Daily Comments
US: retailers and housing data drive the market higher
03.09.2010 9:11:00 Zareena Sayeedova, Senior Analyst, Global Markets (Finam)
On Thursday, September 2, the US stock market locked in gains due to a favorable confluence of macroeconomic circumstances. For the record, the number of initial jobless claims went down in the past week to 472,000 and almost coincided with the median estimate. At the same time, a 5.2% m-o-m rise in pending home sales in July flew in the face of the projected 1% drop. Thus, market participants were apparently relieved to see these new data after recent dismal figures on existing and new home sales. In addition, research firm Retail Metrics released its same-store sales survey for August which also overshot expectations.
However, the buying mood remained subdued on Thursday as investors had already built up substantial equity positions the day before when indexes surged almost 3%.
The external environment for the US trading session proved to be relatively conducive to buying, with Asia trading ending on a positive note and European bourses also posting modest gains. By the final bell, the blue-chip gauge Dow Jones Industrial Average Index gained 50.63 points, or 0.49%, and settled at 10,320.10, the broader US market benchmark Standard & Poor's 500 advanced 9.81 points, or 0.91%, to 1,090.10 and the technology-focused measure Nasdaq Composite Index moved up 23.17 points, or 1.06%, to reach 2,200.01.
On the commodity front, light, sweet crude oil futures for October delivery rose 1.5% in NYMEX trading to USD 75.02/bbl, while COMEX gold futures appreciated 0.4% to USD 1,253.40/oz. The US dollar weakened against both the euro and the Japanese yen, but managed to firm against the British pound.
Only six stocks declined in the blue-chip stock index, with even these losses being miniscule (Thursday’s decliners include American Express, IBM, Kraft Foods, Merck, Travelers and Verizon). Conversely, Alcoa, Boeing, HP, Home Depot, JPMorgan, Wal-Mart and some others locked in gains above 1%.
Retail research firm Retail Metrics released its index highlighting same-store sales in August. The metric rose 3.5% while a 2.8% increase had been anticipated. In addition, some retailers announced their August sales data, which surpassed expectations and gave a boost to their market capitalization. Thus, Nordstrom grew 8.1%, J.C. Penney chalked up a 3.2% gain while Limited Brands surged 6.1%. At the same time, though, Abercrombie & Fitch plunged 3.9% after analysts at RBC Capital Markets gave a negative assessment to its sales figures.
Fast food restaurant chain Burger King soared 25% on news 3G Capital is considering taking it over for USD 4 bn, or USD 24 per share, which is almost half above the previous close price.
Mariner Energy, an oil and gas exploration and production company, sank 2.6% as news hit the wires its oil rig located in the Gulf of Mexico caught fire early in the morning.
At the same time, Anadarko Petroleum leapt 3% on rumors the world’s biggest mining giant BHP Billiton might be interested in acquiring the US oil and gas exploration and production company.
