Stocks Rally 3%, Oil Surges 10%, Copper Jumps

123jump.com Staff
04 Nov, 2008
New York City

U.S. stocks rallied more than 3% on an election day. Hopes of U.S. Treasury injecting capital in non-financial companies lifted insurance stocks. European stocks rallied on better than expected earnings. Lower interbank rates lifted stocks in Japan and in Europe. Australia lowered its key rate.

4:25PM New York, 10:25PM Frankfurt, 6:25AM Sydney[R]– U.S. stocks rallied more than 3% on an election day. Hopes of U.S. Treasury injecting capital in non-financial companies lifted insurance stocks. European stocks rallied on better than expected earnings. Lower interbank rates lifted stocks in Japan and in Europe. Australia lowered its key rate more than expected.[/R]

Global Markets

U.S. stocks rallied on the election day on the hopes that the elected leader will represent a change in the economic direction. U.S. Treasury may invest directly in non-financial companies through its bank rescue plan, a departure from its original goal. Paulson credibility takes another knock as he keeps changing his approach to the on-going financial crisis. Insurance stocks rallied on the speculation that sector will receive cash infusion from the U.S. Treasury.

MasterCard Inc reported third quarter revenue rise of 24% and a loss of $1.49 a share or $193.6 million. After excluding one-time charges the company reported net income of $2.47 a share and guided that it is likely to miss its earnings revenue target in the next year.

Herbalife Ltd plunged 23% after it issued cautious sales outlook for the fourth quarter on strong dollar. Fluor Corp surged after JP Morgan made positive comments. Archer Daniels Midland surged 21% after net income jumped nearly 250%. Expeditors International soared 22% on 15% earnings gains.

The UK stocks surged after the retailer Marks & Spencer reported better than expected earnings and crude oil futures prices rose. Miners and energy stocks rose after a rise in copper and oil prices. Kazakhmys led advancers in the FTSE 100 index shares with a rise of 17.6%.

The Japan benchmark Nikkei 225 index surged 6.3%. Panasonic proposal to acquire Sanyo Electric lifted stocks. Lower than expected decline in Japanese auto sales in the U.S. and a decline in interbank rates contributed to the positive mood.

Hong Kong October home sales dropped 17.8% from September and plunged 54% from a year ago. Energy stocks fell on a decline in oil price in the region. Mining stocks dropped after Baosteel lowered its production target for December.

Mumbai stocks rallied for the second day this week after a surprise rate cut from the Reserve Bank of India. Prime Minister Singh will review the current financial crisis on a weekly through a new panel. Banks rallied after they indicated a decline in rates for loans and deposits.

The larger than expected interest rate but by the Reserve Bank of Australia of 75 basis points to 5.25% only highlighted the vulnerabilities of the Australian economy. The RBA hinted that further rate cuts are possible if the global economic conditions do not stabilize.

North American Markets

Dow Jones Industrial Average surged 305.45 or 3.3% to a close of 9,625.28, S&P 500 Index closed up 39.42 or 4.1% to 1,005.72, and Nasdaq Composite Index increased 53.79 or 3.12% to close at 1,780.12. In Toronto, TSX Composite Index gained 422.41 or 4.4% to 10,143.67.

Of the 30 stocks in Dow Jones Industrial Average 29 closed higher, 1 fell and none was unchanged.

General Electric led gainers in the Dow Jones Industrial Average with a rise of 8.5% followed by gains in Caterpillar inc of 8%, in Chevron Corp of 5.7%, in Verizon communication of 5.5%, in Home Depot Inc of 5.4% and in American Express of 5.5%.

Hewlett Packard was the lone declined in the Dow with a loss of 1.1%.

Of the stocks in S&P 500 index, 442 increased, 55 declined and three were unchanged. Of the index stocks, 279 rose more than 3% and 11 fell more than 3%.

Tenet Healthcare led decliners in the S&P 500 index with a plunge of 38% followed by losses in Dean Foods Company of 19%, in PPL Corp of 9%, in Cigna Corp of 6.2%, in Aetna Inc of 6.1% and in CB Richard Ellis of 5.6%.

CIT Group Inc led the gainers in the S&P 500 index with a surge of 33% followed by gains in Principal Financial of 21%, in Rowan Companies of 19%, in MasterCard Inc of 19%, Expeditors International of 18%, in MBIA Inc of 16.5%, in E*Trade Financial of 16% and in Nabor Industries of 15.7%.

South American Markets Indexes

Peru led gainers in the region with a rise of 8.6% followed by increase in Argentina of 6.2%, in Brazil of 5.3%, in Mexico of 4.5%, in Chile and Colombia of 2.7%. Venezuela gained 0.7%.

Europe Markets Review

In London FTSE 100 Index closed higher 143.44 or 3.23% to 4,586.72, in Paris CAC 40 Index increased 128.38 or 3.64% to close at 3,656.35 and in Frankfurt DAX index higher 186.00 or 3.70% to close at 5,212.84. In Zurich trading SMI increased 146.74 or 2.35% to close at 6,380.62.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 537.62 or 6.27% to 9,114.60, Hang Seng index in Hong Kong increased 39.97 or 0.28% closed to 14,384.34. CSI 300 index in China lower 25.78 or 1.56% closed to 1,627.76. ASX 200 index in Australia decreased 6.40 or 0.15% to close 4,215.10. The KL Composite index in Malaysia higher 6.23 or 0.69% closed to 905.58.

The Kospi Index in South Korea increased 24.27 or 2.15% to close at 1,153.35. SET index in Thailand closed higher 8.43 or 1.88% to 457.62 and JSE Index in Indonesia increased 17.07 or 1.26% to 1,369.78. The Sensex index in India increased 293.44 or 2.84% closed to 10,631.12.

Commodities, Metals, and Currencies

Crude oil increased $6.18 to close at $70.09 a barrel for a front month contract, natural gas increased 41 cent to $7.25 per mBtu and gasoline futures increased 15.50 cents to close at 151.75 cents per gallon.

Wheat futures closed up 10.50 cents in Chicago trading and closed at $5.72 a bushel. Sugar increased 0.53 cent to 12.71 cents a pound. Soybean future closed up 21.5 cents to $9.59 a bushel.

Gold increased $33.60 in New York trading to close at $760.40 per ounce, silver closed up 38 cents to $10.13 per ounce and copper for the front month delivery increased 11.7 cent to $1.9570 per pound.

Dollar edged lower against euro to $1.2996 and rose against yen to 99.80.

Yields on 10-year U.S. bonds increased to 3.73% and with 30-year maturities increased to 4.21%.