U.S. Indexes Up 1%; Bond Yields Rise

123jump.com Staff
01 Feb, 2010
New York City

President Obama proposed $3.8 trillion budget for fiscal 2011. The shortfall in the year is estimated at $1.6 trillion or 10.6% of gross domestic product, the largest in 54 years. The plan calls for additional taxes of $800 billion and stimulus of $100 billion. Bond yields closed higher.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – President Obama proposed $3.8 trillion budget for fiscal 2011. The shortfall in the year is estimated at $1.6 trillion or 10.6% of gross domestic product, the largest in 54 years. The plan calls for additional taxes of $800 billion and stimulus of $100 billion. Bond yields closed higher.[/R]

Stocks traded higher after manufacturing expanded in January and the dollar advanced. Commodities traded mixed. Bond yields rose after the President Obama proposed a record budget deficit.

President Obama proposed $3.8 billion budget for fiscal 2011 and deficit of $1.6 trillion or 10.6% of gross domestic product, the largest in 54 years. The proposed budget plans to impose additional tax of $800 billion on those earning more than $250,000 a year and a special tax on banks that received bailout funds and higher taxes on industries generating pollution.

Gannett Co., Inc led the decliners in the S&P 500 index with a loss of 10% on a revenues decline of 14%. Amazon.com declined after it reversed its stance and allowed Macmillan to charge higher prices for digital books. Sysco second quarter beats earnings estimates. Ford Motor Company trades higher.

European market indexes closed higher. In a class action law suit in New York City, federal jury found Vivendi SA misled investors several times in three years to 2002. Russia’s gross domestic product shrank 7.9% in 2009 after crude oil prices plunged from its peak in 2008.

The UK benchmark indexes closed higher. Home prices increased in January, sixth monthly increase in a row. Northumbrian Water Group Plc soared on the speculation that Canada based pension fund is likely to bid for the company. Ryanair Holdings Plc gained 7% after it lifted full year outlook.

Stocks in Shanghai dropped on the worries that China will tighten lending conditions after the comments from Deputy Governor of People’s Bank of China. Cement and building materials makers surged in Hong Kong but steelmakers declined in Shanghai.

January new vehicles sales rise 36.8% in Japan. U.S regulators approve Toyota’s solution to fix foot pedal problem. Honda launches its worldwide recall to fix power windows. Toshiba Corp. said fiscal year sales are expected to be 5.9% lower.

Auto sales in January surge in India. Maruti Suzuki sales increased 33% and Mahindra & Mahindra sales surged 70%. Hathway Cable & Datacom Ltd plans offer 27.8 million shares in a public offering. Reliance Communications, Titan Industries and Procter & Gamble close higher on earnings.

Australian investors took a cautious view ahead of the RBA meeting and rates are expected to increase by 25 basis points to 4%. Australia’s home prices rise 5.2% in December and private read on inflation shows an increase of 0.8% in January. Xstrata considers A$6 billion expansion.

North American Markets

Dow Jones Industrial Average increased 107.62 or 1.1% to a close of 10,174.95, S&P 500 Index edged higher 13.65 or 1.3% to 1,087.52, and Nasdaq Composite Index increased 20.22 or 1% to close at 2,167.57. Toronto TSX Composite Index increased 211.82 or 1.9% to 11,306.13.

Latin American Markets Indexes

Mexico Bolsa Index decreased 419.74 or 1.4% to 30,391.61 in Friday’s trading and Brazil Bovespa Stock Index added 1,169.97 or 1.8% to 66,571.74.

Europe Markets Review

In London FTSE 100 Index closed higher 58.89 or 1.14% to 5,247.41, in Paris CAC 40 Index increased 22.55 or 0.60% to close at 3,762.01, in Frankfurt DAX index higher 45.69 or 0.81% to close at 5,654.48. In Zurich trading SMI increased 55.61 or 0.86% to close at 6,496.33.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 6.98 or 0.07% to 10,205.02, and Hang Seng index in Hong Kong increased 121.76 or 0.61% to 20,243.75, and CSI 300 index in China lower 51.45 or 1.61% to 3,152.71. ASX 200 index in Australia decreased 45.50 or 1.00% to 4,524.10. Markets in Malaysia were closed today.

The Kospi Index in South Korea increased 4.01 or 0.25% to close at 1,606.44. SET index in Thailand closed higher 1.06 or 0.15% to 697.61. JSE Index in Indonesia decreased 23.25 or 0.89% to 2,587.55. The Sensex index in India decreased 1.93 or 0.01% to 16,356.03.

Commodities, Metals, and Currencies

Crude oil increased $1.88 to $74.77 a barrel for a front month contract, natural gas edged up 28 cents to $5.42 per mBtu and gasoline increased 3.16 cents to 194.50 cents.

Soybean future closed down 4.25 cents to $9.097 a bushel. Wheat futures closed up 0.75 cents in Chicago trading to $4.747 a bushel. Sugar closed down 0.60 cents at 29.28 cents.

Gold increased $23.10 in New York trading to close at $1,106.90 per ounce, silver closed up $0.48 to $16.69 per ounce and copper for the front month delivery increased 4.20 cent to $3.09 per pound.

Dollar closed lower against euro to $1.3929 and edged higher against the Japanese yen to 90.66.

Yield on 10-year U.S. bonds increased to 3.66% and with 30-year maturities closed higher at 4.56%.