US Stocks Propelled Higher Following A Surge In The Financial Sector

March 12th, 2010  by Bryden Elssmann

Closing Data

	Current	Change	%
Dow Jones	10,611.84	44.51	0.4%
NASDAQ	2,368.46	9.51	0.4%
S P 500	1,150.24	4.63	0.4%
FTSE 100	5,617.26	-23.31	-0.4%
Nikkei 225	10,664.95	101.03	1.0%
ASX 200	4,813.40	-0.9	-0.0%
COMEX Gold - Dec 09	1,108.10	0	0.0%
COMEX Silver - Sep 09	17.17	0.152	0.9%
COMEX Copper - Sep 09	337.65	0.85	0.3%
WTI Spot	82.6	0.72	0.9%
AUD-USD	0.9151	0	-0.0%
Aluminium	2,233.00	32.5	1.5%
Copper	7,524.00	129	1.7%
Lead	2,282.50	76.5	3.5%
Nickel	21,995.00	50	0.2%
Tin	17,650.00	400	2.3%
Zinc	2,362.50	44	1.9%

Wall Street

U.S. stocks climbed Thursday, lifting the Standard & Poor's 500 to a 17-month high, the highest since October 2008, as bullish comments from Citigroup's chief executive lifted the financial sector and boosted investor sentiment for a broad range of companies including Walt Disney and Home Depot.

The Dow Jones Industrial Average rose 44.51 points, or 0.42%, to 10611.84, marking its third-straight day higher and its highest closing level since Jan.

Asian Markets

China’s inflation rate outstripped returns on household savings for the first time in 16 months, making it harder for officials to damp rising expectations for price gains. Consumer prices rose a more-than-forecast 2.7 percent in February, the fastest pace in 16 months, the statistics bureau said in Beijing yesterday. This number was most likely boosted by seasonal factors. The benchmark one-year deposit rate is 2.25 percent.

Chinese policy makers are aiming to prevent the world’s fastest- growing major economy from overheating following reports illustrating exports rebounded, industrial production accelerated and new loans exceeded forecasts. Central bank Governor Zhou Xiaochuan may raise interest rates in the next three weeks.

Indonesia’s central bank has raised its estimates for economic growth this year to approximately 6 percent from an earlier forecast of 5.6 percent, mentioned by Deputy Governor Hartadi A. Sarwono in a statement on Bank Indonesia’s Web site. Expectation of an expansion in 2011 may be 6 percent to 6.5 percent and that the outlook is supported by domestic demand and the global economic recovery, which was also mentioned in a statement by Sarwono late yesterday.

Japan’s central bank may seek next week to counter a contraction of its balance sheet caused by the month-end expiration of an emergency-credit program as deflation persists in the world’s second-largest economy.

Australian Market

Our market is set to open up 16 points as indicated by SPI Futures.  On an hourly chart, the S&PASX 200 cash index is hovering above moving averages as it continues the consolidation it has done since last Friday.  A break above 4855 may see an extension above 5000, as a pennant continuation pattern as formed on a daily chart.  We are still trading above long term moving averages but we will need to see the market above 4896 to see the long term trend line resume its course from March 09 lows.  Today we could see resistance at 4850 and support at 4802.  The last week may have a necessary breather the market had to take before its next move; watch for breaks above 4850 on significant volume.

Company news

BHP appears to be winning the war on how the steel industry buys its raw materials following news that Brazilian miner Vale has backed the miner on shorter term contracts. Last week, BHP agreed to a coking-coal supply agreement with Japan’s JFE Holdings – the first deal that will run for three months. Most coking coal is supplied on annual contracts and based on a fixed price. BHP is seeking deals that cover shorter periods and plans the same for the larger iron ore market as prices of commodities climb on Chinese demand. Vale is said to have asked Japanese steel mills for more than a 90% increase if they wanted to lock in yearly contracts. Looking at net profit, for 2009 BHP Billiton posted a $7.2 billion result.

Leighton Holdings Ltd (LEI) has won a $463 million contract to construct a section of a high speed rail link between Hong Kong and mainland China. Leighton Asia will construct a 7.6km twin-track tunnel and ventilation buildings for the express rail link, with the cooperation of private contracting group McMahon Holdings. As the Hong Kong section of the link will be underground for 26km, the project will involve drill and blast techniques. The contract was awarded by Hong Kong rail operator MTR Corporation, which is in control of the Hong Kong section of the express rail link.Work is due to begin later this month and is scheduled for completion in 2015. Leighton Holdings reported a profit of $440 million for the 2009 financial year.

LEI Dividend

Clients with sold March calls need to be aware the stock is ex-div on Monday for 65cents, and may be early exercised for the dividend.

 

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

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