2/5/08

The Dow Jones jumped 189.9 points to finish at 13,010, the S&P 500 surged 23.75 points to end at 1,409.35. The Nasdaq edged 1.7 points higher to close at 2,426.1.

The Nasdaq took strength from Apple Inc, just managing to keep the index in positive territory. News that the company would make movies available to buy on iTunes on the same day they are released on DVD sent shares 3.5% higher. Rival Research in Motion advanced 5.2%. Also in the tech sector, security software maker Symantec reported strong fourth quarter profits to push shares 12.3% higher.

Exxon Mobil also reported quarterly figures. Both sales and earnings were sharply higher as oil prices continued to rally, but results still came in lower than expected and shares in the company fell 3.6%.

Financial stocks benefited from the prospect of a pause in the Fed's campaign to lower borrowing costs. American Express led gains to finish almost 7% higher.

Elsewhere, Home Depot gained 3.7% after announcing that it will close 15 underperforming stores as well as cutting back on future store openings.

US light crude oil for June delivery slid $0.94 to finish at $112.52 a barrel. COMEX gold for June delivery dropped $14.20 to settle at $865.10 an ounce.

Treasury prices tumbled, lifting the yield on the 10 year note 3.76% from 3.72% late Thursday.

The Nikkei surged 282.4 points higher to 14,049.26 this morning, capping its seventh straight weekly gain. Mizuho Financial led banks higher following the belief in the US that the credit market turmoil will ease. Toyota Motor Corp rose to a two month higher after sales gained in the US and the yen sank to a two month low. Sumitomo Realty & Development Co jumped to a three month high after a newspaper said its profit had risen to a record.

The Hang Seng is currently 493.25 points higher at 26,248.6, with developers and banks gaining after the city cut interest rates. Sino Land Co jumped the most in a month while Bank of China Ltd looks set for its best close since December.

A mixed session for big-hitting mining stocks and wider market lethargy saw the FTSE 100 Index end the session unchanged yesterday. Fresh takeover talk surrounding Xstrata helped some of the sector gain ground, but others were weighed down. Despite a strong opening on Wall Street this afternoon, hesitant trading in London saw the Footsie close flat at 6087.3 points.

British Airways was the stand out winner amid the prospect of a tie-up with US rivals American Airline and Continental, soaring 7%. Reports suggested the trio could co-ordinate schedules, fares and frequent flyer programmes for trans-Atlantic flights. With oil prices also on the retreat from this week's near $120-a-barrel record, the carrier's shares rose 16.5p to 243p.

Miners featured on both the risers and fallers board amid the cocktail of takeover talk. Xstrata chief executive Mick Davis's reported comments that he would have no issue with a takeover if it delivered value for shareholders moved the firm 2% higher at 4032p as merger speculation revived. Kazakhmys was best off with a 2% rise to 1615p, and Anglo American ahead 65p at 3334p. Vedanta Resources had earlier clawed back losses after a downbeat note yesterday, but ended the day down 3p at 2242p. Eurasian Natural Resources was also down, shedding 40p to end at 1160p.

Newly merged media group Thomson Reuters also received a boost after a well-received trading update. Shares rose 52p to 1615p as it targeted an extra $250m (£125.6m) of cost savings. But retailers were on the back foot after Goldman Sachs cut Kingfisher to "sell", saying the outlook for DIY spending looked weak. Kingfisher dropped 1.8p to 131p - a fall of more than 2%. Homebase parent Home Retail Group was also dragged lower, off 7.25p at 256.75p, as it lost some of the gains seen yesterday with forecast-beating annual profits.

Elsewhere, shopping centre and office real estate group Hammerson fell 13p to 995p after it said property values had fallen further this year while retailers suffered and City rents fell as banks cut staff in the credit crunch. The leading Footsie faller was medical equipment firm Smith & Nephew, which fell nearly 13% to 570p, after uncovering "unacceptable" sales practices at a recently-acquired orthopaedics business.

The headline flash PMI eased to 50.8, (down 1.2 points), with new orders falling below 50 (to 48.6). Export orders also receded to 498. Employment was down to 51.4, whilst current output managed a very marginal 0.1 points rise to 52.5. The annual rate of IP growth is set to ease back to below 2 percent. The new orders component means one cannot exclude a sub-50 manufacturing PMI going forward. Germany and France were down to 53.6 and 51.5 respectively, but the Eurozone headline number suggests that other economies must have had weaker readings as well. Output prices remained stubbornly high at 56.3.

US Non farm payrolls (April) 13.30 bst

Non farm payrolls are seen falling 50,000. Initial jobless claims have declined a bit on average in April. The unemployment rate could rise further to 5.2 percent, from 5.1 percent in March. Last months 80k drop in payrolls was partly due to a 24,000 fall in auto manufacturing, as ongoing auto parts strikes have halted auto production. The impact should be smaller this month following the initial shock. However, job losses have been coming from a range of industries, including business and employment services, retail and finance. Recent employment declines have been smaller in the state payroll data (-49,000 in Feb and -12,000 in Jan), suggesting some possibility of upward revisions. A 0.3 percent rise in average hourly earnings would keep the year on year rate at 3.6 percent.

US Factory orders (Mar) 15.00 bst

We know durable good orders fell by 0.3 percent in March,  but non durable orders should get a boost from higher oil prices. Assuming a 1.2 percent rise in non durable orders, total factory orders are seen rising 0.4 percent.