World Markets Edge Higher; Gold, Silver Firm

Mukesh Buch
04 Sep, 2009
New York City

U.S. stocks closed higher after four days of decline. Gold and silver traded near their recent highs. The unemployment rate increased to 9.7% in August. The WTO is expected to rule against Airbus on the illegal subsidies from the EU.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. stocks closed higher after four days of decline. Gold and silver traded near their recent highs. The unemployment rate increased to 9.7% in August. The WTO is expected to rule against Airbus on the illegal subsidies from the EU.[/R]

U.S. stocks gained after the release of jobs report. Employers cut jobs in August at the slowest pace in a year but unemployment surged to a 16-year high after falling in July.

Employers eliminated 216,000 jobs in August and job losses estimate for July was revised higher to 276,000. The unemployment rate increased to 9.7% from 9.4% in July. Factory payrolls decreased 63,000 after falling 43,000 in the previous month.

Esterline Technologies surged after it lifted its earnings outlook. Shanda Interactive, the Chinese game developer plans to spin-off its U.S. division and list on Nasdaq. Freddie Mac gained after it met NYSE listing price requirements. Moody’s declined after Berkshire lowered its holding.

The WTO ruled Airbus subsidies from EU government as illegal according to reports b the Wall Street Journal and Reuters. The judges in Geneva, Switzerland are expected to rule that A380 superjumbo plan received illegal subsidies from France, Spain, UK and Germany. However, the judges are expected to rule in favor of recent grants for the launch of A350.

UK Mining companies gained for the second day in a row on a rise in gold and silver related stocks. Wellstream Holdings sold its pipe technology division to focus on off-shore pipe business. Elan Corp violated a contract with Biogen after it agreed to sell a stake in the company to Johnson & Johnson.

Stocks in Mumbai gained despite the weakness in the regional trading. Market indexes closed higher on the monsoon rain pickup, better than expected auto sales and benign wholesale inflation index. Oil India is preparing its public offering. Steelmakers increase production and shipment in August.

Coal companies surged as merger activities in the sector heats up. Only a day ago Coal India, the state controlled coal miners said that it is looking to acquire coal companies in Australia. Rio Tinto has suspended its price negotiation talks with China.

North American Markets

Dow Jones Industrial Average increased 96.66 or 1.03% to a close of 9,441.27, S&P 500 Index added 13.16 or 1.3% to 1,016.40, and Nasdaq Composite Index advanced 35.58 or 1.8% to close at 2,018.78. Toronto TSX Composite Index increased 95.98 or 0.9% to 11,017.47.

Of the stocks in S&P 500 index, 445 increased, 49 declined and 6 were unchanged.

AIG led the decliners in the S&P 500 index with a loss of 4.1% followed by losses in Abercrombie & Fitch Co of 3.3%, in Frontier Communications Corporation of 2.5%, in H&R Block Inc of 2.3% and in Public Services Enterprise of 1.8%.

Tenet Healthcare led gainers in the S&P 500 index with a rise of 7.1% followed by gains in Sprint Nextel Company 6.4%, in Wynn Resorts Ltd of 5.9% and in Regions Financial of 5.7%.

South American Markets Indexes

Mexico Bolsa Index increased 159.46 or 0.6% to 28,309.55 Brazil Bovespa Stock Index increased 945.11 or 1.7% to 55,652.28.

Argentina Merval Index closed up 1.4% and Chile Stock Market Select index edged higher 0.2%, Peru Lima General Index edged higher 0.6% and Colombia IGBC General Index increased 1.4%.

Europe Markets Review

In London FTSE 100 Index closed higher 54.95 or 1.15% to 4,851.70, in Paris CAC 40 Index increased 45.25 or 1.27% to close at 3,598.76, in Frankfurt DAX index higher 83.01 or 1.57% to close at 5,384.43. In Zurich trading SMI increased 45.35 or 0.75% to close at 6,119.07.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 27.53 or 0.27% to 10,187.11, Hang Seng index in Hong Kong increased 556.94 or 2.82% to 20,318.62 and CSI 300 index in China higher 25.18 or 0.82% to 3,077.14. ASX 200 index in Australia increased 5.90 or 0.13% to 4,435.50. The FTSE Bursa KL Composite index in Malaysia closed higher 5.08 or 0.43% to 1,178.74.

The Kospi Index in South Korea decreased 4.63 or 0.29% to close at 1,608.90. SET index in Thailand closed higher 2.87 or 0.43% to 668.41 and JSE Index in Indonesia increased 0.49 or 0.02% to 2,322.74. The Sensex index in India increased 290.79 or 1.89% to 15,689.12.

Commodities, Metals, and Currencies

Crude oil fell 17 cents to $67.79 a barrel for a front month contract, natural gas edged up 25 cents to $2.76 per mBtu and gasoline decreased 2.78 cents to 176.50 cents.

Wheat futures closed down 7.00 cents in Chicago trading to $4.71 a bushel. Sugar edged down to 1.54 cents a pound. Soybean future closed down 19.50 cent to $9.22 a bushel.

Gold decreased $1.60 in New York trading to close at $996.10 per ounce, silver closed down $0.03 to $16.26 per ounce and copper for the front month delivery decreased 1.30 cent to $2.85 per pound.

Dollar edged lower against euro to $1.43 and closed higher against the Japanese yen to 92.97.

Yield on 10-year U.S. bonds decreased at 3.31% and with 30-year maturities edged lower to 4.12%.