Early Rally in New York Fades; Oil New High

Mukesh Buch
24 Aug, 2009
New York City

Early rally in stocks faded but the gains in commodities held at close in New York. SunTrust Banks chief cautioned investors and signaled higher commercial loan losses. Oil traded at a new intra-day high and European markets closed at a new high for the year.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Early rally in stocks faded but the gains in commodities held at close in New York. SunTrust Banks chief cautioned investors and signaled higher commercial loan losses. Oil traded at a new intra-day high and European markets closed at a new high for the year.[/R]

New York stocks in the morning trading edged higher after sharp gains in Asia and a rise in European markets. Commodities edged higher with crude oil reaching another intra-day high for the year. Agriculture commodities edged higher.

Higher oil and base metal prices lifted stocks in the sector. Harman International fell on media speculation. The Good Year Tire & Rubber led the decliners in S&P 500 index and Advanced Micro Devices led the gainers.

The early bloom in the market indexes faded after chief executive of SunTrust Banks Inc made cautionary remarks. At a speech in Atlanta James Wells III said that we are not at the end of the financial crisis and commercial loan losses are likely to rise.

European market indexes closed higher for the third day in a row to a new 11-month high. Euro zone industrial order increased 3.1% in June from the previous month but dropped 25.1% from a year ago. Steelmakers, banks and resource stocks closed higher in the region

UK stocks edged higher for the fifth day in a row on a rally in commodities and crude oil. Resource stocks jumped for the third day in a row. Amlin Plc first half profit increased 29%. Bovis Homes Group first half profit plunged. Bunzl Plc closed up latest results.

Stocks in Mumbai rallied on the rise in commodities prices and optimistic view on the world economic recovery. Asian markets surged sharply with a rally in Japan and China. Fortis Healthcare acquired 10 hospitals from Wockhardt Hospitals for $188 million.

North American Markets

Dow Jones Industrial Average increased 3.32 or 0.03% to a close of 9,509.28, S&P 500 Index decreased 0.56 or 0.1% to 1,025.57, and Nasdaq Composite Index edged lower 2.92 or 0.14% to close at 2,017.98. Toronto TSX Composite Index decreased 41.21 or 1.1% to 304.69.

Of the stocks in S&P 500 index, 200 increased, 295 declined and 5 were unchanged.

Harman International led the decliners with a loss of 5.5% followed by losses in Goodyear Tire of 5.2%, in KeyCorp of 4.8%, in Huntington Bancorp of 4.6% and in Best Buy Co Inc of 4.5%.

Advanced Micro Devices led gainers with a surge of 8.1% followed by gains in SLM Corp of 5.2%, in Lorilard Inc of 4.2%, in XL Capital Ltd of 3.7%, in McGraw Hill of 3.5%, in AIG of 3.1% and in Prologis of 2.8%.

South American Markets Indexes

Mexico Bolsa Index decreased 304.69 or 1.1% to 28,004.27 Brazil Bovespa Stock Index added 46.78 or 0.1% to 57,775.37.

Argentina Merval Index decreased 0.9%. Chile Stock Market Select index edged lower 0.7%, Peru Lima General Index edged lower 0.6% and Colombia IGBC General Index added 1.4%.

Europe Markets Review

In London FTSE 100 Index closed higher 45.34 or 0.93% to 4,896.23, in Paris CAC 40 Index increased 36.36 or 1.01% to close at 3,652.17 and in Frankfurt DAX index higher 57.01 or 1.04% to close at 5,519.75. In Zurich trading SMI increased 54.59 or 0.89% to close at 6,194.39.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 342.85 or 3.35% to 10,581.05, Hang Seng index in Hong Kong increased 336.92 or 1.67% to 20,535.94 and CSI 300 index in China higher 25.98 or 0.81% to 3,229.60. ASX 200 index in Australia increased 135.50 or 3.16% to 4,426.10. The FTSE Bursa KL Composite index in Malaysia closed higher 10.70 or 0.92% to 1,174.49.

The Kospi Index in South Korea increased 31.24 or 1.98% to close at 1,612.22. SET index in Thailand closed higher 8.57 or 1.33% to 653.20 and JSE Index in Indonesia increased 41.98 or 1.80% to 2,375.87. The Sensex index in India increased 387.92 or 2.55% to 15,628.75.

Commodities, Metals, and Currencies

Crude oil increased $0.48 to close at $74.37 a barrel for a front month contract, natural gas increased 12 cent to $2.92 per mBtu and gasoline increased 4.44 cents to 204.00 cents.

Wheat futures closed up 12.00 cents in Chicago trading to $4.993 a bushel. Sugar decreased 0.05 cent in trading at 21.79 cents a pound. Soybean future closed up 34.50 cent to $10.07 a bushel.

Gold decreased $10.50 in New York trading to close at $944.20 per ounce, silver closed down $0.01 to $14.19 per ounce and copper for the front month delivery decreased 0.05 cent to $2.893 per pound.

Dollar edged lower against euro to $1.431 and closed higher against the Japanese yen to 94.52.

Yield on 10-year U.S. bonds decreased to 3.48% and with 30-year maturities edged lower to 4.27%.