Banks Lead U.S. Advances; Alcoa Up

Mukesh Buch
07 Oct, 2009
New York City

U.S. stocks closed higher ahead of earnings season. Alcoa after the close reported better than expected third quarter earnings of $77 million or 8 cents a share on sales decline of 34% to $4.62 billion. European Commission revises economic outlook higher in the region.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. stocks closed higher ahead of earnings season. Alcoa after the close reported better than expected third quarter earnings of $77 million or 8 cents a share on sales decline of 34% to $4.62 billion. European Commission revises economic outlook higher in the region.[/R]

World stocks traded sideways as commodities prices gain for the third day in a row and gold reach a new intra-day high. Silver, gold and copper advance as investors rethink their inflation expectations. Telefonica SA bids 12% higher than Vivendi SA for Brazil second largest mobile carrier.

In New York trading, stocks trade lower in the morning but closed higher as commodities rise and dollar hovers near its low. Home builders fall on the worries that first time home buyer tax credit many not be extended. Costco gains on better than expected outlook.

Alcoa after the close reported better than expected third quarter earnings of $77 million or 8 cents a share on sales decline of 34% to $4.62 billion. Aluminum prices have recovered 24% in the last quarter but are still one third lower than a year ago.

European economic decline appears to have slowed. The statistical agency of 16-nations in Europe, eurostat reported GDP declined 0.2% in the second quarter from the first and fell 4.8% from a year ago.

The EU Commission forecasted economic growth in the third quarter of 0.2% and 0.1% in the last quarter of this year.

At the end of last week, commercial crude inventories in the U.S. fell 1 million barrels but are still at the upper end of the bond for the year at 337.4 million. Motor gasoline inventories increased 2.9 million barrels and are above the upper bound of the average range. Distillate fuel inventories edged up 0.7 million barrels.

AirTran Holdings plunged after it filed to sell convertible notes and stocks. Avis Budget Group filed to raise at least $250 million. Home builders edged lower. Costco Wholesale Corp gained on positive outlook. Family Dollar advanced on earnings. Yum! Brands quarterly sales fall 2%, net drops 18.4%.


In UK stocks maintained their positive bias for the second day in a row. Retailers fell after J. Sainsbury reported lower than expected comparable same store sales growth. Michael Page, recruitment consultant third quarter profit fell 42%. Chocolate retailer Thorntons quarterly sales increased 2.3%.

Stocks in India closed lower. Tata Steel and JSW Steel said steel production increased in the quarter ending in September. Record gold price is expected to dampen demand in Diwali season. Latest mobile telecom price was dragged into the second week as Reliance follows Tata-DoCoMo price cut.

North American Markets

Dow Jones Industrial Average decreased 5.67 or 0.06% to a close of 9,725.58, S&P 500 Index added 2.86 or 0.2% to 1,057.58, and Nasdaq Composite Index added 6.76 or 0.3% to close at 2,110.33. Toronto TSX Composite Index increased 101.91 or 0.9% to 11,349.88.

Of the stocks in S&P 500 index, 424 increased, 70 declined and 6 was unchanged.

KB Home led the decliners in the S&P 500 index with a loss of 2.9% followed by losses in AT&T Inc of 2.8%, in Cephalon, Inc of 2.5%, in Genuine Parts Company of 2.4% and in Marshall & Ilsley Corporation of 2.3%.

Wyndham Worldwide Corporation led gainers in the S&P 500 index with a rise of 6.0% followed by gains in American International Group, Inc 3.2%, in Costco Wholesale Corporation of 3.1% and in Abercrombie & Fitch Co of 3.0%.

South American Markets Indexes

Mexico Bolsa Index increased 72.89 or 0.3% to 29,763.37 and Brazil Bovespa Stock Index decreased 32.31 or 0.05% to 62,638.28.

Argentina Merval Index closed down 0.2% and Chile Stock Market Select index added 0.2%, Peru Lima General Index edged down 0.2% and Colombia IGBC General Index decreased 0.2%.

Europe Markets Review

In London FTSE 100 Index closed lower 29.08 or 0.57% to 5,108.90, in Paris CAC 40 Index decreased 13.80 or 0.37% to close at 3,756.41, in Frankfurt DAX index lower 16.89 or 0.30% to close at 5,640.75. In Zurich trading SMI decreased 17.01 or 0.27% to close at 6,260.15.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 107.80 or 1.11% to 9,799.60, Hang Seng index in Hong Kong increased 430.06 or 2.07% to 21,241.59, ASX 200 index in Australia increased 104.10 or 2.27% to 4,695.70. The FTSE Bursa KL Composite index in Malaysia was higher 5.88 or 0.48% to 1,218.61. CSI 300 index in China were closed today.

The Kospi Index in South Korea decreased 0.44 or 0.03% to close at 1,598.00 SET index in Thailand closed higher 10.53 or 1.44% to 741.92. JSE Index in Indonesia decreased 14.74 or 0.58% to 2,513.41. The Sensex index in India decreased 151.88 or 0.90% to 16,806.66.

Commodities, Metals, and Currencies

Crude oil decreased $1.02 to $69.86 a barrel for a front month contract, natural gas edged up 3 cents to $4.91 per mBtu and gasoline decreased 4.72 cents to 172.55 cents.

Soybean future closed up 2 cents to $9.12 a bushel. Wheat futures closed up 3 cents in Chicago trading to $4.63 a bushel. Sugar edged down 0.88 cents a pound to 23.12 cents.

Gold increased $5.10 in New York trading to close at $1,044.80 per ounce, silver closed up $0.25 to $17.55 per ounce and copper for the front month delivery decreased 0.45 cent to $2.78 per pound.

Dollar edged lower against euro to $1.4678 and closed lower against the Japanese yen to 88.63.

Yield on 10-year U.S. bonds decreased to 3.17% and with 30-year maturities decreased to 4.00%.