U.S. Banks, Insurers Rally, Europe Follows

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

Investors bid up regional banks and insurance companies a day after stocks fell in these sectors. Jobless claims rose in the previous week and producer prices gained in April on higher food prices. Techs rallied and after the close Nordstrom beat earnings views.

[R]5:00 PM New York, 10:00 PM London, 8:00AM Sydney – Investors bid up regional banks and insurance companies a day after stocks fell in these sectors. Jobless claims rose in the previous week and producer prices gained in April on higher food prices. Techs rallied and after the close Nordstrom beat earnings views.[/R]

Stocks in New York rebounded as investors showed greater willingness to buy banks, brokers and financials. Insurance and regional banks led gainers in trading despite a rise in jobless claims and increase in wholesale inflation on higher food prices.

Seasonally adjusted jobless claims at the end of last week increased 32,000 to 637,000 and the insured unemployment increased to 4.9%. A measure of wholesale inflation increased in April at 0.3% after falling at a rate of 1.2% in March and 0.1% increase in February.

In New York trading tech stocks gained sharply led by increase in CA Inc, Intel, Apple and Cisco. After the close, Nordstrom gained on better than expected earnings and higher earnings forecast.

UK stocks attempted a rebound after brokers recommended banks and mortgage lenders. Royal Mail returns to profit after heavy cost cuts. ITV revenues decline and look for more cost savings. Invensys surges on an increase in orders and a dividend hike. National Grid looks for rate hike.

Stocks in Tokyo were hit hard after the unexpected fall in monthly U.S. retail sales. The recent rally of stocks was already losing its steam as investors are increasingly turning cautious. Sony, Inpex, NEC Electronics declined but NTT Group gained after the release of earnings.

Stocks in Hong Kong and Shanghai fell after markets in the region tracked the losses in the U.S. and in Europe. Banks, electronics contractors and energy companies led the decliners. Tencent Holdings surged 10% and Foxconn declined 5%.

Election fever in India and a prospect of uncertain outcome overshadowed the trading sentiment in Mumbai. Banks and software exporters declined. Shipping lines gained on a rise in freight rate index. Wholesale price index increase dropped below 0.5%.

Investors in Australia focused on the recent slide in metals prices. Fairfax Media dropped on rating downgrade. Leighton Holdings declined after nine month profit was cut in half.

North American Markets

Dow Jones Industrial Average increased 46.43 or 0.6% to a close of 8,331.32, S&P 500 Index gained 9.15 or 1.1% to 893.07, and Nasdaq Composite Index added 25.02 or 1.5% to close at 1,689.21. In Toronto TSX Composite Index closed up 139.69 or 1.4% to 9,849.20.

Of the stocks in S&P 500 index, 365 increased, 133 declined and 2 were unchanged.

Mylan Inc led decliners in the S&P 500 index with a loss of 5.5% followed by losses in GM of 4.8%, in AMD of 3.2%, in Dr Pepper Snapple of 3.2% and in TJX Companies of 2.7%.

Genworth Financial led gainers in the S&P 500 index with a surge of 20.2% followed by gains in Hartford Financial Services of 17.4%, in AIG of 15%, in Lincoln National Corp of 12.6%, in XL Capital of 9.8% and in AES Corp of 9.3%.

South American Markets Indexes

Mexico Bolsa Index increased 250.92 or 1.1% to 23,405.93. Brazil Bovespa Stock Index added 766.83 or 1.6% to 49,446.02.

Argentina Merval Index dropped 0.9%, Chile Stock Market Select index increased 0.6% and Peru Lima General Index added 1.6%. Colombia IGBC General Index edged higher 0.9% and Venezuela Stock Market Index edged up 0.4%.

Europe Markets Review

In London FTSE 100 Index closed higher 31.21 or 0.72% to 4,362.58, in Paris CAC 40 Index increased 3.39 or 0.11% to close at 3,156.29 and in Frankfurt DAX index higher 10.86 or 0.23% to close at 4,738.47. In Zurich trading SMI increased 82.63 or 1.57% to close at 5,360.00.

Asian Markets Review

In Tokyo Nikkei 225 Index closed lower 246.76 or 2.64% to 9,093.73, in Hong Kong Hang Seng index decreased 517.93 or 3.04% closed to 16,541.69. In Australia ASX 200 index lower 132.70 or 3.44% to close 3,723.40. In Malaysia KL Composite index decreased 10.85 or 1.06% closed to 1,011.99.

In South Korea Kospi Index decreased 33.57 or 2.37% to close at 1,380.95, in Thailand SET index closed lower 26.16 or 4.73% to 526.55 and Indonesia JSE Index edged decreased 66.33 or 3.58% to 1,785.00. Sensex index in India decreased 146.74 or 1.22% to 11,872.91.

Commodities, Metals, and Currencies

Crude oil increased $0.53 to close at $58.55 a barrel for a front month contract, natural gas decreased 5 cent to $4.28 per mBtu and gasoline futures increased 3.09 cents to close at 171.97 cents per gallon.

Wheat futures closed up 4.50 cents in Chicago trading and closed at $5.93 a bushel. Sugar increased 0.07 cent in trading at 15.47 cents a pound. Soybean future closed up 19.50 cent to $11.47 a bushel.

Gold increased $0.80 in New York trading to close at $926.70 per ounce, silver closed up $0.25 to $14.04 per ounce and copper for the front month delivery increased 0.45 cents to $2.0355 per pound.

Dollar edged lower against euro to $1.3638 and closed down against yen to 95.80.

Yields on 10-year U.S. bonds decreased to 3.09% and with 30-year maturities closed down at 4.05%.