Weak Rally in Housing Stocks

123jump.com Staff
06 Dec, 2007
New York City

The Bank of England lowered the rate by 0.5% and the European Central Bank lef the rates unchanged. Mining and banks rose after the rate decision. U.S. stocks advanced on optimism that rate may be lowered next week in the U.S. after the Bank of England lowered the rate by 0.5%. Dow added 1.3%, S&P 500 increased 1.5%, and Nasdaq advanced 1.6%. Deutsche Bank plans to raise dividend, after two-years.

[R]4:30PM New York, 10:30PM Frankfurt, 4:00AM Mumbai[/R]

[R]Global Markets Indexes[/R]

In London FTSE 100 Index closed down 8.20 or 0.13% to 6,485.60, in Paris CAC 40 Index increased 14.69 or 0.26% to close at 5,673.76, and in Frankfurt DAX index declined 4.19 or 0.05% to close at 7,940.58. In Zurich trading SMI declined 16.45 or 0.19% to close at 8,741.74.

Dow Jones Industrial Average edged higher by 174.93 or 1.30% to a close of 13,619.86, S&P 500 increased 22.33 or 1.50% to 1,507.34, and Nasdaq Composite Index advanced 42.67 or 1.60% to a close of 2,709.03. In Toronto TSX Composite increased 148.57 or 1.09% to close at 13,728.19.

Of the 30 stocks in Dow Jones Industrial Average, 19 closed higher, 11 closed lower, and none was unchanged.

Disney led the decliners with a fall of 1.45% followed by losses in General Motors of 0.7%, in Coca Cola of 0.7%, and in Verizon Communication of 0.6%. AIG led the gainers with a rise of 4% followed by increases in Intel of 1.8%, in JP Morgan Chase of 1.2%, and American Express of 1.1%.

Of the stocks in S&P 500, 375 closed higher, 122 fell, and 3 were unchanged. Four stocks fell more than 3% and seventy six increased 3% or more.

Family Dollar led the decliners with a loss of 8.3% followed by losses in Target of 7.5%, in Macy’s 4.5%, in AES Corp of 2.4%, and in FPL of 2.2%. KB Home led the gainers with a rise of 16% followed by increases in Countrywide of 15%, in Lennar of 15%, and in Pulte Home of 13%.

In Tokyo Nikkei 225 Index added 265.20 or 1.70% to close at 15,874.08, in Hong Kong Hang Seng index closed up 213.47 or 0.73% to 29,558.92, in Australia ASX 200 closed higher by 92.80 or 1.43% to close 6,600.90.

In South Korea Kospi Index increased 14.97 or 0.77% to close at 1,953.20, Thailand closed up 11.85 or 1.42% to 845.19, and Indonesia edged higher 27.34 or 0.99% to 2,795.40. India added 57.80 or 0.29% to 19,795.87.

In Latin Markets Chile led the gainers with a rise of 2.17% followed by increases in Mexico of 1.61%, in Argentina of 1.36%, and in Brazil of 1.33%.

Bond Yields edged higher on 10-year U.S. bonds to 4.01% and 30-year bonds increased to 4.47%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil increased $3.08 to close at $90.57 per barrel for a front month contract, up 44.00% for the year, natural gas increased 12 cents to $7.31 per mBtu, and gasoline futures decreased 8.75 cents to close at 230.45 cents per gallon.

Gold edged higher $3.40 in New York trading to close at $807.10 per ounce, silver closed down 16 cents to $14.63 per ounce, and copper for front month delivery increased 85 cents to 304.85 cents per pound and in London trading closed down $6.00 to $6,650.00.

Dollar edged lower against euro to $1.464 and higher to 111.27 yen.

[R]12:30PM New York – U.S. stocks edged higher after November same-store sales and weekly initial claims of unemployment report.[/R]

Dow Jones Industrial Average advanced 63.22 to 13,507.71, Nasdaq added 18.02 to 2,684.38, and S&P 500 increased 8.05 to 1,493.25.

U.S. stocks scaled higher after retailers reported November same store sales and weekly claims of the initial claims of unemployment. The Bank of England raised interest rates but theEuropean Central Bank kept rates unchanged.

Wal-Mart Stores same store sales increased 1.5% in November, Macy’s same store sales surged, Costco sales soared 9%, and at Target sales increased 1.1%.

Limited same-store sales fell 7% in the month as most apparel retailers showed weakness in the month. Gap same-store sales were flat but Saks same stores sales surged 26% and at Nordstrom increased 8.7%.

Merrill Lynch lowered the earnings estimates and reduced ratings for several brokerage firms after it said that sub-prime loan losses may be larger than earlier estimated.

