Saudi Lifts Supply, Metals Rise, JC Penney Falls

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

U.S. and European stocks struggled as crude oil traded near record high. Retail and home builder stocks rallied after 8% rise in home starts in April. Inflation in India soared to a new high as manufacturers struggle with rising commodities prices. JC Penney fell after it reported earnings. Copper, aluminum and zinc added between 1.4% and 2.4%.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – Crude oil and base metal prices rose as stocks struggled in the U.S. and European markets. Gains in Brazil led the world markets.[/R]

Global Markets Update

U.S. stocks opened higher after the release of housing start data but quickly lost the ground on a rise in crude oil. April housing starts rose 8.2% and building permits increased 4.9%. The volatile condo construction impacted the monthly rise in addition to the cyclical activity after the winter months. In the earnings news, Kohl's Corp reported first quarter sales rose 1.5% and net income increased 27%. Thailand, Australia and Indonesia led the gainers in Asia.

In India, the latest read on wholesale inflation for twelve months period ending two weeks ago rose to 7.83% from 7.61% in the previous week. The rising inflation in food, energy, fuel and manufactured products prices have put consumers in a tight spot. Government sought and received as much as 5% price reduction in cement prices will help but similar relief is not likely in fuel prices and other industrial products. Sensex 30 index added 0.5% to 17,434.

Abercrombie & Fitch Co., specialty retailer reported first quarter net sales across various store brands increased 8% to $800.2 million compared to $742.4 million in the same period of 2007. Net income increased 3% to $62.1 million or $0.69 per diluted share compared to $60.1 million or $0.65 per share a year ago. Despite worries of the consumer spending slow down, several brands in the chain reported rising same store sales.

British Energy surged 5% after it reported that it exploring merger possibilities with several bidders. British Energy news lifted FTSE 100 index 0.8% to 6,304. British Air reported 45% rise in profit on 3% rise in revenue. Despite the higher fuel costs the operating costs were lower. The airline maintained its estimate of 4% rise in revenue in the current year. London financial service sector hiring was up 10% in April according to a private estimate but the number of applicants increased 20%.

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 fell 5.86 or 0.05% to a close of 12,986.80, S&P 500 closed up 1.78 or 0.13% to 1,425.35, and Nasdaq Composite Index decreased 4.88 or 0.19% to close at 2,528.85. In Toronto TSX Composite closed up 156.14 or 1.05% to 14,984.20.

Of the 30 stocks in Dow Jones Industrial Average, 11 closed higher, 17 closed lower, and none was unchanged.

General Motors led the decliners in Dow Jones Index with a loss of 2.6% followed by losses in Citigroup of 2.5%, in American Express of 2.4%, in Microsoft of 1.5%, and in Bank of America of 1.4%. Chevron led the gainers in the index with a rise of 1.9% followed by increases in ExxonMobil of 1.5%, in Hewlett Packard of 1.2% and in 3M Company of 1.035.

Of the stocks in S&P 500 index, 209 stocks increased, 281 declined, and 10 were unchanged. Of the stocks in the index, 21 stocks fell more than 3% and 31 gained more than 3%.

KeyCorp led the decliners in the S&P 500 index with a fall of 5.5% followed by losses in Regions Financial of 5.4%, in Liz Claiborne of 4.7%, in BB&T of 4.3% and in Apollo Group of 4.15%. Rowan Companies led the gainers in the S&P 500 index with a rise of 6.5% followed by increases in XTO Energy of 6.3%, in BMC Software of 6.09%, in Starbucks of 6% and Apache of 5.4%.

South American Markets Indexes

Brazil led the gainers in the Latin American markets with a rise of 1.78% followed by increases in Chile of 1.49%, in Argentina of 0.70%. Mexico fell 0.18% and Venezuela declined 0.6%.

World markets

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.

In Tokyo Nikkei 225 Index closed lower 32.26 or 0.23% to 14,219.48, in Hong Kong Hang Seng index increased 105.15 or 0.41% closed to 25,618.86. In Australia ASX 200 index higher 40.30 or 0.68% to close 5,931.00. In Malaysia KL Composite index increased 6.52 or 0.50% closed to 1,300.67.

In South Korea Kospi Index increased 3.17 or 0.17% to close at 1,888.88, in Thailand SET index closed higher 14.72 or 1.72% to 870.33 and Indonesia JSE Index edged increased 19.03 or 0.78% to 2,468.84. Sensex index in India increased 81.40 or 0.47% to 17,434.94.

Commodities, Metals, and Currencies

Crude oil increased $2.71 to close at $126.83 a barrel for a front month contract, natural gas decreased 33 cents to $11.07 per mBtu, and gasoline futures increased 6.425 cents to close at 323.00 cents per gallon.

Gold increased $19.90 in New York trading to close at $899.90 per ounce, silver closed up 27 cents to $16.96 per ounce, and copper for front month delivery increased 8.8 cents to $3.8265 per pound.

Wheat futures increased 4.00 cent in Chicago trading and closed at $7.75 per bushel. Sugar increased 13 cent to $11.13 per pound. Soybean future closed up 30.50 cents to $13.78 a bushel.

Dollar edged higher and traded near record low against euro to $1.5594 and edged lower against yen to 103.98.

Yields on U.S. bonds increased to 3.85% with 10 years of maturities and increased to 4.57% with 30-year of maturities.