Mild Inflation Lifts Stocks in U.S., Europe

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

U.S. stocks gained after latest measured inflation data suggested that price increases are contained. UK unemployment increased to 7.9%, highest since November 1996. Chinese companies are expected to expand overseas investment in mining and energy companies.

[R]9:50 AM New York – U.S. stocks gained after latest measured inflation data suggested that price increases are contained. UK unemployment increased to 7.9%, highest since November 1996. Chinese companies are expected to expand overseas investment in mining and energy companies.[/R]

U.S. investors bid up stocks after the release of latest data on inflation and industrial production. Banks, commodities and mining companies led the early gainers in the morning.

European markets surged more than 1.5% after the release of U.S. inflation data. In the overnight trading in Asia, markets gained on the back of positive comments from Fed Chairman Bernanke.

Adobe Systems agreed to acquire Omniture, Inc for $1.8 billion. The deal offers 45% premium to the average price of last thirty days as Adobe struggles with declining revenues.

Omniture is the second largest acquisition by Adobe after it acquired Macro Media in 2005 for nearly $3.4 billion. Omniture surged 24%.

Global Economic Review

Seasonally adjusted consumer price index in the U.S. increased 0.4% in August and unadjusted index decreased 1.5% from a year ago. The inflation index excluding food and energy increased 0.1%. The entire increase in the index was driven by 9.1% rise in gasoline index.

U.S. industrial output increased 0.8% in August after July data was revised higher to 1% increase. Manufacturing production expanded 0.6% in the month after the revised expansion 1.4% in July. The output at mines increased 0.5% and at utilities increased 1.9%. Total industrial production decreased 10.7% from a year ago.

UK unemployment rate for the three months to July increase 0.7% from the previous quarter to 7.9% and 2.3% over a year. The number of unemployed people increased 210,000 in the quarter and 743,000 during the one year ending in July to 2.47 million.

The unemployment reached to a record high last seen in three months to November 1996.

The number of people claiming unemployment compensation increased 1.61 million in August, highest since May 1997.

According to the latest data from the Office of Statistics there are 31 million employed in June, down 163,000 in the quarter ending in the month with the largest decline in finance and business services and construction industry.

Global Earnings Review

Adobe Systems Incorporated, the diversified software company said third quarter revenues fell 21.4% to $697.5 million from $887.3 million a year ago. Net income in the quarter fell 29% to $136 million or 26 cents per diluted share compared to net income of $191.6 million or 35 cents per share a year ago.

Next plc, the fashion retailer said first-half revenues rose 0.7% to £1.51 billion from £1.50 billion a year ago. Net profit for the first-half rose 7% to £137.1 million or 67.6 pence per diluted share compared to net profit of £123.2 million or 63.3 pence a year ago.

Industria de Diseno Textil SA, the textile industry said first-half revenues rose 6.6% to €4.86 billion from €4.56 billion a year ago. Net profit in the first-half fell 7.6% to €375 million compared to net profit of €406 million a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 53.15 or 0.52% to 10,270.77, Hang Seng index in Hong Kong increased 536.55or 2.57% to 21402.92 and CSI 300 index in China lawer 44.41or 1.34% to 3,258.24 ASX 200 index in Australia increased 110.10 or 2.42% to 4,650.40. The FTSE Bursa KL Composite index in Malaysia closed higher 5.51 or 0.46% to 1,212.98.

The Kospi Index in South Korea increased 29.93 or 1.81% to close at 1,683.33. SET index in Thailand closed higher 7.09 or 1.01% to 710.25 and JSE Index in Indonesia increased 19.25 or 0.80% to 2,439.36. The Sensex index in India increased 222.59 or 1.35% to 16,677.04.

Europe Markets Review

In London FTSE 100 Index traded higher 71.38 or 1.42% to 5,113.51, in Paris CAC 40 Index increased 48.04 or 1.28% to 3,800.25 and in Frankfurt DAX index traded higher 47.61 or 0.85% to 5,676.59. In Zurich trading SMI increased 50.55 or 0.81% to 6,263.74.

ASX 200 Index Movers

Goodman Group led the decliners in the ASX 200 index of 4.1% followed by losses in Austar United Communications Limited of 3.6%, in Primary Health Care Limited of 3.6%, in IOOF Holdings Limited of 2.1% and in Nufarm Limited of 1.4%.

Lynas Corporation Limited gainers in the ASX 200 index with a rise of 18.8% followed by gains in Carnarvon Petroleum Limited of 14.8%, in Macquarie Media Group Ltd of 10.6% and in Molopo Australia Limited of 10.4%.

Nikkei 200 Average Movers

The Sumitomo Trust and Banking Company, Limited the decliners in the Nikkei 225 index of 4.1% followed by losses in J Front Retailing Co Ltd. of 3.4%, in Fukuoka Financial Group Inc of 3.2 %, in Yahoo Japan Corporation of 3.2% and in Mizuho Trust & Banking Co Ltd of 2.9%.

Mitsui Chemicals, Inc. led gainers in the Nikkei 225 index with a rise of 7.5 % followed by gains in Canon Inc of 4.2%, in Okuma Corp of 4.1% and in Showa Denko KK of 4.0%.