Global Markets Up; Stocks, Metals, Oil Rise

Mukesh Buch
30 Jul, 2009
New York City

Global markets traded higher after earnings driven optimism lifted markets around the world. In the U.S. MasterCard, Cigna, Motorola delivered better than expected earnings. Initial claims of unemployment increased and crude oil rebounded. Metals in commodities closed higher in London and New York.

[R]4:00 PM New York, 9:00 PM London, 6:00 AM Sydney – Global markets traded higher after earnings driven optimism lifted markets around the world. In the U.S. MasterCard, Cigna, Motorola delivered better than expected earnings. In Europe Volkswagen, Alcatel-Lucent and BT Group gained. Sony, Honda and Nissan closed in Japan.[/R]

U.S. stocks traded higher on a firm footing after a few days of sideways trading. Global markets have surged more than 10% in the last three weeks and continue to enjoy tailwind from positive earnings in the U.S, India, China, Europe and Brazil. Shanghai markets rebounded after plunging more than 5% a day before.

Technology, telecom and industrial companies around world reported better than expected earnings. BT Group, Alcatel-Lucent, Volkswagen, Honda, Nissan and Sony were some of the companies that surprised investors.

Motorola and MasterCard returned to profit.

Expedia, Inc led gainers in the S&P 500 index with a rise of 13.4%. Amkor Technology, Inc beat second quarter estimates. BorgWarner Inc posts another quarterly loss on charges, the stock plunged 60%. MasterCard surged after quarterly profit. Cigna gained on revised earnings outlook.

Jobless claims at the end of last week increased and economic conditions are still weak but investors’ appetite for risk is increasing with each passing day.

UK stocks closed up as metals gain and earnings lift large cap companies and home price rise. Nationwide Building Society estimated 1.3% home price increase July. Rolls Royce adjusted profit beats estimates.

Stocks in Europe gained on better than expected earnings from Volkswagen. BASF reported 74% decline in earnings and may trim dividend. Siemens third quarter orders decreased 28%. France Telecom net profit fell 4.3%. Volkswagen sales fell 7.7% and net profit fell 83%.

Earnings dominated trading in Tokyo. Industrial production increased 2.4% in June and in the quarter surged 8.3%. Sony surged after it reported lower than expected loss. Honda soared after it offered better than expected annual earnings.

Earnings from companies in various industries in India present a picture of healthy economy and rising corporate spending. ICICI, Mahindra & Mahindra, State Bank of India, Mundra Port and Patni Computer exceeded expectations. Rupee declined 0.3%. Banks and software services providers gained.

North American Markets

Dow Jones Industrial Average increased 104.82 or 1.2% to a close of 9,175.54, S&P 500 Index gained 13.82 or 1.4% to 988.97, and Nasdaq Composite Index edged higher 19.32 or 1% to close at 1,987.08. Toronto TSX Composite Index increased 206.45 or 2% to 10,661.78.

Of the stocks in S&P 500 index, 431 increased, 65 declined and 4 were unchanged.

Akamai Technologies, Inc led the decliners in the S&P 500 index with a loss of 19.7% followed by losses in Symantec Corporation of 12.9%, in MetroPCS Communications, Inc of 4.9%, Avery Dennison declined 9.8% and Eastman Kodak decreased 8.8%.

Wynn Resorts Ltd led gainers in the S&P 500 index with a rise of 15.1% followed by gains in Lincoln National Corp 13.8%, in Hartford Financial Services of 13.6% and Flowserve Corp of 13%.

South American Markets Indexes

Mexico Bolsa Index increased 378.96 or 1.4% to 26,894.90. Brazil Bovespa Stock Index gained 1,044.17 or 1.9% to 54,778.70.

Argentina Merval Index increased 2.4%. Chile Stock Market Select index edged lower 0.5%, Peru Lima General Index added 0.3% and Colombia IGBC General Index decreased 2.2%.

Europe Markets Review

In London FTSE 100 Index closed higher 84.08 or 1.85% to 4,631.61, in Paris CAC 40 Index increased 69.87 or 2.08% to close at 3,435.49 and in Frankfurt DAX index higher 90.34 or 1.71% to close at 5,360.66. In Zurich trading SMI increased 145.43 or 2.51% to close at 5,932.62.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 51.97 or 0.51% to 10,165.21, Hang Seng index in Hong Kong increased 98.58 or 0.49% to 20,234.08 and CSI 300 index in China higher 76.31 or 2.14% to 3,634.82. ASX 200 index in Australia increased 47.60 or 1.15% to 4,190.40. The FTSE Bursa KL Composite index in Malaysia closed lower 3.82 or 0.33% to 1,160.66.

The Kospi Index in South Korea increased 10.42 or 0.68% to close at 1,534.74. SET index in Thailand closed higher 7.07 or 1.15% to 621.95 and JSE Index in Indonesia increased 72.32 or 3.25% to 2,298.14. The Sensex index in India increased 214.50 or 1.41% to 15,387.96.

Commodities, Metals, and Currencies

Crude oil increased $3.79 to close at $67.14 a barrel for a front month contract, natural gas increased 18 cents $3.73 per mBtu and gasoline added 13.85 cents to 199.35 cents.

Wheat futures closed up 4.75 cents in Chicago trading to $5.16 a bushel. Sugar increased 0.19 cent in trading at 18.75 cents a pound. Soybean future closed up 55.00 cent to $9.71 a bushel.

Gold decreased $7.70 in New York trading to close at $934.90 per ounce, silver closed up $0.23 to $13.49 per ounce and copper for the front month delivery increased 8.50 cents to $2.56 per pound.

Dollar edged lower against euro to $1.407 and closed up against the Japanese yen to 95.25.

Yield on 10-year U.S. bond decreased to 3.63% and with 30-year maturities decreased to 4.41%