U.S. Stocks Rebound, Bernanke Testimony

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

U.S. stocks rebounded after the Fed Chairman Bernanke testified that for now the largest banks have enough capital and do not need to be nationalized. Banks, retailers and realty companies surged and lifted broader market indexes after these two assertions.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – U.S. stocks rebounded on the assurances from the Fed and FDIC Chairmen that banks have enough capital and do need to be capitalized.[/R]

U.S. stocks rebounded after the Fed Chairman Bernanke testified that for now the largest banks have enough capital and do not need to be nationalized. The FDIC Chairman Sheila Bair also suggested in an interview that the banks meet regulatory capital requirements. Banks, retailers and realty companies surged and lifted broader market indexes after these two assertions.

AIG led the decliners in the S&P 500 index with a loss of 22.6%. Home Depot posts fourth quarter loss. Nordstrom, Inc earnings plunge but the stock surges. Target drops on weak sales and earnings.

European markets close lower as earnings worries and weak banks drag investors sentiment lower. Business confidence in Germany falls to 25-year low. Markets in Asia close sharply lower as investors see no sign of the end of the current financial crisis. Nomura plans to raise $3 billion.

UK stock edged lower after mortgage lending hovered at half the level a year ago, home builders are expected to take another write-off in land values and insurance stocks are the latest target of short sellers. The net mortgage lending rose in January but dropped 43% form a year ago.

Japan stocks fell 1.5% as investors were unsettled by news that Nomura Holdings will issue shares at a premium in order to boost its balance sheet. However, losses were trimmed by a falling yen, which slumped the most in three months against the dollar to 95.85 yen from 94.61 yen yesterday.

Ahead of the budget speech in Hong Kong, the benchmark index of stocks declined 2.9%. Consumer price index in January rose at 3.1% compared to a year ago. HSBC, China Life and Manulife declined on the weakness in financial stocks.

Australian stocks fell. Suncorp reported today that its net profit after tax in the six months ended December 31 dropped 33% to A$258 million. The company also replaced its chief executive. Aristrocrat Leisure, the second largest slot machine maker reported second half net dropped 75%.

American Markets Reviews

Dow Jones Industrial Average increased 236.16 or 3.32% to a close of 7,350.94, S&P 500 added 29.81 or 4.01% to 773.14, and Nasdaq Composite Index edged higher 54.11 or 3.90% to a close of 1,441.83. In Toronto TSX Composite gained 211.66 or 2.8% to close at 7,859.33.

In Latin American trading, Mexico Bolsa Index increased 339.71 or 1.89% to 18,296.11.

Argentina gained 3.14%, Chile increased 0.2%, Peru decreased 1.1% and Colombia edged lower 0.9%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 482 increased, 18 declined and none were unchanged.

Radisoshack Corp led the decliners in the S&P 500 index with a loss of 24.4% followed by losses in AIG with a loss of 22.6%, in Office Depot Inc of 13.1%, in Newmont Mining of 5.1%, in Constellation Energy of 3.1%.

Developers Diversified led gainers in the S&P 500 index with a surge of 54% followed by gains in Marshall & Ilsley of 26%, in Lincoln National Corp of 26%, in General Motors of 25.4% and in Capital One Financial of 24%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 107.60 or 1.46% to 7,268.56, Hang Seng index in Hong Kong decreased 376.58 or 2.86% closed to 12,798.52, CSI 300 index in China lower 108.63 or 4.51% closed to 2,301.85. ASX 200 index in Australia decreased 19.60 or 0.58% closed to 3,331.60. The KL Composite index in Malaysia higher 6.24 or 0.70% closed to 894.07.

The Kospi Index in South Korea decreased 35.67 or 3.24% to close at 1,063.88. SET index in Thailand closed lower 3.67 or 0.84% to 431.32 and JSE Index in Indonesia decreased 16.57 or 1.26% closed to 1,295.87. The Sensex index in India decreased 21.15 or 0.24% closed to 8,822.06.

Europe Markets Review

In London FTSE 100 Index closed lower 34.29 or 0.89% to 3,816.44, in Paris CAC 40 Index decreased 19.82 or 0.73% to close at 2,708.05 and in Frankfurt DAX index lower 40.70 or 1.03% to close at 3,895.75. In Zurich trading SMI decreased 74.10 or 1.54% to close at 4,723.02.

Commodities, Bonds and Currencies

Yields on 10-year bond decreased to 2.78% and on 30-year bonds decreased to 3.53%.

The U.S. dollar edged higher to $1.2738 to a euro and against the Japanese yen inched higher to 95.06 yen.

Immediate futures prices of Texas crude oil decreased $0.47 to $37.97 a barrel, for natural gas decreased $0.06 cent to $4.04 per mbtu and gasoline prices increased 0.36 cents to 104.69 cents a gallon.

Futures of corn decreased 2 cent to $3.4975, soybean decreased 1.750 cents to $8.74, sugar declined to 0.07 a pound to 12.99 and wheat decreased 1.25 cents to $5.20 a bushel.

In metals trading, copper prices decreased 1.35 cents to $1.43 a pound, gold decreased $7.30 to $987.70 per ounce and silver decreased 0.08 cent to $14.37.