While you were sleeping: Oil gains, Wall St edges up

Monday 4th May 2009

Crude oil rose to a five-week high on Friday in New York after figures showing better-than-expected US consumer confidence and manufacturing fanned optimism the recession may be abating in the world’s biggest economy.

Crude oil for June delivery rose US$2.08 to US$53.20 a barrel on the New York Mercantile Exchange, the highest since March 26.

The Reuters/University of Michigan index of consumer sentiment rose to 65.1 last month, from 57.3 in March, and has recovered from a 30-year low 55.3 last November.

The Institute for Supply Management’s factory index gained to 40.1 in April, from 36.3 in March. Anything below 50 signals contraction.

Copper advanced after figures showed manufacturing in China grew for a second month, stoking expectations demand will rise in the nation that is the world’s biggest consumer of the metal. Copper futures for July delivery rose 2.6% to US$2.101 a pound on the New York Mercantile Exchange.

China’s Purchasing Manager’s Index rose to a 53.5 in April, seasonally adjusted, according to the Federation of Logistics and Purchasing. A reading above 50 means demand is growing.

Gold extended its slide as more optimism in stocks markets sapped demand for the precious metal as an alternative investment. Gold futures for June delivery edged down 0.3% to US$888.20 an ounce in New York.

Stocks rose on Wall Street on Friday, having chalked up the biggest monthly gain in nine years, as more companies beat earnings forecasts. About 70% of firms on the Standard & Poor’s 500 Index beat first-quarter estimates.

The S&P gained 0.5% to 877.52 and the Dow Jones Industrial Average climbed 0.5% to 8212.41. The Nasdaq Composite rose 0.1% to 1719.20. Aluminium producer Alcoa led gains on the Dow, rising 6.8% to US$9.69 on Friday.

Caterpillar climbed 4.7% to US$37.26 and Boeing Co. gained 2.9% to US$41.21. Exxon Mobil, the world’s biggest company by market value, rose 2% to US$68.01, tracking gains in the price of oil.

Citigroup fell 2.6% to US$8.70 amid reports the Treasury’s stress tests show it needs to raise a further US$10 billion in capital. General Motors was the biggest decliner on the Dow on Friday, slipping 5.7% to US$1.81.

Chrysler LLC will seek court approval to sell most of its assets in three weeks, Bloomberg reported, citing a person familiar with the matter.

The US dollar and the yen weakened against the euro, helped by more upbeat comments from the US Federal Reserve about the outlook for economic growth. The Fed said the US economy’s slump has become “somewhat slower.”

The yen fell to 131.74 per euro from 132.35 yesterday while the dollar slipped to $1.3257 per euro, from $1.3230. The yen fell to 99.29 per dollar from 99.58.

In Europe, the Dow Jones Stoxx 600 climbed 1.5% to 200.23. German chemical company Wacker Chemie AG jumped 19% on better-than-expected first-quarter earnings. Bank of Ireland surged 18% and Rentokil Initial climbed 17%.

Germany’s DAX Index gained 1.4% to 4769.45, France’s CAC 40 rose 1.4% to 3159.85.

The UK’s FTSE 100 slipped 0.01% to 4243.22, paced by a 3.4% decline in Legal & General and a 3.3% slide in Intercontinental Hotels.

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