Regions, Huntington, Capital One Soar

123jump.com Staff
08 May, 2009
New York City

U.S. stocks rebounded after nineteen banks gained. The stress results reassured investors that banks are strong enough to withstand adverse economic conditions in the next two years.Fifth Third Bancorp soared 59%, SunTrust Banks, Inc advanced 12% and Marshall & Ilsley gained 28%. Oil inched to $60.

[R]4:00PM New York, 10:00PM Frankfurt – U.S. stocks rebounded after nineteen banks and lenders gained. The stress results reassured investors that banks are strong enough to withstand adverse economic conditions in the next two years. Unemployment rose to 8.9% in April but the rate of job losses declined.[/R]

U.S. stocks closed higher after the release of stress test results by bank regulators and lower than expected jobless claims at the end of last week. Wells Fargo, JP Morgan and American Express surged at least 10%.

Regional banks Fifth Third Bancorp soared 59%, SunTrust Banks, Inc advanced 12% and Marshall & Ilsley Corporation surged 27.5%. Capital One soared 31%. All nineteen banks closed higher.

Banks were quick to raise capital from private investors, those who could. Morgan Stanley raised $8 billion through $4 billion common stock offering and $4 billion of bonds. Wells Fargo raised $7.5 billion in common stock offering today.

Bank of America filed to sell 1.25 billion in common shares to complete the offering in the next few weeks. At Friday’s close price the offering will raise $17.8 billion and regulators have asked banks to $35 billion.

Goldman Sachs added 4.4% and Morgan Stanley increased 3.9%. General Electric increased 4%.

Unemployment increased to 8.9% in April and in the month 539,000 people lost jobs. The job losses were the lowest since October last year but unemployment rate surged to 26-year high. Since the beginning of recession, 5.7 million people have lost their jobs.

U.S. Department of Labor Statistics noted, ‘In April, job losses were large and widespread across nearly all major private-sector industries. Overall, private-sector employment fell by 611,000.’

Stocks in Europe close higher after the release of jobless data in U.S. The banks rebounded on the optimism stirred after the U.S. Fed reassured investors about the health of largest banks. Luxottica surged 10% after net fell 22.5%. Commerzbank net loss surged to €861 million.

UK stocks rallied on the back of positive trading sentiment after lower than expected jobless claims in the U.S. Royal Bank of Scotland surged on 26% increase in revenues. Miners climbed higher on a rise in commodities prices. Producer Price index increased at a faster pace in April.

In Tokyo, financials and insurers surged after the U.S. regulators required only ten banks to raise $75 billion. Investor were cautious after larger than expected loss at Toshiba and an estimate of loss at Fuji Heavy Industries. Toyota annual sales declined 22% and estimated operating loss in fiscal 2010.

Hong Kong Monetary Authority reassured investors that banks have adequate capital after conducting their own tests. The central bank also suggested that the island is attracting net capital which contributed to the rally in the last seven sessions. Foreign currency reserves increase by $7.1 billion.

In Mumbai, India, ahead of last phase of parliament elections, stocks declined. Commodities prices fell. Wholesale price index increased at 0.7% as measured inflation hovers near three-decade low. DLF founders are in a deal to sell stake in the company and raise at least $420 million.

The Reserve Bank of Australia estimated that the economy will shrink at 1.2% by the second quarter and regain its momentum by the end of the year. The bank cited strength of its exports and links to China and stable financial sector in the county. OZ Minerals urges investors to support China deal.

North American Markets

Dow Jones Industrial Average advanced 164.80 or 1.96% to a close of 8,574.65, S&P 500 Index gained 21.84 or 2.4% to 929.23, and Nasdaq Composite Index increased 22.76 or 1.3% to close at 1,739.00. In Toronto TSX Composite Index closed up 270.94 or 2.7% to 10,237.99.

Of the stocks in S&P 500 index, 403 increased, 95 declined and 2 were unchanged.

Nvidia Corp led decliners in the S&P 500 index with a loss of 13.8% followed by losses in Allstate Corp of 5.4%, in Microchip Tech of 5.2%, in Broadcom Corp of 5.1% and in SanDisk Corp of 5.1%.

Fifth Third Bancorp led gainers in the S&P 500 index with a surge of 58% followed by gains in Dynegy Inc of 37%, in Huntington Bancshares of 33.7%, in Marshall & Ilsley of 27.5%, in Zions Bancorp of 27.1% and in Regions Financial of 24.9%.

South American Markets Indexes

Mexico Bolsa Index added 496.18 or 2.1% to 24,085.58. Brazil Bovespa Stock Index jumped 1,337.93 or 2.67% to 51,395.99.

Argentina Merval Index surged 5.4%, Chile Stock Market Select index increased 3.4% and Peru Lima General Index surged 6.1%. Colombia IGBC General Index leapt 4.1% and Venezuela Stock Market Index edged up 0.5%.

Europe Markets Review

In London FTSE 100 Index closed higher 56.31 or 1.44% to 4,462.09, in Paris CAC 40 Index increased 61.07 or 1.88% to close at 3,312.59 and in Frankfurt DAX index higher 109.80 or 2.29% to close at 4,913.90. In Zurich trading SMI increased 65.38 or 1.23% to close at 5,391.01.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 47.13 or 0.50% to 9,432.83, Hang Seng index in Hong Kong increased 171.98 or 1.00% closed to 17,389.87, CSI 300 index in China higher 22.14 or 0.80% closed to 2,789.22. ASX 200 index in Australia increased 3.00 or 0.08% closed to 3,941.70. The KL Composite index in Malaysia higher 3.31 or 0.32% closed to 1,026.78.

The Kospi Index in South Korea increased 11.05 or 0.79% to close at 1,412.13. JSE Index in Indonesia increased 33.68 or 1.84% closed to 1,862.53. The Sensex index in India decreased 240.51 or 1.98% closed to 11,876.43. The Markets of Thailand were closed today.

Commodities, Metals, and Currencies

Crude oil increased $1.83 to close at $58.54 a barrel for a front month contract, natural gas increased 27 cent to $4.35 per mBtu and gasoline futures increased 3.37 cents to close at 169.92 cents per gallon.

Wheat futures closed up 20.75 cents in Chicago trading and closed at $5.91 a bushel. Sugar decreased 0.22 cent in trading at 15.27 cents a pound. Soybean future closed up 9.50 cent to $11.11 a bushel.

Gold increased $0.60 in New York trading to close at $916.10 per ounce, silver closed down $0.05 to $13.98 per ounce and copper for the front month delivery decreased 1.90 cents to $2.145 per pound.

Dollar edged lower against euro to $1.3638 and closed up against yen to 98.45.

Yields on 10-year U.S. bonds decreased to 3.29% and with 30-year maturities closed down at 4.26%.