While you were sleeping: Stocks, commodities rally; US retail sales climb

Tuesday 17th November 2009

Stocks rose on Wall Street, extending a global rally, and commodities advanced as figures showed stronger-than-expected U.S. retail sales and after APEC nations pledged to maintain stimulus measures.

The Dow Jones Industrial Average gained 1.3% to 10406.89 and the Standard & Poor’s 500 rose 1.6% to 1110.1.6. The Nasdaq Composite climbed 1.5% to 2200.00.

Sears Holdings Corp., the parent of Kmart and Sears, Roebuck, climbed 4.7% to US$78.03, pacing gains in retailers after the U.S. Commerce Department reported a 1.4% gain in retail sales last month, a turnaround from September’s 2.3% decline.

Retail sales exceeded the 1% forecast in a Reuters survey, driven by a surge in autos. Excluding autos, sales rose 0.2%. Consumer spending makes up about 70% of the world’s biggest economy.

Barrick Gold, the world’s biggest gold miner, rose 3.3% to US$44.32 after the price of the precious metal climbed to a record US$1,137 an ounce, amid bets the U.S. dollar will extend its slide. Newmont Mining Corp. rose 3.7% to US$52.85 after announcing the completion of the sale of assets in Indonesia.

Motors Liquidation Co., the company created to sell assets of General Motors during its bankruptcy reorganisation, surged 14% to US$0.64 after GM said it generated US$3.3 billion in cash in the third quarter and will start repaying government loans.

In Europe, the Dow Jones Stoxx 600 gained 1.4% to 251.34, helped by the 21-member Asia-Pacific Economic Cooperation group’s pledge to maintain stimulus measures until the economic recovery is certain.

Among national benchmarks, the U.K.’s FTSE 100 rose 1.6% to 5382.67, Germany’s DAX 30 gained 2.1% to 5804.82 and France’s CAC 40 rose 1.5% 3863.16.

BHP Billiton, the world’s largest mining company, surged 6.7% and Rio Tinto, the third-biggest, jumped 7.4% as the prices of raw materials rose.

The Reuters/Jefferies CRB Index of 19 raw materials climbed 2.8% to 276.55, helped by figures showing stronger Chinese industrial output, a pick-up in machinery orders in Japan, where gross domestic product rose at an annual pace of 4.8%.

British Airways Plc jumped 9.2% and Iberia Lineas Aereas de Espana rose 7.5% after the two airlines agreed to a US$7 billion merger that will give the U.K. carrier 55% of the combined company.

Credit Agricole rose 7.3% after posting third-quarter earnings that beat estimates and HSBC Holdings climbed 8.5% after Europe’s biggest lender said third-quarter earnings rose “significantly.”

Volkswagen AG ordinary shares dropped 12% and its preferred stock fell 14% after Credit Suisse and Goldman Sachs Group sold 25 million of the preferreds that were controlled by Qatar Holding.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.7% to 74.79.

The U.S. dollar weakened to US$1.4989 in New York from US$1.4903 at the end of last week and slipped to 88.92 yen from 89.34. The euro traded at 133.33 from 133.63.

The greenback rallied briefly after Federal Reserve Chairman Ben Bernanke said the Fed is “attentive” to changes in the value of its currency and will “help ensure that the dollar is strong.”

Bernanke’s comments were unusual in that the Fed typically defers to the Treasury in commenting on the greenback.

Crude oil had its biggest advance in a month as the dollar weakened and stocks rallied, amid confidence a recovery in the global economy will stoke demand for fuel.

Crude oil for December delivery jumped 3.2% to US$78.81 a barrel on the New York Mercantile Exchange.

Gold climbed to a record as investors sought out the precious metal as an alternative investment to the U.S. dollar.

Gold futures for December delivery rose 1.2% to US$1,130 an ounce in New York.

Copper reached its highest level in more than 13 months on the London Metal Exchange. Copper for three-month delivery reached US$6,855 a tonne, the highest since September last year.

Businesswire.co.nz

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