11/03/10

Bank stocks rose on upbeat analyst comments and bullish statements from some executives. Citibank rose 3.6 percent after the company priced a $2bn offering of trust preferred securities. Bank of America rose nearly 2 percent. AIG gained over 10 percent as investors welcomed the company's recent asset sales. Fannie Mae and Freddie Mac also gained significant ground.

Energy stocks weakened as oil prices pared earlier gains. Oil briefly traded above $83 a barrel after the government reported a smaller than expected increase in oil supplies and a dip in gasoline inventory, but ended 60 cents higher to close at $82.09 a barrel.

In economic news, the US Commerce Department said wholesale inventories fell 0.2 percent in January, after a 1 percent drop the month before, raising expectations that consumer demand is strengthening. Separately, the Labor Department said fewer states reported increases in unemployment in January.

The Treasury Department said the government suffered a record $220.9bn budget deficit in February, after a short-fall of $42.6bn in January. It was the 17th consecutive monthly deficit and was slightly smaller than the $221bn shortfall economists had forecasts.

Facet Biotech soared 66 percent after Abbott Labs announced plans to acquire the company for $27 a share. Abbott gained about 0.7 percent.

Airline stocks rose on growing expectations that 2010 is turning into a profitable year for the industry. Shares of UAL and Continental Airlines added 5 percent.

The dollar slipped versus the euro but rose against the yen and the pound.

The price of oil rose 60 cents to close at $82.09 after hitting a high of $83.03 earlier in the session.

Gold fell $14.20 to close at $1,108.10 an ounce.

The price of the 10 year note fell, pushing the yield to 3.71 percent. The government sold $21bn worth of reopened 10 year notes Wednesday as part of a $74bn offering of US debt this week.

The Nikkei average rose today, with exporters such as Sony Corp climbing on a weaker yen and after the Nasdaq rallied on data showing US wholesale inventories fell unexpectedly in January and sales hit their highest in more than a year. The Nikkei average closed 101.03 points higher at 10664.95.

UK stocks closed higher on Wednesday, buoyed by strength in commodity stocks, supported by trade data from China, and in banks and insurers as Wall Street opened up strong. The FTSE100 closed 38.27 points higher at 5640.57.

Miners were strong as copper prices rose after data showed Chinese exports and imports grew faster than expected in February. Fresnillo, Xstrata, Vedanta Resources, Lonmin and Rio Tinto were 1.8 to 3.2 percent higher.

Energy stocks were higher, supported by a rally in crude prices which rose above $82 a barrel after a US government oil inventory report showed an unexpected drop in gasoline stockpiles. Royal Dutch Shell, BG Group and Cairn Energy added 0.8-1.5 percent. But Tullow Oil fell 0.3 percent after it posted a 92 percent fall in 2009 net profit.

Banks were higher with HSBC up 0.7 percent, while RBS and Lloyds Banking Group gained 3.9 percent and 3.6 percent respectively. Standard Chartered added 0.5 percent in spite of the stock trading ex-dividend.

Barclays added 0.6 percent. The bank was said to be looking to buy a retail bank in the US to extend its presence after acquiring Lehman Brothers North American operations in 2008, the Wall Street Journal reported.

ICAP jumped 4.5 percent higher, excited by news its mid cap peer Tullett Prebon was in preliminary offer talks. Tullett shares jumped 25.7 percent with Australia's Macquarie and Bank of China mentioned as possible predators.

British Airways gained 3.7 percent after it, American Airlines and Iberia offered to cede a number of lucrative trans-Atlantic slots in a bid to gain EU antitrust immunity for their alliance.