Deals of $43 Billion Drive U.S., Europe Stocks

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

Three deals worth $43 billion lifted market sentiment. Personal spending gained more than expected and personal income increased less than anticipated. The dollar strength led commodities to decline but copper closed higher.

[R]4:00 PM New York, 9:00 PM London, 8:00 AM Sydney – Three deals worth $43 billion lifted market sentiment. Personal spending gained more than expected and personal income increased less than anticipated. The dollar strength led commodities to decline but copper closed higher.[/R]

U.S. stocks advanced after manufacturing expanded for the seventh month in a row. AIG agreed to sell its Asian unit to Prudential Plc for $35.5 billion. Merck KGaA agreed to pay $6 billion beating the offer from Thermo Fisher for Millipore. Copper gained nearly 2%.

AIG agreed to sell its Asian unit for $35.5 billion to Prudential Plc. The deal will help the troubled U.S. insurer to raise capital to repay U.S. Federal Reserve and Treasury $185 billion bailout. Prudential will raise $20 billion in a rights offering at 40% discount.

Millipore Corporation led gainers in the S&P 500 index after it agreed to be acquired by Merck KGaA. AIG surged 13% after it agreed to sell its Asia division to Prudential Plc for $35.5 billion. RiskMetrics Group soared 14% after it accepted a proposal from MSCI Inc.

European markets indexes closed up 2% on a speculation that Greece is inching closer to a bailout package of €25 billion. Euro area unemployment rate in January was unchanged at 9.9%. Merck KGaA agreed to acquire Millipore Corp for $6 billion.

UK stocks closed higher on a rally in resource stocks and commodities. Prudential Plc dropped 12% after it agreed to acquire Asia unit of AIG for $35.5 billion. Pearson plc increased after it reported better than expected earnings. HSBC declined 5.2% after it reported higher loan loss charges.

Asian markets closed higher after resource stocks gained in China, Japan and Australia. Copper surged in Asian trading after Chile was struck with 8.8 magnitude earthquake. Insurance stocks gained after Prudential Plc agreed to pay $35.5 billion for Asian insurance division of AIG.

North American Markets

Dow Jones Industrial Average increased 4.23 or 0.04% to a close of 10,325.26, S&P 500 Index edged higher 1.55 or 0.1% to 1,104.49, and Nasdaq Composite Index added 4.04 or 0.18% to close at 2,238.22. Toronto TSX Composite Index decreased 1.81 or 0.02% to 11,629.63.

Latin American Markets Indexes

Mexico Bolsa Index decreased 14.56 to 31,634.54 and Brazil Bovespa Stock Index rose 382.23 or 0.6% to 66,503.27.

Europe Markets Review

In London FTSE 100 Index closed higher 51.42 or 0.96% to 5,405.94, in Paris CAC 40 Index increased 60.74 or 1.64% to close at 3,769.54, in Frankfurt DAX index higher 115.05 or 2.06% to close at 5,713.51. In Zurich trading SMI increased 80.49 or 1.20% to close at 6,791.48.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 24.07 or 0.24% to 10,126.03, and Hang Seng index in Hong Kong increased 209.13 or 1.03% to 20,608.70, and CSI 300 index in China lower 10.46 or 0.32% to 3,281.67. ASX 200 index in Australia increased 43.60 or 0.95% to 4,637.70. Markets in Malaysia were closed today.

The Kospi Index in South Korea increased 7.07 or 0.45% to close at 1,594.58. SET index in Thailand closed higher 4.27 or 0.60% to 721.37. The Sensex index in India increased 175.35 or 1.08% to 16,429.55. Markets in Indonesia were closed today.

Commodities, Metals, and Currencies

Crude oil increased $0.88 to $78.78 a barrel for a front month contract, natural gas edged down 13 cents to $4.68 per mBtu and gasoline decreased 2.49 cents to 216.30 cents.

Soybean future closed up 1.50 cents to $9.62 a bushel. Wheat futures decreased 14.75 cents in Chicago trading to $5.04 a bushel. Sugar closed down 1.34 cents at 22.26 cents per pound.

Gold decreased $0.80 in New York trading to close at $1,118.10 per ounce, silver closed down $0.05 to $16.46 per ounce and copper for the front month delivery increased 6.40 cent to $3.34 per pound.

Dollar edged lower against euro to $1.363 and declined against the Japanese yen to 88.81.

Yield on 10-year U.S. bonds closed down to 3.60% and with 30-year maturities closed lower at 4.55%.