Oil in Focus; Stocks Struggle

123jump.com Staff
11 Aug, 2008
New York City

Crude oil edged higher as Russia continues its campaign of bombing in neighboring state Georgia. The heavy response from Russia forced Georgia to seek help from EU and the U.S. and requested a cease fire. Crude oil rose in European trading before the U.S. markets open but most of the gains were pared after the first hour of trading in New York. China trade surplus rose in July. Royal Bank of Scotland placed $8 billion of debt with private equity firms.

[R]10:30AM New York – Crude oil edged higher as Russia continues its campaign in Georgia and oil supplies in the region may suffer.[/R]

Crude oil prices rose in early trading in New York as Russia continues its campaign in Georgia and threatens the crude oil and natural gas supply. Georgia seems to be caught between ongoing tensions between Russia and the U.S. and NATO allies. While U.S. has occupied Iraq and diverts its crude oil production to the country Russia is reasserting its authority in the region.

U.S. stocks traded mixed after one hour of trading. Tech heavy Nasdaq rose 9.38 to 2,423.48 and S&P 500 added 1.50 to 1,250.97.

China continues to expand its trade surplus despite the worries that economy may slow down in the second half of the year. China July trade surplus widens more than expected and producer price index in the month rose to a 12-year high. In other news, China is expected to surpass the U.S. to be the largest manufacturing nation in the world.

As inflation around the world picks up, UK reported its producer price index rose to the highest level since 1986. In another sign of rising trouble at UK banks, Royal Bank of Scotland sold $8 billion of debt to private equity firms.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 262.50 or 1.99% to 13,430.91, Hang Seng index in Hong Kong decreased 25.87 or 0.12% closed to 21,859.34. ASX 200 index in Australia increased 39.90 or 0.80% to close 5,026.10. The KL Composite index in Malaysia increased 7.15 or 0.64% closed to 1,127.46.

The Kospi Index in South Korea increased 12.37 or 0.79% to close at 1,581.09, SET index in Thailand closed higher 12.23 or 1.77% to 702.93 and JSE Index in Indonesia decreased 62.01 or 2.82% to 2,133.92. The Sensex index in India increased 336.10 or 2.22% closed to 15,503.92.

Europe Markets Review

In London FTSE 100 Index traded higher 41.20 or 0.75% to 5,530.40, in Paris CAC 40 Index increased 21.94 or 0.49% to 4,513.79 and in Frankfurt DAX index traded higher 21.36 or 0.33% to 6,583.01. In Zurich trading SMI increased 40.58 or 0.56% to 7,302.68.

Berkshire Hathaway Inc. reported quarterly profit of $1,465 a share. Revenue in the second quarter rose to $25 billion from $22.6 billion in the quarter a year ago. Net earnings fell to $2.8 billion from $3.11 billion a year ago. Net cash flow from operating activities fell to $5 billion from $7.43 billion a year ago.

Ratings revisions lift Emulex Corp, Qwest Communications International and Hertz Global Holdings Inc and National City Corp fell after the SEC opened an informal inquiry to its subprime lending practices.