Retailers, Banks Drive U.S. Indexes Higher

Mukesh Buch
18 Aug, 2009
New York City

Stocks in New York edged higher after banks and retailers gained. Healthcare stocks fell after riding higher in the previous session as the healthcare debate continues. Single family home building permits increased in July but overall construction demand edged lower.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Stocks in New York edged higher after banks and retailers gained. Healthcare stocks fell after riding higher in the previous session as the healthcare debate continues. Single family home building permits increased in July but overall construction demand edged lower.[/R]

U.S. stocks recovered from the lows reached yesterday after retailers and banks led gainers. Healthcare insurers led the decliners after trading higher in the previous session. Saks and Target added near 7% after reporting smaller than expected profit declines and banks gained after net charges on credit card loans fell in July. The rebound in German investors’ confidence also helped the market gains in the U.S. and Europe.

The PPI index decreased 0.9% in July after increasing 1.8% in June and 0.2% in May. For the one year period ending in July, the prices for finished goods dropped 6.8%, intermediate goods decreased 15.1% and petroleum products plunged 44.8%.

Building permits in July decreased 1.8% but single family permits increased 5.8% from the revised June data. Housing starts decreased 1% in July and plunged 37.7% from a year ago. Housing completions in the month decreased 0.9% and fell 26.4% from a year month.

European stocks edged higher in a late rally. Continental AG surged 17% to €26.10 after Schaeffler Group finalized its agreement to refinance debt. France based GDF Suez and Australia based Santos formed a venture to explore and sell natural gas field in the Northwestern Australia coast.

The measure of UK annual inflation stayed at 1.8% in July matching the rate in June. The pound edged higher after the release of the report. British Land Company decreased 2.5% after it reported quarterly loss. The auto dealer Pendragon Plc declined after a steep fall in sales and profit.

Stocks in Mumbai rebounded 1.6% after late monsoon rains in key agriculture states. Foreign investors continue to increase their exposure to India. Bharti Airtel advanced after several banks approached the telecom carrier to fund the MTN Group Ltd.

Reserve Bank of Australia highlighted that risks to global economies are reduced but not declined. The latest monetary policy committee meeting suggested that bank is worried about too accommodative interest rate regime. Amcor Ltd offered $2 billion to acquire the packaging unit of Rio Tinto.

North American Markets

Dow Jones Industrial Average decreased 82.60 or 0.9% to a close of 9,217.94, S&P 500 Index increased 9.94 or 1% to 989.67, and Nasdaq Composite Index edged higher 25.08 or 1.3% to close at 1,955.92. Toronto TSX Composite Index increased 142.25 or 1.40% to 10,673.84.

Of the stocks in S&P 500 index, 389 increased, 109 declined and 2 was unchanged.

Constellation Brands led the decliners in the S&P 500 index with a loss of 3.1% followed by losses in The TJX Companies, Inc of 3%, in MetroPCS Communications, Inc of 2.8%, in Coventry Health Care, Inc of 2.6% and in IMS Health Inc of 2.5%.

Ciena Corp led gainers in the S&P 500 index with a rise of 9% followed by gains in Agilent Technologies, Inc of 7.8%, in Manitowoc Co of 7.4%, in Target Corporation 7.4%, in Deere & Company of 6.2% and in Harman International of 5.6%.

South American Markets Indexes

Mexico Bolsa Index increased 244.74 or 0.9% to 27,544.32 Brazil Bovespa Stock Index added 530.55 or 1% to 55,748.92.

Argentina Merval Index decreased 1.9%. Chile Stock Market Select index edged higher 0.3%, Peru Lima General Index edged higher 0.6% and Colombia IGBC General Index fell 0.5%.

Europe Markets Review

In London FTSE 100 Index closed higher 40.77 or 0.88% to 4,685.78, in Paris CAC 40 Index increased 31.00 or 0.91% to close at 3,450.69 and in Frankfurt DAX index higher 49.13 or 0.94% to close at 5,250.74. In Zurich trading SMI decreased 70.05 or 1.19% to close at 5,953.75.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 16.35 or 0.16% to 10,284.96, Hang Seng index in Hong Kong increased 168.62 or 0.84% to 20,306.27 and CSI 300 index in China higher 31.72 or 1.01% to 3,171.99. ASX 200 index in Australia decreased 6.80 or 0.15% to 4,381.60. The FTSE Bursa KL Composite index in Malaysia closed lower 4.64 or 0.40% to 1,164.41.

The Kospi Index in South Korea increased 3.18 or 0.21% to close at 1,550.24. SET index in Thailand closed higher 8.20 or 1.30% to 640.25 and JSE Index in Indonesia decreased 49.88 or 2.09% to 2,336.99. The Sensex index in India increased 250.34 or 1.69% to 15,035.26.

Commodities, Metals, and Currencies

Crude oil increased $2.60 to close at $69.35 a barrel for a front month contract, natural gas decreased 6 cents to $3.10 per mBtu and gasoline increased 3.91 cents to 199.06 cents.

Wheat futures closed down 1.25 cents in Chicago trading to $4.98 a bushel. Sugar decreased 0.05 cent in trading at 21.78 cents a pound. Soybean future closed up 4.50 cent to $9.59 a bushel.

Gold increased $3.20 in New York trading to close at $939.00 per ounce, silver closed down $0.05 to $13.97 per ounce and copper for the front month delivery decreased 0.60 cents to $2.7795 per pound.

Dollar edged lower against euro to $1.412 and closed higher against the Japanese yen to 94.73.

Yield on 10-year U.S. bonds increased to 3.51% and with 30-year maturities rose to 4.36%.