25/1/08

The Dow Jones rose 108.4 points to end at 12,378.6, the S&P 500 climbed 13.45 points to finish at 1,352.05. The Nasdaq advanced 44.51 points to close at 2,360.92.

Qualcomm was prominent amongst the Nasdaq risers board following strong first quarter results. The mobile phone maker also said second quarter and full year profit will be in line with expectations. Shares rallied 10.3% to close at $40.41. Xerox Corp lent support following a stronger than expected quarterly rise in profit. The company also stated that it would meet its 2008 full year profit forecast, sending shares 8.2% higher to $14.33.

A number of companies reported after the closing bell. Microsoft Corp rose 5% after reporting higher quarterly sales and earnings that beat estimates. Sun Microsystems reported a rise in quarterly profit that beat estimates, but shares remained little changed. While Amgen added 5% following higher earnings on weaker sales in its fourth quarter.

Ambac Financial Group also enjoyed an after hours flourish after the Evening Standard reported that billionaire investor Wilbur Ross may take over the bond insurer. Shares soared 15.1% to $13.05.

Treasury prices slipped, raising the yield on the 10 year note to 3.71% from 3.60% late Wednesday.

US light crude oil for March delivery added $2.42 to settle at $89.41 a barrel. COMEX gold for February delivery jumped $22.70 to settle at $905.80 an ounce.

The Nikkei rallied 536.4 points this morning to close at 13,629.2. The jump came following the move by US lawmakers to pay tax rebates to US families to boost consumer spending. Toyota Motor Corp gained the most in more than four years, while Canon Inc had its biggest rise in five months after the yen weakened against the dollar.

The Hang Seng is currently 1,649 points higher at 25,188.2. PetroChina climbs in tandem with crude oil prices. Bank of Communications Co jumped after Morgan Stanley raised its rating to "overweight". Esprit Holdings Ltd surged after a survey indicated better than expected business confidence in Germany, where the company does half of its sales.

The FTSE 100 surged nearly 5% yesterday after further gains in the US helped extend the market's recent recovery. The index closed 266.5 points higher at 5875.8, to leave stocks within touching distance of the 5901.7 mark seen at the start of a turbulent week. The rally came after US regulators had pressed for a bail-out of bond insurers, a move which would help ease fears of more credit crunch losses. Even shock news of one of the biggest banking frauds of all time - a hefty £3.7bn - and sub-prime write downs at French bank Societe Generale failed to derail the recovery as European markets also rose.

In London, the leading Footsie riser was inter-dealer broker Icap, which gained from heavy trading activity to advance 14% to 666p. Another top performer was London Stock Exchange - a beneficiary of the recent market turmoil - which cheered investors with a 15% revenue rise during the third quarter. LSE shares surged nearly 11% or 173p to 1751p. Joining this pair among the leading performers was HBOS after traders had highlighted strong sales at majority-owned financial services firm St James's Place Capital. HBOS surged 60.5p, to 693.5p, while St James's cheered 66p to 310p in the FTSE 250 - a gain of almost 27%. Other major banking stocks lent weight to the benchmark index on the brighter US news. Lloyds TSB was up 33.75p to 443.75p, while Royal Bank of Scotland was up 33.75p at 400.25p and Barclays was 36.25p ahead at 491p - the three all posting gains of 8% or more.

Foster's brewer Scottish & Newcastle recouped earlier losses after the Takeover Panel gave the group another 24 hours to agree a £7.8bn offer from twin suitors Carlsberg and Heineken. The shares were down almost 9% at one point as investors fretted over an offer failing to emerge but rose 31p higher at 766p after the panel's announcement.

December and the Christmas period is the key period for retailers. If the results published by individual retailers are characteristic of the whole market, then volumes were reasonable but only because of sizeable discounting. Although the retailers aren't happy, weak consumer spending is required in 2008 to ensure inflation remains near the 2% target.

US University of Michigan Confidence (Jan, prelim) 1500 GMT/1000 EST

The economic components of IBD/TIPP optimism and the latest ABC/Washington Post confidence readings are marginally above their respective lows in November and early December. However, stocks have fallen and the gasoline price has risen in early January. These factors, along with the December unemployment rate rising to 5.0% from 4.7%, suggest some downside risk to confidence. Analysts look for a decline to 74.

US Leading Indicators (Dec) 1500 GMT/1000 EST

Analysts expect December leading indicators to be flat. Positive contributions from ISM supplier deliveries and real money supply growth should offset lower manufacturing hours worked and higher initial jobless claims.

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