Gold at $980, Oil Above $66; Bonds in Focus

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

U.S. stocks closed up as global economic indicators point to improved economic climate. Industrial production in Japan, mild inflation in Europe and faster economic expansion in India and the improving confidence in the U.S. lifted stocks and commodities. Crude oil surpassed $66 and gold $980.

[R]5:00 PM New York, 10:00 PM London, 8:00AM Sydney – U.S. stocks closed higher as global economic indicators point to improved economic climate. Industrial production in Japan, mild inflation in Europe and faster economic expansion in India and a improving consumer confidence in the U.S. lifted stocks and commodities. Crude oil surpassed $66 and gold $980.[/R]

Investors around the world feel optimistic and ready to take on more risks. The positive indicators around the world point to a recovery in industrial activity, international trade and confidence but what is not clear is how sustainable this so called recovery is. Crude oil and gold prices have been on the rise and reached a new high for the year at close.

The 19-day in a row surge in international freight rate index, a rise in industrial production in Japan, faster economic expansion in India and revised economic decrease in the first quarter GDP in the U.S. were only few of the indicators that investors digested today.

The latest read on the U.S. consumer confidence in May was better than expected and preliminary estimate of EU inflation in May is zero. German retail sales declined but on a seasonally adjusted basis sales increased. Home prices in the UK were up in May.

First quarter U.S. GDP estimate was revised to a decrease of 5.7% from an earlier estimate of 6.3% a month ago. The revision in GDP reflects higher than expected decrease in imports and smaller than expected decrease in inventories.

Dell first quarter profit tumbles 63% on 24% decline in sales. Jamba, Inc reports wider losses for the first quarter. Tiffany & Co first quarter sales declined 22% and net plunged 62%.

The Bank of Nova Scotia second quarter revenues rose 12% to $3.7 billion and net income fell 11% to $872 million or 81 cents a share. Dell Inc first quarter sales fell 23.6% to $12.3 billion and net income fell 63% to $290 million or 15 cents a share.

In European trading, stocks edged higher after industrial production in Japan increased. Germany reported zero inflation in May and retail sales decreased in April. The dollar declined against the euro. GM and Magna appear to be in a preliminary agreement for the sale of Opel division.

The familiar sectors were active in stock trading in London. Miners led the gainers after precious metal prices surged. Gold jumped above $975 an ounce and crude oil hovered near $65 a barrel. Home prices in a latest survey showed an increase of 1.2% in May.

Electrocomponents plc full-year sales rose 5.4% to £974.6 million and net profit rose 3.6% to £66.2 million or £15.2 a share. Severn Trent Plc full-year sales rose 5.8% to £1.64 billion and net loss was £57.8 million or £24.6 a share.

In Japan, industrial production in April surged and is expected to rise in May at a faster pace. The rebound in exports of electronics and automobiles helped manufacturing to recover. The consumer price index in the month fell and unemployment surged to a five-year high. Shipper gained and retailers fell.

In India, the GDP expanded at 5.8% in the fourth quarter and for the fiscal year ending in March at 6.7%. The annual growth rate was the slowest in the last six years after hitting the peak of 9.6% two years ago. The government spending in rural areas ahead of election surged 12.5% in the quarter.

In Mumbai the benchmark index closed up 2.3% after the release of fourth quarter economic data. Real estate developers, banks and oil and energy companies traded higher. The benchmark indexes have rebounded 52% from their lows ten weeks ago.

Indian Oil Corporation Limited fourth quarter total income fell 15.6% to Rs. 60,599.80 crore and net profit was Rs. 6,622.96 crore. Tata Power Company Limited full-year total income rose 23% to Rs.7,868.58 crore and net profit rose 19% to Rs. 967.50 crore or Rs.43.69 a share.

North American Markets

Dow Jones Industrial Average increased 96.53 or 1.2% to a close of 8,500.33, S&P 500 Index added 12.31 or 1.4% to 919.14, and Nasdaq Composite Index edged higher 22.54 or 1.3% to close at 1,774.33. Toronto TSX Composite Index closed down 22.30 or 0.2% to 10,370.07.

Of the stocks in S&P 500 index, 431 increased, 81 declined and 6 were unchanged.

General Motors led decliners in the S&P 500 index with a loss of 33% followed by losses in Novell Inc of 6.1%, in Cintas Corp of 5.4%, in Tyson Foods of 4% and in Gannett Company of 3.8%.

Genworth Financial led gainers in the S&P 500 index with a surge of 14.3% followed by gains in Tenet Healthcare of 13%, in Expedia Inc of 8.9%, in CIT Group Inc of 8.8%, in Union Pacific Corp of 8.2% and in CB Richard Ellis of 8%.

South American Markets Indexes

Mexico Bolsa Index decreased 327.53 or 1.3% to 24,331.71. Brazil Bovespa Stock Index added 156.99 or 0.3% to 53,197.73.

Argentina Merval Index increased 1.7%, Chile Stock Market Select index decreased 0.06% and Peru Lima General Index surged 3.4%. Colombia IGBC General Index edged higher 0.6% and Venezuela Stock Market Index edged down 1.0%.

Europe Markets Review

In London FTSE 100 Index closed higher 30.40 or 0.69% to 4,417.94, in Paris CAC 40 Index increased 13.95 or 0.43% to close at 3,277.65 and in Frankfurt DAX index higher 7.94 or 0.16% to close at 4,940.82. In Zurich trading SMI decreased 0.85 or 0.02% to close at 5,349.74.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 71.11 or 0.75% to 9,522.50, Hang Seng index in Hong Kong increased 285.73 or 1.60% closed to 18,171.00, ASX 200 index in Australia increased 62.40 or 1.66% closed to 3,818.10. The KL Composite index in Malaysia higher 2.87 or 0.28% closed to 1,044.11.The Markets of China were closed today.

The Kospi Index in South Korea increased 3.72 or 0.27% to close at 1,395.89. SET index in Thailand closed higher 4.98 or 0.90% to 560.41 and JSE Index in Indonesia increased 13.96 or 0.73% closed to 1,916.83. The Sensex index in India increased 329.24 or 2.30% closed to 14,625.25.

Commodities, Metals, and Currencies

Crude oil increased $1.49 to close at $66.57 a barrel for a front month contract and natural gas decreased 8 cent to $3.87 per mBtu.

Wheat futures closed up 6.75 cents in Chicago trading and closed at $6.37 a bushel. Sugar decreased 0.06 cent in trading at 15.58 cents a pound. Soybean future closed up 5 cent to $11.84 a bushel.

Gold increased $17.10 in New York trading to close at $980.30 per ounce, silver closed up $0.55 to $15.71 per ounce and copper for the front month delivery increased 6.00 cents to $2.19 per pound.

Dollar edged lower against euro to $1.4158 and closed down against the Japanese yen to 95.34.

Yields on 10-year U.S. bonds decreased to 3.46% and with 30-year maturities closed down at 4.34%.