North American Markets recover on technical rebound
Some last minute buying when markets reached 2003 level helped US markets close higher on Tuesday. Dow gained 151 points to close 8,425 while S&P 500 and NASDAQ also edged up a meagre 8 points and 1.2 points to close at 859 and 1,483 respectively. Weak gold and oil and gold prices restricted gains in Toronto however and TSX added just 40 points to settle at 8,835. TSX venture index fell sharply by 35.5 points or 4.5 percent to close at 750. The Canadian dollar fell against the US dollar by 0.44 cents to close at 81.31 cents.
Wall Street was also helped by Hewlett Packard (NYSE: HPQ) as the computer maker announced that its 4Q2008 and 2009 earnings will pass analyst estimates. Hewlett Packard soared a whopping 14.3 percent to close at $33.59. International Business Machines (NYSE: IBM) and Dell Computers (NASDAQ: DELL) also gained 3.36 percent and 0.76 percent on the back of that news.
From the economic front however bad news continued. Indicating potential deflation, the Labour Department reported that wholesale prices fell a record amount in October. According to the National Association of Home Builders/Wells Fargo housing market index (NAHB) builder confidence in the market for newly built single-family homes plunged in November. The index fell 5 points to 9, the lowest since the index was created in January 1985.
The executives of automakers together with the head of United Auto Workers union are in the Capitol Hill seeking a $25 billion bailout package. Henry Paulson however continued to express his opposition to the proposal. The adversity did not help auto stocks as both General Motors (NYSE: GM) and Ford Motor Co (NYSE: F) fell 2.8 percent and 2.3 percent respectively. The other big news on Wall Street was the resignation of Yahoo Inc (NASDAQ: YHOO) founder and Chief Executive Jerry Yang. Markets greeted the news with a wave of buying and Yahoo closed 8.7 percent higher at $11.55.
Energy
Oil continued to fall and light, sweet crude closed at a new 22-month low, shedding $0.56 to settle at $54.39 a barrel on the New York Mercantile Exchange. It was mixed results in Toronto however as EnCana Corp. (TSX: ECA) gained 2.12 percent to $52.59 while Suncor Energy Inc. (TSX: SU) fell marginally $0.03 or 0.13 percent to $23.25. Petro-Canada (TSX: PCA) gained $1.45 to close $25.40 while Canadian Natural Resources (TSX: CNQ) slipped $0.09 to $46.57. Oilexco (TSX: OIL) continued its free fall and closed another 18 percent lower at $2.49. We contacted one of the directors and were assured that there is no fundamental issue that concerns Oilexco.
In the US Exxon Mobil Corp. (NYSE: XOM) added $2.95 to close at $76.33 while Chevron Corp. (NYSE: CVX) gained $2.62 to reach $73.40. ConocoPhillips (NYSE: COP) and Marathon Oil (NYSE: MRO) added $3.13 and $0.47 to close at $49.89 and $25.30 respectively. BP plc (NYSE: BP) also gained $1.72 to close at $45.51.
Metals
Falling gold prices caused some weakness in gold stocks today. Goldcorp Inc. (TSX: G) fell $0.15 to $24.10 while Barrick Gold Corp. (TSX: ABX) shed $0.39 or 1.5 percent to reach $25.75. Kinross Gold (TSX: K) fell $0.11 to $14.78. In the US, Newmont Mining (NYSE: NEM) inched up $0.30 or 1.2 per cent to close at $23.65. AngloGold Ashanti (NYSE: AU) weakened 2.5 percent. Goldfields (NYSE: GFI) however gained 1.32 percent to close at $6.15.
Teck Cominco Ltd. (NYSE: TCK) gave away all its yesterday’s gains and closed 5.3 percent lower at $5.04. In addition to falling copper prices, its $9.5 billion loan continues to test investor nerves. Freeport McMoran (NYSE: FCX) also fell $1.46 or 6.3 percent to $21.68.
Technology
One major winner in Toronto was Research in Motion (TSX: RIM). RIM gained 12 percent to $58.00, on the back of analyst recommendations. Though not as sharp, similar gains were observed in the US with Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL) and Cisco Systems (NASDAQ: CSCO) gaining 2.2 percent, 2 percent and 1.5 percent respectively.
An interesting day awaits as banks and commodity stocks in Asia continue to trade lower at the time of writing.
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