Wall Street sinks along with consumer confidence

Posted: 01 July 2009 0558 hrs

Traders work on the floor of the New York Stock Exchange.

NEW YORK: Wall Street shares ended the second quarter in a slump on Tuesday after a surprise fall in consumer confidence dented hopes that spending will lead the country out of recession.

The Dow Jones Industrial Average shed 82.38 points (0.97 percent) to close at 8,447.00.

The tech-heavy Nasdaq dropped 9.02 points (0.49 percent) to 1,835.04 and the broad-market Standard & Poor's 500 retreated 7.91 points (0.85 percent) to finish at 919.32.

"The main culprit is an unexpected drop in consumer confidence, ending a two-month winning streak in that index," Charles Schwab & Co. analysts said in a client note.

The Conference Board, a business research group, said its consumer confidence index retreated to 49.3 points in June from a revised 54.8 in May.

Most analysts expected a much stronger reading of 55.3 points in the 100-point index.

Stocks turned sharply lower as investors digested the surprising decline in confidence which suggested recession-weary consumers were not ready to open their wallets to boost the spending that drives two-thirds of US economic activity.

"This latest setback in consumer sentiment does not auger well for any near-term revival in consumer spending," said Brian Bethune of IHS Global Insight.

Bethune warned that the government's massive economic stimulus efforts may "run the risk of engineering the biggest fiscal stimulus 'dud in post-World War II history."

"Despite the huge cash incentives being dangled in front of consumers to purchase homes - and prospectively to trade in gas-guzzling auto clunkers - households are not going for the bait," he said.

Still, the major indices ended the second quarter with robust gains. The blue-chip Dow jumped 11 percent in the past three months, the Nasdaq surged 20 percent and the S&P 500 advanced 15 percent.

Investors digested a raft of data in the holiday-shortened week, with the market closed on Friday for the July 4 Independence Day celebration.

The S&P/Case-Shiller index showed the decline in housing prices in the 20 top US cities slowed in April, to a drop of 18.1 percent, from a year ago.

Retail sales at chain stores rose in the past by the strongest gain since late January, the International Council of Shopping Centers reported.

Investors were focused on Thursday's unemployment report, which is widely expected to show the jobless rate climbed to 9.6 percent in June, up from 9.4 percent in May.

"The heavy burden of all of the people who have no jobs will bring down consumer spending and retail revenue, adding to this government's obligations as it struggles more and more with its growing debt load which will be compounded by falling tax revenue," said Douglas McIntyre of 24/7WallSt.com.

Among stocks in focus, United Technologies dropped 0.97 percent to 51.96 dollars and Caterpillar skidded 4.89 percent to 33.04 dollars.

ExxonMobil shed 0.95 percent to 69.91 dollars and Chevron slid 0.94 percent to 66.25 dollars as crude oil prices headed lower.

Walt Disney dipped 1.39 percent to 23.33 dollars after the entertainment giant and the Hong Kong government on Tuesday reached an agreement to expand the city's beleaguered Disneyland amusement park.

The bond market weakened. The yield on the 10-year US Treasury bond rose to 3.523 percent from 3.492 percent on Monday and that on the 30-year bond advanced to 4.311 percent from 4.307 percent. Bond yields and prices move in opposite directions. - AFP/de

From ChannelNewsAsia.com; see the source article here.

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Rising oil, commodity prices pull US stocks higher

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06/30/2009 | 07:33 AM

NEW YORK – A jump in oil prices sent investors rushing to put money into the stock market in the final days of the second quarter.

Energy, industrial and materials stocks pulled the market higher in light trading Monday as investors raced to keep up with the gains in oil.

Crude rose $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange after China said it would boost oil reserves and Nigerian militants partly shut down an offshore oil platform.

With the quarter's end coming up on Tuesday, some money managers were making last-minute adjustments to their portfolios just ahead of issuing quarterly reports to their clients. A benchmark against which many funds are compared, the Standard & Poor's 500 index, is up 16.2 percent since the start of the April-June quarter.

Analysts cautioned against seeing the upswing as a sign of conviction among investors that it was time to move into the market ahead of an economic recovery. Stocks seesawed in the early going but jumped after oil gained.

After running the S&P 500 index up 37 percent since March on a litany of "less bad" economic data, investors have become more cautious about the pace of the economy's recovery this month and are looking for more concrete signs of growth.

The Dow Jones industrial average rose 90.99, or 1.1 percent, to 8,529.38. The S&P 500 index rose 8.33, or 0.9 percent, to 927.23, while the Nasdaq composite index rose 5.84, or 0.3 percent, to 1,844.06. Stocks ended last week mixed.

There was little economic news Monday but the week, which is abbreviated by the Independence Day holiday on Friday, brings key data that could give investors a better sense of where the economy is headed.

Of particular importance is the monthly employment report due out Thursday. Though considered a lagging indicator of the country's economic health, the unemployment rate is still one of the most closely watched gauges of the economy. The labor market is intricately tied to many facets of the economy including consumer spending.

Investors also will get reports on consumer confidence and manufacturing this week.

