Bailout Worries, Senate Ready For Vote

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

Banks and financial rebounded. The U.S. Senate is prepared to vote for a bill that is smaller than the one passed by the House with fewer benefits for businesses. In trading, financials rebounding. Citigroup, Bank of America and Regions Financial gained more than 8%. XL Capital surged 61%.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – Banks and financial rebounded. The U.S. Senate is prepared to vote for a bill that is smaller than passed by the House with fewer benefits for businesses.[/R]

U.S. stocks rose in anticipation of the passage of economic stimulus package in the U.S. Senate. The current version of the bill is $789 billion in size but smaller than $819 billion passed by the House.

The bill calls for a tax credit of $8,000 of tax credit for the first time home buyer, interest rate relief in taxes for auto buyers and tax breaks to businesses in payroll taxes. Nearly 35% of the total package is in tax relief. The bill also calls for at least 20 additional weeks of unemployment benefits in most states and provide additional benefit of $25 a week.

U.S. stocks traded sideways with financials rebounding. Citigroup, Bank of America and Regions Financial gained more than 8%. XL Capital surged 61% after it cut its dividend in half, despite reporting second quarterly loss in a row. CB Richard Ellis jumped 12% after it reported adjusted fourth quarter earnings of 37 cents a share.

European market indexes edged higher and recover from the morning losses after Credit Suisse reported wider than expected loss. Arcelor Mittal and PSA Peugeot Citroen SA recorded a loss of €343 million. Sanofi-Aventis reported net profit rose 14% to €1.63 billion.

The British pound dropped against euro, yen and dollar as the Bank of England lowered its estimate of inflation and economic growth. The bank now estimates inflation to drop to 0.5% and economy to shrink at 4% annual rate in the first quarter. The pound continues to trade weak.

Exports from China dropped 17.5% in January and imports plunged 43%. Total foreign trade surplus in the month surged 102% to $51.43 billion in the month. Stocks in Hong Kong dropped sharply on the weakness in financial on the lack of clarity in the U.S. bank bailout plan.

The Australian consumer confidence index declined in February. Weak job market and falling home values contributed to the consumer anxieties. In trading, stocks edged lower with weakness in financials and miners.

American Markets Reviews

Dow Jones Industrial Average increased 50.65 or 0.6% to a close of 7,939.53, S&P 500 added 6.58 or 0.80% to 833.74, and Nasdaq Composite Index edged up 5.77 or 0.38% to a close of 1,530.50. In Toronto TSX Composite lost 80.00 or 0.91% to close at 8,737.89.

In Latin American trading Brazil Bovespa Index decreased 0.9% or 361.81 to 40,845.62 and Mexico Bolsa Index dropped 1.9% or 379.07 to 19,446.65.

Argentina rose 0.3%, Chile declined 0.4%, Peru increased 0.4% and Colombia edged lower 0.4%. Venezuela gained 0.7%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 319 increased, 174 declined and 7 were unchanged.

Nvidia Corp led the decliners in the S&P 500 index with a loss of 12.6% followed by losses in Allegheny Energy with a loss of 10.1%, in International Paper Company of 7.2%, in Devon Energy of 6.4%, in Qwest Communication of 5.2%.

XL Capital Ltd led gainers in the S&P 500 index with a surge of 61.4% followed by gains in Marsh & McLennan of 14.4%, in Regions Financial of 14%, in Marshall & Ilsley of 13% and in Ingersoll Rand of 12.6%.

Asian Markets Review

Hang Seng index in Hong Kong decreased 341.43 or 2.46% closed to 13,539.21, CSI 300 index in China higher 4.38 or 0.19% closed to 2,331.14. ASX 200 index in Australia decreased 14.30 or 0.41% closed to 3,474.40. The KL Composite index in Malaysia lower 6.45 or 0.71% closed to 897.07. Markets of Tokyo were closed today.

The Kospi Index in South Korea decreased 8.69 or 0.72% to close at 1,190.18. SET index in Thailand closed higher 0.93 or 0.21% to 444.10 and JSE Index in Indonesia decreased 7.31 or 0.55% closed to 1,324.82. The Sensex index in India decreased 28.93 or 0.30% closed to 9,618.54.

Europe Markets Review

In London FTSE 100 Index closed higher 21.18 or 0.50% to 4,234.26, in Paris CAC 40 Index increased 6.97 or 0.23% to close at 3,027.72 and in Frankfurt DAX index higher 24.55 or 0.54% to close at 4,530.09. In Zurich trading SMI decreased 20.92 or 0.41% to close at 5,123.77.

Commodities, Bonds and Currencies

Yields on 10-year bond decreased to 2.78% and on 30-year bonds dropped to 3.45%.

The U.S. dollar edged higher to $1.2878 to a euro and against the Japanese yen inched lower to 90.35 yen.

Immediate futures prices of Texas crude oil decreased $0.04 to $35.98 a barrel, for natural gas increased $0.05 cent to $4.58 per mbtu and gasoline prices increased 2.59 cents to 126.98 cents a gallon.

Futures of corn decreased 8.25 cent to $3.68, soybean decreased 16.00 cents to $9.78, sugar unchanged to 13.50 a pound and wheat decreased 12.75 cent to $5.43 a bushel.

In metals trading, copper prices increased 1.60 cents to $1.5560 a pound, gold decreased $4.60 to $939.90 per ounce and silver decreased 3 cents to $13.49.