U.S. Stocks Rise, IMF Lowers Global Outlook

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

U.S. unemployment rose in October and an index of pending home sales declined. Crude oil hovered near $60 a barrel. IMF lowered outlook for global economy. General Motors and Ford seek federal assistance but fail to trim labor costs and executive compensation. British Airways lifted revenue outlook.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– U.S. unemployment rose in October and an index of pending home sales declined. Crude oil hovered near $60 a barrel. IMF lowered outlook for global economy. General Motors and Ford seek federal assistance but fail to trim labor costs and executive compensation. British Airways lifted revenue outlook.[/R]

Global Markets

U.S. unemployment rate in October rose to 6.5% from 6.1% in September. The U.S. economy has lost 1.2 million jobs in the first ten months of the year. Total of 10.1 million people are unemployed.

General Motors and Ford reported weaker than expected results and cried out for federal help but fail to trim executive compensation and labor costs. GM dropped 10% and Ford declined below $2. Dolby Laboratories dropped 4% after third quarter net rose 10%. The global commercial real estate broker and investment manager CB Richard Ellis surges after earnings.

Global economic worries and lowered IMF estimates of global growth played into early sell-off of 7% in Tokyo trading. Stocks recovered to close down 3.6% for the day and 0.1% for the week. Japan Airlines second quarter operating profit fell to 26.3 billion yen from 65 billion yen a year ago.

British Airways lifted its revenue guidance to 4% from earlier projection of 3% increase. However, the six-month net dropped 75%. Commodities and energy stocks rallied on an increase in crude oil and metal prices. Stocks in London trading rose 1.8%.

Stocks in Hong Kong rose 3.3% and in Shanghai gained 1.7% on higher trading volume. The HKMA reported that foreign exchange reserve declined in October to $155 billion from $160 billion. Banks and real estate companies increased. Hong Kong Exchange dropped on broker comments.

Stocks in Mumbai rose after a week of volatile trading. The IMF lowered growth projections for India, Europe, Australia and the U.S. and said that emerging markets will still lead the world economic growth but at a slower pace. Local banks lowered interest rates on loans. Rupee gains 4% in the week.

Australian stocks fell 2.3% after the IMF lowered the growth estimate for the country to 1.8%. Australia offered emergency funding of A$22 million to ABC Learning Centers, the child care company in voluntary administration.

North American Markets

Dow Jones Industrial Average gained 248.02 or 2.9% to a close of 8,943.81, S&P 500 Index closed up 26.11 or 2.9% to 930.99, and Nasdaq Composite Index increased 38.70 or 2.4% to close at 1,647.40. In Toronto, TSX Composite Index rose 40.80 or 0.4% to 9,596.21.

Of the 30 stocks in Dow Jones Industrial Average 28 closed higher and 2 closed lower.

Alcoa Inc led the gainers in the index with a rise of 9% followed by increases in Exxon Mobil Corp of 5.7%, in Intel Corp of 5.5%, in Du Pont of 5%, in Chevron Corp of 4.8% and in Johnson & Johnson of 4%.

General Motors led the decliners in the Dow with a loss of 9% followed by losses in JP Morgan Chase of 1.3%.

Of the stocks in S&P 500 index, 425 increased, 72 decreased and three were unchanged. Of the index stocks, 224 rose more than 3% and 22 fell more than 3%.

Genworth Financial led decliners in the S&P 500 index with a plunge of 43% followed by losses in Unisys Corp of 30%, in Yahoo Inc of 12.6%, in General Growth Properties of 12.6%, in General Motors of 9% and in E*Trade Financial of 8.5%.

AES Corp led the gainers in the S&P 500 index with a rise of 28% followed by gains in CB Richard Ellis of 25%, in Fluor Corp of 21%, in Nvidia Corp of 14%, Autonation Inc of 13.5%, in AIG of 12.8%, in Archer Daniels Midland of 12.8% and in Equity Residential Properties of 10.8%.

South American Markets Indexes

Peru led gainers in the region with a rise of 5.4% followed by increase in Colombia of 4%, in Chile of 1.9%, in Mexico of 1.1% and in Brazil of 0.8%.

Venezuela fell 1.5% and Argentina declined 3.5%.

Europe Markets Review

In London FTSE 100 Index closed higher 114.73 or 2.69% to 4,387.14, in Paris CAC 40 Index increased 81.87 or 2.42% to close at 3,469.12 and in Frankfurt DAX index higher 124.89 or 2.59% to close at 4,938.46. In Zurich trading SMI increased 83.26 or 1.41% to close at 6,008.16.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 316.14 or 3.55% to 8,583.00, Hang Seng index in Hong Kong increased 453.39 or 3.29% closed to 14,243.43 CSI 300 index in China higher 28.05 or 1.70% closed to 1,677.83. ASX 200 index in Australia decreased 98.40 or 2.37% to close 4,051.30. The KL Composite index in Malaysia lower 2.00 or 0.22% closed to 893.95.

The Kospi Index in South Korea increased 42.27 or 3.87% to close at 1,134.49. SET index in Thailand closed higher 0.88 or 0.19% to 463.81 and JSE Index in Indonesia increased 30.46 or 2.33% to 1,338.36. The Sensex index in India increased 230.07 or 2.36% closed to 9,964.29.

Commodities, Metals, and Currencies

Crude oil increased $0.27 to close at $61.04 a barrel for a front month contract, natural gas decreased 19 cent to $6.78 per mBtu and gasoline futures increased 1.26 cents to close at 134.86 cents per gallon.

Wheat futures closed down 1.50 cents in Chicago trading and closed at $5.21 a bushel. Sugar increased 0.14 cent to 12.01 cents a pound. Soybean future closed up 15 cents to $9.21 a bushel.

Gold increased $4.30 in New York trading to close at $736.50 per ounce, silver closed down 4 cents to $10.01 per ounce and copper for the front month delivery decreased 2.45 cent to $1.70 per pound.

Dollar edged lower against euro to $1.2726 and fell against yen to 98.31.

Yields on 10-year U.S. bonds increased to 3.78% and with 30-year maturities increased to 4.26%.