Global Markets Optimistic; Earnings Momentum

123jump.com Staff
04 Aug, 2009
New York City

U.S. investors bid stocks higher as home sales sustain the momentum for the fifth month. Caterpillar positive comments also boosted the sentiment. PepsiCo agreed to acquire two bottlers for $7.8 billion. BMW reported quarterly loss and Toyota lowered its estimate of annual loss.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. investors bid stocks higher as home sales sustain the momentum for the fifth month. Caterpillar positive comments also boosted the sentiment. PepsiCo agreed to acquire two bottlers for $7.8 billion. BMW reported quarterly loss and Toyota lowered its estimate of annual loss.[/R]

Stocks traded higher in New York after an index of pending home sales increase 3.6% in June, fifth monthly increase. The rise in home sale overshadowed the decline in personal income in the month. Home builders, apartment REITs and construction equipment makers gained.

PepsiCo Inc agreed to acquire two bottlers in a bid to garner better control on its distribution system. The second largest beverage maker agreed to offer $7.8 billion for Pepsi Bottling Group Inc for $36.50 a share and Pepsi Americas Inc for $28.50 a share.

Pepsi ((PEP)) will pay half in cash and the rest in its stock. The company expects to save $300 million after the merger.

Cognizant surged after it lifted its third quarter revenue and earnings outlook. D.R. Horton, Inc reports third quarter loss. CVS Caremark second quarter revenues increased 18% and net income gained 15%.

BMW reported net quarterly loss and indicated no change in weak outlook for the year. Bauer AG dropped 8% after net income plunged 43%. Beiersdorf AG earnings fell on weak industrial demand. Fresenius Medical reiterated annual earnings and sales outlook.

Standard & Chartered declined after it plans to raise capital £1 billion. Legal & General cut dividend by 45%. GKN cuts more jobs after loss. Weir lifts dividend after profit hike. Cookson Group increased after first half revenues fell 12% and less than expected quarterly loss.

Toyota lowered annual loss estimate and revised higher annual unit sales. Yamaha plunged after it estimated sharply higher annual loss. Idemitsu Kosan, the crude oil refiner sales fell and reported net loss in the quarter.

China’s efforts to restrict speculative home lending appear to yield results as prices in the four large cities declined for the first time in seven months in July. Chinese regulators are also likely to tighten capital reserve calculations to curb lending. Resource stocks rose in Hong Kong.

Stocks in Mumbai trading declined from fourteen-month high. Earnings dominate trading sentiment. HCL Infosystems gains after winning new orders. Sical Logistics and Mitsui OSK in a joint venture to manage auto shipment port in Southern India. Tata Motors gain on monthly sales rise.

North American Markets

Dow Jones Industrial Average increased 33.63 or 0.4% to a close of 9,320.19, S&P 500 Index gained 3.02 or 1.5% to 1,005.65, and Nasdaq Composite Index edged higher 2.70 or 0.1% to close at 2,011.31. Toronto TSX Composite Index increased 230.95 or 2% to 11,018.10.

Of the stocks in S&P 500 index, 297 increased, 199 declined and 4 were unchanged.

PPL Corporation led the decliners in the S&P 500 index with a loss of 13.2% followed by losses in Gannett Company of 5.9%, in Archer Daniels Midland of 5.2%, in Expeditors International, Inc of 4.9% and in AutoNation Inc of 4.9%.

MBIA Inc led gainers in the S&P 500 index with a rise of 28.9% followed by gains in Eastman Kodak of 24%, in Cognizant Technology Solution of 10.3% and Wynn Resorts Ltd of 5.8%.

South American Markets Indexes

Mexico Bolsa Index increased 177.44 or 0.6% to 27,869.92. Brazil Bovespa Stock Index gained 40.26 or 0.1% to 56,038.07.

Argentina Merval Index decreased 0.2%. Chile Stock Market Select index edged higher 0.5%, Peru Lima General Index added 0.3% and Colombia IGBC General Index increased 0.3%.

Europe Markets Review

In London FTSE 100 Index closed lower 11.09 or 0.24% to 4,671.37, in Paris CAC 40 Index decreased 1.43 or 0.04% to close at 3,476.37 and in Frankfurt DAX index lower 9.83 or 0.18% to close at 5,417.02. In Zurich trading SMI decreased 27.65 or 0.46% to close at 5,939.78.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 22.54 or 0.22% to 10,375.01, Hang Seng index in Hong Kong decreased 10.83 or 0.05% to 20,796.43 and CSI 300 index in China lower 0.42 or 0.01% to 3,786.62. ASX 200 index in Australia increased 45.90 or 1.08% to 4,309.30. The FTSE Bursa KL Composite index in Malaysia closed higher 8.57 or 0.73% to 1,179.88.

The Kospi Index in South Korea increased 1.39 or 0.09% to close at 1,566.37. SET index in Thailand closed lower 0.20 or 0.03% to 641.23 and JSE Index in Indonesia increased 21.30 or 0.91% to 2,360.09. The Sensex index in India decreased 93.25 or 0.59% to 15,830.98.