Equities bounce back
May 15th, 2009 by Bryden Elssmann
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8331.32 | 46.43 | 0.6% |
| NASDAQ | 1689.21 | 25.02 | 1.5% |
| S P 500 | 893.07 | 9.15 | 1.0% |
| FTSE 100 | 4362.58 | 31.21 | 0.7% |
| Nikkei 225 | 9093.73 | -246.76 | -2.6% |
| SPI Futures | 3771 | 35 | 0.9% |
| All Ords | 3710.8 | 131.7 | 3.4% |
| Oil | 46.17 | 6.92 | 17.6% |
| Gold | 928.4 | 2.5 | 0.3% |
| Silver | 14.04 | 0.02 | 0.1% |
| Aluminium | 1473 | -10 | -0.7% |
| Copper | 4309 | -199 | -4.4% |
| Lead | 1395 | -56 | -3.9% |
| Nickel | 12175 | -280 | -2.2% |
| Tin | 13600 | -295 | -2.1% |
| Zinc | 1430 | -5 | -0.3% |
On Wall St, equities bounced back after yesterday’s selling as investors weighed weaker-than-expected reports with growing economic optimism. The Dow was 0.5% higher to 8331.32, while the SP 500 rose 1% to 893.
In further weak economic news, the number of Americans filing new claims for unemployment last week surged to 637,000 from 601,000 the previous week, according to reports from the Labour Department. The rise more than likely reflects the huge layoffs in the auto industry with the bankruptcy of Chrysler.
Also, the Producer Price Index, a measure of wholesale inflation was up 0.3% in April after falling 1.2% in March. It was expected to rise 0.2%.
In corporate news, the focus was still on the automotive sector. Chrysler said it wants to close 789 dealerships, or roughly 25% of those in business according to a plan filed in bankruptcy court.
General Motors is expected to announce tonight that it will look to close 1000 – 2000 of its dealerships. GM said that it has agreed to accelerate payments to its parts suppliers, as it edges closer and closer to bankruptcy.
Outside of the auto sector, Wal-Mart Stores reported higher quarterly earnings that beat estimates, despite slightly weaker revenues. Looking ahead, the number one retailer forecasts second-quarter earnings to be in a range that is likely to exceed analysts’ current expectations.
Of the Dow’s 30 components, Coca-Cola was among the biggest gainers, up 2.9% while drug maker Merck and Co added 1.5%.
In the commodities market, June Crude Oil futures reversed Thursday’s fall as investors shrugged off lower demand forecasts from the International Energy Agency and focused instead on a rally in stocks and a weaker dollar. Crude Oil for June delivery added 1% to be currently trading at $58.55 per barrel.
The Australian dollar was trading higher at US76 cents from yesterday’s close of US75.30c.
The Australian market may open higher today after Wall Street snapped a three-day losing streak and bank borrowing costs fell to a new record low. The SPI ended the overnight session 11 points higher at 3747, suggesting the market could claw back some of yesterday’s losses.
CSL
This morning we continue our Buy/Write recommendation on CSL Limited. Buying the stock around $31 and selling a $33 June call. If you have any questions regarding your portfolio please do not hesitate to contact your adviser.
Investor Update
The broking desk will be attending the Brisbane investor update this Sunday and welcome the opportunity to meet with clients attending the session.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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