Home Sales, Asset Rules Lift U.S. Stocks

123jump.com Staff
01 Apr, 2009
New York City

U.S. stocks closed up on the hopes that the housing market is indicating early signs of stabilization and banks will meet revised market-to-market asset rules. Investors overlooked weak job report. Business confidence in Japan plunged. European indexes closed higher. Daimler AG cuts 14% labor cost.

5:00PM New York, 11:00PM Frankfurt, 8:00AM Sydney[R]– U.S. stocks closed higher on the hopes that the home market is indicating early signs of stabilization and banks will meet revised market-to-market asset rules. Investors overlooked weak job report for March. Business confidence in Japan plunged. [/R]

Global Markets

U.S. stocks closed higher on a rise in index related to existing homes and expectations of revised rules for the ‘mark to market’ assets for banks and despite a weak employment report. The Institute for Supply Management reported factory index increased in March indicating that the fall in factory activities is declining at a slower pace. Employers cut 742,000 jobs in March according to ADP Employment Services.

The index for pending home resale increased 2.1% in February and lifted stocks of home builders. DR Horton led gainers in home building segment with a rise of 4% followed by gains in Centex Corp and KB Home with a gain of 3%.

Banks traded higher on the hopes that the revised rules related to asset valuation will show most banks with enough regulatory capital and will not unleash another round of earnings downgrades.

Celgene Corporation led the decliners in the S&P 500 index with a loss of 14.1%. Apollo Group, Inc reports second quarterly profit 77 cents. Sealy Corporation first quarter net falls 71%. Worthington Industries, Inc third quarter profit plummets on lower volumes.

Markets in Europe closed higher on the back of a reversal in trading sentiment in New York. Telecom stocks gained on broker recommendations. Telecom Italia and Belgacom SA jumped after Goldman Sachs upgraded stock ratings.

Daimler AG is looking to reduce its annual labor cost to 10 billion euros, a reduction of 2 billion euros on cutting worker hours, foregoing pay rises and cutting bonuses. The workers will be asked to work 30 hours instead of 35 hours and cut wages by 14%. The labor leader of Daimler employees wants the 280 million euros profit sharing payment to be exchanged for a stake in the company.

Japan business confidence drops to record low in March quarter as managers see no immediate signs of clearing inventories and a rise in sales. Manufacturers in the monthly survey estimated more job cuts. Honda plans to cut production by 62,000 in North America. Stocks closed higher on weak yen.

Australian dollar fell after retail sales decline 2% in February however Australian residential approvals rise 7.8% in February. China controlled Minmetals Group and Australian regulators are likely to agree for the sale of international assets of Oz Minerals Ltd. for $1.2 billion.

North American Markets

Dow Jones Industrial Average increased 152.68 or 2.01% to a close of 7,761.60, S&P 500 Index increased 13.21 or 1.7% to 811.08, and the Nasdaq Composite Index increased 23.01 or 1.51% to close at 1,551.60.

Of the stocks in S&P 500 index, 394 increased, 104 declined and 2 were unchanged.

Apollo Group led decliners in the S&P 500 index with a loss of 15% followed by losses in Celgene Corp of 13.4%, in Fidelity National of 7.3%, in Moody’s Corp of 6%, in Lennar Corp of 5.3% and in Kimco Realty of 5.2%.

JDS Uniphase led gainers in the S&P 500 index with a rise of 15.4% followed by gains in Huntington Bancorp of 14.5%, in Wyndham Worldwide of 13.1%, in Textron Inc of 12.4% and in Sprint Nextel Company 11.2%.

South American Markets Indexes

Mexico Bolsa Index increased 253.62 or 1.3% to 19,880.37. Brazil Bovespa Stock Index added 1,050.46 or 2.6% to 41,976.33.

Argentina benchmark index increased 0.7%, Chile increased 1.5% and Peru increased 1.9%. Colombia increased 0.3%.

Europe Markets Review

In London FTSE 100 Index closed higher 29.47 or 0.75% to 3,955.61, in Paris CAC 40 Index increased 32.27 or 1.15% to close at 2,839.61 and in Frankfurt DAX index higher 46.31 or 1.13% to close at 4,131.07. In Zurich trading SMI increased 87.47 or 1.78% to close at 5,014.90.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 242.38 or 2.99% to 8,351.91, Hang Seng index in Hong Kong decreased 56.48 or 0.42% closed to 13,519.54, CSI 300 index in China higher 40.43 or 1.61% closed to 2,548.22. ASX 200 index in Australia decreased 2.40 or 0.07% closed to 3,579.70. The KL Composite index in Malaysia higher 11.63 or 1.33% closed to 884.18.

The Kospi Index in South Korea increased 27.10 or 2.25% to close at 1,233.36. SET index in Thailand closed lower 1.41 or 0.33% to 430.09 and JSE Index in Indonesia increased 27.67 or 1.93% closed to 1,461.75. The Sensex index in India increased 193.49 or 1.99% closed to 9,901.99.

Commodities, Metals, and Currencies

Crude oil decreased $1.34 to close at $48.32 a barrel for a front month contract, natural gas decreased 9 cents to $3.68 per mBtu and gasoline futures decreased 5.02 cents to close at 137.11 cents per gallon.

Wheat futures closed down 7.250 cents in Chicago trading and closed at $5.2555 a bushel. Sugar increased 6 cents in trading at 12.73 cents a pound. Soybean future closed unchanged to $9.52 a bushel.

Gold increased $2.00 in New York trading to close at $927.00 per ounce, silver closed down $0.005 to $12.99 per ounce and copper for the front month delivery increased 1.65 cents to $1.8610 per pound.

Dollar edged higher against euro to $1.3231 and declined against yen to 98.61.

Yields on 10-year U.S. bonds decreased to 2.65% and with 30-year maturities declined to 3.50%.