Nasdaq Surges In July; Emerging Markets Lead

Mukesh Buch
31 Jul, 2009
New York City

World markets edged higher in July after earnings drove indexes higher in China, India, Brazil, U.S., Canada and UK. The Nasdaq led U.S. indexes with a rise of 44% for the year and 8% in the month. Dun & Bradstreet fell 13% in trading after it lowered its earnings outlook.

[R]5:00 PM New York, 10:00 PM London, 7:00 AM Sydney – World markets edged higher in July after earnings drove indexes higher in China, India, Brazil, U.S., Canada and UK. The Nasdaq led U.S. indexes with a rise of 44% for the year and 8% in the month. Emerging markets lead world indexes for the year.[/R]

The economy contraction in the second quarter slowed to an annual rate of 1% after falling at 6.4% in the first quarter and 5.4% in the fourth quarter of last year. The smaller decline in GDP reflected a rise in government spending and smaller decline in fixed investments and private inventories.

The Dun & Bradstreet dropped 14% after it lowered annual earnings outlook. Dolby Laboratories third quarter results exceed estimates. ITT led the gainers after it posted profit and lifted annual earnings outlook to as high as $3.70 a share. First Solar plunged after earnings.

The three popular indexes Dow, S&P 500 and Nasdaq gained between 7.4% and 8.6%. For the year to June, Nasdaq led the gainers with a rise of 43.6% followed by increase of 34.3% in the S&P 500 and 8.5% in the Dow.

FTSE 100 index gained in the month nearly 10% and is up 4% for the year, Nikkei 225 Stock Average climbed 4% higher in the month and 5.6% in the year, Hang Seng index added 11% in the month and Sensex in India added nearly 11% and for the year is up 62.4%.

The sharp rally in the U.S. indexes may indicate that market may be ahead of fundamentals and may be overdue for a pause.

Energy companies and airlines declined in European trading. Michelin gained after earnings results were better than expected. The comments from Deutsche Bank chief dragged market indexes lower. Eni SpA sales fell 24.2% and net profit fell 59.5%. Total S.A. sales fell 35% and net profit fell 54%.

UK stocks edged higher on a rise in the Pound. Energy companies declined after Royal Dutch and Eni reported a decline in earnings and revenues. British Airways increased after it reported wider loss but sounded optimistic outlook for the second half. United Business Media surged on dividend hike.

Stocks in Japan in weak trading advanced for the week and for the fifth month in a row. Mitsui Fudosan, the largest Japanese real estate operator earnings surged lifting stocks in the sector. Unemployment in June increased to six-year high and consumer price index declined in the month.

Stocks in India reached five-month high on the back of earnings. Hindalco, Reliance Infrastructure, Great Eastern Shipping and Welspun reported better than expected earnings. Rain deficit at the end of this week has declined to 18% from 27% two weeks ago on above normal rain.

North American Markets

Dow Jones Industrial Average increased 17.15 or 0.2% to a close of 9,171.61, S&P 500 Index gained 0.73 or 0.1% to 987.48, and Nasdaq Composite Index edged lower 5.80 or 0.3% to close at 1,978.50. Toronto TSX Composite Index increased 110.43 or 1% to 10,787.15.

Of the stocks in S&P 500 index, 264 increased, 232 declined and 4 were unchanged.

The Dun & Bradstreet Corporation led the decliners in the S&P 500 index with a loss of 13.1% followed by losses in Pitney Bowes Inc of 12.1%, in Genyme Corp of 7.8% and in PerkinElmer Inc of 7.7%.

Ford Motor Corp led gainers in the S&P 500 index with a rise of 8.3% followed by gains in Washington Post of 7.7%, in Goodyear Tire of 7.3% and Snap-On Inc of 7.2%.

South American Markets Indexes

Mexico Bolsa Index increased 233.23 or 0.9% to 27,043.50. Brazil Bovespa Stock Index gained 287.29 or 0.6% to 54,765.72.

Argentina Merval Index increased 1.4%. Chile Stock Market Select index edged lower 0.4%, Peru Lima General Index added 1.4% and Colombia IGBC General Index increased 0.6%.

Europe Markets Review

In London FTSE 100 Index closed lower 23.25 or 0.50% to 4,608.36, in Paris CAC 40 Index decreased 9.22 or 0.27% to close at 3,426.27 and in Frankfurt DAX index lower 28.52 or 0.53% to close at 5,332.14. In Zurich trading SMI increased 18.07 or 0.30% to close at 5,950.69.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 191.62 or 1.89% to 10,356.83, Hang Seng index in Hong Kong increased 339.25 or 1.68% to 20,573.33 and CSI 300 index in China higher 99.80 or 2.75% to 3,734.62. ASX 200 index in Australia increased 53.60 or 1.28% to 4,244.00. The FTSE Bursa KL Composite index in Malaysia closed higher 14.24 or 1.23% to 1,174.90.

The Kospi Index in South Korea increased 22.55 or 1.47% to close at 1,557.29. SET index in Thailand closed higher 2.05 or 0.33% to 624.00 and JSE Index in Indonesia increased 25.10 or 1.09% to 2,323.24. The Sensex index in India increased 282.35 or 1.83% to 15,670.31.

Commodities, Metals, and Currencies

Crude oil increased $2.15 to close at $69.09 a barrel for a front month contract, natural gas decreased 8 cents $3.67 per mBtu and gasoline added 5.42 cents to 200.56 cents.

Wheat futures closed up 12.00 cents in Chicago trading to $5.28 a bushel. Sugar decreased 0.14 cent in trading at 18.61 cents a pound. Soybean future closed up 11.00 cent to $9.82 a bushel.

Gold increased $18.20 in New York trading to close at $955.50 per ounce, silver closed up $0.46 to $13.94 per ounce and copper for the front month delivery increased 5.80 cents to $2.62 per pound.

Dollar edged lower against euro to $1.42 and closed up against the Japanese yen to 94.69.

Yield on 10-year U.S. bond decreased to 3.48% and with 30-year maturities decreased to 4.30%.