U.S. Stocks Rise, Wheat Falls 4%

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

U.S. stocks edged higher on the weekly unemployment report. The fall in claims at the end of the last week, lower than expected lifted market averages. Ford Motor cut its production target for the next two quarters by 20% and said that it may only break-even in the year 2009. Earlier it had estimated a return to profitability by the year. UBS offered rights at 31% discount from its closing price on yesterday. Crude oil fell back to $130 a barrel after rising above $135.

10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney[R]– U.S. stocks closed higher the weekly jobless claims report and fall in crude oil price futures. Crude oil price reached another intra-day high on the talks of future supply shortage.[/R]

Global Markets Update

U.S. stocks edged higher on the weekly unemployment report. The fall in claims at the end of the last week, lower than expected lifted market averages. Ford Motor cut its production target for the next two quarters by 20% and said that it may only break-even in the year 2009. Earlier it had estimated a return to profitability by the year. UBS offered rights at 31% discount from its closing price on yesterday.

Crude oil prices in New York and London trading rose above $135 a barrel but closed lower. In New York prices reached $135.10 and in London Brent crude traded at $134.25. Crude oil futures are increasingly used by financial investors to hedge weak dollar. Talks of oil supply shortages, though a possibility only in 2012 and after, has attracted more speculators to the market.

Ford Motor Company stock fell 7.5% after it withdrew its 2009 profitability target and cut production. The company now expects at the best to break-even in the year before taxes and special charges. In the second and third quarter auto maker plans to cut production by as much as 20% and between 2% and 8% in the fourth quarter from a year ago. Consumers are increasingly opting for smaller cars and avoid gas guzzling trucks.

The drug retailer Longs Drug Stores revenues in the first quarter rose 8.5% to $1.41 billion and earnings increased 77% to $23.5 million. Earnings per share rose 65 cents from 34 cents a year ago. Same store sales at retail drug stores rose 1% and total sales increased 2.9%. Apparel retailer Limited Brands first quarter sales declined 17% to $1.9 billion and earnings increased 49% to $97.8 million or 28 cents per share. The quarter included one-time gain of 18 cents per share.

European Markets indexes

In London FTSE 100 Index closed lower 16.50 or 0.27% to 6,181.60, in Paris CAC 40 Index increased 1.19 or 0.02% to close at 5,028.74 and in Frankfurt DAX index higher 29.50 or 0.42% to close at 7,070.33. In Zurich trading SMI increased 3.76 or 0.05% to close at 7,578.03.

North American Markets indexes

Dow Jones Industrial Average rose 24.43 or 0.19% to a close of 12,625.62, S&P 500 closed up 3.64 or 0.26% to 1,394.35, and Nasdaq Composite Index increased 16.31 or 0.67% to close at 2,464.58. In Toronto TSX Composite closed up 13.79 or 0.09% to 14,804.16.

Of the 30 stocks in Dow Jones Industrial Average, 16 closed higher, 14 closed lower, and none were unchanged.

General Motors led the gainers in Dow Jones Industrial Average with a loss of 3.4% followed by losses in Alcoa of 1.9%, in Caterpillar of 1.6% and in Pfizer of 1.5%. Citigroup led the gainers in the Dow Jones with a rise of 2.9% followed by gains in Coca Cola of 2.6%, in AIG of 1.4%, and Wal-Mart Stores of 1.3%.

Of the stocks in S&P 500 index, 279 stocks increased, 220 declined, and one was unchanged. Of the stocks in the index, 17 stocks fell more than 3% and 12 gained more than 3%.

Ford Motor Company led the decliners in the S&P 500 index with a loss of 8.9% followed by losses in Akamai Technology of 7.5%, in Moody’s Corp of 7.5%, in NetApp Inc of 5.8%, in Cameron International of 4.8% and in GameStop of 4.4%. Sovereign Bancorp led the gainers in the S&P 500 index with a rise of 7.3% followed by increases in Wendy’s International of 5.7%, in King Pharmaceuticals of 4.9%, in Aetna Inc of 4.8%, in Leggett & Platt of 4.7% and in Dell Inc of 4.55%.

South American Markets Indexes

Argentina led the gainers in the Latin American markets with a rise of 1.24% followed by increases in Mexico of 0.38% and in Chile of 0.02%. Peru led the decliners in the region with a loss of 1.95% followed by declines in Brazil of 1.66%, in Venezuela of 0.79% and in Colombia of 0.49%.

Asian markets

In Tokyo Nikkei 225 Index closed higher 52.16 or 0.37% to 13,978.46, in Hong Kong Hang Seng index decreased 417.17 or 1.64% closed to 25,043.12. In Australia ASX 200 index higher 3.50 or 0.06% to close 5,826.90. In Malaysia KL Composite index decreased 3.63 or 0.28% closed to 1,277.57.

In South Korea Kospi Index decreased 12.09 or 0.76% to close at 1,835.42, in Thailand SET index closed lower 9.65 or 1.09% to 874.54 and Indonesia JSE Index edged increased 9.24 or 0.37% to 2,503.95. Sensex index in India decreased 336.05 or 1.95% to 16,907.11.

Commodities, Metals, and Currencies

Crude oil decreased $2.53 to close at $130.64 a barrel for a front month contract, natural gas increased 5 cents to $11.69 per mBtu, and gasoline futures decreased 7.25 cents to close at 332.40 cents per gallon.

Gold decreased $10.30 in New York trading to close at $918.30 per ounce, silver closed up 32 cents to $18.05 per ounce, and copper for front month delivery decreased 3.20 cents to $3.71 per pound.

Wheat futures decreased 33.00 cent in Chicago trading and closed at $7.45 per bushel. Sugar decreased 17 cent to $10.43 per pound. Soybean future closed down 24.250 cents to $13.24 a bushel.

Dollar edged higher and traded near record low against euro to $1.5708 and fell against yen to 104.23.

Yields on U.S. bonds increased to 3.91% with 10 years of maturities and increased to 4.62% with 30-year of maturities.