U.S. Tech Stocks, European Inflation Rise

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

U.S. tech stocks rallied after better than expected earnings from Dell Inc and Marvell Technology. In economic report, U.S. perosnal spending and income rose at a slower pace and expectations of core inflation rate, a controversial measure of inflation, rate remained subdued. In commodities trading crude oil fell but natural gas traded near record level. India reported its fourth quarter economic growth rate at 8.8% and fiscal year 2008 rate of 9%. Inflation expectations rise in euro zone.

10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney[R]– U.S. tech stocks rallied after better than expected earnings from Dell.[/R]

Global Markets Update

U.S. personal spending in April rose 0.2% after increasing 0.4% in March. Personal income in the month rose 0.2% and disposable income increased 0.2%. The price index for personal consumption expenditure, the inflation index preferred by the Fed increased 0.2% in the month compared to a rise of 0.3%. On the deal front, Calpine Corp is looking for a higher bid from NRG Energy as its largest shareholder urges the two companies to explore merger. J Crew Group fell 21% after it reported earnings.

European Union area annual inflation is expected to be 3.6% in May according to a flash estimate by European Union Statistical Office released today, higher than April rate of 3.3%. The key indices in Germany and France closed higher after a decline in the crude oil prices. Oil prices continue to fall as Brent crude oil fell $1.18 or 0.93% to $128.07 per barrel. Air France-KLM and Lufthansa rose 4% on the decline in oil prices. Deutsche Postbank rose on talks of takeover.

Fourth quarter GDP in India surged at 8.8% beating the expectations of 8.2% set by the government. For the fiscal year ending in March, economy grew at 9%. Service sector growth led the rise in the economy in the quarter and for the year. Lack of agriculture growth continues to drag the overall economy and record inflation at 8.1% is sapping disposable income for consumers.

Australian stocks fell 1%. Allco Finance Group agreed to tough financial conditions to refinance its $255 million of debt and Centro Group requested a trading halt on its stock as it negotiates with its creditors. Origin Energy surged 7% after it rejected $13 billion bid from the UK based BG Group. The provider of drilling services to mining companies including BHP Billiton Ltd, Boart Longyear Ltd share gained 12% after it lifted its annual sales growth estimate to between 20% and 25% from 15%.

European Markets indexes

In London FTSE 100 Index closed lower 14.60 or 0.24% to 6,053.50, in Paris CAC 40 Index increased 38.38 or 0.77% to close at 5,014.28 and in Frankfurt DAX index higher 41.76 or 0.59% to close at 7,096.79. In Zurich trading SMI decreased 30.47 or 0.40% to close at 7,511.29.

North American Markets indexes

Dow Jones Industrial Average fell 7.90 or 0.06% to a close of 12,638.32, S&P 500 closed up 2.12 or 0.15% to 1,400.38, and Nasdaq Composite Index increased 14.34 or 0.57% to close at 2,522.66. In Toronto TSX Composite closed up 138.20 or 0.43% to 14,714.73.

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

AIG led the gainers in the Dow Jones Index with a rise if 1.9% followed by gains in United Technologies of 1.15%, in Procter & Gamble of 0.9%, in Boeing Company of 0.8% and in Alcoa of 0.6%. Bank of America led the decliners in the index with a loss of 1.7% followed by losses in General Motors of 1.6%, in JP Morgan Chase of 1.3%, in Hoe Depot of 1.26% and in Coca Cola of 1%.

Of the stocks in S&P 500 index, 254 stocks increased, 242 declined, and 4 were unchanged. Of the stocks in the index, 7 stocks fell more than 3% and 17 gained more than 3%.

Tesoro led the gainers in the S&P 500 index with a rise of 6.8% followed by increases in Broadcom Corp of 5.6%, in Dell Inc of 5.7%, in Novell Inc of 5.5%, in Cognizant Technology of 5.3% and in Nvidia of 5%. CIT Group led the decliners in the S&P 500 index with a loss of 8.5% followed by losses in Ashland Inc of 7.9%, in Weyerhaeuser Company of 7.5%, in MBIA Inc of 5.6% and in Regions Financial of 4%.

South American Markets Indexes

Peru led the gainers in the Latin American markets with a rise of 1.30% followed by increases in Brazil of 1.1%, in Colombia of 0.91% and in Mexico of 0.4%. Chile led the decliners in the region with a loss of 1.53% followed by losses in Argentina of 0.8% and in Venezuela of 0.02%.

Asian markets

In Tokyo Nikkei 225 Index closed higher 214.07 or 1.52% to 14,338.54, in Hong Kong Hang Seng index increased 149.13 or 0.61% closed to 24,533.12. In Australia ASX 200 index lower 54.70 or 0.96% to close 5,654.70. In Malaysia KL Composite index increased 14.28 or 1.13% closed to 1,276.10.

In South Korea Kospi Index increased 10.80 or 0.59% to close at 1,852.02, in Thailand SET index closed higher 3.04 or 0.37% to 833.65 and Indonesia JSE Index edged decreased 2.61 or 0.11% to 2,444.35. Sensex index in India increased 99.31 or 0.61% to 16,415.57.

Commodities, Metals, and Currencies

Crude oil increased $1.20 to close at $127.82 a barrel for a front month contract, natural gas increased 34 cents to $11.81 per mBtu, and gasoline futures increased 2.7 cents to close at 335.50 cents per gallon.

Gold increased $9.80 in New York trading to close at $891.50 per ounce, silver closed up 35 cents to $16.86 per ounce, and copper for front month delivery increased 4.75 cents to $3.60 per pound.

Wheat futures increased 18 cent in Chicago trading and closed at $7.61 per bushel. Sugar increased 5 cent to $10.02 per pound. Soybean future closed up 40.75 cents to $13.63 a bushel.

Dollar edged lower and traded near record low against euro to $1.5554 and rose against yen to 105.51.

Yields on U.S. bonds decreased to 4.06% with 10 years of maturities and decreased to 4.71% with 30-year of maturities.