U.S. Stocks Surge; Crude Oil, Yields Rise

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

General Motors filed for protection to restructure operations, wipe-off most of its debt and reduce its labor and operating cost. Stocks surged around the world after China manufacturing expanded for the third month in a row. Copper price reached six-month high and crude oil high for the year.

[R]5:00 PM New York, 10:00 PM London, 8:00AM Sydney – General Motors filed for protection to restructure operations, wipe-off most of its debt and reduce its labor and operating cost. Stocks surged around the world after China manufacturing expanded for the third month in a row. Copper price reached six-month high and crude oil at a record for the year.[/R]

General Motors filed bankruptcy protection to emerge as a smaller and leaner automaker with domestic market focus. Most of its international divisions will be sold. The automaker will shut at least 14 plants, eliminate 21,000 jobs, shed $79 billion in debt and wipe out its current stock holders. The President Obama vowed that the U.S. will take hands-off approach and hopes to exit from the company investment soon.

Retailers and commodities surged in New York trading after the benchmark indexes traded higher 2.5%. Stocks linked to Russia, China, Brazil and India surged as markets in Asia and emerging economies surged. Energy and commodities stocks gained as well.

U.S. bonds yields as the fears recession recede and investors focus on inflation build up.

European markets rallied after China reported third monthly manufacturing expansion in a row. The less than expected decline in manufacturing also supported a rise in energy and commodities stocks. Steelmakers, industrials and energy stocks jumped.

UK stocks traded higher on a rise in copper, gold and crude oil prices. A global rally sparked by the third monthly increase in manufacturing in China. Copper reached $5,000 a ton, six-month high. UK home prices stabilized in May.

Stocks in Shanghai and Hong Kong surged after China reported third successive monthly expansion in manufacturing. The gain set-off a strong rally that expanded to Asian markets and supported indexes in Europe and the U.S.

Stocks in Japan and in Asia closed higher after manufacturing index in China increased. The prospect of higher exports also lifted stocks of steelmakers, shippers and metal processing companies.

Stocks in Mumbai gained for the fourth day in a row as rupee gained, trade deficit declined in April and foreign investors poured record investment in Indian stocks. April trade deficit declined 42% to $5 billion. Foreign investors poured $4.3 billion in Indian stocks in May.

Australian home and retail sales increased better than expected, lifted the Australian benchmark index. Stocks surged 2% and Aussie gained against the U.S. dollar. Crude oil, gold, copper and silver closed higher.

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, 450 increased, 48 declined and 2 were unchanged.

KeyCorp led decliners in the S&P 500 index with a loss of 5.20% followed by losses in Regions Financial of 4.8%, in Cephalon Inc of 3.5%, in Dow Chemical of 3.2% and in Sprint Nextel Company of 2.9%.

CBS Corp led gainers in the S&P 500 index with a surge of 18.4% followed by gains in CB Richard Ellis of 15.2%, in Macy’s Inc of 15.1%, in J.C. Penney Co. of 14.9%, in Dynegy Inc of 14.4% and in Nordstrom Inc of 14%.

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 88.25 or 2.00% to 4,506.19, in Paris CAC 40 Index increased 101.84 or 3.11% to close at 3,379.49 and in Frankfurt DAX index higher 201.74 or 4.08% to close at 5,142.56. 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 155.25 or 1.63% to 9,677.75, Hang Seng index in Hong Kong increased 717.59 or 3.95% closed to 18,888.59, CSI 300 index in China higher 98.63 or 3.57% closed to 2,858.34. ASX 200 index in Australia increased 76.30 or 2.00% closed to 3,894.40. The KL Composite index in Malaysia higher 17.69 or 1.69% closed to 1,061.80.

The Kospi Index in South Korea increased 19.21 or 1.38% to close at 1,415.10. The SET index in Thailand closed higher 19.57 or 3.49% to 579.98 and JSE Index in Indonesia increased 81.75 or 4.26% closed to 1,998.58. The Sensex index in India increased 215.38 or 1.47% closed to 14,840.63.

Commodities, Metals, and Currencies

Crude oil increased $2.27 to close at $68.58 a barrel for a front month contract, natural gas increased 41 cent to $4.25 per mBtu and gasoline increased 2.90 cents to 192.43 cents.

Wheat futures closed up 37.25 cents in Chicago trading and closed at $6.74 a bushel. Sugar increased 0.27 cent in trading at 15.85 cents a pound. Soybean future closed up 34.50 cent to $12.18 a bushel.

Gold decreased $2.20 in New York trading to close at $977.80 per ounce, silver closed up $0.13 to $15.74 per ounce and copper for the front month delivery increased 12.15 cents to $2.31 per pound.

Dollar edged lower against euro to $1.4152 and closed up against the Japanese yen to 96.52.

Yields on 10-year U.S. bonds increased to 3.67% and with 30-year maturities closed up at 4.53%.