Of the 30 stocks in Dow Jones Industrial Average, 19 stocks increased and dropped. AIG led the gainers with a rise $2.30 to $60.44 followed by Intel with a rise of 48 cents to $27.70, JP Morgan with an increase of 55 cents to $45.45. Disney led the decliners with fall of 47 cents to

Of the S&P 500 stocks, 299 rose, 199 declined, and 2 were unchanged. KB Home led the gainers with a rise of 10% followed by increases in Lennar of 9%to $17.79, in Countrywide Financial jumped 8% to $11.33, in Ambac Financial of 8% to $25.46. Home builders, bond rating agencies and insurers rallied as well.

The Bank of England lowered its key interest rates to 5.5% from 5.75% after holding rates firm for two years. Recent weakness in the falling home prices and weakening consumer spending may have contributed to the decision making process.

The European Central Bank kept the rates same at 4% and indicated that the economy in the 13-member economic zone is likely to grow at a slower pace than in 2007.


[R]6:00AM New York, 7:00PM Tokyo - Tokyo soared 1.7% on the U.S. productivity and jobs report and falling yen.[/R]

In Tokyo trading Nikkei 225 rose 1.7% or 265.2 to 15,874.08, while the broader Topix Index gained 25.64 to 1,552.27.

In the first section of the Tokyo Stock Exchange 8.3 billion shares valued at 1.1 trillion yen were traded and in the second section 274 million shares worth 7.3 billion yen changed hands.

Of the Nikkei 225 stocks 182 firmed, 38 declined, and 5 were unchanged. Fujikura led advancers with a rise of 11.11%, followed by Sumco Corp and Advantest Corp rising 9.02% and 7.12% respectively after analysts forecasted computers demand from emerging markets is expected to rise in 2008.

Third quarter worker productivity in the U.S. climbed the most since 2003 to an annual 6.3%. Economists had forecasted a 6.2% rise. Furthermore the third-quarter figure in output per unit of labor or hour of work was revised up from an earlier 4.9% estimate and was nearly three times increase of 2.2% in the second quarter.

Separately, ADP Employer Services said the U.S added 189,000 jobs more than triple analyst forecasts.

U.S. buyout fund TPG Incorporated might announce a 30 billion yen acquisition of lender NIS Group Company. The Japanese lender posted a first half loss of 2 billion yen as claims of interest refunds increased. The news was first reported by the Bloomberg News.

Japan Today, local newspaper in Tokyo reported that Daiwa House Industries is considering a business and capital alliance with Odakyu Construction Company in a bid to overcome the increasingly difficult business environment.

Of the Nikkei 225 index shares, Fujikura Limited led gainers with a rise of 11.11% followed by rises of 9.03% in Sumco Corp, 7.12% in Advantest Corp, 6.86% in Kajima Corp, and 6.81% in Nikon Corp.

Tech stocks rose after analyst Kevin Cassidy at Thomas Weisel yesterday revised Intel Corp’s rating to “overweight” citing increased demand of computers from countries such as India, China, Russian and Vietnam. In addition, Dramexhange Technology Incorporated said yesterday prices for 512 megabit DRAM chips rose by 1.1%.

Financial stocks rose as well after the U.S. regulators and lenders agreed to freeze interest rates on sub-prime mortgages for five years to stem rising foreclosures. Mitsubishi UFJ Financial Group climbed 6.60%, Mizuho Financial Group soared 5.54% and Sumitomo Mitsui Financial Group increased 6.59%.

Exporters soared after the yen declined to a four week low from 110.96 to 111.03. Canon Incorporated gained 0.86%, Honda Motor Corporation edged up 2.41%, Toyota Motor Corp soared 1.63% and Sony Corp spiked 2.39%.

Energy stocks gained after the OPEC elected to keep its output quota on hold. Oil price jumped above $90 per barrel as a result. Inpex Holdings rose 2.63%, Mitsui & Co firmed 1.10% and Nippon Oil Corp gained 3.11%.

Denki Kagaku led decliners in the Nikkei 225 index shares with a loss of 5.29%, followed by declines of 3.76% Kyowa Hakko Kog, of 2.55% in Yahoo Japan Corp, of 2.48% in Mitsui Engineering & Shipbuilding, and Suzuki Motor Corporation of 2.24%.

The Nikkei newspaper said today IHI Corp will supply doors and other parts from its Russian joint venture to Renault SA beginning in 2009. The parts will be used in the manufacture of Logan vehicle for sale in emerging markets. The company closed up 2.93%.