U.S. Stocks Surge, Oil Rises 7%

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

U.S. stocks rallied in the afternoon on a strenght in tech stocks, 7% rise in crude oil prices and hopes that new economic team will focus on economic growth. Stocks in energy, technology and retail sectors closed higher. The largest Canadian telecom operator BCE leveraged buyout may unravel.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– U.S. stocks rebounded on the hopes that new administration will focus sharply on the economy. Oil jumped 7%. UK third quarter GDP shrank 0.5%. Toyota debt rating was lowered. China lowered its key lending rate in a surprise move.[/R]

Global Markets

U.S. stocks edged lower after the new home sales plunged 40% from a year ago in October. The new orders for durable goods orders declined 6.2% in October and orders excluding volatile transportation dropped 4.4%. Stocks in the early hours traded sideways but closed sharply higher on a rally in the late afternoon in tech stocks.

Borders Group dropped 52% after the third quarter net loss widened to $175.4 million. BCE Inc, the largest Canadian telecom operator may not be able to complete its privatization plan. Deere & Company dropped 12% on a drop in fourth quarter earnings. Genworth continues its slide.

Stocks in Japan closed lower on falling domestic electronics sales and a sharp decline in U.S. home prices. Investors in Japan are looking for clues for the depth and length of the U.S. recession and its impact on the exports from Japan. Toyota debt rating was lowered to AA from AAA.

China cut its key lending and deposit rate to stimulate economic activities. Exports from China are expected to decline faster than previously estimated and real estate prices in mainland have plunged more than 25%. China cuts its key lending rate to 5.58%. Chinalco raised its stake in Rio Tinto.

Stocks in India closed above 9,000 after foreign direct investment in the first six months of the fiscal year surged to $17 billion. The surprise rate cut in China also lifted stocks in the Asian markets. Rupee edged higher and software services export stocks followed. Reliance Industries gained 6%.

GDP in the third quarter in UK shrank 0.5% on falling consumer spending and tight credit environment. The British pound fell immediately against dollar and euro. The UK government has lowered taxes and the BoE has lowered interest rate but nearly 1 million people are claiming jobless benefits.

Australian stocks fell on the rising worries that government budget may slip in negative for the first time in seven years. Separately, OECD lowered its growth estimate for the country to 1.7% in 2009 and revised higher the unemployment projections. Rio Tinto plunged 37%.

North American Markets

Dow Jones Industrial Average increased 247.14 or 2.9% to a close of 8,726.61, S&P 500 Index increased 30.29 or 3.5% to 887.68, and Nasdaq Composite Index gained 67.37 or 4.6% to close at 1,532.10. In Toronto, TSX Composite Index gained 200.66 or 2.40% to 8,643.52.

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

General Motors led the gainers in the Dow with a rise of 35% followed by increase in Citigroup Inc of 16%, in Alcoa Inc of 8%, in Verizon Communication of 6.4%, in Intel Corp of 6.4% and in Home Depot Inc of 5.8%.

Johnson & Johnson led decliners in the Dow with a fall of 0.7% followed by losses in Procter & Gamble of 0.03%.

Of the stocks in S&P 500 index, 450 increased, 49 decreased and 1 was unchanged. Of the index stocks, 315 rose more than 3%, 7 fell more than 3% and 63 surged above 10%.

General Motors led gainers in the S&P 500 index with a surge of 35% followed by gains in Ford Motor Co of 29%, in AK Steel Holding of 25%, in Lennar Corp of 22%, Manitowoc Co of 22.6%, in Assurant Inc of 21.8%, in Leucadia National of 20.6% and in Jones Apparel of 19.5%.

Office Depot led decliners in the S&P 500 index with a fall of 5.6% followed by losses in Waste Management of 5.2%, in XL Capital Ltd of 4.8%, in American Capital of 4.7%, in Rohm & Haas of 4.2% and in Danaher Corp of 3%.

South American Markets Indexes

Argentina led gainers in the South American region with a surge of 5.4% followed by increases in Brazil of 4.8%, in Mexico of 3.8%, in Peru of 2.8%, in Colombia of 2% and in Chile of 0.3%.

Venezuela closed down 0.45%.

Europe Markets Review

In London FTSE 100 Index closed lower 18.56 or 0.44% to 4,152.69, in Paris CAC 40 Index decreased 39.71 or 1.24% to close at 3,169.85 and in Frankfurt DAX index higher 0.08 or unchanged to close at 4,560.50. In Zurich trading SMI increased 20.17 or 0.37% to close at 5,498.56.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 110.71 or 1.33% to 8,213.22, Hang Seng index in Hong Kong increased 490.85 or 3.81% closed to 13,369.45 CSI 300 index in China higher 9.20 or 0.50% closed to 1,843.50. ASX 200 index in Australia decreased 83.40 or 2.30% to close 3,540.00. The KL Composite index in Malaysia lower 3.81 or 0.44% closed to 856.37.

The Kospi Index in South Korea increased 46.46 or 4.72% to close at 1,029.78. SET index in Thailand closed higher 3.37 or 0.86% to 395.22 and JSE Index in Indonesia increased 39.01 or 3.38% to 1,193.15. The Sensex index in India increased 331.19 or 3.81% closed to 9,026.72.

Commodities, Metals, and Currencies

Crude oil increased $4.14 to close at $54.91 a barrel for a front month contract, natural gas decreased 42 cents to $6.81 per mBtu and gasoline futures increased 8.75 cents to close at 118.24 cents per gallon.

Wheat futures closed up 1.25 cents in Chicago trading and closed at $5.54 a bushel. Sugar increased 0.20 cent to 11.81 cents a pound. Soybean future closed up 3 cent to $8.86 a bushel.

Gold decreased $6.20 in New York trading to close at $814.30 per ounce, silver closed up 0.04 cents to $10.345 per ounce and copper for the front month delivery increased 5.70 cent to $1.7100 per pound.

Dollar edged higher against euro to $1.2878 and rose against yen to 95.55.

Yields on 10-year U.S. bonds dropped to 2.98% and with 30-year maturities decreased to 3.52%.