U.S. Stocks Rise on Intel, Cisco, Wal-Mart

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

U.S. trade deficit in February increased 5.7% as imports in the month rose faster than exports. Talks of cheap dollar fueling exports, at least in February did not help. Dollar came immediately under renewed pressure in the currency market and talks of another rate cut intensified. In addition, initial claims of jobless benefit fell 53,000 at the end of last week. The Bank of England lowered its key rate to 5% but ECB left its target rate at 4%.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – U.S. stocks closed higher led by a rise in Wal-Mart, Intel and Cisco. February trade deficit jumped 5.7%.[/R]

Global Markets Update

U.S. stocks closed higher on the strength in tech stocks. February trade deficit rose on rising imports of crude oil and automobiles from Europe and Japan. Trade deficit with Japan, Canada, Mexico and China persisted at elevated levels. Imports rose faster than exports prompting another round of worries related to dollar. Initial claims of jobless benefit fell at the end of last week.

U.S. same store sales at retailers in March lagged, as consumers held tight grip on their wallets. Apparel retailers suffered one of the worst declined in years, and third monthly sales decline in a row. Discount retailers saw surge of new customers as consumers shifted from department stores shopping. Wal-Mart Stores same store sales rose 0.7%, excluding fuel and lifted the first quarter forecast but department stores chain Kohl’s lowered its outlook on 15% decline in sales. Costco continued to report rise in same store sales, eleventh monthly increase above 6% in a row. For the most apparel retailers, this was their sixth monthly same store sales decline in a row.

The ECB left its key rate unchanged at 4% but the Bank of England lowered its rate by 0.25% to 5%. The ECB decision was influenced by rising inflation pressures and lowest unemployment rate in the region. While, the Bank of England worried that risk of softness in the housing market was critical than rising inflation.

The Bank of England lowered its key rate to 5% from 5.25% after it weighed weak conditions in housing market and rising pressures on inflation. The Bank also indicated that economic conditions are likely to be challenging for the rest of the year. Separately, ECB left its rate unchanged and worried that tight labor markets may fuel inflation. Retailers in UK fell after DSG lowered its earnings estimate and Kingfisher indicated tough retail environment.

February machinery orders in Japan fell 12.9% from January. Current account surplus in Japan widened for the second consecutive month in February, rising 2.9% from a year earlier to 2.46 trillion yen. In Tokyo trading Nikkei 225 fell 1.3% to 12,945, and the broader Topix Index declined 1.2% to 1,248. Shionogi led advancers in the Nikkei 225 index with a rise of 3.4% followed by rises in Yahoo Japan Corp. of 2.8%, Toshiba Corp of 2.6%, in Nisshinbo Industries of 2.5%, and Hitachi Ltd. of 2.2%.

The largest Chinese bank ICBC estimated earnings gain for the first quarter of this year to rise at least 50%, lifting stocks in the financial sector. China Construction Bank gained 4% ahead of its earnings tomorrow. Higher crude prices crimped margins at refiners, dragging the sector lower. China statics agency revised its estimate for economic growth higher in 2006 and 2007.

Stock markets in India lost the ground ahead of the release of key economic data on Friday. Industrial production is expected to rise and inflation is expected to be at elevated level. The key index, Sensex lost 0.6% and in the broader markets, Nifty fell 0.3%. Oil and gas stocks gained but software exporters declined on the worries related to the U.S. economic health. Reliance industries authorized 800 crore rupees stock buyback. Crude oil jumped to record $112 a barrel.

European Markets indexes

In London FTSE 100 Index closed lower 18.80 or 0.31% to 5,965.10, in Paris CAC 40 Index decreased 15.55 or 0.32% to close at 4,859.42 and in Frankfurt DAX index lower 17.04 or 0.25% to close at 6,704.32. In Zurich trading SMI decreased 90.43 or 1.22% to close at 7,312.65.

North American Markets indexes

Dow Jones Industrial Average added 54.72 or 0.44% to a close of 12,581.98, S&P 500 closed up 6.06 or 0.45% to 1,360.55, and Nasdaq Composite Index increased 29.58 or 1.27% to close at 2,351.70. In Toronto TSX Composite closed up 159.03 or 1.16% to 13,909.58.

Of the 30 stocks in Dow Jones Industrial Average, 19 closed higher, 10 closed lower, and one was unchanged.

Alcoa led the gainers in the Dow Jones index with a fall of 1.98% followed by losses in JP Morgan Chase of 0.99%, in Bank of America of 0.63% and in Caterpillar of 0.59%. Intel led the gainers in the index with a rise of 3.1% followed by increases in Home Depot of 2.57%, Merck of 1.88% and in IBM of 1.72%.

Of the stocks in S&P 500 index, 296 stocks increased, 197 declined, and 7 were unchanged. Of the stocks in the index, 12 stocks fell more than 3% and 33 gained more than 3%.

E*Trade led the decliners in the S&P 500 index with a loss of 7% followed losses in Ambac Financial of 6.7%, in Fannie Mae of 5.6%, in CIT Group of 5.4%, in Patterson of 4.5%, and in Sovereign Bancorp of 4%.

Lexmark International led the gainers in the S&P 500 index with a rise of 8.4% followed by increases in National Semiconductor of 6.3%, in Amgen of 2.4%, and in Lowe’s of 5.2%.


South American Markets Indexes

Colombia led the decliners in South American trading with a loss of 1.63% followed by decreases in Peru of 1.34%, and in Argentina of 0.67%. Venezuela led the gainers in the region with a rise of 2.25% followed by gains in Mexico of 0.74% and in Brazil of 0.08%.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 166.59 or 1.27% to 12,945.30, in Hong Kong Hang Seng index increased 202.53 or 0.84% closed to 24,187.10. In Australia ASX 200 index lower 73.80 or 1.34% to close 5,446.40. In Malaysia KL Composite index increased 20.45 or 1.67% closed to 1,248.19.

In South Korea Kospi Index increased 9.93 or 0.57% to close at 1,764.64, in Thailand SET index closed lower 5.21 or 0.63% to 820.98 and Indonesia JSE Index edged increased 55.85 or 2.56% to 2,235.93. Sensex index in India decreased 95.41 or 0.60% to 15,695.10.

Commodities, Metals, and Currencies

Crude oil decreased $0.72 to close at $110.15 a barrel for a front month contract, natural gas decreased 3 cent to $10.03 per mBtu, and gasoline futures increased 1.18 cents to close at 278.60 cents per gallon.

Gold decreased $5.70 in New York trading to close at $931.80 per ounce, silver closed down $0.16 cents to $18.04 per ounce, and copper for front month delivery decreased 7.60 cents to $3.924 per pound.

Wheat futures decreased 10.00 cents in Chicago trading and closed at $9.36 per bushel. Sugar increased 15.00 cent to $13.08 per pound. Soybean future closed up 42.75 cents to $13.73 a bushel.

Dollar edged higher and traded near a record low against euro to $1.5744 and edged higher against yen to 101.925.

Yields on U.S. bonds declined to 3.53% on 10-year bonds and fell on 30-year bonds to 4.34%.