26/06/09

The Dow Jones jumped 172.54 points to close at 8,472.40 while the S&P 500 gained 19.32 points end at 920.26. The Nasdaq rose 37.20 points to finish at 1,829.54.

In corporate news, Bed Bath & Beyond reported higher quarterly earnings that beat expectations. The company said cost cutting countered the impact of slowing demand. Shares of the company jumped 9.5%. Homebuilder Lennar rallied 17.5% after reporting a larger than expected quarterly loss against a year ago. However, the company reported a rise in new home sales and orders versus the first quarter.

US light crude oil for August delivery added $1.56 to $70.23 a barrel.

COMEX gold for August delivery gained $5.10 to $939.50 an ounce.

Treasury prices surged higher, lowering the yield on the 10 year note to 3.54% from 3.68%.

The Nikkei gained 81.31 points to close at 9,877.39 this morning. Nippon Electric, the world's No 3 maker of glass for flat panel televisions, jumped 6.3% after saying it would beat its profit target. Bridgestone, the world's largest tyre maker, rallied 8.5% after narrowing its first half loss forecast.

The Hang Seng is currently 363.72 points higher at 18,638.75. Shipping companies thrilled investors after projecting higher prices while energy stocks were boosted after Goldman Sachs upgraded China Shenhua Energy.China Cosco Holdings, the world's largest operator of dry bulk ships, jumped 7.6% after the company's chairman said freight rates are set to rise.

The FTSE 100 is currently 38.59 points higher at 4,291.16. Mining stocks help lift the market with Eurasian Natural Resources, Antofagasta, Xstrata and Kazakhmys all gaining between 2% and 4%. Oil companies also benefit after the price of the commodity rose. Royal Dutch Shell gains 1.5%. There was bad news however for BSkyB after Ofcom said the pay TV group should make its premium channels available to other content providers on a wholesale basis. Shares are currently 0.8% lower.

Economics
US Personal income & spending (May) 13:30 BST/ 08:30 EDT

Analysts expect May personal income to rise by 0.2%. Aggregate hours worked fell 0.7% while hourly earnings only rose 0.1%, suggesting that the change in employee compensation will return to negative territory after rising 0.1% in April. In April, personal income was boosted by an increase in weekly unemployment payments, while disposable income was boosted by the USD400 tax credit for individuals (USD800 for married taxpayers). These factors will probably have less of an impact in May. Meanwhile, we expect personal spending to rise 0.5%. Assuming a 0.1% rise in the PCE deflator (based on CPI results), real PCE could rise 0.4% in May, boosted by stronger auto sales (9.9 million from 9.3 million in April) and stable ex-autos retail sales. Based on the CPI data, we also expect the core PCE deflator to rise 0.16%, which would keep the year-on-year rate stable at 1.9%. US University of Michigan confidence (Jun, final) 14:55 BST/ 09:55 EDT

The preliminary June reading was almost unchanged at 69, but the underlying components were more mixed. The buying conditions index rose 10pts and has climbed 35pts since November, while the 12-month business expectations series fell 14pts after having risen 44pts over the previous three months. Gasoline prices have continued to rise steadily, reaching USD2.72/gallon in mid-June, while the weekly ABC News consumer index has now dropped by 7pts since the middle of May. Analysts look for the final Michigan reading for June to stay at 69. Meanwhile, five-year median inflation expectations climbed to 3.1% in the preliminary survey (from 2.8% in May), while the one-year median rose to 3.1% from 2.9%.

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