Dow Above 9,000; Nasdaq 12-Day Gain

Mukesh Buch
23 Jul, 2009
New York City

U.S. stocks surged on lower than expected rise in unemployment claims and third monthly increase in home sales. Earnings momentum drove the market indexes to record territory for the year. Dow closed above 9,000 for the first time since January. Markets in Asia, Europe and South America closed up.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – U.S. stocks surged on lower than expected rise in unemployment claims and third monthly increase in home sales. Earnings momentum drove the market indexes to near record territory for the year. Dow closed above 9,000 for the first time since January. Markets in Asia, Europe and South America closed up.[/R]

The housing market data, upbeat earnings outlook and steady rebuilding of inventories sharply lifted market indexes in New York. The Dow closed above 9,000 for the first time since January and broader indexes S&P 500 and Russell 1000 also rallied.

Markets around world including Brazil, Canada, UK, France, Germany, Japan, China and India scaled higher.

The less than expected rise in U.S. unemployment claims increase and third monthly gains in home price also contributed to the rise.

Seasonally adjusted initial claims of unemployment for the week ending July 18 increased 30,000 to 524,000. The four week moving average declined 19,000 to 566,000 according to the Department of Labor.

Existing home sales increased 3.6% in June to a seasonally adjusted annual rate of 4.89 million units. The May sales were revised downward to 4.72 million. Existing homes for sale inventories declined 14.9% from a year ago to 3.82 million according to the National Association of Realtors.

Cyclical and industrial stocks led the gainers in the session. Earnings related stocks also dominated most active stocks.

Ford Motor Company reported a loss but expects earnings to improve for the year. eBay, International Game Technology and EMC surged after companies exceeded expectations. Pacific Sunwear declined on lowered earnings outlook. SanDisk revenue guidance disappoints investors.

Japan exports in June declined at a slower pace. Exports to China attracted demand for electronic and auto component makers. Yen weakened on the report. KDDI declines on a broker downgrade. Nitto Denko June sale decline slowed. Fujitsu Ltd gained on fiscal 2011 target. Japan Tobacco falls.

In Hong Kong and Shanghai real estate developers, bank and resource stocks rallied as retail investors bid up stocks. Ample liquidity in the financial system is stoking investor risk appetite. China State Construction receives bids more than 35 times its initial public offering size.

Stocks in Mumbai trading surged on positive earnings from Maruti Suzuki, ACC, ITC, Biocon and Union Bank of India. Tata Power and Sterlite completed their international capital raising. The latest read on wholesale inflation index showed a decline.

North American Markets

Dow Jones Industrial Average increased 188.03 or 2.1% to a close of 9,069.29, S&P 500 Index increased 22.22 or 2.3% to 976.29, and Nasdaq Composite Index edged higher 47.22 or 2.45% to close at 1,973.60. Toronto TSX Composite Index soared 236.93 or 2.3% to 10,669.28.

Of the stocks in S&P 500 index, 442 increased, 58 declined and none were unchanged.

CIT Group Inc led decliners in the S&P 500 index with a loss of 17% followed by losses in SanDisk Corp of 11%, in Flir Systems of 10.2%, in Safeway Inc of 7.9%, in Goodrich Corp of 7.1% and in IMS Health Inc of 6.2%.

Intuitive Surgical led gainers in the S&P 500 index with a rise of 26.7% followed by increase in Celgene Corp of 18.8%, in Hartford Financial Services of 16.7%, in Fifth Third Banc of 14.2%, in Ryder System Inc of 13.4% and in International Game Technology of 13.1%.

South American Markets Indexes

Mexico Bolsa Index increased 517.21 or 2% to 26,805.42. Brazil Bovespa Stock Index increased 1,160.01 or 2.2% to 54,232.58.

Argentina Merval Index increased 2.3%. Chile Stock Market Select index edged higher 0.6%, Peru Lima General Index added 3.1% and Colombia IGBC General Index increased 2.7%.

Europe Markets Review

In London FTSE 100 Index closed higher 66.07 or 1.47% to 4,559.80, in Paris CAC 40 Index increased 68.65 or 2.08% to close at 3,373.72 and in Frankfurt DAX index higher 125.72 or 2.45% to close at 5,247.28. In Zurich trading SMI increased 128.49 or 2.28% to close at 5,765.51.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 69.78 or 0.72% to 9,792.94, Hang Seng index in Hong Kong increased 569.53 or 2.96% to 19,817.70 and CSI 300 index in China higher 45.04 or 1.25% to 3,651.97. ASX 200 index in Australia decreased 4.40 or 0.11% to 4,064.10. The FTSE Bursa KL Composite index in Malaysia closed higher 3.45 or 0.30% to 1,152.15.

The Kospi Index in South Korea increased 2.45 or 0.16% to close at 1,496.49. SET index in Thailand closed higher 13.97 or 2.34% to 612.19 and JSE Index in Indonesia increased 35.10 or 1.65% to 2,160.72. The Sensex index in India increased 387.92 or 2.61% to 15,231.04.

Commodities, Metals, and Currencies

Crude oil increased $1.88 to close at $67.28 a barrel for a front month contract, natural gas decreased 23 cents $3.56 per mBtu and gasoline increased 8.17 cents to 192.00 cents.

Wheat futures closed up 9.75 cents in Chicago trading to $5.31 a bushel. Sugar increased 0.27 cent in trading at 18.26 cents a pound. Soybean future closed up 24 cent to $9.32 a bushel.

Gold decreased $3.20 in New York trading to close at $950.10 per ounce, silver closed up $0.06 to $13.76 per ounce and copper for the front month delivery decreased 2.60 cents to $2.49 per pound.

Dollar edged higher against euro to $1.419 and closed up against the Japanese yen to 95.00.

Yield on 10-year U.S. bond increased to 3.68% and with 30-year maturities increased to 4.56%.