U.S. Stocks Rise, Merck, Schering Shine

123jump.com Staff
03 Feb, 2009
New York City

U.S. stocks rebounded on the hopes that the government will soon increase its efforts to forestall the widening recession and looming job losses. Vodafone sales rise lifted telecom and broader market indexes in European trading.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks rebounded on the hopes that the government will soon increase its efforts to forestall the widening recession and looming job losses. Vodafone sales rise lifted telecom and broader market indexes in European trading.[/R]

U.S. stocks traded sideways but closed higher after yet another assertion from the government that a plan to fix the ailing financial system will get “aggressive.” Treasury Secretary in a media interview suggested that the government will increase its efforts to fight the widening recession and looming job losses.

Earnings at Merck, Schering Plough and Tyco International Ltd and smaller loss at DR Horton lifted mood in trading. PNC Financial, Motorola and SanDisk Corp declined after larger than expected earnings fall. UPS rose 4.6% after it reported profit but package volume in the U.S. fell, sharpest in nine years.

European stocks gained after earnings from Vodafone lifted telecom sector. Earnings in Germany and in France lifted mood in trading on smaller than expected loss at Heidelberg Druck. BNP Paribas dropped on the worries that merger of Fortis assets may be delayed.

The stocks in UK and in Europe closed higher after a reversal in the afternoon trading. Vodafone reported better than expected sales increase, largely based on the strength in new customers in India. The Bank of England and the U.S. Fed agreed to extend the terms of currency swap arrangement.

The Bank of Japan announced a plan to buy liquid stocks and other highly rated securities from banks that are battered by rising losses. The latest move by the Bank of Japan will add more capital in the financial system and may spur lending. Banks have been reluctant to lend. Denso forecasted loss.

China offered yet another stimulus package this time focused on low income housing, healthcare and education sectors. Trade between Hong Kong and Mainland China rises by 3.3%. Property stocks declined as more home loans fall in negative equity status in Hong Kong.

Sales of automobiles in India declined in January on tight lending conditions and weak consumer confidence. Tata Motors sales dropped 33% and Mahindra Mahindra sales fell 21%. Market leader, Suzuki sales rose on demand for smaller cars.

The Reserve Bank of Australia lowered its key lending rate by 100 basis points to 3.25%. The bank gave a weak economic conditions outlook. Separately, Australia unveiled A$42 billion plan to create jobs and investment in infrastructure. Stocks edged higher.

American Markets Reviews

Dow Jones Industrial Average increased 141.53 or 1.8% to a close of 8,078.33, S&P 500 added 13.07 or 1.6% to 838.51, and Nasdaq Composite Index increased 21.87 or 1.5% to a close of 1,516.30. In Toronto TSX Composite added 3.80 or 0.04% to close at 8,628.63.

In Latin American trading Brazil Bovespa Index decreased 1.6% or 634.35 to 38,666.44 and Mexico Bolsa Index edged higher 0.1% or 28.09 to 19,565.14 in Friday’s trading. Mexico celebrated Constitution Day today.

Argentina rose 1.4%, Chile added 1.1%, Peru decreased 0.6% and Colombia edged higher 0.7%. Venezuela edged higher 0.53%.

U.S. Stock Movers

Of the stocks in S&P 500 index 387 declined, 111 increased and 2 were unchanged.

SanDisk Corp led decliners in the S&P 500 index with a loss of 23% followed by loses in Marshall & Ilsley of 17.7%, in SunTrust Banks of 16.2%, in Fifth Third Bancorp of 14.4%, in AIG of 12.2%, in Bank of America of 11.7% and in Motorola Inc of 11%.

DR Horton Inc led gainers in the S&P 500 index with a rise of 21.4% followed by gains in Tyco International Limited of 19.3%, in Harley Davidson of 15.8%, in Salesforce.com of 12.6% and in Centex Corp of 10.4%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 48.47 or 0.62% to 7,825.51, Hang Seng index in Hong Kong decreased 84.60 or 0.66% closed to 12,776.89, CSI 300 index in China higher 51.85 or 2.52% closed to 2,108.91. ASX 200 index in Australia increased 11.30 or 0.32% closed to 3,508.70. The KL Composite index in Malaysia lower 4.78 or 0.54% closed to 879.67.

The Kospi Index in South Korea increased 16.25 or 1.42% to close at 1,163.20. SET index in Thailand closed higher 2.84 or 0.66% to 430.69 and JSE Index in Indonesia decreased 6.31 or 0.48% closed to 1,304.33. The Sensex index in India increased 82.60 or 0.91% closed to 9,149.30.

Europe Markets Review

In London FTSE 100 Index closed higher 86.68 or 2.13% to 4,164.46, in Paris CAC 40 Index increased 52.34 or 1.79% to close at 2,982.39 and in Frankfurt DAX index higher 103.92 or 2.43% to close at 4,374.96. In Zurich trading SMI increased 50.65 or 0.98% to close at 5,217.61.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.88% and on 30-year bonds increased to 3.68%.

The U.S. dollar dropped to $1.3017 to a euro and against the Japanese yen dropped to 89.43 yen.

Immediate futures prices of Texas crude oil increased to $0.70 to $40.78 a barrel, for natural gas decreased $0.04 cent to $4.51 per mbtu and gasoline prices increased 1.78 cents to 116.70 cents a gallon.

Futures of corn decreased 8.75 cent to $3.61, soybean decreased 13.50 cents to $9.46, sugar decreased 0.09 cents to 12.66 a pound and wheat decreased 11.25 cent to $5.52 a bushel.

In metals trading, copper prices rose 9.10 cents to $1.522 a pound, gold decreased $14.70 to $892.50 per ounce and silver decreased 11 cents to $12.30.