Nasdaq Surges 2%, Fifth Third Plunges 13%

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

U.S. stocks surged at close led by a surge in tech stocks. The Nasdaq index closed up 2% as Google, Apple, and Research in Motion closed higher. Crude oil edged lower, but only by a fraction and airlines closed higher. Fifth Third Bancorp plunged 13% after analyst comments that the bank may need to raise capital.

7:00PM New York, 10:00PM Frankfurt, 8:00AM Sydney[R]– U.S. stocks surged at close, lifted by rising financials and a rebound in tech stocks. The Nasdaq Index rose 2%.[/R]

Global Markets Update

U.S. stocks surged at close after the release of inflation data in the morning. May CPI rose at 0.6% and increased at 3.6% for the same month in the previous year. The inflation measure in May without the season adjustment rose 0.8% in the month and increased 4.5% from a year ago. Stocks in the morning trading rose after the inflation data and a drop in crude oil prices. Saudi Arabia is likely to increase fuel production. German inflation reached at the upper level of the target range.

German inflation rose above the target range of the central bank for the second time this year. The CPI in May rose to 3% from a year ago, a rise at or above the target range after rising at 3.1% in March. The inflation index in April rose at 2.4% from a year ago. The sharp rise in energy prices and food prices are stoking inflation that is likely to spill over in the wage rates. Separately Eurostat reported that employment rates across the 27 nations rose in the first quarter.

European auto sales fell 7.8% in May on higher fuel cost and weak economies in Italy and Spain. Only in France sales rose in May from April and from the same month in the previous year. Sales in Germany fell 6% in the month but rose 4.2% from a year ago. Total sales in first five months in Europe declined 0.7%.

UK stocks closed nearly unchanged. The regulatory agency FSA tightened the lending standards for short selling and increased the disclosure requirements for short sellers. The recent market volatility in the rights issue of several banks was exploited by short sellers to their advantage. Candover Partners and Goldman Sachs revised their offer for Expro International. The new offer at 1,615 pence per share values the deep oil well testing company at 1.8 billion pounds.

Hong Kong stock indexes fell despite strong rise in retail sales in May after rising oil prices reinforced the uncertainty over the health of global market. The National Bureau of Statistics said retail sales jumped 21.6% to Rmb870 billion from the same month a year earlier. Also in the first five months of the year sales rose 21.1% year-on-year to Rmb4.24 trillion. Foreign investment climbed 38% to Rmb7.76 billion in May.

North American Markets indexes

Dow Jones Industrial Average gained 165.77 or 1.37% to a close of 12,307.35, S&P 500 closed up 20.16 or 1.50% to 1,360.03, and Nasdaq Composite Index increased 50.15 or 2.09% to close at 2,454.50. In Toronto TSX Composite closed down 175.87 or 1.20% to 14,778.46.

Of the 30 stocks in Dow Jones Industrial Average, 28 closed higher, 2 closed lower, and one was unchanged.

Alcoa led the gainers in the Dow Jones Industrial Average with a rise of 4.5% followed by gains in General Motors of 4.4%, in JP Morgan Chase of 4.2%, in Home Depot of 3.97%, in CIT Group of 2.97%. Coca-Cola led the decliners in the index with a fall of 3% followed by decline in Procter &Gamble of 0.02%.

Of the stocks in S&P 500 index, 441 stocks increased, 58 declined, and 1 was unchanged. Of the stocks in the index, 5 stocks fell more than 3% and 104 gained more than 3%.

Lehman Brothers led the gainers in the S&P 500 index with a rise of 13.7% followed by increase in MBIA Inc of 10.6%, in Allied Waste of 7.8%, in Apollo Group of 7.7%, Morgan Stanley of 6.9%, in Goldman Sachs of 6.9% and in Tesoro Group of 6.7%.

Fifth Third Bancorp led the decliners in the S&P 500 index with a loss of 10.4% followed by losses in Wachovia Corp of 5.8%, in Comerica Inc of 3.6, in Lorillard Inc of 3.2% and in Coca-Cola of 3%.

European Markets indexes

The CAC 40 advanced 0.29% to 4,686.00 In Germany the DAX 30-index gained 54.47 points or 0.81% to 6,768.99. Shares in Switzerland climbed as the Swiss Market index gained 51.58 points or 0.71% to 7,274.37. The FTSE 100 climbed 21.60 points or 0.37% to 5,812.10.

South American Markets Indexes

Chile led the gainers in the Latin American markets with a rise of 0.57% followed by increases in Argentina of 0.41%, in Peru of 0.41% and in Venezuela of 0.01%. Mexico dropped 0.20% and Brazil lost 0.17%.

Asian markets

In Tokyo Nikkei 225 Index closed higher 85.13 or 0.61% to 13,973.73, in Hong Kong Hang Seng index decreased 431.56 or 1.87% closed to 22,592.30. In Australia ASX 200 index higher 48.90 or 0.92% to close 5,378.10. In Malaysia KL Composite index increased 3.81 or 0.31% closed to 1,229.35.

In South Korea Kospi Index increased 7.99 or 0.46% to close at 1,747.35, in Thailand SET index closed lower 8.16 or 1.03% to 782.64 and Indonesia JSE Index edged decreased 10.59 or 0.44% to 2,398.42. Sensex index in India decreased 60.58 or 0.40% to 15,189.62.

Commodities, Metals, and Currencies

Crude oil decreased $1.88 to close at $134.86 a barrel for a front month contract, natural gas decreased 17 cents to $12.61 per mBtu, and gasoline futures decreased 6.34 cents to close at 346.26 cents per gallon.

Gold increased $1.10 in New York trading to close at $873.10 per ounce, silver closed up 7.5 cents to $16.56 per ounce, and copper for front month delivery increased 4.95 cent to $3.59 per pound.

Wheat futures increased 31.50 cent in Chicago trading and closed at $8.99 per bushel. Sugar increased 38 cent to $11.93 per pound. Soybean future closed up 23.5 cents to $15.60 a bushel.

Dollar edged higher and traded near record low against euro to $1.5381 and rose against yen to 108.18.

Yields on U.S. bonds increased to 4.26% with 10 years of maturities and increased to 4.79% with 30-year of maturities.