Dollar Rallies, Gold Plunges; Stocks Struggle

Mukesh Buch
04 Dec, 2009
New York City

Tech stocks retained their gains at close in New York but the Dow and the Nasdaq lost early gains. The jobs report set the stage for a rally in stocks and gold plunged 4.5% and yields on Treasuries increased. The unemployment in November edged lower surprising most economists.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – Tech stocks retained their gains at close in New York but the Dow and the Nasdaq lost early gains. The jobs report set the stage for a rally in stocks and gold plunged 4.5% and yields on Treasuries increased. The unemployment in November edged lower surprising most economists.[/R]

The U.S. benchmark indexes gained after the release of November unemployment data. The job losses in the month declined to 11,000 and unemployment rate decreased to 10%. Bank of America raised $19.3 billion and plans to repay TARP funds of $45 billion.

The UK stocks increased slightly after trading listless in the session. The Berkeley Group Holdings first-half profits slides but the stock gains. The software developer Innovation Group plunged 11% after it reported a wider annual loss.

The European markets indexes closed higher after the release of better than expected jobs data in the U.S. Biotest AG gained 4% after it won the EU approval to market its hepatitis drug in the region. Volkswagen receives shareholders approval to issue up to 135 million preferred shares.

Japan government is expected to unveil 24 trillion yen stimulus plan and the Bank of Japan will provide 10 trillion yen short term liquidity. TSE asked to pay 10.71 billion yen in damages. American Airlines proposes $1.1 billion offer of JAL.

India may sell 3G wireless spectrum license on January 14 and raise as much as $5 billion. Coal imports from Australia and Indonesia is expected to increase as India builds more power plants. Portfolio foreign investments in the seven months to October exceeded $18 billion.

North American Markets

Dow Jones Industrial Average increased 22.75 or 0.2% to a close of 10,388.90, S&P 500 Index edged higher 6.06 or 0.6% to 1,105.98, and Nasdaq Composite Index increased 21.21 or 1% to close at 2,194.35. Toronto TSX Composite Index decreased 125.75 or 1.1% to 11,510.80.

Of the stocks in S&P 500 index, 374 increased, 121 declined and 5 were unchanged.

Du Pont led the decliners in the S&P 500 index with a loss of 7.2% followed by losses in Freeport McMoran of 4.7%, in Newmont Mining Corporation of 4.6% and in AK Steel of 3.8%, in Range Resources of 3.6% and in Hess Corp of 3.6%.

Big Lots, Inc led gainers in the S&P 500 index with a rise of 19.3% followed by gains in Monster Worldwide of 12%, in Robert Half International 11%, in Moody’s Corp of 7.7% and in Southwest Air of 7.6%.

South American Markets Indexes

Mexico Bolsa Index increased 137.96 or 0.5% to 32,105.39 and Brazil Bovespa Stock Index decreased 711.30 or 1.1% to 67,603.52.

Argentina Merval Index increased 0.4% and Chile Stock Market Select index fell 0.4% and Colombia IGBC General Index increased 1.2% and in Peru Lima General Index decreased 1.2%.

Europe Markets Review

In London FTSE 100 Index closed higher 9.36 or 0.18% to 5,322.36, in Paris CAC 40 Index increased 47.51 or 1.25% to close at 3,846.62, in Frankfurt DAX index higher 47.30 or 0.82% to close at 5,817.65. In Zurich trading SMI increased 57.08 or 0.89% to close at 6,501.16.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 44.92 or 0.45% to 10,022.59, and Hang Seng index in Hong Kong decreased 55.72 or 0.25% to 22,498.15, and CSI 300 index in China higher 52.62 or 1.47% to 3,643.49. ASX 200 index in Australia decreased 72.40 or 1.52% to 4,702.20. The FTSE Bursa KL Composite index in Malaysia was lower 2.15 or 0.17% to 1,270.20.

The Kospi Index in South Korea increased 9.76 or 0.60% to close at 1,624.76. SET index in Thailand closed lower 5.26 or 0.74% to 701.58. JSE Index in Indonesia increased 11.51 or 0.46% to 2,511.54. The Sensex index in India decreased 84.14 or 0.49% to 17,101.54.

Commodities, Metals, and Currencies

Crude oil decreased $0.67 to $75.79 a barrel for a front month contract, natural gas edged increased 15 cents to $4.61 per mBtu and gasoline decreased 1.06 cents to 198.24 cents.

Soybean future closed down 4.00 cents to $10.43 a bushel. Wheat futures closed down 13.50 cents in Chicago trading to $5.58 a bushel. Sugar closed lower 0.59 cent 22.52 cents.

Gold decreased $55.90 in New York trading to close at $1,162.40 per ounce, silver closed down $0.58 to $18.55 per ounce and copper for the front month delivery decreased 3.85 cent to $3.21 per pound.

Dollar closed higher against euro to $1.4854 and edged higher against the Japanese yen to 90.50.

Yield on 10-year U.S. bonds increased to 3.47% and with 30-year maturities closed up at 4.40%.