While you were sleeping: US tech shares gain, dollar, yen weaken

Monday 22nd June 2009

The Nasdaq Composite rose on Friday, with Apple Inc. climbing amid reports of founder Steve Jobs’ health and the release of new iPhones, while Microsoft Corp. gained after Goldman Sachs raised its rating on the world’s biggest software company.

The Nasdaq climbed 1.1% to 1827.47 while the Standard & Poor’s 500 edged up 0.3% to 921.23. The Dow Jones Industrial Average slipped 0.2% to 8539.73.

Microsoft rose 2.4% to US$24.07 after Goldman Sachs added the stock to its "conviction buy" list, reflecting demand for new products. Apple rose 2.7% to US$139.48 as the company released its latest iPhone. Bloomberg reported that Jobs, slated to return to the helm next month, had a liver transplant two months ago during medical leave.

Exxon Mobil slipped 0.6% to US$71.05 as crude oil fell. Bank of America rose 2.5% to US$13.22 and JPMorgan Chase & Co. rose 2.4% to US$35, the biggest gainers on the Dow.

US drugmakers will spend as much as US$80 billion over the next 10 years to ease the medical burden of elderly Americans under a deal negotiated with US Senator Max Baucus, chairman of the Finance Committee, with the backing of the Obama administration.

Drugmakers including Eli Lilly and Pfizer will discount brand name drugs by as much as 50% under an agreement that will help reduce Medicare’s drug budget deficit.

President Barack Obama called the accord a “turning point in America’s journey toward health-care reform.” Still, groups including the US Chamber of Commerce are lining up to oppose health-care reforms including compulsory health insurance.

The US dollar weakened on Friday as investors warmed somewhat on the global outlook, strengthening their appetite for riskier assets, including global stocks and commodities.

The euro gained 0.3% to $1.394 and was little changed against the yen at 134.2. The dollar slipped 0.3% to 96.26 yen.

International Monetary Fund First Deputy Managing Director John Lipsky on Friday said the IMF may lift its 2010 economic growth forecasts.

Gold futures for August delivery rose 0.2% to US$936.20 an ounce on the New York Mercantile Exchange as the greenback weakened.

Copper fell amid concern rising inventories in China will sap imports to the world’s biggest consumer of the metal.

Copper futures for September deliveries dropped 0.9%to US$2.2615 a pound in New York.

Crude oil fell more than US$1 a barrel amid signs of rising US stockpiles of gasoline. Inventories rose by 3.39 million barrels to 205 million last week, the US Energy Department said last week.

Crude oil for July delivery fell 2.6% to US$69.55 a barrel on the New York Mercantile Exchange.

The US Senate confirmed Herb Allison, former head of Fannie Mae, as assistant Treasury secretary, with oversight of the government's $700 billion Troubled Asset Relief Program (TARP). He replaces Bush-administration appointee Neel Kashkari.

California, one of the world’s biggest economies in its own right, faces the risk of a credit rating downgrade by Moody’s Investors Service unless the state legislature quickly produces a budget with plans to curb its debt mountain.

Moody's said California, currently rated A2, faces a budget shortfall of more than 20% and has limited means to plug the gap.

"If the legislature does not take action quickly, the state's cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July," Moody's said in its statement. "Lack of action could result in a multi-notch downgrade.”

Texas billionaire Allen Stanford indicted on fraud and conspiracy charges related to a US$7 billion pyramid scheme, the US Justice Department said on Friday. Three associates of Stanford and Antigua's top regulator, Leroy King, were also indicted.

Stanford surrendered to FBI agents outside his girlfriend's house in Virginia late on Thursday, Reuters reported. He entered a Richmond federal courtroom in ankle shackles, according to the report.

European Union leaders on Friday agreed to more measures to prevent a repeat of the financial crisis.

The EU is backing the formation of a European system of financial supervisors, a move that follows the Obama administration’s proposals to strengthen consumer finance rules and give more power to the Federal Reserve to oversee the biggest financial institutions.

“It is imperative for the EU to continue to develop and implement the measures required to respond to the crisis," EU leaders said in a draft declaration obtained by Reuters.

European shares rose on Friday, with the Dow Jones Stoxx 600 Index climbing 1.3% to 208.28 amid so-called triple witching, where stock index futures, stock index options and single stock options expire at around the same time.

Cruise and vacation company Carnival Plc rose 6%, leading the FTSE 100’s 1.5% gain to 4345.93. Aviva rose 5.8% and ICAP Plc, the global interdealer broker, climbed 5.6%.

Germany’s DAX 30 edged up 0.04% to 4839.46. Porsche fell 0.3% after reporting a decline in pretax earnings from its sports cars in first nine months of its fiscal year. Volkswagen shed 3%.

France’s CAC 40 rose 0.9% to 3221.27.

Businesswire.co.nz

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