24/04/09

FTSE 100	4018.23, -12.43	Dow	7957.06, +70.49
FTSE 250	7181.53, +21.57	Nasdaq	1652.21, +6.09
FTSE All Share	2059.08, -4.44	S&P 500	851.92, +8.37
Nikkei	8707.99, -139.02	Hang Seng	15258.85, +44.39
Oil (Crude)	$49.62	Gold	$906.60
Base Rate	0.5%	10 Yr Gilt	3.56%
£/$	1.464	Euro/Gbp	0.903

Markets

US stocks made a late rally yesterday to leave all three major indices higher on the day. Economic data had kept stocks lower for much of the session with March existing home sales falling to an annual rate of 4.57 million against expectations of a drop to just 4.65 million. Furthermore, weekly initial jobless claims rose slightly more than expected.

The Dow Jones gained 70.49 points to close at 7,957.06 while the S&P 500 added 8.37 points to end at 851.92. The Nasdaq rose 6.09 points to finish at 1,652.21.

Economic bellwether United Parcel Service dropped 2.8% after reporting earnings and revenue that tumbled versus a year ago due to the recession.

Regional banks lifted the financial sector. PNC Financial Services jumped 7.5% after reporting higher quarterly profit, helped by its purchase of National City. Fifth Third Bancorp also buoyed investors, reporting a narrower than expected quarterly loss. Shares climbed 3.5%.

Apple and eBay helped tech stocks higher in normal trade while further results from the sector after the bell should send stocks higher today. Apple reported higher quarterly sales and earnings to lift the stock 3% while eBay reported lower quarterly sales and earnings that topped forecasts pushing shares 12.5% higher. After the bell, Microsoft added 4.3% after posting a quarterly profit that met expectations. Amazon.com rose 1.2% after reporting an 18% rise in revenue and earnings that beat expectations.

US light crude oil for June delivery added $0.77 to $49.62 a barrel. COMEX gold for June delivery gained $14.10 to $906.60 an ounce. Treasury prices rose, lowering the yield on the 10 year note to 2.91% from 2.94%.

The Nikkei fell 139.02 points to close at 8,707.99 this morning to end its biggest weekly drop in nearly two months. Earnings reports from JFE Holdings and KDDI Corp diminished optimism the recession is abating. Steelmaker JFE lost 3.1% after fourth quarter profit slumped. Mobile carrier KDDI declined 5.2% after its profit forecast was short of analysts’ expectations.

The Hang Seng is 44.39 points higher at 15,258.85. A number of financial stocks fell as investors locked in profits from recent share gains. HSBC loses 0.8% while Industrial & Commercial Bank of China slips 1.1%. Foxconn International, the world's biggest maker of mobile phones, jumped 9.2% after Goldman Sachs upgraded the stock.

The FTSE 100 is currently 46.82 points higher at 4,065.05. Miners lead the market higher after Cazenove upped the sector to Overweight from Neutral. Xstrata climbs 5.2%, Kazakhmys gains 4.9% and Fresnillo adds 3.7%. Amlin rises 2.8% after Goldman Sachs upgraded the stock to Neutral from Sell. Cable & Wireless also benefits from an upgrade courtesy of JPMorgan to Overweight, shares in the stock are 2.8% higher. Banks are higher following results from regional banks in the US. Barclays jumps almost 5% while Lloyds Banking Group advances 3.4%. Oil producers gain following a rise in the price of crude. Royal Dutch Shell is 3% higher while Tullow Oil gains 2.6%.

Economics

UK GDP (Q1, advance) 09.30 bst

Q1 GDP is expected to show a slightly smaller contraction than Q4. Sharp downturns are expected in both consumer and investment spending in Q1, but some stock rebuilding following the record rate of de-stocking that occurred during the fourth quarter of last year.

UK Retail sales (Mar) 09.30 bst

Gauging the "true" state of consumer spending remains incredibly difficult, as the ONS data have provided a consistently more upbeat picture than that suggested by the survey evidence. In February, the sharp fall in spending captured by the ONS data may have been partly attributable to the snowfalls if that month. This might point to some rebound in March. However, with the Easter weekend falling in April this year rather than March, there could be seasonal distortions. The volumes of sales are therefore forecasted to be flat on the month.

US Durable goods orders (Mar) 13.30 gmt

February's 3.5 percent rebound in durable goods orders may be signalling that the rapid rate of decline seen since last August is slowing, even if orders fail to increase again in March. The ISM new orders index rose to 41.2 in March and is up 18.1 points from its all time low in December. Aircraft orders are already at rock bottom levels (Boeing reported six orders in March, up from four in February) and are unlikely to be a substantial drag going forward. Both total durable orders and ex-transportation orders are expected to fall 0.7 percent in March. Meanwhile, the level of durable shipments still has further to fall.

US New home sales (Mar)15.00 gmt

New home sales in January and February remained sluggish, with year on year declines of over 40 percent. In March, mortgage purchase applications rose by about 7 percent month on month. A small rise in March new homes is expected up to 350,000. This would leave sales at extremely low levels, but the year on year rate could rise to around -32 percent, up from -41 percent in February, suggesting a slower rate of decline.

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