Home Prices, Confidence Index Lift Stocks

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

U.S. stocks wavered in trading after China began tightening bank lending. Confidence indexes in the U.S. and Germany climbed. U.S. home price index showed a fraction gain. Commodities retained a negative bias. European markets closed higher.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – U.S. stocks wavered in trading after China began tightening bank lending. Confidence indexes in the U.S. and Germany climbed. U.S. home price index showed a fraction gain. Commodities retained a negative bias. European markets closed higher.[/R]

World markets declined after more banks tighten lending in China. The lending in the first two weeks surged to more than $200 billion, nearly 20% of the annual quota. UK barely emerged from the recession that dragged its GDP down by 6% in the previous six quarters.

Stocks in New York traded lower after China tightened lending. Apple gained more than 2% after it reported quarterly sales increase of 32% and net surge of 50% and indicated higher than expected revenues in the current quarter. The dollar and yen advanced but gold, oil and copper declined.

Metropolitan home price index, The S&P/Case Shiller index increased 0.2% in November and fell 5.3% from a year ago. High end home prices in Miami, Boston, Phoenix and Los Angeles edged up but 10% unemployment is likely to drag recovery to many years.

Conference Board index increased to 55.9 from revised 53.6 in December after dropping as low as 25.3 in February 2008 and stayed near 97 in most of 2007.

United States Steel Corporation led the decliners in the S&P 500 index after it reported fourth quarterly loss in a row. Apple Inc traded higher ahead of new product release tomorrow. Mortgage insurers increased after MGIC Corp reported lower than anticipated loss. Cigna declined on a downgrade.

European markets closed higher after business climate index in Germany increased and UK reported its first quarterly gain in seven quarters. Siemens rallies 5% after reporting sector profit increase of 11%. Novartis net surges 49% and appointed new chief executive.

UK showed first quarterly economic expansion in the last quarter with a rise of 0.1%. The economy shrank 6% in the last six quarters. The GDP declined 4.9% in 2009. UK stocks traded volatile after the weakness in commodities prices.

North American Markets

Dow Jones Industrial Average decreased 2.57 or 0.03% to a close of 10,194.29, S&P 500 Index edged lower 4.61 or 0.4% to 1,092.17, and Nasdaq Composite Index decreased 7.07 or 0.3% to close at 2,203.73. Toronto TSX Composite Index increased 6.68 or 0.06% to 11,361.19.

Latin American Markets Indexes

Mexico Bolsa Index decreased 365.85 or 1.2% to 30,465.06 and Brazil Bovespa Stock Index fell 50.10 or 0.08% to 66,220.04 in Friday’s close.

Europe Markets Review

In London FTSE 100 Index closed higher 16.54 or 0.31% to 5,276.85, in Paris CAC 40 Index increased 25.19 or 0.67% to close at 3,807.04, in Frankfurt DAX index higher 37.56 or 0.67% to close at 5,668.93. In Zurich trading SMI increased 32.93 or 0.51% to close at 6,484.23.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 187.41 or 1.78% to 10,325.28, and Hang Seng index in Hong Kong decreased 489.22 or 2.38% to 20,109.33, and CSI 300 index in China lower 85.22 or 2.56% to 3,242.80. The FTSE Bursa KL Composite index in Malaysia was lower 13.77 or 1.06% to 1,283.02. Markets in Australia were closed today.

The Kospi Index in South Korea decreased 32.86 or 1.97% to close at 1,637.34. SET index in Thailand closed lower 8.73 or 1.23% to 701.66. JSE Index in Indonesia decreased 19.44 or 0.75% to 2,578.42. Markets in India were closed today for the Republic Day holiday.

Commodities, Metals, and Currencies

Crude oil decreased $0.67 to $74.59 a barrel for a front month contract, natural gas edged down 26 cent to $5.47 per mBtu and gasoline decreased 3.13 cents to 196.95 cents.

Soybean future closed up 7 cents to $9.47 a bushel. Wheat futures closed down 4.25 cents in Chicago trading to $4.94 a bushel. Sugar closed down 0.50 cents at 29.30 cents.

Gold increased $2.20 in New York trading to close at $1,099.00 per ounce, silver closed down $0.395 to $16.75 per ounce and copper for the front month delivery decreased 5.4 cent to $3.333 per pound.

Dollar closed higher against euro to $1.4077 and edged lower against the Japanese yen to 89.63.

Yield on 10-year U.S. bonds decreased to 3.61% and with 30-year maturities closed lower at 4.54%.