Gold Jumps 17%

123jump.com Staff
09 Dec, 2005
New York City

Market clsoed higher at close after trading sideways in the morning session on the back of rising consumer confidence. Gold stocks rose and then fell at close even though gold rose 1.5% at close. Gold is trading at near 25-year high. Silver closed above $9. Semiconductor stocks rose. Intel, Advanced Micro, Texas Instruments, Marvel Tech and SanDisk rose during the day. Dollar lost against euro and pound but gained against yen.

U.S. MARKET AVERAGES

Market needed the reason to trade up and found one in consumer sentiment survey.

Market traded cautious as oil stayed firm in the morning hours. Market looked for a reason to trade higher and the latest survey on consumer sentiment provided it. The survey reported the sentiment index level at 88 better than anticipated level of 85. Market rose at mid-day and gained momentum as it neared the close. Dow – 10,778.58 up 23.46, Nasdaq – 2,256.73 up 10.27 and S&P – 1,259.37 up 3.53.

In the absence of any merger or economic news, news of gold and silver trading dominated the equity trading. Gold rose at peak during the day more than 2% only to fall at close but still higher 1.5% at close. Stocks in the sector rose up and then fell at close. Gold traded above $533, silver above $9 and platinum above $1,012 and copper above $2.11 in the session.


MOVERS AND SHAKERS

Intel Corp. ((INTC)) released a disappointing mid-quarter sales forecast, as the company reaffirmed its revenue guidance, versus expectations that it would lift it. The stock fell 1.5% at mid-day but closed up 1.5% at close. Intel narrowed its current quarter revenue forecast to $10.4 billion to $10.6 billion. Advanced Micro Devices ((AMD)) rose another 5.11% at close.

Gold stocks continued their run today as gold advanced 1.5% during the session. Shares of Harmony Gold Mining ((HMY)) rose 3.2% and then fell 1.7%, Anglo AngloGold Ashanti rose 2.5% and then fell 2.5% at close. Newmont Mining Corp ((NEM)) rose 2.1% and then at closed down 49 cents or 1% at $49.79.

Shares of Getty Images ((GYI)) have been volatile this week. Shares dropped by more than $3 during the week and recovered the loss today. During the week shares were down on the news that the company will only meet the low end of the revenue guidance for the year 2005 and 2006 and earnings for the year 2005 2006 will be also at the low end of the revised range.

International Speedways ((ISCA)) shares fell as much as 11% before recovering to flat level after company reported lower than expected revenue from television rights for the Nascar auto racing.

The New England Journal of Medicine said Merck ((MRK)) withheld information about the cardiac side effects of its arthritis drug Vioxx. The medical journal said that the Merck study failed to mention three heart attacks suffered by participants using Vioxx, which has since been taken off the market because of safety concerns. Company’s shares fell 2.4%.

Eli Lilly ((LLY)) announced it sees its fourth-quarter and full-year earnings at the top of its guidance, or in the range of 73 to 79 cents and $2.80 to $2.86 respectively. The company forecast 2006 earnings to be from 8% to 12% higher compared with the previous year. Shares of the company gained 4.5%.

JAMDAT Mobile ((JMDT)) surged on news that it agreed to be acquired by Electronic Arts ((ERTS)) for $680 million, or $27 per share. The stock climbed 17%.

Dendrite International ((DRTE)) sharply moved to the downside, after it revised its fourth-quarter earnings forecast and named a new CFO. The stock dropped 22%.

ECONOMIC NEWS

The Department of Commerce released its report on wholesale trade in the month of October on Friday, showing a notable increase in wholesale sales as well as a modest increase in wholesale inventories.

The report showed that wholesale sales rose 1.2 percent in October following a 2.4 percent increase in September. The increase was partly due to a 1.9 percent increase in wholesale sales of durable goods, which benefited from higher sales of metals and minerals and furniture.

At the same time, the report showed that wholesale inventories rose 0.2 percent in October after rising 0.6 percent in September. The increase in wholesale inventories of durable goods more than offset a decrease in wholesale inventories of non-durable goods.

Subsequently, the Commerce Dept. said that the inventories/sales ratio fell to 1.13 in October from 1.15 in September.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished Friday session higher. The Nikkei recovered from yesterday’s sharp decline and advanced 1.5% to 15,404.05, ignoring disappointing revised GDP report. Regional markets gained with Singapore Straits Times in the lead, up 0.7%, followed by Hong Kong’s Hang Seng, up 0.2%, and Taipei’s Weighted Index rising 0.2%.

European markets closed under the flat line as oil companies declined and chip stocks were pressured by Intel’s lowered fourth-quarter sales outlook. The German DAX 30 fell 0.1%, the French CAC 40 dropped 0.2%, and London’s FTSE 100 lost 0.3%.

OIL, METALS, CURRENCIES

Crude oil and natural gas prices retreated. Light sweet crude for January delivery dropped $1.46 to $59.20 a barrel on the Nymex. Natural gas futures fell 71 cents to $14.28 per 1,000 cubic feet, following a 10% rise on Thursday.

Gold hit a 25-year high, rising over $533 per ounce on robust world demand, inflation concerns and central-bank buying but at close gold for February delivery rose $7, or 1.5% to $530.20 per troy ounce. Since November 7, the precious metal has gained $75, or 16.4%. Silver rose to $9.105.

The U.S. dollar lost ground against the euro and pound, rose against the yen. In New York trading the euro was quoted at $1.1819, up from $1.1813. The dollar bought 120.57 yen, up from 120.26. The British pound stood at $1.7548, up from $1.7530.