Commodities Rise, Lift Stocks

123jump.com Staff
04 Mar, 2009
New York City

Stocks around the world closed higher as mining companies and commodities rebounded. General Electric and General Motors dropped a multi-decade low. U.S. lawmakers draft a legislation to let courts change terms of troubled mortgage loans.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – Stocks around the world closed higher as mining companies and commodities rebounded. General Electric and General Motors dropped a multi-decade low. U.S. lawmakers draft a legislation to let courts change terms of troubled mortgage loans.[/R]

U.S. stocks edged higher as markets in Asia and Europe closed up on the hopes that economic stimulus in China will sustain demand for commodities. The speculators drove mining and commodities stocks higher in the U.S., UK, Canada, Australia and South America. The U.S. House of Representatives are likely to pass a legislation that will permit courts to change terms of mortgage loans. General Electric dropped again on the mounting speculation that it is likely to lose its highest credit rating.

Big Lots, Inc surged of 15.8% after it posted lower quarterly profits but beat the expectations of analysts. Luna Innovations Inc sees revenue below estimates. VeriFone Holdings, Inc first quarter profit beats estimates.

Stocks in UK and Europe closed sharply higher on a rise in consumer confidence in UK and a gain in commodities related stocks. Rio Tinto and BHP Billiton surged more than 13%. ITV annual loss surged to £2.7 billion and plans to eliminate 600 jobs and through restructuring save £245 million in 2011.

Stocks in Japan edged higher as the Bank of Japan offers to lend directly to corporations. Banks are weary of increasing lending to companies. Investors are looking for China to expand stimulus package.

Stocks in Hong Kong and Shanghai surged on the hopes that new economic stimulus package will help the economy and sustain consumption and market confidence. A latest read on manufacturing index increased from the previous month but still showed a contraction in the sector.

India approved twenty nine foreign direct investment projects ranged from media and entertainment, financial services and logistic services. Stocks edged higher as markets in the region advanced. The rupee rose to 51.52 against the dollar from 51.95 yesterday.

Australian economy shrank 0.5% in the quarter ending in December on falling exports and weak retail sales. The economy grew in the quarter compared to a year ago, but declined from the third quarter. The sudden deterioration in the world economy has dampened the exports of minerals and metals.

American Markets Reviews

Dow Jones Industrial Average increased 149.82 or 2.2% to a close of 6,875.84, S&P 500 Index gained 16.54 or 2.4% to 712.87, and Nasdaq Composite Index edged higher 32.73 or 2.5% to a close of 1,353.74. In Toronto TSX Composite increased 183.13 or 2.4% to close at 7,814.75.

In Latin American trading, Mexico Bolsa Index increased 731.71 or 4.3% to 17,824.96 and Brazil Bovespa Stock Index increased 5.31% or 1,934.68 to 38,402.24.

Argentina increased 6.1%, Chile increased 1.4%, Peru increased 3.3% and Colombia added 1.5%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 436 increased, 61 declined and 3 were unchanged.

US Bancorp led the decliners in the S&P 500 index with a loss of 13% followed by losses in Wells Fargo & Company of 9.5%, in JP Morgan Chase of 8.1%, in Apollo Group of 7.8%, in Citigroup Inc of 7.4%.

Big Lots Inc led gainers in the S&P 500 index with a rise of 18% followed by gains in Prologis of 17.3%, in MBIA Inc of 15.6%, in AK Steel Holding of 15.5% and in Janus Capital Group of 14%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 61.24 or 0.85% to 7,290.96, Hang Seng index in Hong Kong increased 297.27 or 2.47% closed to 12,331.15, CSI 300 index in China higher 143.00 or 6.68% closed to 2,285.15. ASX 200 index in Australia decreased 52.80 or 1.64% closed to 3,166.40. The KL Composite index in Malaysia lower 1.81 or 0.21% closed to 866.93.

The Kospi Index in South Korea increased 33.69 or 3.29% to close at 1,059.26. SET index in Thailand closed higher 4.77 or 1.15% to 417.86 and JSE Index in Indonesia increased 24.56 or 1.94% closed to 1,289.38. The Sensex index in India increased 19.20 or 0.23% closed to 8,446.49.

Europe Markets Review

In London FTSE 100 Index closed higher 133.78 or 3.81% to 3,645.87, in Paris CAC 40 Index increased 121.13 or 4.74% to close at 2,675.68 and in Frankfurt DAX index higher 200.22 or 5.42% to close at 3,890.94. In Zurich trading SMI increased 105.67 or 2.42% to close at 4,463.67.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.98% and on 30-year bonds increased to 3.67%.

The U.S. dollar edged lower to $1.2654 to a euro and against the Japanese yen inched higher to 99.14 yen.

Immediate futures prices of Texas crude oil increased $3.52 to $45.17 a barrel, for natural gas increased $0.05 cent to $4.33 per mbtu and gasoline prices increased 5.26 cents to 137.20 cents a gallon.

Futures of corn increased 13 cent to $3.63, soybean increased 15.00 cents to $8.68, sugar edged higher to 0.57 a pound to 13.26 and wheat increased 21.25 cents to $5.23 a bushel.

In metals trading, copper prices increased 11.50 cents to $1.71 a pound, gold decreased $5.20 to $908.40 per ounce and silver increased 0.225 cent to $12.95.