US markets finished higher yesterday as a sharp drop in oil eased investors inflation fears and an upward revision of first quarter GDP growth suggested a recession may be avoided. The government reported that US gross domestic product grew at an annual rate of 0.9%, against an initial reading of 0.6%.
The Dow Jones added 52.2 points to close at 12,646.2, the S&P 500 gained 7.4 points to finish at 1,398.25. The Nasdaq rose 21.26 points to end at 2,508.32.
MasterCard contributed further optimism to investors moods after raising its long term profit outlook. The company have benefited from more consumers turning to plastic instead of using cash. Shares in the credit card processor rallied nearly 8%.
Also in the financial sector, JPMorgan Chase & Co climbed 1.7% after a majority of Bear Stearns shareholders, as expected, endorsed JPM's proposed takeover of the brokerage. A bank spokesman said its $1.5 billion deal to acquire Bear Stearns would be completed today, well ahead of forecasts. Bank of America added 2.2% as expectations built that they would acquire mortgage lender Countrywide Financial. Countrywide surged over 8% as a result.
Retailers were stronger following a number of positive results from the sector. Budget stores Big Lots and Fred's Inc topped expectations as struggling consumers sought bargains. Big Lot's jumped 7.5%, while Fred's finished 5.6% higher.
After the bell, Dell Inc announced quarterly sales and earnings that topped estimates. Shares in the No 2 personal computer maker surged 10% in after hours trading.
US light crude oil for July delivery dropped $4.41 to settle at $126.62 a barrel COMEX gold for August delivery sank $23.30 to end at $881.70 an ounce.
Treasury prices slumped, raising the yield on the 1 year note to 4.08% from 4% late Monday.
The Nikkei jumped 214.1 points to close at 14,338.5 this morning, its highest level in almost five months. Banks led the advance on speculation that higher interest rates will help boost their lending income. Mitsubishi UFJ Financial Group Inc, Japan's biggest publicly traded bank, surged the most in a month, while Sony Corp gained after the US economy grew more than estimated.
The Hang Seng is currently 136.7 points higher at 24,520.7. Refiners and airliners lead gains after a drop in crude oil prices eased concern higher fuel costs will erode earnings. China Petroleum and Chemical Corp, the nation's largest refiner, rose the most in four weeks, and Cathay Pacific Airways Ltd climbed the most in two weeks.
House price gloom outweighed gains for energy stocks as the London market dipped into the red yesterday. Retailers, housebuilders and banks were all well into negative territory as investors fretted over the latest survey from Nationwide that showed a record 2.5% fall in house prices during May. Crude rising back up above $130 a barrel mark buoyed oil firms, but the downbeat sentiment elsewhere saw the FTSE 100 Index close 1.5 points down at 6068.1.
Persimmon was the biggest loser of the day, falling 5%, or 26p to 487.5p. Second tier rivals Taylor Wimpey and Bovis Homes were also down, falling 8p to 85.5p and 19p to 429p respectively. In the fall-out from the house price misery, building supplies firm Wolseley was another casualty, shedding 19.5p to 537.5p, a drop of more than 3%. Kingfisher was also on the back foot, falling 4.2p to 135.7p, with Argos and Homebase parent Home Retail Group slipping 7.25p to 228.75p.
Banks also suffered amid fears that several looming rights issues in the sector may not be fully taken up by shareholders. Royal Bank of Scotland, which has asked investors for £12bn, slipped 6.25p to 231.75p, and Halifax Bank of Scotland, which is calling for £4bn, fell 16.75p to 414.25p.
Oil firms dominated the risers' board, with Cairn Energy and Tullow Oil near the top with rises of more than 3%. Cairn was 104p better off at 3419p, with Tullow 24.5p up at 922p. BP and Shell - two of the market's biggest stocks - also rose, adding 7p to 612.5p and 31p to 2188p respectively. Domestic power generator and supplier Scottish & Southern Energy added 14p to 1466p after saying it was targeting nine million customers this year. The group added 700,000 during the year to March after delaying bill hikes to the end of the month.
Top of the risers' board was Man Group after the investment house posted pre-tax profits of more than $2bn for the year to March 31, as well as a 21% rise in assets under management to $75bn (£37.9bn). Shares in the company were up 5%, or 30.5p to 615p. It was closely followed by miner Eurasian Natural Resources which rose 71p to 1481p after being picked out a sector star by Credit Suisse analysts.