Rally in Tech and Energy Stocks

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

Tech and energy stocks advacned in the session. Cisco, Intel, Yahoo, Apple, Google and Research in Motion closed higher and lifted Nasdaq up 1.4%. Energy stocks gained as well, after crude traded at elevated level. Oil drillers, explorers and services providers closed higher. Metals and mining companies gained on the weakness in dollar and sustained demands from China and other Asian nations.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – Tech and energy companies rallied in the U.S. markets. Cadbury and SAB Miller rose on earnings and outlook. Barclays reported £1.7 billion charge.[/R]

Global Markets Update

CNET Networks, Inc agreed to be acquired by CBS at $11.50 per share or $1.8 billion. The technology and tech news publisher had regained its footing after the tech bubble in the late nineties. In the year 2007 the company had reported revenue of $406 million and earnings of $177 million. CBS locked in a competitive struggle with News Corp has been acquiring Internet properties to increase its audience reach.

U.S. stocks opened modestly higher. Barclays in its interim report suggested that the first quarter earnings will be lower than in the quarter a year ago and took a charge of £1.7 billion related to losses in the credit market. Tier 1 ratios of capital and equity declined as well in the quarter. The bank has one of the weakest capital ratios in the industry and has no plans to raise capital. CNET agreed to be acquired by CBS for $1.8 billion.

Tech stocks in the U.S. lifted broader market indexes. Nasdaq index gained 1.2% in the late afternoon on a steady rise in Apple, Research in Motion, Intel, Cisco and Google. Carl Ichan and Paulson & Company acquire a stake in Yahoo hoping to elect board that favors a deal with Microsoft. Retailers also rallied after JC Penney reported lower than expected fall in earnings. Barclays reported a large loss related to credit market assets.

UK stocks edged higher after Cadbury indicated that profit margin will be 1.5% higher than a year ago and BT Group reported fourth quarter sales increased 2.5%. SABMiller second half profit rose 24% to $1.07 billion and for the year profit rose $2.02 billion. However, Barclays reported a loss of £1.1 billion in the quarter on the charge of £1.7 billion related to credit market losses and still has exposure to £14 billion pounds to subprime and other asset backed loans at the end of the first quarter.

European Markets indexes

In London FTSE 100 Index closed higher 35.80 or 0.58% to 6,251.80, in Paris CAC 40 Index increased 2.27 or 0.04% to close at 5,057.51 and in Frankfurt DAX index lower 2.19 or 0.03% to close at 7,081.05. In Zurich trading SMI increased 88.82 or 1.17% to close at 7,683.43.

North American Markets indexes

Dow Jones Industrial Average rose 94.28 or 0.73% to a close of 12,992.66, S&P 500 closed up 14.91 or 1.06% to 1,423.57, and Nasdaq Composite Index increased 37.03 or 1.48% to close at 2,533.73. In Toronto TSX Composite closed up 201.75 or 1.38% to 14,828.06.

Of the 30 stocks in Dow Jones Industrial Average, 22 closed higher, 8 closed lower, and none was unchanged.

General Motors led the gainers in the Do Jones Index with a rise of 5.2% followed by increases in Intel Corp of 4.75%, in JP Morgan Chase of 2.4%, in Hewlett Packard of 2.3%, in Citigroup of 2.06% and in Alcoa of 1.76%. United Tech led the decliners in the Dow Jones Index with a loss of 1.1% followed by losses in Wal-Mart Stores of 0.6%, in General Electric of 0.4%.

Of the stocks in S&P 500 index, 391 stocks increased, 107 declined, and 2 were unchanged. Of the stocks in the index, none stocks fell more than 3% and 45 gained more than 3%.

Celgene Corp led the decliners in the S&P 500 index with a loss of 2.8% followed by losses in Electronic Arts of 2.4%, in CBS Corp of 2.3%, in Medco Health Solutions of 2.1% and in WellPoint of 2.1%. Agilent Technologies led the gainers in the S&P 500 index with a rise of 8.6% followed by increases in Peabody Energy of 7.8%, in NVidia of 7.7%, in Allegheny Tech of 7.6% and in EMC Corp of 6.7%.

South American Markets Indexes

Brazil led the gainers in the Latin American markets with a rise of 2.09% followed by increases in Argentina of 1.6%, in Peru of 1.14%, in Mexico of 0.66% and in Chile of 0.32%. Colombia led the decliners in the index with a loss of 0.44% followed by losses in Brazil of 0.38%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 133.19 or 0.94% to 14,251.74, in Hong Kong Hang Seng index decreased 19.77 or 0.08% closed to 25,513.71. In Australia ASX 200 index higher 18.00 or 0.31% to close 5,890.70. In Malaysia KL Composite index increased 6.41 or 0.50% closed to 1,294.15.

In South Korea Kospi Index increased 41.96 or 2.28% to close at 1,885.71, in Thailand SET index closed higher 6.67 or 0.79% to 855.61 and Indonesia JSE Index edged increased 0.47 or 0.02% to 2,449.81. Sensex index in India increased 375.19 or 2.21% to 17,353.54.

Commodities, Metals, and Currencies

Crude oil increased 5 cents to close at $124.27 a barrel for a front month contract, natural gas decreased 21 cents to $11.39 per mBtu, and gasoline futures decreased 1.25 cents to close at 316.79 cents per gallon.

Gold increased $13.50 in New York trading to close at $880.00 per ounce, silver closed up 7 cents to $16.68 per ounce, and copper for front month delivery increased 5.75 cents to $3.738 per pound.

Wheat futures increased 7.50 cent in Chicago trading and closed at $7.71 per bushel. Sugar decreased 5 cent to $11.00 per pound. Soybean future closed down 32.00 cents to $13.47 a bushel.

Dollar edged lower and traded near record low against euro to $1.5446 and edged higher against yen to 104.75.

Yields on U.S. bonds decreased to 3.81% with 10 years of maturities and decreased to 4.55% with 30-year of maturities.