Broad Rally in U.S. Stocks; Amex, Travelers Up

Mukesh Buch
22 Oct, 2009
New York City

U.S. recovered after investors decided to focus on a select list companies that reported better than expected earnings. McDonald

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. recovered after investors decided to focus on few select companies that reported better than expected earnings. McDonald’s, Travelers, Prologis, New York Times and others reported slightly better performance from a year ago. American Express fell as worries related to credit card defaults eased.[/R]

U.S. stocks fell in the morning after weekly jobless claims increased. The Beige Report released by the Federal Reserve painted a weak economic outlook and indicated patchy and uneven recovery. Quarterly reports released at most companies today indicated weak sales and falling earnings but select companies showed healthy gains.

Market sentiment recovered in the afternoon trading as investors focused on earnings at few companies.

New York Times led the gainers after it reported better than expected operating profit on the higher retail sale prices and operations cost cuts. Janus led the decliners after it reported weaker than expected earnings. 3M Company gained on earnings. AT&T reported flat quarterly net.

Stocks in London closed lower after miners and commodities priced declined. China reported rising inflationary pressures as the economy expanded at 8.9% in the third quarter. September retail sales rose 2.4% from a year ago. Punch Tavern and Enterprise Inns surged on a favorable ruling.

European markets fell after banks closed mixed and miners traded lower. Ericsson dropped 6% after quarterly net plunged 71%. Credit Suisse dropped 3% after reporting third quarterly profit in a row. Schneider SA quarterly sales fell 15%. Bilfinger Berger AG completed its €269 million offering.

North American Markets

Dow Jones Industrial Average increased 131.95 or 1.3% to a close of 10,081.48, S&P 500 Index advanced 11.51 or 1.1% to 1,092.92, and Nasdaq Composite Index added 14.56 or 0.7% to close at 2,165.29. Toronto TSX Composite Index gained 91.35 to 11,533.37.

Of the stocks in S&P 500 index, 398 increased, 99 declined and 3 were unchanged.

Janus Capital led the decliners in the S&P 500 index with a loss of 6.3% followed by losses in Fidelity National of 4.8%, in Amgen Inc of 4.3%, in eBay Inc of 4.3% and in Consol Energy of 4.1%.

The New York Times Company led gainers in the S&P 500 index with a rise of 22.5% followed by gains in The PNC Financial Services Group, Inc 12.7%, in Prologis of 9.1%, in MetroPCS Communications, Inc of 8.1% and in Ameriprise Financial of 7.7%.

South American Markets Indexes

Mexico Bolsa Index decreased 127.29 or 0.4% to 30,761.76 and Brazil Bovespa Stock Index increased 649.38 or 1% to 66,134.97.

Argentina Merval Index increased 2.3% and Chile Stock Market Select index decreased 0.3% and Colombia IGBC General Index decreased 0.7% and Peru Lima General Index increased 1%.

Europe Markets Review

In London FTSE 100 Index closed lower 50.49 or 0.96% to 5,207.36, in Paris CAC 40 Index decreased 52.37 or 1.35% to close at 3,820.85, in Frankfurt DAX index lower 70.56 or 1.21% to close at 5,762.93. In Zurich trading SMI decreased 28.75 or 0.45% to close at 6,405.91.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 66.22 or 0.64% to 10,267.17, Hang Seng index in Hong Kong decreased 107.59 or 0.48% to 22,210.52, and CSI 300 index in China lower 21.96 or 0.65% to 3,347.32. ASX 200 index in Australia decreased 25.80 or 0.53% to 4,812.80. The FTSE Bursa KL Composite index in Malaysia was lower 0.04 or 0.00% to 1,260.02.

The Kospi Index in South Korea decreased 23.53 or 1.42% to close at 1,630.33 SET Index in Thailand closed lower 7.59 or 1.06% to 708.76. JSE Index in Indonesia decreased 43.61 or 1.76% to 2,433.18. The Sensex index in India decreased 219.43 or 1.29% to 16,789.74.

Commodities, Metals, and Currencies

Crude oil decreased $0.13 to $81.24 a barrel for a front month contract, natural gas edged down 13 cents to $4.97 per mBtu and gasoline decreased 0.58 cents to 204.85 cents.

Soybean future closed up 2.75 cents to $10.07 a bushel. Wheat futures closed up 9.25 cents in Chicago trading to $5.51 a bushel. Sugar closed down 0.96 cent 23.08 cents.

Gold decreased $3.90 in New York trading to close at $1,060.60 per ounce, silver closed down $0.15 to $17.68 per ounce and copper for the front month delivery decreased 1.25 cent to $3.023 per pound.

Dollar edged down against euro to $1.502 and closed up against the Japanese yen to 91.32.

Yield on 10-year U.S. bonds increased to 3.42% and with 30-year maturities increased to 4.24%.