Fed Deliberates Stimulus; Commodities Advance

123jump.com Staff
06 Jan, 2010
New York City

U.S. stocks barely closed in the positive as commodities surge after severe weather in the Northern Hemisphere. Freezing weather lifted prices of energy to 14-month high and copper, wheat, sugar and silver added more than 2%. Private sector cut 84,000 jobs in December.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – U.S. stocks barely closed in the positive as commodities surge after severe weather in the Northern Hemisphere. Freezing weather lifted prices of energy to 14-month high and copper, wheat, sugar and silver added more than 2%. Private sector cut 84,000 jobs in December.[/R]

Severe weather conditions affected lives in several countries from China, to Northern Europe to the U.S. Southeast. Crude oil, aluminum and orange juice futures contracts gained. Wholesale prices of electricity surged in France and Germany as temperatures drop to record lows.

Stocks in New York were nearly unchanged after the release of private sector employment data. Orange juice futures traded near two-year high and natural gas and heating prices advance as well. Family Dollar surges 10% after quarterly net gains 14%.

The Fed officials discussed possibilities of providing added stimulus if the economy remained weak and did not indicate any plan to increase rate soon, according to the latest minute of meeting released today.

Family Dollar Stores, Inc led gainers in the S&P 500 index. Zep Inc turns to profit in first quarter. The Mosaic Company second quarter net income falls 89%. Synnex Corp fourth quarter net up. The agrochemicals maker Monsanto posts first quarter loss on weak sales.

European markets traded sideways ahead of earnings season next week. Industrial new orders declined 2.2% in November and producer prices increased 0.1%. Service sector in the euro region expanded in December.

UK stocks pared gains after indexes that track consumer confidence and outlook declined. Autonomy Corp increased after it made positive comments. Marks & Spencer declined 7% after it reported lower than expected sales increases.

Mumbai stocks retained their momentum as evidence of economic health mount. The publisher of Hindi and Gujarati newspapers D.B. Corp on its first day of trading increased 25%. Bharat Heavy Electricals received an order to set up a solar power plant in Karnataka.

New home construction permits in November increased 5.9% from October and auto sales in December increased but declined 7.4% in the year to 937,000. Stocks traded sideways after energy and metals prices hovered near their recent highs.

North American Markets

Dow Jones Industrial Average increased 1.66 or 0.02% to a close of 10,573.68, S&P 500 Index edged higher 0.62 or 0.05% to 1,137.14, and Nasdaq Composite Index decreased 7.62 or 0.3% to close at 2,301.09. Toronto TSX Composite Index added 56.46 or 0.5% to 11,944.54.

Latin American Markets Indexes

Mexico Bolsa Index increased 97.40 or 0.30% to 32,830.16 and Brazil Bovespa Stock Index added 489.52 or 0.7% to 70,729.34.

Europe Markets Review

In London FTSE 100 Index closed higher 7.54 or 0.14% to 5,530.04, in Paris CAC 40 Index increased 4.76 or 0.12% to close at 4,017.67, in Frankfurt DAX index higher 2.47 or 0.04% to close at 6,034.33. In Zurich trading SMI decreased 19.85 or 0.30% to close at 6,559.41.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 49.62 or 0.46% to 10,731.45, and Hang Seng index in Hong Kong increased 137.09 or 0.62% to 22,416.67, and CSI 300 index in China lower 22.31 or 0.63% to 3,541.73. ASX 200 index in Australia decreased 2.90 or 0.06% to 4,921.40. The FTSE Bursa KL Composite index in Malaysia was higher 4.93 or 0.38% to 1,293.17.

The Kospi Index in South Korea increased 14.70 or 0.87% to close at 1,705.32. SET index in Thailand closed higher 3.62 or 0.49% to 735.73. JSE Index in Indonesia decreased 1.98 or 0.08% to 2,603.30. The Sensex index in India increased 14.89 or 0.08% to 17,701.13.

Commodities, Metals, and Currencies

Crude oil increased $1.35 to $83.12 a barrel for a front month contract, natural gas edged up 35 cents to $5.99 per mBtu and gasoline increased 0.95 cents to 213.45 cents.

Soybean future closed down 2.00 cents to $10.59 a bushel. Wheat futures closed up 14.75 cents in Chicago trading to $5.67 a bushel. Sugar closed up 0.77 cents at 28.41 cents.

Gold increased $19.80 in New York trading to close at $1,138.50 per ounce, silver closed up $0.41 to $18.22 per ounce and copper for the front month delivery increased 8.00 cent to $3.49 per pound.

Dollar closed lower against euro to $1.4413 and edged higher against the Japanese yen to 92.34.

Yield on 10-year U.S. bonds increased to 3.82% and with 30-year maturities closed higher at 4.69%.