Dollar Worries Drive Stocks, Metals and Oil

123jump.com Staff
09 Sep, 2009
New York City

U.S. stocks traded higher in weaker than average volume as commodities markets activities overshadowed the stock market. Copper declined but gold and silver traded near recent highs. Crude oil gained but weakness in natural persisted. Small caps gained more than large caps in the session.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. stocks traded higher in weaker than average volume as commodities markets activities overshadowed the stock market. Copper declined but gold and silver traded near recent highs. Crude oil gained but weakness in natural persisted. [/R]

The weakness in dollar and action in the commodities pits dominated trading in stocks. Stocks followed weak dollar and investors looked for companies that have not rallied so far in the last six months.

The dollar traded at a new low for the year and dropped to the level last seen in September 2008 but the prices of gold and silver hovered near their recent highs. Copper fell after the latest inventory data showed higher than expected increase.

Pep Boys second quarter profit rises 40% but sales disappoint. Casey’s General Stores, Inc profit jumps. McDonald’s global sales in August increase 2.2%.

Global merge activity heats up as telecom operators look for acquisitions. Gold and silver trade at elevate levels and crude oil and natural gas rise. Earnings lift Casey’s. Julius Baer spins off Artio Global Investors.

Telecom companies are looking to acquire companies outside of mature markets. Vivendi offered to acquire Brazil based GVT and Bharti and MTN are in advanced stages of their $24 billion merger.

The Swiss private bank Julius Baer plans to spin off its asset management unit Artio Global Investors. The proceeds will be used to repay Julius Baer and two principal shareholders.

European markets gained on the rise in energy and commodities linked stocks. Banks in Germany gained after Commerzbank said it plans to return 5 billion to the bank rescue fund. BMW gained on an analyst recommendation. Renault increased on positive comments from its chief.

UK trade deficit in July matched the deficit in June of £6.5 billion and consumer confidence rose to the highest in the year in August. Resource stocks edged higher on steady rise in commodities prices. Johnson Service Group returns to the black. Laura Ashley sales rise as profit shrinks.

North American Markets

Dow Jones Industrial Average increased 49.88 or 0.5% to a close of 9,547.22, S&P 500 Index added 7.98 or 0.8% to 1,033.37, and Nasdaq Composite Index advanced 22.62 or 1.1% to close at 2,060.78. Toronto TSX Composite Index decreased 105.13 or 1% to 11,000.17.

Of the stocks in S&P 500 index, 378 increased, 115 declined and 7 were unchanged.

Sherwin Williams led the decliners in the S&P 500 index with a loss of 2.6% followed by losses in Electronic Arts of 2.2%, in McDonald’s Corp of 2%, in Coca-Cola Enterprises Inc of 1.95% and in Mylan Inc of 1.9%.

Genworth Financial led gainers in the S&P 500 index with a rise of 9.7% followed by gains in AIG of 8.5%, in Juniper Networks of 7.6% and in Wynn Resorts of 6.4%.

South American Markets Indexes

Mexico Bolsa Index decreased 90.77 or 0.3% to 29,100.05 Brazil Bovespa Stock Index increased 55.15 or 0.1% to 57,909.95.

Argentina Merval Index closed up 1.2% and Chile Stock Market Select index edged higher 0.2%, Peru Lima General Index edged down 0.5% and Colombia IGBC General Index decreased 0.3%.

Europe Markets Review

In London FTSE 100 Index closed higher 56.96 or 1.15% to 5,004.30, in Paris CAC 40 Index increased 46.73 or 1.28% to close at 3,707.69, in Frankfurt DAX index higher 92.53 or 1.69% to close at 5,574.26. In Zurich trading SMI increased 7.32 or 0.12% to close at 6,202.04.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 81.09 or 0.78% to 10,312.14, Hang Seng index in Hong Kong decreased 218.77 or 1.04% to 20,851.04 and CSI 300 index in China higher 23.94 or 0.76% to 3,194.91. ASX 200 index in Australia decreased 1.60 or 0.04% to 4,522.20. The FTSE Bursa KL Composite index in Malaysia closed lower 5.61 or 0.47% to 1,196.46.

The Kospi Index in South Korea decreased 11.92 or 0.74% to close at 1,607.77. SET index in Thailand closed higher 3.86 or 0.56% to 695.59 and JSE Index in Indonesia increased 12.04 or 0.51% to 2,383.34. The Sensex index in India increased 59.88 or 0.37% to 16,183.55.

Commodities, Metals, and Currencies

Crude oil increased $0.22 to $71.32 a barrel for a front month contract, natural gas edged up 3 cents to $2.84 per mBtu and gasoline decreased 0.03 cents to 182.86 cents.

Wheat futures closed down 2.75 cents in Chicago trading to $4.56 a bushel. Sugar edged up to 0.13 cents a pound to 22.53 cents. Soybean future closed down 8.00 cent to $9.28 a bushel.

Gold decreased $7.10 in New York trading to close at $992.70 per ounce, silver closed down $0.16 to $16.35 per ounce and copper for the front month delivery decreased 5.00 cent to $2.90 per pound.

Dollar edged lower against euro to $1.455 and closed lower against the Japanese yen to 92.06.

Yield on 10-year U.S. bonds decreased at 3.47% and with 30-year maturities edged higher to 4.33%.