Nasdaq Surges 3%, Homebuilders Gain

123jump.com Staff
24 Mar, 2008
New York City

Nasdaq surge of 3% led the U.S. stock rally. JP Morgan revised its offer to purchase Bear Stearns and agreed to purchase 39.5% of the broker at $10 per share from the previous bid of $2 per share. Existing home sales in February rose 2.9% from February but fell 24% from a year ago. The surprise rise in home sales and revised bid for Bear lifted financial, home builders, and retail stocks. European markets were closed and Brazil and Mexico added 1.9% and 1.5% respectively. Shanghai fell 5%.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – Nasdaq surged 3% and led a rally in the U.S. stocks. European markets were closed.[/R]

Global Markets Update

JP Morgan lifted its Bear Stearns to $10 per share. The sharp rise in the bid was in response to a mounting criticism and a near revolt from shareholders. JP Morgan agreed to take first $1 billion in the loss of loan guarantee of $30 billion from the Federal Reserve. Morgan will also purchase additional 95 million shares in the company and acquire a total of 39.5% of shares at $10 per share.

U.S. stocks rose in the morning trading, extending a two-day rally. JP Morgan lifted its Bear Stearns bid to $10 per share from $2 as Bear Stearns shareholders mounted aggressive campaign to scuttle the deal. Dow, Nasdaq, and S&P 500 jumped more than 2.5% in trading. Tiffany soared 13% after it reported better than expected earnings. Walgreen Co earnings jumped 5% on 10% rise in sales.

Home builders, retailers, and select financials participated in the rally. Home builders rallied after the release of existing home sales data. February home sales increased 2.9% from January but declined 24% from a year ago in the month.

European Markets

European markets were closed on Monday on the account of Easter holidays. Following are closings in Thursday trading.

In London FTSE 100 Index closed lower 50.40 or 0.91% to 5,495.20, in Paris CAC 40 Index decreased 22.23 or 0.49% to close at 4,533.72 and in Frankfurt DAX index lower 41.23 or 0.65% to close at 6,319.99. In Zurich trading SMI decreased 63.13 or 0.89% to close at 7,009.86.

North American Markets indexes

Dow Jones Industrial Average added 187.32 or 1.52% to a close of 12,548.64, S&P 500 closed up 20.37 or 1.53% to 1,349.88, and Nasdaq Composite Index increased 68.64 or 3.04% to a close at 2,326.75. In Toronto TSX Composite closed up 244.08 or 1.91% to 13,019.72.

Of the 30 stocks in Dow Jones Industrial Average, 27 closed higher, 3 closed lower, and none were unchanged.

General Motors led the gainers in the Dow 30 stocks with a rise 4.5% followed by increases in Home Depot of 4.2%, in Citigroup of 3.4%, in AT&T of 3.2%, and in American Express of 3.11%. Johnson & Johnson led the decliners in the Dow 30 index with a loss of 0.75% followed by losses General Electric of 0.24% and in Microsoft of 0.03%.

Of the stocks in S&P 500 index, 407 stocks increased, 93 declined, and none were unchanged. Of the stocks in the index, 7 stocks fell more than 3% and 152 gained more than 3%.

Bear Stearns led the gainers in the index with a surge of 88% followed by increases in CIT Group of 35.3%, in CB Richard Ellis Group of 13.55%, in MBIA Inc of 11%, Tiffany of 10.5%, in E*Trade Financial of 10.4%, and in Coach Inc of 9.13%.

Home builders were among the gainers in the S&P 500 index, with KB Home, D R Horton and Lennar adding more than 6%.

Fannie Mae led the decliners in the index with a loss of 9% followed by declines in Freddie Mac of 6%, in Medco Health of 5.5%, in Bank of NY 5.1%, in Ambac Financial of 4.33%, and in Assurant of 3.47%.

South American Markets Indexes

In Latin Markets Mexico led the gainers in the region with a rise of 1.94% followed by increases in Chile of 1.51%, and in Brazil of 1.40%. Peru led the decliners in the region with a loss of 1.62% followed by Venezuela with a decline of 0.36%.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 2.48 or 0.02% to 12,480.09, in Malaysia KL Composite index increased 11.96 or 1.01% closed to 1,201.02. Market of Hong Kong and Australia were closed today.

In South Korea Kospi Index increased 9.61 or 0.58% to close at 1,655.30, in Thailand SET index closed higher 3.96 or 0.49% to 807.28 and Indonesia JSE Index edged increased 15.73 or 0.68% to 2,339.29. Sensex index in India increased 294.57 or 1.96% to 15,289.40.


Bond Yields increased for 10-year U.S. bonds and closed at 3.56% and on 30-year bonds declined to close at 4.36%.

Commodities, Metals, and Currencies

Crude oil decreased $1.30 to close at $100.54 a barrel for a front month contract, natural gas increased 28 cent to $9.34 per mBtu, and gasoline futures increased 3.09 cents to close at 263.60 cents per gallon.

Gold decreased $1.30 in New York trading to close at $918.70 per ounce, silver closed up $0.26 cents to $17.11 per ounce, and copper for front month delivery increased 4.90 cents to 362.25 per pound.

Wheat futures increased 32.50 cents in Chicago trading and closed at $10.20 per bushel. Sugar increased 3.00 cent to 11.92 cents per pound. Soybean future closed up 50.00 cents to $12.57 a bushel.

Dollar edged lower and traded near a record low against euro to $1.5422 and edged higher against yen to 100.75.