,000 to 522,000 according to the Labor Department. The four-week average of new claims declined 22,500 to 584,500, the lowest since the end of January.

Hotel stocks declined after Marriott offered weak outlook for the rest of the year. Nokia declined 14% after it reported earnings fall of 66% and said that it no longer expects to gain market share in the second half in its mobile devices.

Mosaic Company surged 12% after Brazil based Vale is exploring to acquire the fertilizer maker.

CIT, the lender to small businesses and retail trade for more than a century is struggling to negotiate debt workout with its major lender after its negotiations with the government agencies failed. The lender may need more than $4 billion to avoid bankruptcy.

UK stocks advanced as global stock and commodities markets continue to rise. The benchmark index closed higher for the fourth day in a row. Lloyds Banking eliminates more staff. Autonomy dropped after it reported 67% increase in earnings. Henderson dropped after it issued weak earnings outlook.

Stocks in Japan closed higher after China reported a rebound in the economy and U.S. stocks jumped on Intel earnings. Industrial and commodities related stocks in Tokyo closed higher. Mitsubishi UFJ plans to raise as much as $4 billion.

Economic growth in China accelerates in the second quarter to 7.9% from 6.1% in the first quarter as the stimulus reaches many sectors of the economy. Consumption and investment contributed to the growth but the fall in trade surplus deducted the expansion.

Stocks in Shanghai traded higher in the morning but close lower on the valuation worries. Sinotruk surged 15% after MAN SE acquired 25% stake in the company. Jiangxi Copper added nearly 4% on strong commodities

Sterlite Industries is in process of raising $1.5 billion to fund its power generation business. Indian government plans to raise $22.5 billion by the end of September to fund its budget deficit and infrastructure development. Larsen & Toubro and Bajaj Auto earnings surge.


North American Markets

Dow Jones Industrial Average increased 95.61 or 1.1% to a close of 8,711.82, S&P 500 Index increased 8.06 or 0.8% to 940.74, and Nasdaq Composite Index edged higher 22.13 or 1.2% to close at 1,885.03. Toronto TSX Composite Index increased 88.96 or 0.8% to 10,304.42.

Of the stocks in S&P 500 index, 385 increased, 110 declined and 5 were unchanged.

CIT Group Inc led the decliners in the S&P 500 index with a loss of 75% followed by losses in AIG of 10.4%, in Marriott International, Inc of 6.3%, in Citigroup Inc of 4.4%, in MBIA Inc of 4.3% and in Motorola Inc of 4.3%.

Whirlpool Corp led gainers in the S&P 500 index with a rise of 9% followed by gains in SanDisk Corp 9%, in Harley-Davidson, Inc of 8.4%, FedEx Corp of 7.7% and Massey Energy of 7.1%.

South American Markets Indexes

Mexico Bolsa Index increased 399.23 or 1.6% to 25,735.56. Brazil Bovespa Stock Index surged 621.54 or 1.2% to 51,918.20.

Argentina Merval Index increased 1.4%. Chile Stock Market Select index edged higher 1.7%, Peru Lima General Index decreased 0.4% and Colombia IGBC General Index added 0.4%.

Europe Markets Review

In London FTSE 100 Index closed higher 15.38 or 0.35% to 4,361.84, in Paris CAC 40 Index increased 28.41 or 0.90% to close at 3,199.68 and in Frankfurt DAX index higher 28.75 or 0.58% to close at 4,957.19. In Zurich trading SMI increased 65.24 or 1.19% to close at 5,538.57.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 74.91 or 0.81% to 9,344.16, Hang Seng index in Hong Kong increased 103.21 or 0.57% to 18,361.87 and CSI 300 index in China higher 7.94 or 0.23% to 3,501.24. The ASX 200 index in Australia increased 71.10 or 1.81% to 3,995.60. The FTSE Bursa KL Composite index in Malaysia closed higher 11.64 or 1.06% to 1,108.88.

The Kospi Index in South Korea increased 11.36 or 0.80% to close at 1,432.22. SET index in Thailand closed lower 5.12 or 0.87% to 582.74 and JSE Index in Indonesia decreased 5.33 or 0.25% to 2,117.95. The Sensex index in India decreased 2.99 or 0.02% to 14,250.25.

Commodities, Metals, and Currencies

Crude oil increased $0.46 to close at $62 a barrel for a front month contract, natural gas increased 0.32 cents to $3.60 per mBtu and gasoline increased 0.58 cents to 171.39 cents.

Wheat futures closed down 1.50 cents in Chicago trading to $5.33 a bushel. Sugar increased 0.09 cent in trading at 17.77 cents a pound. Soybean future closed down 13.50 cent to $9.04 a bushel.

Gold decreased $2.40 in New York trading to close at $937.00 per ounce, silver closed up $0.08 to $13.28 per ounce and copper for the front month delivery increased 0.05 cents to $2.39 per pound.

Dollar edged lower against euro to $1.4148 and closed down against the Japanese yen to 93.81.

Yield on 10-year U.S. bond decreased to 3.57% and with 30-year maturities increased to 4.57%.