GDP Report Lifts U.S. Stocks, Russia Up 19%

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

U.S. stocks edged higher as earnings dominated trading sentiment and third quarter GDP shrank. Stocks in Tokyo surged 26% in a 3-day rally. Benchmark index in Hong Kong soared 13% and in Brazil jumped 7.7%. Markets in Europe edged higher. Deutsche Bank reported profit on revised write down rules.

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– U.S. stocks edged higher after the third quarter GDP was better than expected. UK home prices fell. Tokyo stocks in a 3-day rally surged 26%. Hong Kong stocks surged 13%. Brazil led the gainers in the South America.[/R]

Global Markets

Third quarter U.S. GDP adjusted for seasonality fell at annual rate of 0.3% from the second quarter after rising at a rate of 2.8% in the second quarter and 0.9% in the first quarter. The sharpest pull back in consumer spending in the last three decades of 3.1% contributed to the weakness the GDP data. The real GDP rose 0.8% from the third quarter a year ago.

Colgate Palmolive surged 8% after third quarter revenue rose 13%. CVS Caremark Corp gained 8% after third quarter net income surged 7%. Deutsche Bank surged 21% on quarterly revenue fell 14% and net income dropped 74%. First Solar surged 19% after third quarter net income increased 40%.

UK home prices in October fell 14.6% from a year ago and dropped 1.4% from September on tight lending conditions and weak consumer confidence. Money market rates as measured by the libor rate fell 23 basis points to 3.2% after the U.S. Fed lowered the rate by 0.5%. Vedanta Resources surged 16%.

Stocks in Japan soared 10% after the U.S. Fed lowered interest rate by 0.5% to 1%. Nikkei 225 surge capped a three-day rally of 26%, the largest gain thirty five years. Prime minister is expected to unveil a 5 trillion yen stimulus package to stimulate consumer spending.

Stocks in Hong Kong soared after the HKMA lowered rates by 0.5% following the U.S. rate cut. The benchmark index Hang Seng surged 13%. Stocks in Shanghai increased 2.4%. PetroChina third quarter earnings rose 30%, however Sinopec earnings fell 39%. China Cosco surged 41% on 19% rise in earnings.

Stocks in Australia surged on a steep rise in copper and crude oil prices. The U.S. Fed rate cut of 0.5% to 1% lifted prices of base metals and energy in Asian trading. The benchmark index ASX 200 index surged 4% and closed at 4,001.10. Australian dollar surged 5% to 68.22 U.S. cents to a dollar.

Markets in India were closed to celebrate Hindu New Year 2065.

North American Markets

Dow Jones Industrial Average fell 189.73 or 2.1% to a close of 9,180.69, S&P 500 Index closed up 24.00 or 2.6% to 954.09, and Nasdaq Composite Index increased 41.31 or 2.5% to close at 1,698.52. In Toronto, TSX Composite Index surged 354.65 or 3.7% to 9,856.21.

Of the 30 stocks in Dow Jones Industrial Average 25 closed higher, 4 fell and 1 was unchanged.

General Motors led the decliners in the Dow with a loss of 10.4% followed by losses in Microsoft Corp of 0.9%, in Johnson & Johnson of 0.7% and in Wal-Mart Stores of 0.1%.

Intel Corp led gainers in the Dow Jones Industrial Average with a rise of 8.8% followed by gains in Hewlett Packard of 7%, in Merck & Company of 6.4%, in Walt Disney Company of 6%, in Home Depot Inc of 5.9% and in JP Morgan Chase of 5.8%.

Of the stocks in S&P 500 index, 420 increased, 79 declined and one was unchanged. Of the index stocks, 288 rose more than 3% and 36 fell more than 3%. And 47 gained more than 10%, 13 fell more than 10%.

Hartford Financial Services led decliners in the S&P 500 index with a plunge of 51.7% followed by losses in Assurant Inc of 26%, in Cigna Corp of 20.9%, in Prudential Financial of 19.2%, in Symantec Corp of 16% and in Expedia Inc of 15.8%.

Office Depot Inc led the gainers in the S&P 500 index with a surge of 49% followed by gains in Intercontinental Exchange of 33%, in Manitowoc Company of 26%, in Legg Mason of 23%, Advanced Micro Devices of 21%, in General Growth Properties of 19.7%, in National Oilwell Varco of 17% and in Allied Waste Industries 17%.

South American Markets Indexes

Brazil led gainers in the region with a surge o 7.5% followed by increase in Argentina of 6.0%, in Mexico of 5.2%, in Peru of 4.2% and in Chie of 2.2%. Venezuela fell 0.02%.

Europe Markets Review

In London FTSE 100 Index closed higher 49.11 or 1.16% to 4,291.65, in Paris CAC 40 Index increased 5.25 or 0.15% to close at 3,407.82 and in Frankfurt DAX index higher 60.61 or 1.26% to close at 4,869.30. In Zurich trading SMI increased 38.23 or 0.65% to close at 5,842.34.

Russian market index surged 19% after the U.S. provided dollar liquidity to Brazil, New Zealand and South Korea.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 817.86 or 9.96% to 9,029.76, Hang Seng index in Hong Kong increased 1,627.78 or 12.82% closed to 14,329.85. CSI 300 index in China higher 39.43 or 2.38% closed to 1,697.66. ASX 200 index in Australia increased 155.50 or 4.04% to close 4,001.10. The KL Composite index in Malaysia higher 24.15 or 2.91% closed to 853.56.

The Kospi Index in South Korea increased 115.75 or 11.95% to close at 1,084.72. SET index in Thailand closed higher 24.16 or 6.29% to 408.31 and JSE Index in Indonesia increased 60.24 or 5.41% to 1,173.86. Markets in India were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $2.20 to close at $65.30 a barrel for a front month contract, natural gas decreased 35 cent to $6.43 per mBtu and gasoline futures decreased 20.25 cents to close at 146.00 cents per gallon.

Wheat futures closed down 23.25 cents in Chicago trading and closed at $5.38 a bushel. Sugar decreased 0.24 cent to 11.85 cents a pound. Soybean future closed down 4 cents to $9.43 a bushel.

Gold decreased $16.00 in New York trading to close at $738.00 per ounce, silver closed down 4.50 cents to $9.76 per ounce and copper for the front month delivery decreased 20.95 cent to $1.87 per pound.

Dollar edged higher against euro to $1.2928 and rose against yen to 98.30.

Yields on 10-year U.S. bonds increased to 3.94% and with 30-year maturities increased to 4.29%.