Energy Stocks Rise, Financials Decline

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

U.S. stocks traded in a tight range and as it has been for the most of the year energy complex stocks led the gainers and financial stocks led the decliners. Lehman, Goldman Sachs, Wachovia, Citigroup and Bank America fell. Walgreen Company rose after net income rose 2%. Inflation in China increased to 5.7% and Indian rupee declined on a recent inflation surge to 11.5%. UK home prices fell.

4:35PM New York, 10:35PM Frankfurt, 6:35AM Sydney[R]– Familiar trading preferences were on display again in New York trading. Energy stocks gained and financials declined. China inflation surges. Indian rupee declines. UK home prices fell.[/R]

Global Markets Update

U.S. stocks traded in a tight range after financials led the decliners and energy complex stocks closed higher. Lehman Brothers, Goldman Sachs and Citigroup fell. National Oilwell rose on recommendation and Goodrich Petroleum rose after it raised its production target for the second quarter. MBIA and Ambac fell on the continued worries of the capital adequacy. Range Resources rose and XL Capital fell on brokers rating revisions.

Walgreen Company advanced after it reported 2% rise in net income. BCE Inc advanced after the Supreme Court of Canada ruled that the buy-out may proceed, despite a challenge from the bond holders. European market edged higher led by a rise in Germany, France and UK. Markets in Mumbai and Shanghai dropped 2%.

Corn Products agreed to be acquired by Bunge Limited in all stock transaction that may value the company between $4.4 billion and $6 billion. Bunge will assume debt of $414 million and will pay between 0.42 and 0.5142 of its share. In addition, Republic Services Group and Allied Waste have agreed to merge. The shareholders of Allied will hold 52% of the combined waste collection company.

In the UK trading the Brent Crude oil prices rose, home prices in the month fell and stocks in trading edged slightly higher. UK home prices fell 1.2% in the month after more sellers list homes for sale and inventory rose to a record level. The Brent Crude oil rose 2% in trading after Nigeria reported oil production declined to a 15-year low. Aggreko, power equipment rental company surged 10% after it issued earnings estimate.

Stocks in Shanghai fell 2% and are now 55% lower from its peak in November as inflation in May rose to 5.7%. Inflation is expected to rise in the coming months after recent fuel prices and upsurge in food price increases. Chalco, the Aluminum Corp of China fell 6% after it estimated profit decline of 50% in the first half. Sinopec slipped 2.5% after it said that the recent price hike will not be enough to generate profit.

North American Markets indexes

Dow Jones Industrial Average fell 0.33 to a close of 11,842.36, S&P 500 closed up 0.08 or 0.01% to 1,318.01, and Nasdaq Composite Index decreased 20.35 or 0.85% to close at 2,385.74. In Toronto TSX Composite closed down 105.41 or 0.72% to 14,686.08.

Of the 30 stocks in Dow Jones Industrial Average 12 gained and 17 declined.

General Motors led the decliners in the Dow Jones Industrial Average stocks with a loss of 6.5% followed by losses in AIG of 5.5%, in Home Depot of 4.5%, in Bank of America of 4.4% and in Citigroup of 4%.

Exxon Mobil led the gainers in the Dow Jones Average with a rise of 3% followed by gains in Chevron Corp of 2.5%, in Merck of 2.1%, in Verizon Communications of 1.5%, in Disney of 1.5% and in Caterpillar of 1.1%.

Of the stocks in S&P 500 index, 194 increased, 301 declined, and five were unchanged. Of the index stocks 6 increased more than 3% and 119 declined more than 3%.

MGIC Capital led the decliners in the S&P 500 index with a loss of 16% followed by losses in MBIA Inc of 14%, in Huntington Bancshare of 13%, in Ford Motor Company of 9%, in XL Capital Ltd of 9%, and in Sovereign Bancorp of 8.8%.

Noble Energy led the gainers in the S&P 500 index with a rise of 8.4% followed by increases in National Oilwell Varco of 8.3%, in Baker Hughes of 6.1%, in Chesapeake Energy of 6% and in Halliburton of 5.9%.

European Markets Indexes

In UK FTSE 100 index led the gainers in the region with a rise of 0.83% followed by increases in DAX 30 in Germany of 0.17%, in 0.05% in CAC 40 in France. Stockholm 30 Index led the decliners in the region with a loss of 2% followed by declines in Swiss Market Index of 0.6%, in MIB Index in Milan of 0.4% and in IBEX Index in Spain of 0.07%.

South American Markets Indexes

Argentina led advancers in the Latin American markets with a rise of 1.2% followed by increases in Chile of 0.31%, in Venezuela of 0.19% and in Brazil of 0.09%.

Peru led the decliners in the region with a loss of 0.44% followed by losses in Mexico of 0.23%, in Colombia of 0.02% and in Costa Rica of 0.02%.

Asian markets

In Tokyo Nikkei 225 Index closed lower 84.61 or 0.61% to 13,857.47, in Hong Kong Hang Seng index decreased 30.64 or 0.13% closed to 22,714.96. In Australia ASX 200 index lower 4.60 or 0.09% to close 5,283.70. In Malaysia KL Composite index decreased 11.26 or 0.93% closed to 1,195.41.

In South Korea Kospi Index decreased 15.41 or 0.89% to close at 1,715.59, in Thailand SET index closed higher 0.00 or 0.00% to 768.90 and Indonesia JSE Index edged decreased 9.03 or 0.38% to 2,362.74. Sensex index in India decreased 277.97 or 1.91% to 14,293.32.

Commodities, Metals, and Currencies

Crude oil increased $1.57 to close at $136.93 a barrel for a front month contract, natural gas increased 22 cents to $13.22 per mBtu, and gasoline futures increased 2.07 cents to close at 345.99 cents per gallon.

Gold decreased $16.50 in New York trading to close at $887.20 per ounce, silver closed down 60.70 cents to $16.79 per ounce, and copper for front month delivery decreased 2.25 cent to $3.80 per pound.

Wheat futures decreased 14.50 cent in Chicago trading and closed at $8.84 per bushel. Sugar decreased 37 cent to $13.08 per pound. Soybean future closed down 12.50 cents to $15.09 a bushel.

Dollar edged higher and traded near record low against euro to $1.5523 and rose against yen to 107.81.

Yields on U.S. bonds were unchanged to 4.17% with 10 years of maturities and decreased to 4.70% with 30-year of maturities.