While you were sleeping: Up and away on earnings

Wednesday 21st April 2010

Strong earnings and a rebound in commodities prices helped pace equities higher in Europe and on Wall Street in overnight trading.

Investors seem determined to look at the positives.

While shares in Goldman Sachs fell today, they remain on the buy list of many analysts. Goldman overnight reported that its first-quarter profit was 91% higher than a year ago, bolstered by record fixed-income trading revenue.

In late trading, the Dow Jones Industrial Average was up 0.28%, the Standard & Poor’s 500 Index added 0.8% and the Nasdaq Composite advanced 0.75%.

Among the advancing stocks were Harley-Davidson Inc, Marshall & Ilsley, Monster Worldwide Inc and Interpublic Group of Cos.

The decliners included Goldman Sachs, IBM, Coca-Cola Co. Apple and Yahoo both are set to report results after the closing bell.

About 82% of S&P 500 companies that have reported first-quarter results beat the average analyst earnings estimate, according to data compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ fell 6.9% to 16.14.

In Europe, the Stoxx 600 Index surged 1.4% to 269.73.

Germany’s DAX jumped 1.65%, the CAC 40 in Paris gained 1.41% and the UK’s FTSE 100 rose 0.97%.

Among the most actives were Deutsche Bank AG, Daimler AG, Volvo AB, Associated British Foods and Trelleborg AB.

The Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.15% to 81.04.

Canada’s dollar surged after the country’s central bank signalled it would be the first Group of Seven nation to push interest rates higher, with strategists saying an increase was now expected in June.

It was the yen though which dominated forex markets overnight, falling against all of its major counterparts amid speculation the Bank of Japan would maintain its easing focus and might let inflation rise higher than its previous target.

The yen depreciated 0.5% to 125.27 per euro at 2:39 p.m. in New York, from 124.64 yesterday. The yen slid 0.9% to 93.22 per dollar, from 92.40, after earlier declining 1.1% to 93.39 in the biggest intraday loss since March 24.

The euro traded at US$1.3438, compared with US$1.3489.

The two-year US Treasury note’s yield rose 3 basis points, or 0.03 percentage point, to 1.02% in early afternoon trading in New York, according to BGCantor Market Data. The yield touched 0.93% a day earlier, the lowest level since March 18.

The Treasury will next week sell US$42 billion in two-year notes, US$41 billion in five-year securities, US$32 billion in debt maturing in seven years and US$10 billion in five-year Treasury Inflation Protected Securities, according to Jefferies & Co in New York. The forecasts were reported by Bloomberg.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, edged 0.93% higher to 275.78.

Most commodities rose as investors opted to focus on the earnings power being generated in the U.S. and bets that demand was poised to accelerate.

Copper for May delivery ended up 1.65 cents at US$3.5135 per lb on the New York Mercantile Exchange's COMEX division.

Spot gold was bid at US$1,139.15 an ounce at 1533 GMT, against US$1,134.60 late in New York on Monday. U.S. gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose US$4.0 to US$1,140.00 an ounce.

Palladium was at US$545.50 against US$535.00, having earlier hit US$550.50, its highest since March 2008. Platinum was at US$1,712.00 an ounce against US$1,693.50.

Trading on U.S. crude for June delivery was brisk, rising 1.17% to US$84.10 per barrel by 1.45pm (1545 GMT). Brent crude for June rose 72 cents to US$84.95.

U.S. crude for May delivery jumped about US$2 to US$83.40, after falling nearly 5% in last two sessions, in a spate of short-covering late in the contract's last day.

Businesswire.co.nz

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