Highs in Oil, Stocks on Home Sales

Mukesh Buch
21 Aug, 2009
New York City

World markets rebounded after the release of better-than-expected home sales in the U.S. The indexes in Americas and Europe reached a new high and crude oil hit record intra-day high for the year. Economic conditions improve in Germany and France. India prepares for stake sale of listed companies.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – World markets rebounded after the release of better-than-expected home sales in the U.S. Indexes in New York and Europe reached new high. Crude oil hit record high for the year. Economic conditions improve in Germany and France. India prepares for stake sale of listed companies.[/R]

After the largest monthly increase in home sales, stocks accelerated gains in New York and lifted index in Europe and Latin American markets. The existing home sales increased for the fourth month in a row, last seen in June 2004.

Existing homes sales increased 7.2% in July to annual rate of 5.24 million from 4.89 million in June. The steady gains in sales are supported by low interest rates and weak home price environment across the country. Home builders gained after the release of the report.

Crude oil reached a new intra-day high of $74.72 as more speculators return to the market.

Chairman Ben S. Bernanke, in a speech delivered at the annual gather in Jackson Hole, Wyoming urged greater cooperation among international central bankers and said that a new regulatory framework is needed to incorporate the experiences of two years to prevent the recurrence of the crisis.

Brocade Communications declined after it swung to net loss. Foot Locker, Gap, Pacific Sunwear, Zumiez and Ann Taylor declined on weak results. Intuit declined on higher than expected loss. Mentor Graphics and Salesforce.com surged on guidance.

European markets extended early gains after the release of U.S. housing data. German service index surged on the rise in confidence in the industry and French manufacturing index showed expansion on new orders. Volkswagen rebounded.

In London, resources and energy companies led the gainers. The benchmark index FTSE 100 index surged 2% and for the week added 2.9% to 4,850.89. The index crossed 4,800 for the first time in eleven months. Legal & General, Aviva and Prudential closed higher.

Stocks in Japan rebounded on the hopes that global economic recovery will take hold in the last quarter. Automakers declined after the U.S. ends rebate program for the new vehicles purchase. Japan Airlines and Nippon Yusen explore merger of cargo operations.

Stocks in Mumbai rebounded after government plans to lower stake in state controlled listed companies and ask private companies to increase public float. The Cabinet raised debt ceiling to 4% for state government allowing additional $5 billion of borrowing.

Australian stocks edged lower on high volume after the liquidation of Future Fund holding of Telstra share and weak commodities sentiment. Australia proposed to eliminate tax on federal debt held by foreigners.

North American Markets

Dow Jones Industrial Average increased 155.91 or 1.7% to a close of 9,505.96, S&P 500 Index increased 18.76 or 1.9% to 1,026.13, and Nasdaq Composite Index edged higher 31.68 or 1.6% to close at 2,020.90. Toronto TSX Composite Index increased 130.67 or 1.2% to 10,831.18.

Of the stocks in S&P 500 index, 476 increased, 24 declined and none was unchanged.

Intuit Inc led the decliners in the S&P 500 index with a loss of 7.2% followed by losses in Tenet Healthcare of 3.0%, in Nike, Inc of 2.4%, in E*Trade Financial of 2.1% and in Goodyear Tire of 1.6%.

Salesforce.com, Inc led gainers in the S&P 500 index with a rise of 16.2% followed by gains in Jabil Circuit 10.9%, in Limited Brands, Inc of 4.1% and in Nabor industries of 6.7%.

South American Markets Indexes

Mexico Bolsa Index increased 364.72 or 1.3% to 28,308.96 Brazil Bovespa Stock Index added 897.11 or 1.6% to 57,728.59.

Argentina Merval Index increased 1.7%. Chile Stock Market Select index edged lower 0.2%, Peru Lima General Index edged higher 0.7% and Colombia IGBC General Index added 0.6%.

Europe Markets Review

In London FTSE 100 Index closed higher 94.31 or 1.98% to 4,850.89, in Paris CAC 40 Index increased 110.49 or 3.15% to close at 3,615.81 and in Frankfurt DAX index higher 151.68 or 2.86% to close at 5,462.74. In Zurich trading SMI increased 107.75 or 1.79% to close at 6,139.80.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 145.21 or 1.40% to 10,238.20, Hang Seng index in Hong Kong decreased 129.84 or 0.64% to 20,199.02 and CSI 300 index in China higher 59.23 or 1.88% to 3,203.62. ASX 200 index in Australia decreased 86.90 or 1.99% to 4,290.60. The FTSE Bursa KL Composite index in Malaysia closed higher 0.36 or 0.03% to 1,163.79.

The Kospi Index in South Korea increased 4.59 or 0.29% to close at 1,580.98. SET index in Thailand closed higher 3.65 or 0.57% to 644.63 and JSE Index in Indonesia increased 5.26 or 0.23% to 2,333.90. The Sensex index in India increased 228.51 or 1.52% to 15,240.83.

Commodities, Metals, and Currencies

Crude oil increased $0.95 to close at $73.86 a barrel for a front month contract, natural gas decreased 16 cent to $2.78 per mBtu and gasoline increased 2.14 cents to 200.36 cents.

Wheat futures closed up 3.00 cents in Chicago trading to $4.9650 a bushel. Sugar decreased 0.13 cent in trading at 21.84 cents a pound. Soybean future closed up 16.00 cent to $9.73 a bushel.

Gold increased $13.80 in New York trading to close at $955.50 per ounce, silver closed up $0.27 to $14.18 per ounce and copper for the front month delivery increased 13.90 cent to $2.89 per pound.

Dollar edged lower against euro to $1.433 and closed higher against the Japanese yen to 94.33.

Yield on 10-year U.S. bonds increased to 3.57% and with 30-year maturities edged higher to 4.37%.