Friday, April 10, 2009

Foreign Market To Gain Some Momentum - April 10, 2009

Wednesday, the US stock ended higher backed by a late session rally in the market. The stocks started the session on a higher note helped by news that the Treasury is planning to extend bailout funds to insurers. Further some merger news in the housing sector also led the market to gain some momentum.

The Dow Jones Industrial Average (DJIA) advanced by 47.55 points to close at 7,837.11. The NASDAQ Composite (RIXF) index increased by 29.05 points to close at 1,590.66 and the S&P 500 (SPX) grew by 9.61 points to close at 825.16.

On the earnings front, Dow component Alcoa unofficially kicked off earnings season Tuesday evening with a deeper-than-expected loss. Alcoa reported a first-quarter loss of 59 cents per share, wider than the loss of 56 cents per share analysts were expecting. Revenue fell to $4.1 billion from $7.375 billion a year ago, versus forecasts for a bigger drop to $4.08 billion.

Among the M&A news, Pulte Homes announced that it will acquire Centex for $10.50 per share, which marks a premium of almost 38% for shares of Centex from their closing price Tuesday.

The selling pressure emerged in the mid session after the release of the minutes from the Federal Reserve policy meeting last month, when central bank policymakers opted to keep interest rates at levels near zero. The central bank forecast a delay in the economic recovery until 2010, instead of the second half of this year. The bankers also thought the unemployment rate would rise more steeply into 2010.

Separately, The Federal Reserve announced that its second TALF auction received $1.7 billion in requests, which is down markedly from the $4.7 billion that was requested in March.

Further the markets cut some gains following reports that regulators are recommending restrictions on all short-selling, not just on financial shares.

US light crude oil futures for May delivery closed marginally up by 0.6% to settle at $49.45 a barrel on the New York Mercantile Exchange. The crude oil contracts spiked $3.00 per barrel following the DOE Inventory report which was roughly in-line with expectations.

Gold futures for the month of June delivery finished the session at $885.90 per ounce, marginally up by $2.6. The gold futures traded between $879.20 and $891.70 per ounce during the pit session.

No comments: