Tuesday, 9 December 2008

Stocks, commodities surge

The stock market rally from the October low proved short-lived. The rally from the November low is proving stronger, especially after Monday's gains. From Bloomberg:

Stocks rose around the world, sending the Dow Jones Industrial Average to a one-month high, as President-elect Barack Obama pledged to boost the economy with the biggest public-works spending package since the 1950s.

The Standard & Poor’s 500 Index extended its gain from an 11-year low last month to 21 percent. U.S. Steel Corp. and Alcoa Inc. climbed at least 17 percent, while Chevron Corp. added 4.9 percent, as Obama’s plan to improve infrastructure triggered gains in commodities. General Motors Corp. jumped 21 percent as lawmakers agreed in principle with the White House to provide funds to shore up the car industry...

The S&P 500 surged 3.8 percent to 909.7, with all 10 industry groups advancing. The Dow added 298.76 points, or 3.5 percent, to 8,934.18 and earlier rose above 9,000 for the first time in a month. The Nasdaq Composite Index increased 4.1 percent to 1,571.74. Five stocks gained for each that fell on the New York Stock Exchange...

Benchmark indexes in Germany and France added 7.6 percent and 8.7 percent respectively, while Tokyo’s Nikkei 225 climbed 5.2 percent.

Commodities joined in the rally on Monday. Bloomberg reports:

Oil, copper and corn rose for the first time in seven days after President-elect Barack Obama pledged the biggest U.S. public works program in half a century to revive the economy...

Crude oil for January delivery rose $2.90, or 7.1 percent, to settle at $43.71 a barrel on the New York Mercantile Exchange...

Copper futures for March delivery rose 12.45 cents, or 9.1 percent, to settle at $1.498 a pound on the Comex division of Nymex, the biggest one-day increase since Oct. 29. Corn futures for March delivery rose 20.75 cents, or 6.7 percent, to settle at $3.30 a bushel on the Chicago Board of Trade.

The Reuters/Jefferies CRB Index of 19 raw materials climbed 5.2 percent to 219.36. The gauge lost 54 percent since reaching a record in July as the credit crunch choked worldwide growth.

And with risky assets up, the US dollar and yen were predictably down, falling 1.9 percent and 1.8 percent respectively against the euro.

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