U.S. Stocks Gain; ECB Raise Loan Loss Estimate

123jump.com Staff
18 Dec, 2009
New York City

U.S. stocks advanced in the early trading as the dollar trades near its recent peak against the euro. The European Central Bank revised its bank loan losses by 13% as commercial property market conditions remain weak.

[R]10:00 AM New York – U.S. stocks advanced in the early trading as the dollar trades near its recent peak against the euro. The European Central Bank revised its bank loan losses by 13% as commercial property market conditions remain weak.[/R]

Stocks in early trading in New York were on the rise as the dollar traded near its two month high and crude oil edged higher and gold edged lower. The yield on ten year Treasuries traded at 3.5%.

In the currencies market the dollar was stable against the euro but gained against the yen and the pound. The dollar increased to $1.433 for one euro, gained 0.4% to 90.33 yen and added 0.2% to $1.618 for one British pound.

The ECB revised its estimate of loan losses at banks in the euro-zone 13% to 553 billion for the period between 2007 and 2010. The central bank revised losses as the conditions in the property market have continued to weaken and thereby deteriorating the mortgage bonds and commercial mortgage backed securities.

General Motors Co. and Spyker Cars NV of the Netherlands could not agree on a sale of Saab Automobile.

GM Chairman and Chief Executive Officer Ed Whitaker had earlier said that he would prefer to close the Swedish unit if a deal is not reached by the end of this month. GM in a statement said that Saab will pay its suppliers and continue to provide parts and services and honor warranties on the vehicles.

Preliminary estimate of EA16 trade balance in October with rest of the world was 8.8 billion euro surplus, compared with a deficit of 1.2 billion a year ago month. Seasonally adjusted exports fell 0.2% in October from September.

Earnings Review

CarMax, Inc, the car dealership chain reported third quarter sales rose 18.5% to $1.73 billion from $1.46 billion a year ago. Net income in the quarter was $74.6 million or 33 cents per diluted share compared to net loss of $21.9 million or 10 cents per share a year ago.

CarMax, Inc ((KMX)) in the last one year traded as high as $23.07 in October 2009 and as low as $6.92 in January 2009. Based on the yesterday’s closing price of $21.82 the company has market cap of $4.84 billion.

Stewart Enterprises, Inc, a provider of funeral, and cemetery products and services reported fourth quarter revenues fell 5% to $124.1 million from $130.4 million a year ago. Net income in the quarter was $5.9 million or 6 cents per diluted share compared to net loss of $35.6 million or 39 cents per share a year ago.

Revenues for the fiscal year 2009 fell 7.6% to $487.8 million from $527.9 million a year ago. Net income for the year was $35.7 million or 39 cents per diluted share compared to net loss of $3.7 million or 4 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 21.75 or 0.21% to 10,142.05, and Hang Seng index in Hong Kong decreased 171.75 or 0.80% to 21,175.88, and CSI 300 index in China lower 88.42 or 2.54% to 3,391.74. ASX 200 index in Australia decreased 19.80 or 0.42% to 4,650.50. The Markets in Malaysia were closed today.

The Kospi Index in South Korea decreased 0.80 or 0.05% to close at 1,647.04. SET index in Thailand closed lower 0.13 or 0.02% to 715.68. The Sensex index in India decreased 174.42 or 1.03% to 16,719.83. The Markets in Indonesia were closed today.

Europe Markets Review

In London FTSE 100 Index traded higher 53.63 or 1.03% to 5,271.24, in Paris CAC 40 Index increased 23.16 or 0.60% to 3,853.98 and in Frankfurt DAX index traded higher 37.23 or 0.64% to 5,881.67. In Zurich trading SMI increased 20.63 or 0.32% to 6,509.86.