Tech Stocks Rise; TARP Funds for Autos

123jump.com Staff
12 Dec, 2008
New York City

U.S. may use TARP funds to bail out auto industry. Tech stocks surged on government stimulus plan to spend on technology research. November retail sales in China rose 21% and consumer prices rose at a slower pace. Troubled UK mortgage lender HBOS reported larger than expected loan loss.

4:30PM New York, 10:30PM Frankfurt, 7:30AM Sydney[R]– U.S. may use TARP funds to bail out auto industry. November retail sales in China rose 21% and consumer prices rose at a slower pace. Troubled UK mortgage lender HBOS reported larger than expected loan loss and majority shareholders approved merger.[/R]

Global Markets

U.S. stocks edged higher in the afternoon on the hopes that Treasury will consider TARP funds to bailout auto industry. European markets traded sharply lower and Japan dropped more than 5% after the U.S. Senators failed to agree on need for a bailout for the auto makers. Japanese auto makers dropped on the worries that parts suppliers in the U.S. may not be able to survive and crimp their production abilities.

Stocks in London dropped 2.6% after mortgage lender HBOS reported larger than expected loss in the interim period. Majority shareholders approved merger of the troubled lender with Lloyds TBS Group. UK is likely to provide second stimulus package as reluctant banks are not increasing lending.

Stocks in Tokyo plunged after the U.S. auto bailout discussions failed to produce a consensus among the U.S. Senate Republicans. Stocks plunged 5.6% but for the week rose 4%. Japanese automakers dropped sharply on the worries that U.S. auto parts makers that supply to Japanese companies may suffer.

November retail sales in China surged at 21%, but at a slower pace than in October and September. Year to date retail sales increased at 22%. Consumer prices in China rose at 2.4% rate in the month and year to date prices increased 6.3% from a year ago period. Stocks in Hong Kong dropped 5.5%.

Industrial production in India drops 0.4% in October as domestic economy slows. Foreign investors were net buyers of stocks in the last four weeks. World Bank is expected to lend $14 billion over the next three years to step up infrastructure development in poor states.

Australian Prime Minister Kevin Rudd today unveiled a $A4.7 billion infrastructure spending program on critical infrastructure in transport, rail, education to stimulate growth and create 32,000 jobs and boost economic growth between 0.25% and 0.50%.

North American Markets

Dow Jones Industrial Average rose 64.59 or 0.8% to a close of 8,629.68, S&P 500 Index increased 6.14 or 0.7% to 879.73, and Nasdaq Composite Index rose 32.84 or 2.2% to close at 1,540.72. In Toronto, TSX Composite Index increased 123.55 or 1.5% to 8,515.45.

Of the stocks in Dow Jones Industrial Average 21 increased and 9 declined and none was unchanged.

Intel Corp led gainers in the Dow Jones Industrial Average with a rise of 5.3% followed by increases in United Tech Corp of 3.7%, in Hewlett Packard of 3.4%, in JP Morgan Chase of 3.3%, in Du Pont of 2.6% and in Merck & Company 2.3%.

General Motors led decliners in the Dow with a fall of 4.4% followed by decrease in Boeing Company of 2.7%, in Johnson & Johnson of 1.7%, in Walt Disney Company of 0.9% and in Chevron Corp 0.6%.

Of the stocks in S&P 500 index, 339 increased, 157 decreased and 4 were unchanged. Of the index stocks, 37 fell more than 3%, 132 closed above 3% and 10 surged more than 10%.

XL Capital Ltd led decliners in the S&P 500 index with a fall of 22% followed by losses in Perkin Elmer Inc of 18.4%, in Waters Corp of 11.2%, in E*Trade Financial of 9.4%, in Thermo Fisher of 8.6% and in Union Pacific Corp of 8.3%.

Prologis led gainers in the S&P 500 index with a surge of 43% followed by increases in CB Richard Ellis of 21%, in Equity Residential Corp of 15.4%, in Host Hotels & Real Estate of 14.7% and in Micron Tech of 11.9%.

South American Markets Indexes

Peru led decliners in South America with a drop of 1.33% followed by losses in Mexico of 1.3% and in Colombia of 0.54%.

Brazil led gainers in the region with a rise of 2.2% followed by gains in Argentina of 0.8%, in Chile of 0.7% and in Venezuela of 0.61%.

Europe Markets Review

In London FTSE 100 Index closed lower 108.34 or 2.47% to 4,280.35, in Paris CAC 40 Index decreased 92.53 or 2.80% to close at 3,213.60 and in Frankfurt DAX index lower 103.83 or 2.18% to close at 4,663.37. In Zurich trading SMI decreased 93.68 or 1.63% to close at 5,636.17.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 484.68 or 5.56% to 8,235.87, Hang Seng index in Hong Kong decreased 855.51 or 5.48% closed to 14,758.39 CSI 300 index in China lower 85.96 or 4.20% closed to 1,960.38. ASX 200 index in Australia decreased 87.60 or 2.43% to close 3,510.40. The KL Composite index in Malaysia lower 8.41 or 0.98% closed to 852.27.

The Kospi Index in South Korea decreased 50.61 or 4.38% to close at 1,103.82. SET index in Thailand closed higher 0.18 or 0.04% to 424.79 and JSE Index in Indonesia decreased 53.73 or 4.08% to 1,262.97. The Sensex index in India increased 44.61 or 0.46% closed to 9,690.07.

Commodities, Metals, and Currencies

Crude oil increased $3.88 to close at $47.40 a barrel for a front month contract, natural gas decreased 9 cents to $5.51 per mBtu and gasoline futures increased 0.64 cents to close at 108.50 cents per gallon.

Wheat futures closed up 5.50 cents in Chicago trading and closed at $5.13 a bushel. Sugar decreased 0.25 cent to 11.64 cents a pound. Soybean future closed down 4.25 cent to $8.5625 a bushel.

Gold decreased $3.60 in New York trading to close at $823.00 per ounce, silver closed down 14 cent to $10.34 per ounce and copper for the front month delivery decreased 0.45 cent to $1.46 per pound.

Dollar edged lower against euro to $1.3370 and dropped against yen to 91.15.

Yields on 10-year U.S. bonds decreased to 2.57% and with 30-year maturities decreased to 3.04%.