U.S. Stocks Await Earnings; Commodities in Focus

Mukesh Buch
11 Jan, 2010
New York City

U.S. traded sideways but commodities gained on the rise in Chinese exports. Heineken agreed to acquire beer unit of Femsa SAB in Mexico. Gold and crude oil gained as the dollar eased. President Obama is considering to levy a charge on banks to as he looks for ways to trim the deficit.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – U.S. traded sideways but commodities gained on the rise in Chinese exports. Heineken agreed to acquire beer unit of Femsa SAB in Mexico. Gold and crude oil gained as the dollar eased.[/R]

Weather remained in focus in northern hemisphere as the severe conditions affected life in Europe, China and the Eastern region in the U.S.

Heineken agreed to acquire the beer business of Mexico based Femsa SAB in a deal that values its Mexican business and exports operations at $7.7 billion or €5.3 billion. The deal is expected to pave a way for Heineken to expand its operations in Latin America.

Commodities prices and Asian stocks traded higher after China reported 18% rise in December exports. China surpassed Germany to be the largest exporter and the U.S. to be the largest automaker in 2009.

U.S. stocks traded sideways after commodities prices rose and the dollar declined. Alcoa gained nearly 6% on the expectations of quarterly profit report after the close. Gold and copper gained sharply.

MercadoLibre, the online e-commerce site operator plunged 9%. Pacific Ethanol surged 60% on the expectations of higher sales. McMoran Exploration soared after it discovered energy prospects in the Gulf of Mexico.

Volkswagen 2009 worldwide auto sales decreased 1.1% and at BMW fell 10%. Spain based Telefonica SA declined 3% after Venezuela devalued its currency by 50%. Telefonica is looking to repatriate $2 billion from Venezuela before the devaluation. Heineken NV gained 3.3% after it agreed to acquire beer unit of Mexico based Femsa SAB.

UK stocks traded sideways but resource sector stocks gained. UK financial services executives indicate weak sentiment for the industry. Manchester United files to raise £500 million. BAA Ltd said December traffic decreased 0.9%.

Stocks in Mumbai traded lower after Reliance agreed to lift its offer for LyondellBasell to $13.5 billion from $12 billion and raised $763 million through the sale of treasury stocks. Rupee edged higher after as foreign investors increase exposure to Indian stocks. Dhampur Sugar Mills net triples.

Australian stocks edged higher ahead of earnings season this week. A rise of 0.7% in oil and 0.5% in gold lifted resource linked stocks. Job ads in December increased in newspapers and on the Internet. Australia’s home loan arrears gain 1.3 in October.

North American Markets

Dow Jones Industrial Average increased 45.80 or 0.4% to a close of 10,663.99, S&P 500 Index edged higher 2.00 or 0.2% to 1,146.14, and Nasdaq Composite Index decreased 4.76 or 0.2% to close at 2,312.41. Toronto TSX Composite Index increased 2.42 or 0.02% to 11,956.25.

Latin American Markets Indexes

Mexico Bolsa Index increased 43.34 or 0.1% to 32,935.38 and Brazil Bovespa Stock Index added 170.79 or 0.3% to 70,433.49.

Europe Markets Review

In London FTSE 100 Index closed higher 3.83 or 0.07% to 5,538.07, in Paris CAC 40 Index decreased 2.05 or 0.05% to close at 4,043.09, in Frankfurt DAX index higher 2.89 or 0.05% to close at 6,040.50. In Zurich trading SMI decreased 25.62 or 0.39% to close at 6,592.26.

Asian Markets Review

Hang Seng index in Hong Kong increased 114.77 or 0.51% to 22,411.52, and CSI 300 index in China higher 1.92 or 0.06% to 3,482.05. ASX 200 index in Australia increased 38.60 or 0.79% to 4,950.70. The FTSE Bursa KL Composite index in Malaysia was higher 1.53 or 0.12% to 1,294.51. Markets in Japan were closed today.

The Kospi Index in South Korea decreased 1.14 or 0.07% to close at 1,694.12. SET index in Thailand closed higher 7.99 or 1.08% to 746.95. JSE Index in Indonesia increased 17.83 or 0.68% to 2,632.20. The Sensex index in India decreased 13.58 or 0.08% to 17,526.71.

Commodities, Metals, and Currencies

Crude oil decreased $0.40 to $82.35 a barrel for a front month contract, natural gas edged down 29 cents to $5.46 per mBtu and gasoline decreased 1.8 cents to 213.75 cents.

Soybean future closed down 11.50 cents to $10.10 a bushel. Wheat futures closed up 4 cents in Chicago trading to $5.72 a bushel. Sugar closed down 0.8 cents at 26.75 cents.

Gold increased $14.10 in New York trading to close at $1,153.00 per ounce, silver closed up $0.13 to $18.60 per ounce and copper for the front month delivery increased 1.41 cent to $3.44 per pound.

Dollar closed lower against euro to $1.4520 and edged lower against the Japanese yen to 92.09.

Yield on 10-year U.S. bonds increased to 3.83% and with 30-year maturities closed higher at 4.74%.