U.S. Indexes Rise on Investors Enthusiasm

123jump.com Staff
01 Apr, 2008
New York City

U.S. stocks surged across market capitalization and industry sectors on rising optimism and investor appetite for risk. Gold and oil fell. Lehman Brothers raised its convetible preferred share offering to 4 million shares.UBS reported $12 billion in first quarter losses and proposed to raise $15 billion. Nasdaq surged 3.7% followed by a gain of 3.6% in S&P 500 and 3.2% in Dow Jones. Brazil, Mexico and European markets surged as well.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – U.S. stocks surged on tentative optimism in the credit market and level of interest in Lehman offering of 4 million convertible shares.[/R]

Global Markets Update

U.S. stocks rallied after investors took aggressive pasture. Stocks rallied across market capitalization and various sectors on no apparent economic data or credit market news. Lehman Brothers said that it has raised its plan to sell to 4 million convertible preferred shares from 3 million shares on “investor interest.” Investors at least for today appear to put behind the liquidity crunch at the bank and declining quality and value of the portfolio of assets at the bank. Even after the offering, Lehman will remain one of the most leveraged brokerage in the U.S. when compared to cash to asset.

The second largest Swiss bank, UBS reported a sharply higher loss in the first quarter and proposed to raise $15 billion in rights offering. The pre-announced loss was larger than what market had expected. The losses and write-down in real estate loans amounted to $19 billion. Separately UBS announced that its long time chairman Marcel Ospel has resigned and is replaced by its general counsel. UBS also confirmed that it is losing clients and assets in its wealth management unit.

Business confidence in Japan fell to a 4-year low as large and small manufacturers worried about the health of the U.S. market for their products. Rising exports to Asia, Europe, and Middle East is helping businesses to cope with the expected decline in sales in the U.S. In Tokyo trading Nikkei 225 gained 1.04% or 130.88 to 12,656.42, and the broader Topix Index increased 1.5% or 17.53 to 1,230.49.

Stocks in Hong Kong advanced tracking gains in international markets but stocks in Shanghai continue to fall. Shanghai stocks have suffered the most in the last five months of trading and retail investors are bearing most of the losses. Mainland investors are worried that Chinese government will not support the stock market. Fear of more declines is driving Shanghai stocks lower.

European Markets indexes

In London FTSE 100 Index closed higher 150.50 or 2.64% to 5,852.60, in Paris CAC 40 Index increased 158.93 or 3.38% to close at 4,866.00 and in Frankfurt DAX index higher 185.36 or 2.84% to close at 6,720.33. In Zurich trading SMI increased 269.99 or 3.74% to close at 7,494.30.

North American Markets indexes

Dow Jones Industrial Average surged 391.47 or 3.19% to a close of 12,654.36, S&P 500 closed up 47.48 or 3.59% to 1,370.18, and Nasdaq Composite Index increased 83.65 or 3.67% to a close at 2,362.75. In Toronto TSX Composite closed up 90.59 or 0.68% to 13,440.72.

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

Citigroup led the gainers in the Dow Jones index with a rise of 11.3% followed by increases in JP Morgan of 9.4%, in AIG of 8.7%, and in Bank of America of 7.8%. General Motors and Home Depot gained more than 5%.

Of the stocks in S&P 500 index, 486 stocks increased, 13 declined, and 1 were unchanged. Of the stocks in the index, 1 stock fell more than 3% and 308 gained more than 3%.

Fannie Mae led the gainers in the S&P 500 index with a surge of 19.7% followed by a rises in Lehman Brothers of 18%, in Freddie Mac of 15.4%, in Lennar of 13.7%, and in Countrywide Financial 13%.

Teradata led the decliners in the S&P 500 index with a loss of 6.4% followed by declines in Clear Channel of 2.5%, in Yahoo of 1.5%, and in Ensco of 1.3%.

South American Markets Indexes

In Latin Markets Brazil led gainers in the region with a rise of 2.96% followed by increases in Mexico of 2.83%, in Colombia of 2.52%, and in Argentina 1.54% and in Chile of 0.67%. Venezuela declined in the region with a fall of 1.5%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 130.88 or 1.04% to 12,656.42, in Hong Kong Hang Seng index increased 288.26 or 1.26% closed to 23,137.46. In Australia ASX 200 index higher 5.50 or 0.10% to close 5,361.20. In Malaysia KL Composite index increased 2.89 or 0.23% closed to 1,250.41.

In South Korea Kospi Index decreased 1.74 or 0.10% to close at 1,702.25, in Thailand SET index closed higher 6.33 or 0.77% to 823.36 and Indonesia JSE Index edged decreased 54.05 or 2.21% to 2,393.25. Sensex index in India decreased 17.82 or 0.11% to 15,626.62.

Commodities, Metals, and Currencies

Crude oil decreased $0.82 to close at $100.76 a barrel for a front month contract, natural gas decreased 48 cent to $9.62 per mBtu, and gasoline futures increased 1.22 cents to close at 263.93 cents per gallon.
Gold decreased $33.70 in New York trading to close at $887.80 per ounce, silver closed down $2.43 cents to $16.89 per ounce, and copper for front month delivery decreased 2.45 cents to 380.65 per pound.

Wheat futures decreased 34.00 cents in Chicago trading and closed at $8.95 per bushel. Sugar decreased 25.00 cent to 11.44 cents per pound. Soybean future closed up 13.75 cents to $12.11 a bushel.

Dollar edged higher and traded near a record low against euro to $1.5614 and edged higher against yen to 101.84.

Bond Yields increased for 10-year U.S. bonds and closed at 3.56% and on 30-year bonds increased to close at 4.40%.