Financials Lift Dow and S&P 500

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

U.S. stock averages advanced after a steady rise in financials and insurance stocks. Merrill Lynch surged 10% after it said that it will not cut dividend. Credit Suisse edged 5% higher after it swung to $2.2 billion loss and said that for now it may not need to raise capital. Stocks of T. Rowe Price and Aflac gained on better than expected earnings.

[R]2:45PM New York – Financial rallied and lifted market averages higher.[/R]

U.S. stocks rallied after a surprise drop in initial jobless claims at the end of last week, however new home sales and durable goods orders declined in March. Inventories of unsold homes rose to 11 month of supply.

Financial stocks rallied led by a rise in T Rowe Price, Afalc, Credit Suisse, and Merrill Lynch.

T Rowe Price stock ((TROW)) surged $6 to $60 after it reported net revenue in the first quarter jumped to $559 million from $508 million and earnings rose to $151.5 million from $143 million. Earnings per share increased to 55 cents from 51 cents a year ago. The company increased dividend to 24 cents from 17 cents a year ago.

Aflac stock ((AFL)) disability insurance provider in the U.S. and Japan rose $3 to $68.07 after it reported 14% increase in profit on rising sales in Japan. Total revenues were $4.3 billion in the first quarter of 2008, compared with $3.8 billion a year ago. Net earnings were $474 million, or $.98 per diluted share, compared with $416 million, or $.84 per share, a year ago.

The Travelers Company stock ((TRV)) increased $2.06 to $50.35 after it reported earnings reported net income of $967 million, or $1.54 per diluted share, for the quarter ended March 31, 2008, compared to $1.086 billion, or $1.56 per share, for the quarter a year ago..

Merrill Lynch ((MER)) stock surged $4.08 to $48.98 after its chief executive said that the company has no plans to cut dividend.

Credit Suisse ((CS)) Swiss investment banker rose $2.57 to $54.18 after it reported net loss of SFr 2.14 billion compared to net income of 2.72 billion a year ago. The stock rose after the company said that it is not looking to raise capital to bolster its balance sheet. In the last one month Royal Bank of Scotland and UBS in Europe have announced plans to raise $24 billion and $15 billion.

Brady W Dougan, chief executive said, """"Credit Suisse remains well positioned in an extremely challenging environment: our capital position is strong and we will continue to manage our liquidity conservatively and control our expenses effectively.”

New homes sales fell

Sales of new one-family houses in March 2008 were at a seasonally adjusted annual rate of 526,000, 8.5% below the revised February rate of 575,000 and is 36.6% from a year ago estimate of 830,000.

The median sales price of new houses sold in March 2008 was $227,600; the average sales price was $292,200. The seasonally adjusted estimate of new houses for sale at the end of March was 468,000, a supply of 11.0 months at the current sales rate.

Durable goods orders and weekly jobless claims fall

Weekly unemployment claims at the end of last week declined 33,000 to 342,000 after season adjustments and four week average of initial claims fell 7,250 to 369,500.

Seasonally adjusted durable goods orders fell 0.3% in March to $212.2 billion according to the Commerce Department. February data was revised to a decline of 0.9% from an initial estimate of 1.1% drop. This was the third consecutive monthly decrease and followed a 0.9% February decrease. Excluding transportation, new orders increased 1.5%. Excluding defense, new orders increased 0.3%.

Unfilled orders for manufactured durable goods in March, up thirty-four of the last thirty-five months, increased $7.3 billion or 0.9% to record high of $830.1 billion since 1992.

European markets review

In London FTSE 100 Index closed lower 32.90 or 0.54% to 6,050.70, in Paris CAC 40 Index decreased 15.10 or 0.31% to close at 4,929.55 and in Frankfurt DAX index higher 26.29 or 0.39% to close at 6,821.32. In Zurich trading SMI increased 136.02 or 1.86% to close at 7,460.52.

Asian markets review

In Tokyo Nikkei 225 Index closed lower 38.29 or 0.28% to 13,540.87, in Hong Kong Hang Seng index increased 391.54 or 1.55% closed to 25,680.78. In Australia ASX 200 index lower 65.60 or 1.16% to close 5,587.30. In Malaysia KL Composite index increased 4.92 or 0.38% closed to 1,293.08.

In South Korea Kospi Index decreased 1.45 or 0.08% to close at 1,799.34, in Thailand SET index closed lower 3.35 or 0.40% to 834.31 and Indonesia JSE Index edged decreased 44.32 or 1.92% to 2,269.98. Sensex index in India increased 23.04 or 0.14% to 16,721.08.