SanDisk Soft Sales; Coal, Oil Higher

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

U.S. stocks closed mildly higher after rallying in the morning. The index of leading indicators rose 0.1% in Apri lifting stocks in the morning and several brokers recommended buying tech and transportations stocks. The morning rally failed to take hold in the afternoon and tech stocks closed lower. Union Pacific, Norfolk southern and Burlinton Northern closed higher. SanDisk fell after the company confirmed softness in April sales.

[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – A rise in the index of leading indicators and brokers recommendations of tech and transportation fueled a rally in the morning. However, stocks closed lower.[/R]

Global Markets Update

U.S. stocks edged higher on a rally in tech and transportations stocks and on 0.1% rise in index of leading indicators. The U.S. dollar rallied on the hopes that the economy may not slip into a recession. As the earnings season winds down, investors appear to take higher risk and show willingness to pay higher prices for stocks. Broker recommendations lifted Amazon.com, Union Pacific and National City Corp. Campbell Soup reported third quarter revenue rise of 7% to $1.8 billion and earnings gain of 59% to $532 million. Excel Maritime gained after earnings surged 213% on 94% rise in revenue.

UK stocks closed higher on a sustained rally in commodities and mining related stocks. A sharp rise in crude oil and coal prices lifted stocks in the sector. Crude oil, coal, copper and zinc hovered near record levels and Baltic Dry Index also indicated rising freight rates for commodities. UK newly listed homes asked 1.2% more than in May as sellers expect prices to rise. The private research group indicated that sellers may be forced to sell properties at a lower price.

Japanese steelmakers joined the world steel makers in passing higher coal and iron ore prices from Australia and Brazil to automakers in Japan. The sharp revision in steel prices is expected to be effective in the latest negotiations between Nippon Steel and Toyota and Mitsubishi Heavy. Australian iron ore miners have lifted prices of ore by more than 250% in the last five years and now coal prices have jumped 150% in the last two years. Weak U.S. dollar has also contributed to the price hike.

Chinese coal and other mining companies rose as crude oil price rise lifted spot prices of coal and metals. The earthquake damage and three month old snow storms have put the food and energy supply at a risk in the mainland China. Vegetables, fruits and other food priced have surged and now metal and crude oil prices are rising rapidly. CSI 300 index in Shanghai trading fell 0.6% but Hang Seng index rose 0.5%.

European Markets indexes

In London FTSE 100 Index closed higher 72.20 or 1.15% to 6,376.50, in Paris CAC 40 Index increased 64.06 or 1.26% to close at 5,142.10 and in Frankfurt DAX index higher 69.39 or 0.97% to close at 7,225.94. In Zurich trading SMI increased 125.22 or 1.64% to close at 7,778.93.

North American Markets indexes

Dow Jones Industrial Average rose 41.36 or 0.29% to a close of 13,028.16, S&P 500 closed up 1.22 or 0.01% to 1,426.57, and Nasdaq Composite Index decreased 12.76 or 0.50% to close at 2,516.09. In Toronto TSX Composite closed up 156.14 or 1.05% to 14,984.20 in Friday’s trading.

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 index with a rise of 3.5% followed by increases in Boeing of 2.8%, in Chevron of 1.9%, in ExxonMobil of 1.7% and in AT&T of 1.5%. Microsoft led the decliners in the index with a fall of 1.7% followed by declines in Wal-Mart Stores of 0.9%, in IBM of 0.8%, in Hewlett Packard of 0.82% and in AIG of 0.81%.

Of the stocks in S&P 500 index, 283 stocks increased, 211 declined, and 6 were unchanged. Of the stocks in the index, 13 stocks fell more than 3% and 15 gained more than 3%.

SanDisk led the decliners in the S&P 500 index with a loss of 7.6% followed by declines in SLM Corp of 6.6%, in Campbell Soup of 5.3%, in E*Trade Financial of 5.1%, in RadioShack of 4.4% and in KB Home of 4.11%. Amazon.com led the gainers in the S&P 500 index with a rise of 8.15% followed by gains in Vulcan Materials of 7.6%, in National City Corp of 4.8% and in Titanium Metals of 4.7%.

South American Markets Indexes

Argentina led the gainers in the Latin American markets with a rise of 2.60% followed by increases in Mexico of 0.9%, in Chile of 0.7% and in Brazil of 0.50%. Colombia lost 0.01% and Venezuela declined 0.45%.

Asian markets

In Tokyo Nikkei 225 Index closed higher 50.13 or 0.35% to 14,269.61, in Hong Kong Hang Seng index increased 123.37 or 0.48% closed to 25,742.23. In Australia ASX 200 index higher 18.40 or 0.31% to close 5,949.40. Market of Malaysia was closed today.

In South Korea Kospi Index decreased 3.51 or 0.19% to close at 1,885.37. Indonesia JSE Index edged increased 25.42 or 1.71% to 2,510.96. Market of Thailand and India were closed today.

Commodities, Metals, and Currencies

Crude oil increased $0.96 to close at $127.25 a barrel for a front month contract, natural gas decreased 16 cents to $10.93 per mBtu, and gasoline futures increased 1.45 cents to close at 323.80 cents per gallon.

Gold increased $5.90 in New York trading to close at $905.80 per ounce, silver closed up 7 cents to $17.03 per ounce, and copper for front month delivery decreased 5.1 cents to $3.77 per pound.

Wheat futures increased 15.50 cent in Chicago trading and closed at $7.91 per bushel. Sugar decreased 38 cent to $10.75 per pound. Soybean future closed down 45.00 cents to $13.33 a bushel.

Dollar edged higher and traded near record low against euro to $1.5508 and edged higher against yen to 104.195.

Yields on U.S. bonds decreased to 3.81% with 10 years of maturities and decreased to 4.56% with 30-year of maturities.