U.S. Durable Orders Rise; Japan Exports Plunge

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

U.S. stocks edged higher after the unexpected rise in durable goods orders in February. The latest economic data was third in a series of economic news after the release of home sales and retail sales. Stocks edged higher. UK government debt sale falls short. Japan exports plunge.

[R]10:20AM New York – U.S. stocks edged higher after the release of better than expected durable orders data in February.[/R]

U.S. durable goods increased 3.4% in February after falling 7.3% in January. The unexpected increase in the month was driven by a gain in machinery and defense equipment orders.

Excluding the volatile transportation equipment, orders rose 3.9%.

Recent gains in home sales and retail sales and today’s rise in durable goods orders lifted the sentiment in early trading in New York. Stocks and Treasury yields edged higher.

In UK, the government failed to attract buyers to finish its auction for treasury securities known as gilts. UK Debt Management Office attracted bids for only 1.63 billion pounds for a sale of 1.75 billion pounds with 40 years of maturity. UK government plans to sell 146 billion pounds of debt in the current fiscal year and 148 billion pounds in fiscal 2010.

The yield on 10-year government securities gilt rose 4 basis points to 3.37% according to the data reported on Bloomberg News. The pound declined to $1.458 and fell to 92.33 pence against euro.

UK is expected to have 8% budget deficit in the current fiscal year and is expected to be as high as 11% in fiscal 2010.

Japan reported one of the worst declines in monthly exports in February. Exports in the month declined 49.4% from a year ago and exports to the largest market U.S. plunged 58.4%. The largest export category, autos, dropped 71% and is likely to not recover for at least another two months.

The weak exports suggest that the first calendar quarter GDP decline may be as severe as the decline in last calendar quarter of 12.1%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 8.31 or 0.10% to 8,479.99, Hang Seng index in Hong Kong decreased 288.23 or 2.07% closed to 13,622.11, CSI 300 index in China lower 50.46 or 2.06% closed to 2,401.33. ASX 200 index in Australia increased 29.30 or 0.82% closed to 3,609.30. The KL Composite index in Malaysia higher 0.89 or 0.10% closed to 878.81.

The Kospi Index in South Korea increased 7.32 or 0.60% to close at 1,229.02. SET index in Thailand closed lower 1.24 or 0.28% to 436.92 and JSE Index in Indonesia decreased 16.14 or 1.12% closed to 1,419.97. The Sensex index in India increased 196.86 or 2.08% closed to 9,667.90.

Europe Markets Review

In London FTSE 100 Index traded lower 58.22 or 1.49% to 3,853.24, in Paris CAC 40 Index decreased 26.16 or 0.91% to 2,848.23 and in Frankfurt DAX index traded lower 47.37 or 1.13% to 4,139.99. In Zurich trading SMI decreased 12.54 or 0.25% to 4,911.12.