Wall Street sets the tempo
January 22nd, 2009 by Bryden Elssmann
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8228.1 | 279.01 | 3.5% |
| NASDAQ | 1507.07 | 66.21 | 4.6% |
| S P 500 | 840.24 | 35.02 | 4.3% |
| FTSE 100 | 4059.88 | -31.52 | -0.8% |
| Nikkei 225 | 7901.64 | -164.15 | -2.0% |
| SPI Futures | 3426 | -2 | -0.1% |
| All Ords | 3,395.00 | -30.2 | -0.9% |
| Oil | 42.56 | 3.99 | 10.3% |
| Gold | 850.1 | -5.1 | -0.6% |
| Silver | 11.325 | 0.15 | 1.3% |
| Aluminium | 1325.5 | -25.5 | -1.9% |
| Copper | 3211 | -64.5 | -2.0% |
| Lead | 1120.5 | -24.5 | -2.1% |
| Nickel | 11030 | 215 | 2.0% |
| Tin | 11350 | 520 | 4.8% |
| Zinc | 1171.5 | -26 | -2.2% |
Wall Street
Wall Street surged 3.5% after US financial stocks bounced back from the weeks lows.
The Dow Jones Industrial Average rose 279 points to 8228.1, the biggest one day gain since December 16. The Bank of America led the rally, up $US1.58 (31%) to close at $US6.68. The companies CEO, bought 200,000 shares in a bid to restore confidence in the ailing company. The NASDAQ also finished the session higher, up 66.21 points or 4.60% to close 1507 points.
The index was led by a rally in the technology giant IBM. The company posted a 4th quarter profit which exceeded market expectations; IMB rose $US9.44, or 12per cent, to close $US91.42. The company is weathering the financial storm far better than its competitors.
The Dow is continuing to bounce between the 8000 – 9000 level.
Australian Market
The Australian market closed lower yesterday with the S&P/ASX 200 finishing down 34 points and the broader All Ordinaries 30 points lower to close at 3394.8. The financial sector lead the market down with the major banks lower after renewed fear of further write-downs and extending losses in European and US financial stocks.
Banks
National Australia Bank (NAB) led the slide in financials closing 3.8% lower at $17.61, followed by WBC down 3.2% to close at $15.02, CBA closed $25.61 and ANZ finished at $13.17. After three days of heavy losses, we expect a bounce off the lows in the banking sector. Expect continued volatility in the banks as the market awaits CBA to report in early February.
OIL
Oil closed above $40, March delivery settled 6.6% higher at $US43.55 a barrel. Oil prices have risen more than 20% week to date. Traders now question if global demand is weak enough to justify the 5 year-low. Members of OPEC are continuing to cut production levels to offset rising inventories. Supply is continuing to outstrip demand with analysts believing it will be another 3-4 weeks before the market absorbs the impact of OPEC’s production cuts.
Stocks to keep an eye on include: Woodside Petroleum (WPL) down 4.49% last price $34.05, Santos Ltd (STO) closed 2.06% lower $13.08 and Oil Search (OSH) $4.22 down 3.43%.
Wesfarmers (WES)
Wesfarmers is to raise at least $2.9 billion in equity and has announced a new debt plan to combat its problematic balance sheet. The company will raise the capital in a three-for-seven rights issue at $13.50 a share. The raising is expected to drive the share price below $15, an 8 year low for the stock. The company is currently in a trading halt until Tuesday.
Base Metals
A sharp fall in base metal prices overnight combined with widespread job losses and a lowering of production levels is continuing to pressure BHP Billiton and Rio Tinto. BHP Billiton ended the day down -6.59% to close at $28.9 and Rio Tinto fell hardest closing 8.15% lower to end $37.30.
Quote of the day:
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Warren Buffett
Happy Trading!
Bryden Elssmann
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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