US markets swung between gains and losses yesterday to finally end higher. Rising oil and commodity prices lifted the underlying shares while reports that Congress and the White House reached a deal on a bailout for car manufacturers lifted the broader market.
The Dow Jones gained 70.09 points to close at 8,761.42, the S&P 500 added 10.57 points to end at 899.24. The Nasdaq climbed 18.14 points to finish at 1,565.48.
Chevron Corp and Exxon Mobil were among the top risers on the Dow after oil was boosted by signs that exporter Saudi Arabia will cut January supplies to customers. Chevron jumped 3.8% while Exxon Mobil added 2.4%.
Reports suggested that Congress and the White House have proposed a $14 billion bailout for the auto sector in the form of a bridge loan, with a vote in by the House of Representatives being imminent. Ford and General Motors both seemed to struggle for direction rising 0.6% and falling 2.1% respectively.
Yahoo Inc rallied 10% following news that it had already begun to axe staff following an earlier announcement that it would cut 10% of its workforce. Investors were also cheered by comments from Ivory Investment Management, which holds a 1.5% stake in the company, who urged the internet company to sell its search business to Microsoft Corp, saying the deal would double its value.
American Express caused the heaviest drag on the Dow following comments from two analysts that said it would be the most affected in the credit card industry from loan losses. Shares sank 7.4% as a result.
Electronic Arts Inc tumbled 12% after a profit warning in the previous session. Even an announcement that it will cut staff to trim costs did nothing to improve investors’ opinion of the stock.
US light crude oil for January delivery rose $1.45 to settle at $43.52 a barrel. COMEX gold for February delivery jumped $34.60 to $808.80 an ounce. Treasury prices slipped, raising the yield on the 10 year note to 2.72% from 2.69%.
The Nikkei gained 60.31 points to end at 8,720.55 this morning, giving the index its longest winning streak since May. Car manufacturers and the broader market were lifted on expectations of the US bailout being passed by the House of Representatives. Honda Motor Corp, which gets half its sales in North America, extended this week's gains to 33%.
The Hang Seng rose 36.16 points to end at 15,613.90 this morning. Stocks were lifted by news that the Hong Kong Monetary Authority added HKD1.94 billion into the banking system. Henderson Land Development Co led gains among developers on speculation interest rates will be cut.
The FTSE 100 is down 24.57 points at 4,342.71 this morning. Aviva carries the biggest weight on the blue chip index, down almost 7%, while fellow insurer Prudential is off 5.2%. Tullow Oil is the strongest performer, up 6.9%, after announcing new oil finds in Ghana and Uganda. Standard Chartered is 3.1% higher following positive comments from its executives concerning growth levels in China and Asia. Economics
US Trade balance (Oct) 13.30 gmt
Both exports and imports and expected to have tumbled in October. The exports orders (41 from 52) and import (41 from 44) components of the ISM survey both declined in October, with the latter component recording another decline in November. Total exports are expected to have fallen by USD6.5bn (-5.2 percent) partly reflecting lower prices for exported goods (-1.9 percent). Meanwhile, imports could fall USD11bn (-6.2 percent). Partly, this will be due to lower oil prices (import price index -4.7 percent), but an adjustment in volumes is expected, reflecting weaker consumer demand and slowing manufacturing output. Look for declines in cyclical categories like industrial supplies and capital goods. Overall the trade deficit is expected to narrow to USD52bn, from USD 56.5bn in September.
US Import price index (Nov) 13.30 gmt
A 4.5 percent drop in the import price index is expected during November, taking the year on year rate into negative territory at 1.2 percent, down from 6.7 percent in October. Oil prices fell around 20 percent during November, and non petroleum import prices are seen falling 0.8 percent , similar to the monthly declines seen in September and October.
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