Banks Lead U.S. Stocks Rally Ahead of Earnings

123jump.com Staff
13 Jul, 2009
New York City

U.S. stocks surged on the optimism that tech stocks and banks will reported better than expected earnings. Goldman Sachs is expected to report higher than estimated earnings on sharply higher trading revenues. Japan scheduled national election on August 30.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – U.S. stocks surged on the optimism that tech stocks and banks will reported better than expected earnings. Goldman Sachs is expected to report higher than estimated earnings on sharply higher trading revenues. Japan scheduled national election on August 30.[/R]

U.S. stocks surged on the optimism that the banks and technology companies scheduled to release earnings this week will deliver better than expected earnings. Google, IBM, Intel, JP Morgan Chase, Bank of America, General Electric and Goldman Sachs are some of the companies scheduled to release earnings this week.

CIT Group led decliners in the S&P 500 index as the company faces bankruptcy prospects. Expeditors International estimated substantially lower quarter earnings. American Dairy, China based milk powder producer and distributor plunged 40% after the company estimated revenues below expectations.

UK stocks closed higher after merger talks heated up and stocks in New York closed up on the speculation that Goldman Sachs is likely to report profit that will match its record in 2007. Friends & Provident surged on a bind from Resolution that the insurance company rejected.

The ruling party in Japan faces uphill task on the election scheduled on August 30. The opposition party DPJ controls the upper house of the Diet of Japan and is favored to win the election. Stocks fell on the election uncertainty. Kirin and Suntory are reported in merger talks.

Stocks in HK and Shanghai declined after the Central bank in Beijing sounded cautionary note on the recent rise in bank loans. Exports in June fell 21.4% and trade surplus plunged 40%. China Eastern and Shanghai Airlines announced merger plan. Chigo Group completed initial public offering in Hong Kong.

Stocks in Mumbai closed lower as markets in Asia fell. The uncertainty related to monsoon rains dragged auto and consumer stocks. IT services stocks rallied for the second day in a row on better than expected outlook from Infosys. Rupee closed at 49.14 to a dollar.

Australian stocks closed lower as the ongoing controversy between China and Australia heats up. China has arrested Rio Tinto staff under the charges of espionage and bribery related to iron ore price negotiations. Rio Tinto dropped 3.6%. Virgin Blue denied that it is planning to raise A$400 million.

North American Markets

Dow Jones Industrial Average increased 185.16 or 2.3% to a close of 8,331.68, S&P 500 Index increased 21.92 or 2.5% to 901.05, and Nasdaq Composite Index edged higher 37.18 or 2.1% to close at 1,793.21. Toronto TSX Composite Index increased 144.80 or 1.5% to 9,891.93.

Of the stocks in S&P 500 index, 312 increased, 185 declined and 3 were unchanged.

CIT Group Inc led the decliners in the S&P 500 index with a loss of 11.7% followed by losses in Expeditors International of Washington, Inc of 5.6%, in Tenet Healthcare of 1.7%, in Dell Inc of 1.5% and in Sprint Nextel Company of 1.4%.

American International Group, Inc led gainers in the S&P 500 index with a rise of 24.1% followed by gains in Principal Financial 10.2%, in Fifth Third Bancorp of 9.5% and Bank of America of 9.4%.

South American Markets Indexes

Mexico Bolsa Index increased 295.70 or 1.3% to 23,951.96. Brazil Bovespa Stock Index decreased 33.85 or 0.07% to 49,186.93.

Argentina Merval Index surged 4.8%. Chile Stock Market Select index edged higher 1.5%, Peru Lima General Index added 1.2% and Colombia IGBC General Index fell 0.01%.

Europe Markets Review

In London FTSE 100 Index closed higher 74.96 or 1.82% to 4,202.13, in Paris CAC 40 Index increased 68.98 or 2.31% to close at 3,052.08 and in Frankfurt DAX index higher 146.03 or 3.19% to close at 4,722.34. In Zurich trading SMI increased 77.48 or 1.48% to close at 5,315.29.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 236.95 or 2.55% to 9,050.33, Hang Seng index in Hong Kong decreased 453.79 or 2.56% to 17,254.63 and CSI 300 index in China decreased 37.30 or 1.10% to 3,361.01. ASX 200 index in Australia decreased 56.60 or 1.49% to 3,737.50. The FTSE Bursa KL Composite index in Malaysia closed lower 4.10 or 0.38% to 1,063.66.

The Kospi Index in South Korea decreased 50.50 or 3.53% to close at 1,378.12. SET index in Thailand closed lower 3.48 or 0.61% to 562.55 and JSE Index in Indonesia decreased 42.96 or 2.08% to 2,020.14. The Sensex index in India decreased 103.90 or 0.77% to 13,400.32.

Commodities, Metals, and Currencies

Crude oil decreased $0.03 to close at $59.86 a barrel for a front month contract, natural gas decreased 0.09 cents to $3.29 per mBtu and gasoline decreased 1.03 cents to 164.02 cents.

Wheat futures closed up 24.00 cents in Chicago trading to $5.42 a bushel. Sugar increased 0.27 cent in trading at 17.54 cents a pound. Soybean future closed down 5.50 cent to $9.11 a bushel.

Gold increased $6.70 in New York trading to close at $919.20 per ounce, silver closed up $0.16 to $12.80 per ounce and copper for the front month delivery increased 2.75 cents to $2.24 per pound.

Dollar edged lower against euro to $1.3978 and closed up against the Japanese yen to 92.92.

Yield on 10-year U.S. bond increased to 3.35% and with 30-year maturities increased to 4.23%.