U.S. Stocks Rebound Higher; Trade Tensions

Mukesh Buch
14 Sep, 2009
New York City

U.S. stocks recovered from the morning losses but dollar, gold and crude oil closed lower. President Obama asked bankers to take responsibilities for their actions. San Francisco Federal Reserve President Yellen sounded cautious note on the economic recovery. U.S. and China trade tensions rise.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. stocks recovered from the morning losses but dollar, gold and crude oil closed lower. President Obama asked bankers to take responsibilities for their actions. San Francisco Federal Reserve President Yellen sounded cautious note on the economic recovery. U.S. and China trade tensions are on the rise.[/R]

U.S. stocks edged higher as dollar dropped to another low of the year and gold and silver hovered near the resent highs.

President Barack Obama in a New York speech asked bankers to accept tighter scrutiny and urged lawmakers to pass new laws to regulate Wall Street.

The president highlighted that bankers are choosing to ignore the lessons of financial crisis rather learn from it and went on to say, “Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.”

San Francisco Federal Reserve President Janet Yellen at a speech also sounded cautious note on the economic recovery. She said that though the economy is recovering, “but unemployment will remain elevated few more years” and it will take time before people see economic recovery.

Trade tensions between the U.S. and China ratcheted up after China filed a complaint with the World Trade Organization. China also initiated anti-dumping and anti-subsidies investigation against the U.S. agriculture and auto parts products.

Tire makers advance after U.S. imposes tariff on Chinese made tires. Copper Tire & Rubber increased 7.1% and Goodyear Tire & Rubber added 3%.

Coeur d’Alene Mines plunged after an analyst downgraded the silver mining company on the recent price surge. Sprint Nextel rises on the speculation that Deutsche Telekom is exploring merger proposal. Chesapeake Energy rises as natural gas price advance 12%.

European stocks traded sideways as investors stayed on the sideline on stretched valuations. Schneider Electric signed €1.8 billion credit line. Germany completes its first dollar denominated bond offering of $4 billion. HeidelbergCement plans offering to raise debt.

EcoSecurities surged 11% after JP Morgan & Chase subsidiary offers 10% higher than the current bid from Guanabara. Marks & Spencer gains after Morgan Stanley lifts its price target ahead of earnings. The energy metering company Bglobal after it signs a contract with UK subsidiary of Gazprom.

Indian Oil Corp plans to invest $12 billion in the next three years to expand crude oil refining capacity. India will begin the 3G wireless auction process on December 7 and hopes to collect $5 billion. Reliance Industries is looking to invest in Brazil and Gulf of Mexico based oil fields.

Reliance Industries is looking to invest in international oil fields. The largest private sector oil company in India also operates the largest crude oil refinery in the world is also looking to sell stake in some of the international fields including those in Colombia and Middle East.

North American Markets

Dow Jones Industrial Average increased 21.39 or 0.2% to a close of 9,626.80, S&P 500 Index increased 6.61 or 0.6% to 1,049.34, and Nasdaq Composite Index decreased 10.88 or 0.5% to close at 2,091.78. Toronto TSX Composite Index increased 78.81 or 0.7% to 11,332.04.

Of the stocks in S&P 500 index, 371 increased, 120 declined and 9 were unchanged.

SLM Corp led the decliners in the S&P 500 index with a loss of 5.2% followed by losses in Qwest Communications of 3.2%, in Harman International of 2.5%, in MetroPCS Communications of 2.5% and in Hudson City Bancorp of 2.4%.

Sprint Nextel Corporation led gainers in the S&P 500 index with a rise of 10.1% followed by gains in AIG of 9.5%, in E*Trade Financial of 7.3% and in Wynn Resorts, Limited of 7.2%.

South American Markets Indexes

Mexico Bolsa Index decreased 65.60 or 0.2% to 29,383.19 Brazil Bovespa Stock Index increased 501.17 or 0.8% to 58,867.55.

Argentina Merval Index closed up 1% and Chile Stock Market Select index edged lower 0.3%, Peru Lima General Index edged up 0.9% and Colombia IGBC General Index decreased 0.3%.

Europe Markets Review

In London FTSE 100 Index closed higher 7.38 or 0.15% to 5,018.85, in Paris CAC 40 Index decreased 4.28 or 0.11% to close at 3,730.61, in Frankfurt DAX index lower 3.78 or 0.07% to close at 5,620.24. In Zurich trading SMI decreased 7.35 or 0.12% to close at 6,225.64.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 242.27 or 2.32% to 10,202.06, Hang Seng index in Hong Kong decreased 229.22 or 1.08% to 20,932.20 and CSI 300 index in China higher 55.26 or 1.71% to 3,293.39. ASX 200 index in Australia decreased 65.00 or 1.41% to 4,531.10. The FTSE Bursa KL Composite index in Malaysia closed lower 4.92 or 0.41% to 1,203.36.

The Kospi Index in South Korea decreased 16.79 or 1.02% to close at 1,634.91. SET index in Thailand closed lower 13.49 or 1.91% to 694.32 and JSE Index in Indonesia decreased 33.24 or 1.38% to 2,382.70. The Sensex index in India decreased 50.11 or 0.31% to 16,214.19.

Commodities, Metals, and Currencies

Crude oil decreased $0.42 to $68.87 a barrel for a front month contract, natural gas edged up 40 cents to $3.36 per mBtu and gasoline decreased 1.73 cents to 174.25 cents.

Wheat futures closed down 13.25 cents in Chicago trading to $4.54 a bushel. Sugar edged up to 0.83 cents a pound to 23.69 cents. Soybean future closed up 6.50 cent to $9.09 a bushel.

Gold decreased $5.60 in New York trading to close at $1,000.80 per ounce, silver closed down $0.12 to $16.58 per ounce and copper for the front month delivery decreased 3.80 cent to $2.81 per pound.

Dollar edged lower against euro to $1.463 and closed higher against the Japanese yen to 90.91.

Yield on 10-year U.S. bonds increased to 3.42% and with 30-year maturities edged higher to 4.23%.