Oil Above $71; Global Stocks Higher

Mukesh Buch
29 Jun, 2009
New York City

Global markets closed higher as the rising commodities prices lifted resource stocks. Crude oil traded above $71 a barrel and copper rebounded. Disgraced former chairman of Nasdaq Bernard Madoff was sentenced to 150 years in jail. The U.S. has been at the center of largest crimes against investors.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – Global markets closed higher as rising energy and commodities prices lifted resource stocks. Crude oil traded above $71 a barrel and copper rebounded. Disgraced former chairman of Nasdaq Bernard Madoff was sentenced to 150 years in jail. In the last seven years, the U.S. has been the center of some of the largest crimes committed against investors.[/R]

As the second quarter drew to close with only one trading day left, the U.S. investors are wavering with what lies ahead. For nearly nine months, analysts, economists and government officials have suggested that the U.S. economy will begin the process of recovery but unemployment will lag.

U.S. companies’ earnings of the second quarter are expected to be stronger than in the first quarter and better than the quarter a year ago but investors are more focused on the rising government debt, lack of stabilization in the housing markets and a specter of rising commodities and energy prices.

Global markets are expected to diverging paths beginning with the third quarter. The Asian markets are expected to lead followed smaller gains in the American and European markets. Of course that is based on the assumption that the government stimulus plans will revive the growth in the developed world and emerging markets.

The Bank for International Settlements that holds reserves of its central bank members highlighted risks of inflation as banks may be slow in withdrawing stimulus to the economies around the world.

Teppco agreed to be acquired by Enterprise Products Partners to create one of the largest energy in the mid-stream segment of the market. The revised offer values each unit of Teppco at $31.36. The deal creates one of the largest and healthy partnerships to transport crude oil and natural gas.

SLM Corp led gainers in the S&P 500 index with a rise of 6.2%. Alcoa Inc continues penetration in oil and gas market. Biogen Idec Inc reports tent case of brain infection. Oil companies traded higher as crude oil price climbed.

European stocks closed higher as confidence increased on optimistic outlook for the regional economy. Celesio acquired controlling stake in the largest Brazilian drug wholesaler. Lafarge and other cement makers increased after a German court lowered the antitrust fine.

UK stocks closed higher in weak trading. Gross mortgages issued in May matched the lows last seen in 2000 at £10.6 billion as lenders issued 43,191 loans. On earnings, the online retailer declined 5% and Airsprung Furniture surged 90%. Rolls Royce acquired 33% of Norway based Odim.

Tokyo benchmark index fell 1% Daiwa Securities planned to raise $2.4 billion and Mizuho Financial Group plans to raise $6.2 billion. The industrial production index in May increased 5.9% in Japan. Shipping lines, brokerages and real estate companies led the decliners.

Mumbai stocks traded sideways. Tata Motors dropped after it reported annual net loss. Suzlon net declined 10% and plans to raise $1 billion. Mahindra Holidays & Resorts IPO was oversubscribed ten times.

North American Markets

Dow Jones Industrial Average increased 90.99 or 1.1% to a close of 8,529.38, S&P 500 Index added 8.33 or 0.9% to 927.23, and Nasdaq Composite Index edged higher 5.84 or 0.3% to close at 1,844.06. Toronto TSX Composite Index closed up 93.11 or 0.9% to 10,482.87.

Of the stocks in S&P 500 index, 355 increased, 136 declined and 8 were unchanged.

AIG led the decliners in the S&P 500 index with a loss of 8.9% followed by losses in Biogen Idec Inc of 5.8%, in CSX Corp of 3.8%, in Apollo Group of 3.7% and in LSI Corp of 3.2%.

SLM Corporation led gainers in the S&P 500 index with a rise of 8.6% followed by gains in Discover Financial 8.1%, in XL Capital Ltd of 6%, in Lennar Corp of 5.9% and in Lincoln National Corp of 5.5%.

South American Markets Indexes

Mexico Bolsa Index increased 15.30 or 0.1% to 24,473.53. Brazil Bovespa Stock Index increased 618.82 or 0.1% to 52,104.43.

Argentina Merval Index increased 0.6%. On Friday, Chile Stock Market Select index edged higher 1.1%, Peru Lima General Index decreased 0.8% and Colombia IGBC General Index declined 0.1%.

Europe Markets Review

In London FTSE 100 Index closed higher 53.02 or 1.25% to 4,294.03, in Paris CAC 40 Index increased 63.95 or 2.04% to close at 3,193.68 and in Frankfurt DAX index higher 108.62 or 2.27% to close at 4,885.09. In Zurich trading SMI increased 67.46 or 1.25% to close at 5,443.45.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 93.92 or 0.95% to 9,783.47, Hang Seng index in Hong Kong decreased 71.75 or 0.39% to 18,528.51, CSI 300 index in China higher 51.55 or 1.65% to 3,179.97. ASX 200 index in Australia decreased 16.90 or 0.43% to 3,886.90. The KL Composite index in Malaysia closed higher 0.07 or 0.01% to 1,075.84.

The Kospi Index in South Korea decreased 6.08 or 0.44% to close at 1,388.45.SET index in Thailand closed higher 5.80 or 0.97% to 601.60 and JSE Index in Indonesia decreased 6.48 or 0.32% to 2,033.72. The Sensex index in India increased 21.10 or 0.14% to 14,785.74.

Commodities, Metals, and Currencies

Crude oil increased $2.43 to close at $71.59 a barrel for a front month contract, natural gas decreased 16 cents to $3.95 per mBtu and gasoline increased 7.29 cents to 194.70 cents.

Wheat futures closed down 5.75 cents in Chicago trading to $5.28 a bushel. Sugar increased 0.59 cent in trading at 17.90 cents a pound. Soybean future closed down 7.50 cents to $9.83 a bushel.

Gold decreased $1.80 in New York trading to close at $939.20 per ounce, silver closed down $0.24 to $13.91 per ounce and copper for the front month delivery increased 2.25 cents to $2.33 per pound.

Dollar edged lower against euro to $1.4080 and closed down against the Japanese yen to 96.01.

Yield on 10-year U.S. bond declined to 3.48% and with 30-year maturities closed down at 4.30%.