Global Markets Advance

Mukesh Buch
13 Aug, 2009
New York City

Stocks in New York trading edged higher after Wal-Mart earnings exceeded market expectations. July retail sales declined. Weekly jobless claims edged up 4,000. Euro area showed signs of rebound. Volkswagen and Porsche ink deal to merge.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Stocks in New York trading edged higher after Wal-Mart earnings exceeded market expectations. July retail sales declined. Weekly jobless claims edged up 4,000. Euro area showed signs of rebound. Volkswagen and Porsche ink deal to merge.[/R]

U.S. stocks edged higher after the largest retailer Wal-Mart reported better than expected earnings and jobless claims edged up less than expected. Financials closed higher after influential hedge fund manager John Paulson acquired disclosed stakes in Bank of America and Regions Financial Corp.

The seasonally adjusted initial jobless claims increased 4,000 to 558,000 from the previous week''s revised 554,000. The 4-week moving average was 565,000, an increase of 8,500 from the previous week.

Retail sales in July decreased 0.1% from the previous month and fell 8.3% from a year ago. The June sales were revised up to 0.8%. Import prices fell 0.7% in July and export prices decreased 0.3% after increasing 1% in June.

AutoZone, Inc fell after ratings downgrade. Advance Auto Parts second quarter sales and net increased 7%. LDK Solar Co in the second quarter lost $217 million. Wal-Mart edges higher after sales and net edge lower.

Euro area economic decline slowed sharply in the second quarter and the economies of Germany, France and Greece expanding. Second quarter GDP in euro zone declined 0.3% and in the wider area of 27 nations decreased 0.3% from a year ago. The declines in the first quarters were 2.5% and 2.4% respectively.

Volkswagen will acquire 42% stake in Porsche ending a four-month battle to acquire each other. Volkswagen will pay 3.3 billion for 42% stake in Porsche that will create a European giant with annual sales of at least 6 million vehicles. The merger will be conducted in several stages with the 42% stake in Porsche acquired in 2009 and the rest by 2011.

Aegon posts €161 million loss in the second quarter. Celesio second quarter net increased 1.1% on lower taxes.

Stocks in UK and Europe gained after economies expanded in the second quarter in France and Germany and the pace of contraction across euro zone declined. The pound strengthened against major currencies. Prudential Plc first half loss narrowed and raised dividend.

Stocks in India surged after the government proposed to lower individual and corporate taxes to the lowest on record. The simplified and lowered tax regime with vigorous enforcement is expected to widen the taxpayer base from the current 2.5% of population.

North American Markets

Dow Jones Industrial Average increased 36.58 or 0.4% to a close of 9,398.19, S&P 500 Index increased 6.92 or 0.7% to 1,012.73, and Nasdaq Composite Index edged higher 10.63 or 0.5% to close at 2,009.35. Toronto TSX Composite Index increased 165.69 or 1.6% to 10,825.56.

Of the stocks in S&P 500 index, 319 increased, 179 declined and 2 were unchanged.

E*Trade Financial led the decliners in the S&P 500 index with a loss of 4.1% followed by losses in Constellation Energy of 4.1%, in CBS Corp of 4.0%, in DR Horton of 3.7% and in Washington Post of 3.4%.

Harris Corporation led gainers in the S&P 500 index with a rise of 12.4% followed by gains in Tellabs, Inc 10%, in Massey Energy of 8.4% and Regions Financial Corporation of 8%.

South American Markets Indexes

Mexico Bolsa Index increased 59.47 or 0.2% to 28,155.49 Brazil Bovespa Stock Index increased 459.72 or 0.8% to 57,047.98.

Argentina Merval Index increased 1.3%. Chile Stock Market Select index edged higher 0.9%, Peru Lima General Index added 1.8% and Colombia IGBC General Index advanced 0.9%.

Europe Markets Review

In London FTSE 100 Index closed higher 38.70 or 0.82% to 4,755.46, in Paris CAC 40 Index increased 17.15 or 0.49% to close at 3,524.39 and in Frankfurt DAX index higher 51.02 or 0.95% to close at 5,401.11. In Zurich trading SMI increased 24.23 or 0.41% to close at 5,986.72.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 82.19 or 0.79% to 10,517.19, Hang Seng index in Hong Kong increased 426.06 or 2.08% to 20,861.30 and CSI 300 index in China higher 43.42 or 1.28% to 3,440.82. ASX 200 index in Australia increased 92.80 or 2.14% to 4,435.90. The FTSE Bursa KL Composite index in Malaysia closed higher 5.65 or 0.48% to 1,186.19.

The Kospi Index in South Korea decreased 0.71 or 0.05% to close at 1,564.64. SET index in Thailand closed higher 12.66 or 1.97% to 655.68 and JSE Index in Indonesia increased 49.13 or 2.09% to 2,396.49. The Sensex index in India increased 498.33 or 3.32% to 15,518.49.

Commodities, Metals, and Currencies

Crude oil increased $0.89 to close at $71.05 a barrel for a front month contract, natural gas decreased 11 cents to $3.37 per mBtu and gasoline increased 0.62 cents to 203.15 cents.

Wheat futures closed down 8.5 cents in Chicago trading to $5.09 a bushel. Sugar decreased 0.76 cent in trading at 22.21 cents a pound. Soybean future closed down 25.25 cent to $10.18 a bushel.

Gold increased $4.00 in New York trading to close at $956.50 per ounce, silver closed up $0.41 to $14.99 per ounce and copper for the front month delivery increased 10.20 cents to $2.94 per pound.

Dollar edged lower against euro to $1.43 and closed down against the Japanese yen to 95.33.

Yield on 10-year U.S. bonds declined to 3.60% and with 30-year maturities fell to 4.43%.