The Dow is up 30.3 percent from a 12-year low on March 9, though it has fallen 3.1 percent from a five-month high on June 12. The blue chips are now down only 2.8 percent in 2009.

Harry Rady, chief executive of Rady Asset Management, is concerned that although the market's rally has lost steam in the past three weeks traders are still too optimistic about how quickly the economy can recover.

"I see a bit of complacency creeping into the market," he said. "The market has run up and that has the inverse effect of what it should."

Rady sees trouble in the continuing retreat of a gauge of fear in the stock market, and contends that investors are overlooking danger spots in the economy like heavy debt loads and weakness in the dollar.

The Chicago Board Options Exchange Volatility Index, or VIX, is a measure of stock market volatility that has been easing since early March. The VIX is down 37 percent in 2009 and stands below 26. The historical average is 18-20. It hit a record 89.5 in October at the height of the financial crisis.

Three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume came to a light 4 billion shares compared with 5.1 billion traded Friday. Volume was heavy Friday because of the annual reconstitution of the Russell 3000 index forced investors to make changes to their portfolios.

Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.48 percent from 3.53 percent late Friday.

The dollar was mixed against other major currencies. Gold prices fell.

The gains in commodities lifted energy, industrial and materials stocks. Exxon Mobil Corp. rose $1.53, or 2.2 percent, to $70.58, defense contractor General Dynamics Corp. rose $1.54, or 2.8 percent, to $57 and Eastman Chemical Co. rose $1.38, or 3.7 percent, to $38.79.

Shares of Ford Motor Co. rose 17 cents, or 3 percent, to $5.78 after the automaker's top sales analyst said US auto sales might have stopped their month-to-month slide in June and could be down less than 30 percent for the first time since September. Automakers, which are expected to report June sales in the US on Wednesday, have been hit by a 37 percent drop in sales in the first five months of the year.

In other trading, the Russell 2000 index of smaller companies fell 2.61, or 0.5 percent, to 510.61.

Overseas, Britain's FTSE 100 rose 1.3 percent, Germany's DAX index advanced 2.3 percent, and France's CAC-40 rose 2 percent. Japan's Nikkei stock average fell 1 percent. - AP

From GMANews.tv; see the source article here.

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Oil falls to near $69 as optimism on economy wanes

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06/22/2009 | 11:42 AM

SINGAPORE — Oil prices fell to near $69 a barrel Monday in Asia on investor concerns over a weak US economy.

Benchmark crude for July delivery fell 38 cents to $69.17 a barrel by late morning Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it dropped $1.82 to settle at $69.55

The July contract expires later Monday. The August contract slid 44 cents to $69.57.

Crude rose to an eight-month intraday high of $73.23 a barrel earlier this month on investor optimism that the US economy, suffering through its worst recession in decades, may grow by the end of the year.

However, recent economic data has been mixed and reflects an economy still struggling to right itself. The Dow Jones industrial average fell 3 percent last week.

"Oil may have peaked in the short-term," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "The market is overripe for a correction. Eventually the laws of supply and demand will re-exert themselves."

This week, traders will be looking for signals on consumer demand in a Commerce Department report on May personal spending, which has fallen for eight of the past 10 months. The University of Michigan also reports on June consumer sentiment.

On Sunday, militants of the Movement for the Emancipation of the Niger Delta said they attacked two pipelines belonging to oil giant Royal Dutch Shell in south Nigeria.

Violence has been escalating in the region as the military intensifies operations to flush out rebels battling for a larger share of the country's oil revenues.

"The recent attacks haven't had much of an impact on oil because there's a lot of global spare production capacity," Shum said. "Oil is everywhere."

In other Nymex trading, gasoline for July delivery was steady at $1.92 a gallon and heating oil fell 0.50 cent to $1.78. Natural gas for July delivery slid 4.4 cents to $3.99 per 1,000 cubic feet.

In London, Brent prices fell 29 cents to $68.90 a barrel on the ICE Futures exchange. – AP

From GMANews.tv; see the source article here.

Wall Street rises as bond market tensions ease

Posted: 29 May 2009 0531 hrs

A trader watches the numbers as he works on the floor of the New York Stock Exchange.

NEW YORK - Wall Street stocks rose strongly Thursday, lifted by a late rally as tensions eased on the bond market following news of robust demand for Treasury bonds.

The Dow Jones Industrial Average of 30 blue-chip stocks rallied 103.78 points (1.25 percent) to finish at 8,403.80.

The tech-heavy Nasdaq gained 20.71 points (1.20 percent) to 1,751.79 and the broad-market Standard & Poor's 500 index advanced 13.77 points (1.54 percent) to 906.83.

The major indices had churned in a narrow range as investors digested a mixed batch of US economic data and details of a bankruptcy plan for General Motors.

"The equities market reversed course at midday, fueled by climbing commodities prices and stronger-than-expected results from the latest Treasury bond auction," said Andrea Kramer at Schaeffer's Investment Research.

"By the closing bell, all the stars seemingly aligned for the Dow, which ended the session with a triple-digit gain," she added.

