Crude Oil Rise Kills Payrolls Rally

123jump.com Staff
02 May, 2008
New York City

U.S. stocks closed mixed after April payrolls declined 20,000 and unemployment fell to 5% from 5.1%. The smaller than expected drop in payroll lifted stocks in the morning. Crude oil rebounded 3% and dragged market averages at close. Yield on 30 years bonds rose. Stocks in Europe and Latin America closed higher tracking gains in the U.S. Countrywide Financial debt status was lowered to junk level after the Bank of America in filing suggested that it may not guarantee $93 billion of debt.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – U.S. stocks closed mixed as financial stocks gained. Yahoo and Microsoft talks gain momentum. Crude oil rebounds 3%.[/R]

Global Markets Update

U.S. stocks edged lower after surging nearly one percent at the opening. The Fed widened its term auction next week to $75 billion from $50 billion. April non-farm payroll declined lower than expected, sparking a rally in dollar. Construction and retail industries continue to shed workers. In addition, construction spending fell 1.1% in March. Crude oil and gold edged higher. Tech stocks fell after a surge at the opening.

Countrywide credit rating was cut to junk status after the Bank of America in a regulatory filing suggested that it may not redeem or guarantee $93 billion of its debt.

Bankrate.com the online provider of personal financial information reported revenue surged 91% to 42.5 million and earnings rose 27% to $6.8 million. The banana distributor Chiquita Brands revenue in the first quarter rose 7% to $1.3 billion and net income was $31.7 million compared to a loss of $3.4 million in the quarter a year ago. Dolby Labs, the surround system technology licensor reported revenue jumped 34% to $172 million and net income increased to $39.1 million. MetLife net income fell.

Stocks in Japan rose sharply after the yen fell to a 2-year low. Investors returned to stocks on the falling commodities and crude oil futures prices and rising optimism related to credit market. In Tokyo trading Nikkei 225 rose 2.05% or 282.4 to 14,049.26, rising 1.3% for the week, and the broader Topix Index increased 2.3% or 31.29 to 1,377.39.

European Markets indexes

In London FTSE 100 Index closed higher 128.20 or 2.11% to 6,215.50, in Paris CAC 40 Index increased 73.17 or 1.46% to close at 5,069.71 and in Frankfurt DAX index higher 94.41 or 1.36% to close at 7,043.23. In Zurich trading SMI increased 136.80 or 1.82% to close at 7,665.80.

North American Markets indexes

Dow Jones Industrial Average rose 48.20 or 0.37% to a close of 13,058.20, S&P 500 closed up 4.55 or 0.32% to 1,413.89, and Nasdaq Composite Index decreased 3.72 or 0.15% to close at 2,476.01. In Toronto TSX Composite closed up 201.20 or 1.43% to 14,267.01.

Of the 30 stocks in Dow Jones Industrial Average, 20 closed higher, 10 closed lower, and none was unchanged.

American Express led decliners in the Dow Jones with the loss of 2% followed by losses in JP Morgan of 1.5%, in Wal-Mart of 1.2%, in Microsoft of 1.1%, and in Coca Cola of 0.6%. Alcoa led gainers in the Dow Jones index with a rise of 4.2% followed by increases in DuPont of 1.8%, in Citigroup of 1.6%, in AIG of 1.33%, and in Intel of 0.9%.

Of the stocks in S&P 500 index, 249 stocks increased, 244 declined, and 7 were unchanged. Of the stocks in the index, 13 stocks fell more than 3% and 30 gained more than 3%.

Sun Microsystems led decliners in the S&P 500 index with a plunge of 23% followed by losses in Qlogic of 8%, in Allergan of 5.1%, in ADP of 4.9%, in GameStop of 4.5%, and in Washington Post of 4.4%.

Jones Apparel led gainers in the S&P 500 index with a rise of 9% followed by increases in Yahoo of 7%, in SLM Corp of 6.8%, in CIT Group of 6.7%, in Marathon Oil of 6%, and in Ambac Financial of 5.9%.

South American Markets Indexes

Colombia led gainers in the region with a gain of 2.45% followed by gains in Brazil of 2.15%, in Venezuela of 0.85%, in Argentina of 0.65%, in Chile of 0.52% and in Peru of 0.01%. Mexico added 0.89%.


Asian Markets

In Tokyo Nikkei 225 Index closed higher 282.40 or 2.05% to 14,049.26, in Hong Kong Hang Seng index increased 485.67 or 1.89% closed to 26,241.02. In Australia ASX 200 index higher 114.60 or 2.05% to close 5,700.40. In Malaysia KL Composite index decreased 8.38 or 0.65% closed to 1,271.48.

In South Korea Kospi Index increased 22.80 or 1.25% to close at 1,848.27, in Thailand SET index closed higher 10.70 or 1.29% to 843.15 and Indonesia JSE Index edged increased 0.99 or 0.04% to 2,304.52. Sensex index in India increased 312.81 or 1.81% to 17,600.12.

Commodities, Metals, and Currencies

Crude oil increased $3.77 to close at $116.29 a barrel for a front month contract, natural gas decreased 19 cents to $10.75 per mBtu, and gasoline futures increased 8.70 cents to close at 296.00 cents per gallon.

Gold decreased $14.20 in New York trading to close at $850.90 per ounce, silver closed up $0.26 cents to $16.205 per ounce, and copper for front month delivery increased 12.60 cents to $3.8205 per pound.

Wheat futures increased 19.00 cents in Chicago trading and closed at $8.90 per bushel. Sugar increased 14 cent to $11.49 per pound. Soybean future closed up 33.50 cents to $13.04 a bushel.

Dollar edged higher but traded near record low against euro to $1.5414 and edged higher against yen to 105.35.

Yields on U.S. bonds increased to 3.86% with 10 years of maturities and increased 4.58% with 30-year of maturities.