Fed Action Lifts Global Markets

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

U.S. stocks closed higher for the second day in a row after crude oil price fell $5 a barrel and the Fed offered longer term notes and extended access to the discount window for commercial banks. CB Richard Ellis plunged 25% after it reported 88% decline in earnings. Of the stocks in S&P 500 index, 360 increased, 134 declined and 6 were unchanged. Brazil surged 3.4% and India soared 3.6%. Most European markets gained more than 1.4%.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– Financial stocks rallied for the second day in a row in New York trading on Fed in a coordinated move with the ECB and Swiss Bank increased liquidity. Brazil surged 3.4% and European markets added more than 1.5%. In Asian trading India soared 3.6%.[/R]

Global Markets Update

U.S. stocks traded higher in the early afternoon as crude oil futures rose and financials kept their gains of the day. Crude oil rose more than $5 a barrel after a weekly inventory report showed a larger than expected decline in inventories. Supplies at the end of the last week declined about 5 million barrels. Connecticut sued three bond rating agencies for assigning lower rating on municipal bonds for comparable corporate debt structures.

UK stocks closed higher led by miners and financials. The Fed in a coordinated move with the Swiss National Bank and the ECB increased its dollar loan facility in Europe, offered longer dated short term loans and extended its access to discount window facility to commercial banks. Separately, Lloyds TSB fell 5% after it reported 70% decline in profit for the first half. However, Xstrata rose 6% after it estimated higher copper and nickel prices and higher output in the second half.

Stocks in Japan rallied after a fall in crude oil prices in the region, a sharp rise in Matsushita earnings and expectations of better economic conditions in the U.S. June industrial production in Japan fell 2%. In earnings news, Matsushita earnings in the first quarter rose 86% to 73 billion yen. Nidec, the precision motor maker reported 36% rise in net income to 15 billion yen.

North American Markets indexes

Dow Jones Industrial Average increased 186.13 or 1.63% to a close of 11,583.69, S&P 500 closed up 21.06 or 1.67% to 1,284.26, and Nasdaq Composite Index increased 10.10 or 0.45% to close at 2,329.72. In Toronto TSX Composite closed up 340.66 or 2.55% to 13,683.21.

Of the 30 stocks in Dow Jones Industrial Average 25 stocks gained, 4 declined and 1 was unchanged.

Chevron led the gainers in the Dow Jones Index with a rise of 5.4% followed by increases in Alcoa Inc of 4.4%, in Bank of America of 4.3%, in ExxonMobil of 4.3%, in AIG of 3.5% and in Disney of 2.4%. General Motors led decliners in the Dow Jones Industrial Average with a loss of 4.2% followed by losses in Home Depot of 2.4%, in Johnson & Johnson of 0.6% and in Coca-Cola of 0.5%.

Of the stocks in S&P 500 index, 360 increased, 134 declined and 6 was unchanged. Of the index stocks 86 stocks rose more than 3% and 15 fell more than 3%. Only 5 stocks closed above 10%.

CB Richard Ellis led the decliners in the S&P 500 index with a loss of 24.8% followed by declines in Wyeth of 11.9%, in Electronics Arts of 6.6%, in Meredith Corp of 5.9%, in Tyco Electronics of 5.14%, in Ciena Corp of 4.2% and in General Motors of 4.20%.

Avon Products led the gainers in the S&P 500 index with a rise of 17.4% followed by gains in MBIA Inc of 15.45%, in Sunoco Inc of 14.5%, in Hess Corp of 13.5%, in Jones Apparel of 11.74% and in National Oilwell Varco of 10.4%.

South American Markets Indexes

Brazil led gainers in the Latin American markets with a rise of 3.4% followed by increases in Chile of 2.10%, in Colombia of 1.6%, in Argentina of 1.2%, in Mexico of 0.57%, in Venezuela of 0.32% and in Peru of 0.3%.

Europe Markets Review

In London FTSE 100 Index closed higher 101.50 or 1.91% to 5,420.70, in Paris CAC 40 Index increased 80.06 or 1.85% to close at 4,400.55 and in Frankfurt DAX index higher 61.32 or 0.96% to close at 6,460.12. In Zurich trading SMI increased 115.61 or 1.65% to close at 7,108.91.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 208.34 or 1.58% to 13,367.79, Hang Seng index in Hong Kong increased 432.60 or 1.94% closed to 22,690.60. ASX 200 index in Australia increased 89.30 or 1.84% to close 4,936.70. The KL Composite index in Malaysia increased 9.14 or 0.79% closed to 1,159.94.

The Kospi Index in South Korea increased 10.50 or 0.67% to close at 1,577.70. SET index in Thailand closed lower 6.83 or 1.01% to 669.90. The Sensex index in India increased 495.67 or 3.59% to 14,287.21. Market of Indonesia was closed today.

Commodities, Metals, and Currencies

Crude oil increased $4.97 to close at $127.16 a barrel for a front month contract, natural gas closed up 19 cents to $9.32 per mBtu and gasoline futures increased 12.98 cents to close at 313.75 cents per gallon.

Gold decreased $11.60 in New York trading to close at $914.80 per ounce, silver closed up 9 cents to $17.47 per ounce and copper for front month delivery increased 6.40 cent to $3.65 per pound.

Wheat futures decreased 4.25 cent in Chicago trading and closed at $7.87 per bushel. Sugar increased 0.58 cent to 13.42 cents per pound. Soybean future closed up 5.00 cents to $14.05 a bushel.

Dollar edged higher and traded near record low against euro to $1.5580 and edged lower against yen to 108.05.

Yields on U.S. bonds decreased to 4.10% with 10 years of maturities and increased to 4.65% with 30-year of maturities.