Holiday Sales Lift Stocks; Commodities Fall

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

U.S. holiday sales rose 2.9% lifting sentiment in trading and benchmark indexes. Freezing weather has now touched nearly 60% of the U.S. population. China lifted its interbank rate. Agriculture commodities and metals declined.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – U.S. holiday sales rose 2.9% lifting sentiment in trading and benchmark indexes. Freezing weather has now touched nearly 60% of the U.S. population. China lifted its interbank rate. Agriculture commodities and metals declined.[/R]

U.S. stocks followed world markets and traded lower in the early trading but managed to rebound on better than expected retail sales.

Initial claims of unemployment increased 1,000 to 434,000 at the end of last week. Lennar, the troubled home builder Lennar reported a surprise quarterly profit but still lost money in 2009.

Retails stores sales in December exceeded low expectations. Same store sales increased 2.9% in the month according to Thomson Reuters. Sales in two months ending in December increased between 1% and 2%.

Retailers cognizant of weak sales in the year and the experience of last year’s holiday period had focused on keeping inventories low, closing under-performing stores and offering lower prices goods and avoided discounting. The focus on value and moving merchandise faster worked.

The Bank of England left its key lending rate unchanged at 0.5% and kept its bond purchase plan unrevised. Auto sales in December surged on government incentives. UK home prices increased 1.1% in December and added 5.6% from a year ago. Persimmon gained. J Sainsbury same store sales increased 4.2%.

European retail sales fell in November as the economic recovery is uneven and still fragile. The Bank of England kept its rates and bond purchase program in place. The ECB and central bank in Switzerland has already begun to unwind their bond purchase programs. Continental AG plan to raise €1.1 billion.

Finance Minister Naoto Kan in a departure from his predecessor signaled that the government will prefer weaker yen and is prepared to stem the rising yen. The yen fell 1.1% but is still 18% higher than a year ago. Tokyo office vacancy rises to 8.1% in December. Sumitomo Mitsui plans to raise $8.7 billion.

China raised its interbank rate for the first time in five months. The increase was slight, but signaled China’s willingness to tighten the monetary policy as the economic expansion is likely to be more than 9%. In Shanghai trading automakers led the decliners and in Hong Kong banks and resource stocks fell.

Wholesale price index and food prices hover near a high for the decade in India. Automakers brace for lower margin after the release of 12 new models. Hindustan Copper plans to raise $870 million. Rupee strengthens.

Australia’s trade deficit narrows to A$1.7 billion in November and retail sales jump 1.4% in November. The Australian dollar edged lower but hovered near its highs. Kagara Ltd surged after it began its mining operations in the Western Australia.

North American Markets

Dow Jones Industrial Average increased 33.18 or 0.3% to a close of 10,606.86, S&P 500 Index edged higher 4.55 or 0.4% to 1,137.14, and Nasdaq Composite Index decreased 1.04 or 0.05% to close at 2,300.05. Toronto TSX Composite Index decreased 57.03 or 0.5% to 11,887.51.

Latin American Markets Indexes

Mexico Bolsa Index increased 234.41 or 0.7% to 33,064.57 and Brazil Bovespa Stock Index declined 278.23 or 0.4% to 70,451.12.

Europe Markets Review

In London FTSE 100 Index closed lower 3.32 or 0.06% to 5,526.72, in Paris CAC 40 Index increased 7.13 or 0.18% to close at 4,024.80, in Frankfurt DAX index lower 14.97 or 0.25% to close at 6,019.36. In Zurich trading SMI decreased 4.05 or 0.06% to close at 6,555.36.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 49.79 or 0.46% to 10,681.66, and Hang Seng index in Hong Kong decreased 147.22 or 0.66% to 22,269.45, and CSI 300 index in China lower 70.27 or 1.98% to 3,471.46. ASX 200 index in Australia decreased 22.00 or 0.45% to 4,899.40. The FTSE Bursa KL Composite index in Malaysia was lower 1.75 or 0.14% to 1,291.42.

The Kospi Index in South Korea decreased 21.87 or 1.28% to close at 1,683.45. SET index in Thailand closed lower 1.10 or 0.15% to 734.63. JSE Index in Indonesia decreased 16.40 or 0.63% to 2,586.90. The Sensex index in India decreased 85.41 or 0.48% to 17,615.72.

Commodities, Metals, and Currencies

Crude oil decreased $0.51 to $82.67 a barrel for a front month contract, natural gas edged down 16 cents to $5.85 per mBtu and gasoline decreased 0.1 cents to 213.56 cents.

Soybean future closed down 33.00 cents to $10.26 a bushel. Wheat futures closed down 9.50 cents in Chicago trading to $5.57 a bushel. Sugar closed down 0.41 cents at 28.00 cents.

Gold decreased $5.30 in New York trading to close at $1,131.20 per ounce, silver closed up $0.08 to $18.25 per ounce and copper for the front month delivery decreased 5.90 cent to $3.435 per pound.

Dollar closed higher against euro to $1.4315 and edged higher against the Japanese yen to 93.29.

Yield on 10-year U.S. bonds increased to 3.83% and with 30-year maturities closed unchanged at 4.69%.