Dollar, Commodities Drive U.S. Stocks

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

For weeks now investors have focused on the rally in commodities and a growing bearish sentiment against the U.S. Treasuries and the dollar. Dollar gained and commodities prices declined. BlackRock agreed to pay $13.5 billion for investment unit of Barclays.

4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – For weeks now investors have focused on the rally in commodities and a growing bearish sentiment against the U.S. Treasuries and the dollar. Dollar gained and commodities prices declined. BlackRock agreed to pay $13.5 billion for investment unit of Barclays.[/R]

U.S. stocks closed higher and three benchmark indexes closed in the positive territory for the first time this year. S&P 500 index reached as high as last seen in November last year. S&P 500 index for the year is up 4.8%, Nasdaq up 18% and Dow Jones Industrial Average up 0.26%.

BlackRock agreed to acquire investment management unit of Barclays for $13.5 billion. Barclays will record $8.8 billion in capital gains and lift its core capital ratio to 8%. Barclays and other banks will provide $2 billion in financing and BlackRock will raise $2.8 billion in rights offering. BlackRock will pay $6.6 billion in cash and the rest in stocks.

Ameriprise completed its 36 million shares public offering. Hartford Financial declined after it agreed to receive $3.4 billion in TARP funds and raise $750 million in an offering.

Stocks in Japan closed higher after investors accumulated financials, retailers and industrial companies. Consumer confidence in May reached to eight-month high. Financial closed higher on earnings revisions from brokers. Nikkei 225 Average is now up 10% for the year.

In India, industrial production rose in April on a rise in manufacturing and electricity output. Yield on 10-year bond increased to 6.94% and State Bank of India estimated 4% of loan portfolio in restructuring.

North American Markets

Dow Jones Industrial Average increased 28.34 or 0.3% to a close of 8,799.26, S&P 500 Index increased 1.32 or 0.2% to 946.21, and Nasdaq Composite Index edged lower 3.57 or 0.2% to close at 1,858.80. Toronto TSX Composite Index closed down 72.80 or 0.7% to 10,641.31.

Of the stocks in S&P 500 index, 292 increased, 206 declined and 2 were unchanged.

UnitedHealth Group Incorporated led the decliners in the S&P 500 index with a loss of 6.4% followed by Centex Corp of 5.8%, in Pulte Homes of 5.6%, in Lennar Corp of 5.3% and in MBIA Inc of 5.2%.

Genworth Financial led gainers in the S&P 500 index with a rise of 9.6% followed by gains in Regions Financial 8.8%, in Bank of America of 8.2% and KeyCorp of 6.8%.

South American Markets Indexes

Mexico Bolsa Index increased 87.17 or 0.4% to 25,460.02. Brazil Bovespa Stock Index increased 195.89 or 0.4% to 53,606.82.

Argentina Merval Index decreased 0.9%, Chile Stock Market Select index fell 0.4% and Peru Lima General Index declined 0.8%. Colombia IGBC General Index edged higher 0.4% and Venezuela Stock Market Index increased 0.5%.

Europe Markets Review

In London, FTSE 100 Index closed lower 19.92 or 0.45% to 4,441.95, in Paris CAC 40 Index decreased 8.80 or 0.26% to close at 3,326.14 and in Frankfurt DAX index lower 38.02 or 0.74% to close at 5,069.24. In Zurich trading SMI increased 37.99 or 0.69% to close at 5,521.84.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 154.49 or 1.55% to 10,135.82, Hang Seng index in Hong Kong increased 98.65 or 0.52% closed to 18,889.68, CSI 300 index in China lower 55.34 or 1.87% closed to 2,906.29. ASX 200 index in Australia increased 15.00 or 0.37 % closed to 4,062.20. The KL Composite index in Malaysia higher 1.19 or 0.11% closed to 1,090.15.

The Kospi Index in South Korea increased 9.20 or 0.65% to close at 1,428.59.SET index in Thailand closed higher 1.48 or 0.24% to 628.55 and JSE Index in Indonesia increased 1.36 or 0.06% closed to 2,090.94. The Sensex index in India decreased 173.53 or 1.13% closed to 15,237.94.

Commodities, Metals, and Currencies

Crude oil increased $0.43 to close at $72.25 a barrel for a front month contract, natural gas decreased 2 cents to $3.91 per mBtu and gasoline decreased 1.49 cents to 205.00 cents.

Wheat futures closed down 10 cents in Chicago trading to $5.84 a bushel. Sugar decreased 0.15 cent in trading at 16.32 cents a pound. Soybean future closed down 21.50 cents to $12.45 a bushel.

Gold decreased $21.60 in New York trading to close at $940.40 per ounce, silver closed down $0.65 to $14.84 per ounce and copper for the front month delivery decreased 6.65 cents to $2.375 per pound.

Dollar edged higher against euro to $1.4000 and closed up against the Japanese yen to 98.40.

Yields on 10-year U.S. bonds decreased to 3.79% and with 30-year maturities closed down at 4.64%.