Late Rally in U.S. Indexes; Weak Commmodities

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

U.S. stocks rallied in the late afternoon after consumer credit decline in December slowed. The dollar gained against the euro as investors focus on budget deficits of Greece, Spain and Portugal. Toyota President Akio Toyoda apologized for the quality problems. Commodities traded weak.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – U.S. stocks rallied in the late afternoon after consumer credit decline in December slowed. The dollar gained against the euro as investors focus on budget deficits of Greece, Spain and Portugal. Toyota President Akio Toyoda apologized for the quality problems. Commodities remained weak.[/R]

U.S. stocks rallied in the final hour of trading to regain nearly 1% loss of the day and close fractionally higher. Consumer credit in the U.S. declined at a slower pace in December, sparking a rally in stocks. The S&P 500 index declined 1%, fourth weekly loss in a row.

Speculators hoped that the EU may offer a bailout to Greece, Spain and Portugal over the weekend.

U.S. Fed in the afternoon said consumer credit declined $1.7 billion in December after a record fall of $21.8 billion in November.

January unemployment rate declined to 9.7%. Investors remained unconvinced that Spain, Portugal and Greece have a viable plan to lower their budget deficit and the dollar edged higher. California and Pennsylvania state budgets are also worrisome in the U.S.

Airgas Inc surged 40% after Air Products said it may take its $60 a share offer direct to shareholders. Aetna profit declined 15% as underwriting margin falls. Tyson Foods posts higher than expected fourth quarter profit. Weyerhaeuser quarterly loss narrows. UPS board raises dividend.

European markets declined for the fourth week in a row and the indexes in Spain, Portugal and Greece dropped near one-year low. Gross domestic product in Spain declined 0.1% in the fourth quarter to December. Hermes reported 8.6% sales increase and a higher net. LVMH net declined 13%.

UK stocks closed lower on weak metals and energy prices. Xstrata, Vedanta and Rio Tinto declined more than 3%. ICAP Plc, the inter-broker dealer plunged 18% after it lowered the earnings estimate. Liberty International is looking to split the company into two separate listed units.

Toyota Motor Corp President Akio Toyoda apologized for quality problems and set up a committee that will include outside experts to review quality processes. Japan’s foreign reserve assets soar to $1.05 trillion. Mitsubishi Heavy Industries profit drops 84.6%.

Stocks in Mumbai traded lower on the worries that government may struggle to sell more stakes in state controlled companies. The recent stake sale in NTPC received a lukewarm response. Reliance Industries is in talks with Canada based tar-sand oil explorer for $2 billion investment. Realtors and software developers declined.

Australian economy is expected to grow between 3.2% and 3.5% in the years 2010 and 2011 according to an estimate by the Reserve Bank of Australia. The building industry showed an expansion in January. Weak commodities dragged miners in Sydney trading.

North American Markets

Dow Jones Industrial Average increased 10.05 or 0.1% to a close of 10,012.23, S&P 500 Index edged higher 3.08 or 0.3% to 1,066.19, and Nasdaq Composite Index increased 15.69 or 0.7% to close at 2,141.12. Toronto TSX Composite Index increased 94.36 or 0.9% to 11,223.12.

Latin American Markets Indexes

Mexico Bolsa Index added 27.02 or 0.1% to 30,630.73 and Brazil Bovespa Stock Index plunged 1,171.31 or 1.83% to 62,762.70.

Europe Markets Review

In London FTSE 100 Index closed lower 78.39 or 1.53% to 5,060.92, in Paris CAC 40 Index decreased 125.49 or 3.40% to close at 3,563.76, in Frankfurt DAX index lower 98.90 or 1.79% to close at 5,434.34. In Zurich trading SMI decreased 132.18 or 2.07% to close at 6,264.33.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 298.89 or 2.89% to 10,057.09, and Hang Seng index in Hong Kong decreased 676.56 or 3.33% to 19,665.08, and CSI 300 index in China lower 65.72 or 2.04% to 3,153.09. ASX 200 index in Australia decreased 107.50 or 2.33% to 4,514.10. The FTSE Bursa KL Composite index in Malaysia was lower 17.13 or 1.35% to 1,247.90.

The Kospi Index in South Korea decreased 49.30 or 3.05% to close at 1,567.12. SET index in Thailand closed lower 11.11 or 1.58% to 691.41. JSE Index in Indonesia decreased 74.24 or 2.86% to 2,518.98. The Sensex index in India decreased 434.02 or 2.68% to 15,790.93.

Commodities, Metals, and Currencies

Crude oil decreased $1.39 to $71.75 a barrel for a front month contract, natural gas edged up 13 cents to $5.54 per mBtu and gasoline decreased 4.72 cents to 190.36 cents.

Soybean future closed down 0.50 cents to $9.13 a bushel. Wheat futures closed down 2.50 cents in Chicago trading to $4.73 a bushel. Sugar closed down 1.47 cents at 26.17 cents.

Gold increased $4.80 in New York trading to close at $1,067.80 per ounce, silver closed down $0.17 to $15.18 per ounce and copper for the front month delivery increased 0.75 cent to $2.88 per pound.

Dollar closed higher against euro to $1.3664 and edged higher against the Japanese yen to 89.31.

Yield on 10-year U.S. bonds decreased to 3.57% and with 30-year maturities closed down at 4.52%.