U.S. Stocks Surge on Retail Sales, Oil Up $5

123jump.com Staff
05 Jun, 2008
New York City

U.S. stocks surged after same store sales data showed healthy gains at large retailers. Wal-Mart and Costco reported higher than expected sales gain in May lifting stocks across various industries. A sharp rise in crude oil price of more than $5 per barrel lifted stocks energy complex companies. The ECB and Bank of England left interest rates unchanged and issued tougher outlook on inflation. Brazil, Argentina and India surged more than 2.5%.

10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney[R]– U.S. stocks gained on a sharp rise in crude oil price and a strong same store sales report.[/R]

Global Markets Update

The same-store sales at Wal-Mart, the nation’s largest retailer surged 3.9% and at Costco rose 7%. Costco reported same stores sales rose of 5% excluding gasoline sales. In the last four weeks gasoline prices have jumped 19%. Steel, energy and retailers participated in a rally that lifted tech stocks in the afternoon. Investors are awaiting jobless claims data to be released tomorrow morning before the market opening and hope that the claims will not be higher than a loss of 63,000.

Verizon Wireless agreed to acquire Alltel Corporation, a rural telecom operator with 13 million customers. Verizon will pay $5.9 billion in cash and $22.2 billion of estimated debt. TPG and Goldman Sachs controlled fund have agreed to sell the company that they purchased for $24.2 billion less than thirteen months ago with only $4 billion in equity.

The Bank of England and the European Central Bank left the rates unchanged at 5% and 4% respectively. The rising inflation in the region has left central bankers worried. Unlike the Fed in the U.S., central bankers in Europe are more focused on inflation. Separately, retailer Wm Morrison reported 7% rise in sales in the first quarter but home prices fell in May. Stocks in London trading rose with the FTSE 100 index gaining 0.4%.

The ECB President Jean Trichet said that the bank may raise interest rates next month to combat inflation. German manufacturing orders in April declined 1.8% from a month earlier, but orders during the first four months rose 15%. French unemployment rate dropped to its lowest level in a decade, reaching 7.5% in the first quarter. The CAC 40 share index fell 0.1% and the DAX 30-share index declined 0.4%. Credit Agricole prices its stock at a discount. Credit Agricole prices its offering of 6 billion euros.

Japan stock indexes declined after Lehman Brothers cuts its rating for the financial services sector in the wake of rising credit costs. Falling crude oil and metal prices widened losses. In Tokyo trading Nikkei 225 fell 0.7% and the broader Topix Index dropped 0.4%.

Stocks in Hong Kong rose as a retreat in oil prices relieved pressures on oil refiners. Recovering telecommunications stocks also positively impacted investor sentiment. However, price controls for coal producers affected mainland stocks. In Hong Kong trading Hang Seng Index rose 0.55% or 132.04 at 24,255.29 and in Shanghai CSI 300 Index fell 0.98% or 34.78 at 3,512.14.

Indian shares recovered after losses of three days in a row of selling. The 30-share BSE Sensex gained 1.6% or 254.93 15,769.72. On the National Stocks Exchange, the S&P CNX Nifty surged 2% or 91.35 to 4,676.95. Infosys jumped 5.9% to 1,979.70 rupees on the media reports that the firm is looking for acquisitions in Europe. Reliance Communications rose 1.3% to 547.15 rupees on news reports that the firm and South Africa's MTN.

European Markets indexes

In London FTSE 100 Index closed higher 25.20 or 0.42% to 5,995.30, in Paris CAC 40 Index decreased 8.01 or 0.16% to close at 4,907.06 and in Frankfurt DAX index lower 23.60 or 0.34% to close at 6,941.83. In Zurich trading SMI increased 52.75 or 0.70% to close at 7,567.23.

North American Markets indexes

Dow Jones Industrial Average surged 213.97 or 1.73% to a close of 12,604.45, S&P 500 closed up 26.85 or 1.95% to 1,404.05, and Nasdaq Composite Index increased 46.80 or 1.87% to close at 2,549.94. In Toronto TSX Composite closed up 277.90 or 1.99% to 14,982.91.

Of the 30 stocks in Dow Jones Industrial Average, 27 closed higher, 3 closed lower, and none was unchanged.

Verizon Communications led the gainers in the Dow Jones Index with a rise of 5.4% followed by gains in Chevron Corp of 4%, in American Express and in Exxon Mobil of 3.8%, in Hewlett Packard of 3.75%, and in Wal-Mart of 3.6%. Boeing and Pfizer lost 1% and Bank of America declined 0.22%.

Of the stocks in S&P 500 index, 425 stocks increased, 67 declined, and 8 were unchanged. Of the stocks in the index, 2 stocks fell more than 3% and 91 gained more than 3%.

Brown Forman led the gainers in the S&P 500 index with a rise of 9% followed by gains in Nucor Corp of 8.6%, in Range Resources of 8.3%, in Advanced Micro of 8.2%, in Lehman Brothers of 7.8% and in SLM Corp and MBIA of 7.5%.

Ciena Corp led the decliners in the index with a loss of 7.8% followed by losses in Hercules of 4.6%, in Verisign Inc of 2.7%, in Parker Hannifin 2.7% and in Teradyne of 2.5%.

South American Markets Indexes

Brazil led the gainers in the Latin American markets with a rise of 2.9% followed by increases in Argentina of 2.3%, in Venezuela of 1.46% in Chile of 1.07% and in Mexico of 0.90%. Colombia fell 0.08% and Peru declined 0.8%.

Asian markets

In Tokyo Nikkei 225 Index closed lower 94.45 or 0.65% to 14,341.12, in Hong Kong Hang Seng index increased 132.04 or 0.55% closed to 24,255.29. In Australia ASX 200 index lower 54.40 or 0.97% to close 5,530.10. In Malaysia KL Composite index decreased 29.56 or 2.36% closed to 1,223.56.

In South Korea Kospi Index decreased 1.50 or 0.08% to close at 1,832.31, in Thailand SET index closed higher 0.90 or 0.11% to 809.82 and Indonesia JSE Index edged increased 37.09 or 1.57% to 2,399.68. Sensex index in India increased 254.93 or 1.64% to 15,769.72.

Commodities, Metals, and Currencies

Crude oil increased $5.43 to close at $127.73 a barrel for a front month contract, natural gas increased 10 cents to $12.42 per mBtu, and gasoline futures increased 13.49 cents to close at 333.00 cents per gallon.

Gold decreased $8.30 in New York trading to close at $875.50 per ounce, silver closed up 23 cents to $17.17 per ounce, and copper for front month delivery decreased 0.20 cents to $3.543 per pound.

Wheat futures increased 32.50 cent in Chicago trading and closed at $7.853 per bushel. Sugar increased 4 cent to $9.56 per pound. Soybean future closed up 63 cents to $14.52 a bushel.

Dollar edged lower and traded near record low against euro to $1.5593 and rose against yen to 105.98.

Yields on U.S. bonds increased to 4.04% with 10 years of maturities and decreased to 4.74% with 30-year of maturities.