U.S. Stocks Up 5%; Oil, Canada, Brazil Surge

123jump.com Staff
20 Oct, 2008
New York City

U.S. stocks surged nearly 5% after the talks of second stimulus package was endorsed by the Fed chairman. Crude oil rebounded ahead of Opec meeting. Brazil surged 8% and Canada soared 7%. In Europe, UK surged 5% on a rise in commmodities and energy prices. ING Group rebounded 20%.

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– The Fed chairman endorsed the second stimulus plan in works in the House. Stocks surged. Crude oil rebounded.[/R]

Global Markets

U.S. stocks soared after the Fed chairman Bernanke endorsed a second stimulus package. The market surged on the expectations that the stimulus will be directed at consumers, home owners and small businesses. Interbank lending rates dropped. Quarterly earnings from Halliburton and Eaton rose. Crude oil increased above $75 a barrel. NRG, the nuclear power generator surged after Exelon offered 37% premium in all stock offer that valued the company at $6.2 billion.

ING Group, the Dutch insurance giant is forced to accept €10 billion capital injection from the government. The stock has lost more than 60% its value in the last three months as investors worried that it may lack adequate capital to face the current financial markets crisis.

Eaton and Halliburton gained after reporting better than expected earnings. Hasbro dropped 4% after net income in the quarter dropped 14% from a year ago. Landry’s surged 29% after the company agreed to an amended offer to sell to its chief executive. Mattel net income in the quarter was flat.

The UK first half budget deficit rises to £37.6 billion and exceeded the annual deficit of last year. Home prices drop 4.6% in October. Libor rate for dollar deposit declined but stayed above 4%. Royal Bank of Scotland surged on the talks of stake sale of 20%.

Stocks in Japan surged on the hopes that the earnings for the latest quarter will be better than expected. Panasonic operating profit is likely to be higher than expected and steel makers are expected to revise earnings higher for the year. Exporters may benefit from weaker yen.

Rupee dropped to 49 to a dollar, record in the last eight years. In addition, the RBI lowered the rate full percentage point to 8% to improve liquidity in the short term lending market. Software exporters gained on a fall in rupee and realty stocks rose on a decline in interest rates.

North American Markets

Dow Jones Industrial Average surged 413.21 or 4.67% to a close of 9,265.43, S&P 500 Index closed up 44.85 or 4.8% to 985.40, and Nasdaq Composite Index increased 58.74 or 3.4% to close at 1,770.03. In Toronto TSX Composite Index added 688.91 or 7.2% to 10,251.40.

Of the 30 stocks in Dow Jones Industrial Average all closed higher.

Chevron Corp led gainers in the index with a rise of 11.6% followed by increases in Exxon Mobil Corp of 10.2%, in Merck & Company of 8.8%, in Walt Disney Company of 7.2% and in Du Pont of 7.1%.

Of the stocks in S&P 500 index, 441 increased, 58 declined and 1 was unchanged. Of the index stocks, 307 rose more than 3% and 18 fell more than 3%. And 56 rose more than 10%.

Developers Diversified led decliners in the S&P 500 index with a fall of 14% followed by losses in General Growth Properties of 8.7%, in SanDisk Corp of 7%, in Marshall & Ilsley of 6.6%, in Dillards Inc of 5.6% and in Kimco Realty of 5.5%.

National Oilwell Varco led the gainers in the S&P 500 index with a surge of 22% followed by gains in AES Corp of 21%, in AK Steel Holdings of 19.3%, in Peabody Energy of 18%, in Questar Corp of 17%, in Unum Group of 16% and in Sprint Nextel of 16%.

South American Markets Indexes

Brazil led gainers in the region with a rise of 8.4% followed by increases in Chile of 4.7%, in Peru of 3.1%, in Mexico of 2.3%, in Colombia of 1.2% and in Venezuela of 0.5%.

Argentina led decliners in the region with a fall of 3.3%.

Europe Markets Review

In London FTSE 100 Index closed higher 219.66 or 5.41% to 4,282.67, in Paris CAC 40 Index increased 118.59 or 3.56% to close at 3,448.51 and in Frankfurt DAX index higher 53.68 or 1.12% to close at 4,835.01. In Zurich trading SMI increased 116.84 or 1.92% to close at 6,216.46.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 311.77 or 3.59% to 9,005.59, Hang Seng index in Hong Kong increased 768.80 or 5.28% closed to 15,323.01. CSI 300 index in China higher 63.47 or 3.46% closed to 1,896.73. ASX 200 index in Australia increased 171.50 or 4.32% to close 4,142.30. The KL Composite index in Malaysia higher 4.28 or 0.47% closed to 909.51.

The Kospi Index in South Korea increased 26.96 or 2.28% to close at 1,207.63. SET index in Thailand closed higher 5.64 or 1.20% to 476.95, and JSE Index in Indonesia increased 27.51 or 1.97% to 1,426.94. The Sensex index in India increased 247.74 or 2.48% closed to 10,223.09.

Commodities, Metals, and Currencies

Crude oil increased $3.53 to close at $75.38 a barrel for a front month contract, natural gas decreased 3 cent to $6.76 per mBtu and gasoline futures increased 8.3 cents to close at 175.00 cents per gallon.

Wheat futures closed down 11 cents in Chicago trading and closed at $2.75 a bushel. Sugar decreased 0.08 cent to 11.50 cents a pound. Soybean future closed up 34.00 cents to $9.40 a bushel.

Gold decreased $11.00 in New York trading to close at $798.70 per ounce, silver closed up 43 cents to $9.76 per ounce and copper for the front month delivery decreased 2.5 cent to $2.1545 per pound.

Dollar edged higher against euro to $1.3354 and dropped against yen to 101.92.

Yields on 10-year U.S. bonds decreased to 3.84% and with 30-year maturities decreased to 4.26%.