Financials Gyrate, Crude Rebounds

123jump.com Staff
21 Jul, 2008
New York City

Stocks in New York and Europe closed higher on rising crude oil prices, strength in financial stocks and an offer to acquire Genentech at a premium. Bank of America reported 41% decline in earnings but higher than what most analysts had estimated, lifting stocks in the sector. Fannie Mae and Freddie Mac rose after investors put faith in comments from Treasury Secretary. Merck and Schering Plough fell on Vytorin research study. Crude oil rebounded on impending storm in the Gulf of Mexico.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– Nervous U.S. investors nibbled at financial stocks after better than expected earnings from Bank of America. Roche offered to acquire rest of Genentech at $89 per share.[/R]

Global Markets Update

Roche offered to acquire 44% of Genentech that it does not own at $89 per share, nearly 9% above Friday closing price. Roche will raise cash through debt offering and from internal resources to pay for Genentech and keep the company as independent research operation. Roche, struggling with new product development has acquires several smaller research companies in the past to keep its pipeline of new drug offering active. Roche fell 4% and Genentech closed up 15% near $94.

UK edged higher on a rebound in energy prices and expectations of milder than expected recession. Home prices in July dropped 1.8% from June and 2% from a year ago. Rebound in energy and metals prices lifted metals and energy companies stocks. A member of the UK Monetary Policy in an interview stated that UK is probably in a recession and unemployment will jump to 7% from current rate of 5.2%.

North American Markets indexes

Dow Jones Industrial Average decreased 29.23 or 0.25% to a close of 11,467.34, S&P 500 closed down 0.68 or 0.05% to 1,260.00, and Nasdaq Composite Index decreased 3.25 or 0.14% to close at 2,279.78. In Toronto TSX Composite closed up 173.23 or 1.28% to 13,689.19.

Of the 30 stocks in Dow Jones Industrial Average 8 stocks gained and 21 declined.

Merck & Company led the decliners in the Dow Jones Index with a fall of 6.3% followed by decreases in JP Morgan Chase of 3.4%, in American Express of 3%, in Home Depot of 1.4%, in Walt Disney Company of 1.3% and in Pfizer of 1.3%.

American International Group led the gainers in the Dow Jones Index with a rise of 5.8% followed by increases in Bank of America of 3.9%, in Caterpillar of 3.3%, in Exxon Mobil of 1.8% and in Citigroup of 1.75%.

Of the stocks in S&P 500 index, 213 increased, 279 declined and 8 were unchanged. Of the index stocks 45 stocks rose more than 3% and 45 fell more than 3%.

Schering-Plough led the decliners in the S&P 500 index with a loss of 11.6% followed by declines in Legg Mason of 9.2%, in XL Capital of 8.6%, in CIT Group of 8.1%, in Wamu Inc of 7.43%, in Discover Financial of 7% and in Sherwin Williams of 6.8%

Titanium Metals led the gainers in the S&P 500 index with a rise of 12.9% followed by gains in Massey Energy of 11.64%, in AK Steel of 8.4%, in Consol Energy of 8.3%, in Peabody Energy of 8.0% and in Valero Energy of 7.9%.

South American Markets Indexes

Peru led the decliners in the Latin American markets with a fall of 0.90% followed by decreases in Mexico of 0.64%.

Argentina led the gainers in the region with a rise of 3.9% followed by gains in Brazil of 1.3%, in Colombia of 0.43% and in Venezuela of 0.09%.

Europe Markets Review

In London FTSE 100 Index closed higher 27.90 or 0.52% to 5,404.30, in Paris CAC 40 Index increased 27.78 or 0.65% to close at 4,327.14 and in Frankfurt DAX index higher 42.19 or 0.66% to close at 6,424.84. In Zurich trading SMI increased 30.91 or 0.45% to close at 6,858.22.

Asian Markets Review

Hang Seng index in Hong Kong increased 658.71 or 3.01% closed to 22,532.90. ASX 200 index in Australia increased 171.40 or 3.54% to close 5,011.80. The KL Composite index in Malaysia decreased 1.56 or 0.14% closed to 1,103.48. Financial markets in Japan were closed today.

The Kospi Index in South Korea increased 52.93 or 3.51% to close at 1,562.92, SET index in Thailand closed higher 22.78 or 3.43% to 687.30 and JSE Index in Indonesia increased 53.93 or 2.52% to 2,195.07. The Sensex index in India increased 214.64 or 1.57% to 13,850.04.

Commodities, Metals, and Currencies

Crude oil decreased $2.42 to close at $131.30 a barrel for a front month contract, natural gas closed unchanged at $10.57 per mBtu and gasoline futures increased 0.02 cents to close at 316.35 cents per gallon.

Gold increased $5.70 in New York trading to close at $963.70 per ounce, silver closed down 53 cents to $18.20 per ounce and copper for front month delivery decreased 4.60 cent to $3.66 per pound.

Wheat futures decreased 5.50 cent in Chicago trading and closed at $8.04 per bushel. Sugar decreased 22 cent to $12.49 per pound. Soybean future closed down 50.00 cents to $14.48 a bushel.

Dollar edged lower and traded near record low against euro to $1.5924 and fell against yen to 106.43.

Yields on U.S. bonds decreased to 4.04% with 10 years of maturities and decreased to 4.62% with 30-year of maturities.