Bonds rebounded from Wednesday's sell-off. The yield on the 10-year US Treasury bond fell to 3.672 percent from 3.695 percent on Wednesday and that on the 30-year bond eased to 4.530 percent from 4.606 percent. Bond yields and prices move in opposite directions.

Charles Schwab & Co. analysts also noted traders' relief that a Treasury auction of seven-year bonds trimmed yields that had hit months-long highs Wednesday on worries about the swelling US government debt that also drove stocks into a rout.

"A good auction in the bond market pressured yields, which have moved to uneasily high levels, providing some relative relief to fears that increasing yields may hamper a recovery in the equity markets, and stocks finished solidly higher," they wrote in a client note.

Energy shares led gains after the US government reported a surprisingly large decline in US crude oil inventories, sparking hopes of a recovery in demand that sent oil prices sharply higher.

"Big oil has been good for the US economy. Big oil does well when the economy is doing well and the increase that we have seen in oil prices is a sign that the economy is recovering," said Phil Flynn of Alaron Trading.

Oil majors lifted after crude oil prices topped 65 dollars a barrel for the first time in more than six months.

ExxonMobil, the Dow's biggest component, gained 1.36 percent to 69.23 dollars and Chevron leapt 1.92 percent to 65.81 dollars.

Among other stocks in focus, reeling General Motors slid 2.61 percent to 1.12 dollars. The largest US automaker was finalizing a pre-packaged bankruptcy that would leave the US government with up to 72.5 percent of the new firm.

Procter & Gamble dropped 1.56 percent to 52.59 dollars after the consumer products manufacturer and Dow component issued disappointing guidance.

Caterpillar, another Dow component, slid 1.31 percent to 34.59 dollars after a downgrade by UBS analysts.

Time Warner added 2.39 percent to 23.55 dollars. The media group announced it would spin off its AOL Internet unit by year-end.

Telcom giant AT&T advanced 2.33 percent to 24.63 dollars after chief executive Randall Stephenson said the company intended to keep its fixed-line business, unlike rival Verizon, whose shares dropped 1.11 percent to 29.27 dollars. - AFP /ls

From ChannelNewsAsia.com; see the source article here.

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Surge in US consumer confidence lifts stocks

Posted: 27 May 2009 0544 hrs

Traders work on the floor of the New York Stock Exchange (NYSE)

NEW YORK - Wall Street powered higher Tuesday as a surprisingly strong reading on US consumer confidence buoyed hopes of economic recovery, offsetting jitters over North Korea's nuclear and missile tests.

The blue-chip Dow Jones Industrial Average climbed 196.17 points (2.37 percent) to end at 8,473.49 while the tech-rich Nasdaq rose 58.42 points (3.45 percent) to 1,750.43, its best percentage advance since early April.

The broad-market Standard & Poor's 500 index advanced 23.33 points (2.63 percent) to 910.33, clawing its way back above the psychologically significant 900 level for the first time since May 20.

As traders returned to business following the Memorial Day holiday Monday, stocks came under early pressure amid geopolitical concerns stemming from North Korea's second illegal nuclear test on Monday.

But markets shook off the news after the release of a Conference Board survey showing an unexpected surge in US consumer confidence, a key to ramping up spending and lifting the economy out of its prolonged recession.

The business research group's consumer confidence index spiked to 54.9 in May from 40.8 in April, the highest since last September.

"An unexpectedly large jump in consumer confidence is pushing markets higher, negating early weakness from geopolitical concerns regarding North Korea's nuclear program," analysts at Charles Schwab & Co wrote.

The consumer confidence data "gave participants some anecdotal evidence that economic conditions may be improving, which brought about broad-based gains for the major indices," said analysts at Briefing.com.

Retail stocks responded to the increase in the consumer confidence by advancing "though higher consumer confidence has yet to translate into higher consumer spending," the analysts cautioned.

"The (consumer confidence) report had a positive effect on retailers and technology companies," said Wachovia Securities senior equity market strategist Scott Marcouiller.

Large-cap tech stocks like Apple, which was upgraded by analysts at Morgan Stanley, helped give the Nasdaq a major lift.

Apple closed 6.76 percent higher to 130.78 dollars.

General Motors, widely expected to file for bankruptcy protection ahead of a June 1 deadline imposed by the Obama administration, rose 0.7 percent to 1.44 dollars after recovering from a loss of more than 10 percent.

Reports had said the government will provide more massive financial aid to the country's number one carmaker, which reached a deal with the UAW union on cost-saving concessions that still must be ratified by rank-and-file workers.

The largest increase in the Dow Jones index came from JPMorgan Chase, rising 6.19 percent to 36.54 dollars.

Bonds, which plunged last week amid US credit rating worries, ended lower after an opening bounce.

The yield on the 10-year US Treasury bond rose to 3.493 percent from 3.448 percent on Friday and that on the 30-year bond climbed to 4.446 percent from 4.392 percent.

Bond yields and prices move in opposite directions.

- AFP /ls

From ChannelNewsAsia.com; see the source article here.

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