World Markets Advance; Obama Meets Bankers

Mukesh Buch
14 Dec, 2009
New York City

U.S. stocks increased after world markets recovered. Abu Dhabi offered emergency lending to Dubai controlled real estate group. President Obama urged large banks to increase lending to small businesses and back his regulatory reform.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – U.S. stocks increased after world markets recovered. Abu Dhabi offered emergency lending to Dubai controlled real estate group. President Obama urged large banks to increase lending to small businesses and back his regulatory reform.[/R]

The U.S. benchmark indexes closed higher in the early morning led by a rise in tech stocks. President Barack Obama asked large banks gathered at the White House to make “extraordinary commitment” to help rebuild the economy. Obama urged executives at Bank of America, Wells Fargo, JP Morgan Chase and Citigroup and others to increase small business lending.

Wells Fargo plans to increase lending to small business by 25% to $20 billion and Bank of America plans to increase by $5 billion in 2010.

Exxon Mobil Corp agrees to acquire XTO Energy Inc for $31 billion. The low price of natural gas and impending rise in the demand of clean energy sources played a role in the largest acquisition by Exxon since the purchase of Mobil in 1998.

Oracle offered a revised proposal to acquire Sun Microsystems. Abu Dhabi offered $10 billion emergency funding to the troubled real estate conglomerate in Dubai.

Citigroup declined after it plans to raise $20 billion and repay TARP funds. XTO Energy surges on an acquisition offer from Exxon Mobil. Oshkosh Corp declines 13%. Visa Inc increases after the company was selected for the S&P 500 index.

UK stocks edge higher on a rally in banks. Lloyds Banking Group raised £13.5 billion in a rights offering. Spice Plc plunged 20% after it reported first half loss. Miners gained as commodities rebounded. Abu Dhabi offered $10 billion in emergency funds to Dubai World.

European markets closed higher after banks rallied in the region. BayernLB will book a total loss of 3.75 billion in the investment related to Austria based Hypo Alpre-Adria. German bonds gained as investor seek safety as Greece grapples with a large budget deficit.

Prime Minister George Papandreou today said that Greece will lower its fiscal deficit below 3% of GDP by 2013 from the current 12.7%. Investors have been worried that the nation may default on its sovereign obligation for weeks now.

Stocks in Mumbai edged lower after November wholesale price index rose. Food prices have been driving the inflation to a record high in the last seven years on weak monsoon. The media group DB Corp IPO was oversubscribed by two times on the first day of subscription.

North American Markets

Dow Jones Industrial Average increased 29.55 or 0.3% to a close of 10,501.05, S&P 500 Index edged higher 7.70 or 0.7% to 1,114.11, and Nasdaq Composite Index increased 21.79 or 1% to close at 2,212.10. Toronto TSX Composite Index increased 121.76 or 1.1% to 11,545.69.

Latin American Markets Indexes

Mexico Bolsa Index increased 108.19 or 0.4% to 32,009.88 and Brazil Bovespa Stock Index gained 81.93 or 0.4% to 69,349.40.

Europe Markets Review

In London FTSE 100 Index closed higher 53.77 or 1.02% to 5,315.34, in Paris CAC 40 Index increased 26.72 or 0.7% to close at 3,830.44, in Frankfurt DAX index higher 45.97 or 0.8% to close at 5,802.26. In Zurich trading SMI increased 21.51 or 0.4% to close at 6,433.09.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 2.19 or 0.02% to 10,105.68, and Hang Seng index in Hong Kong increased 183.64 or 0.84% to 22,085.75, and CSI 300 index in China higher 37.73 or 1.06% to 3,612.75. ASX 200 index in Australia increased 18.80 or 0.41% to 4,654.00. The FTSE Bursa KL Composite index in Malaysia was higher 5.45 or 0.43% to 1,265.45.

The Kospi Index in South Korea increased 7.87 or 0.47% to close at 1,664.77. SET index in Thailand closed higher 6.10 or 0.87% to 709.74. JSE Index in Indonesia decreased 12.71 or 0.50% to 2,506.39. The Sensex index in India decreased 21.48 or 0.13% to 17,097.55.

Commodities, Metals, and Currencies

Crude oil decreased $0.20 to $69.67 a barrel for a front month contract, natural gas edged up 17 cents to $5.34 per mBtu and gasoline decreased 1.01 cents to 183.15 cents.

Soybean future closed up 20 cents to $10.55 a bushel. Wheat futures closed up 6 cents in Chicago trading to $5.435 a bushel. Sugar closed higher 1.28 cent 25.28 cents.

Gold increased $5.40 in New York trading to close at $1,125.30 per ounce, silver closed up $0.29 to $17.38 per ounce and copper for the front month delivery increased 2.10 cent to $3.15 per pound.

Dollar closed higher against euro to $1.465 and edged higher against the Japanese yen to 88.61.

Yield on 10-year U.S. bonds increased to 3.55% and with 30-year maturities closed down at 4.49%.