Market News - 21 Aug 2009

US Market Recap

The Street once again looked East this morning, as stocks shot higher in parity with China's Shanghai Composite index. Adding fuel to the bulls' fire was news that manufacturing activity in the U.S. mid-Atlantic region rebounded in August, with the Philadelphia Fed index touching its highest level since November 2007, ending 10 consecutive months of contraction. In similar fashion, the Conference Board's index of leading indicators inched higher for the fourth straight month in July. The upbeat figures overshadowed news that initial jobless claims unexpectedly rose to a three-week peak in the latest week, and that mortgage delinquencies touched a new record high in the second quarter. Against this backdrop, stocks marched into the black until the closing bell, with the S&P 500 Index (SPX) scoring a psychological victory.

The Dow Jones Industrial Average (DJIA – 9,350.05) ticked higher right out of the gate this morning, advancing 70.9 points, or 0.8%, by the close. Only seven of the Dow's 30 blue chips bucked the trend, with Kraft (KFT) and Pfizer (PFE) leading the laggards. Blazing the path into the black were Cisco Systems (CSCO) and American Express (AXP). After three consecutive days of gains, the Dow successfully reclaimed support from its 10-day moving average.

The S&P 500 Index (SPX – 1,007.37) clawed its way back atop the 1,000 level for the first time in four sessions today, adding 10.9 points, or 1.1%. In parity with its blue-chip brother, the SPX also powered past its 10-day trendline. Not to be outdone, the Nasdaq Composite (COMP – 1,989.22) gained 20 points, or 1%, by the close, but again failed to muscle past the psychologically significant 2,000 level.

 

Crude Oil Futures

It was a volatile day for crude futures, as commodities traders placed eleventh-hour bets ahead of the front-month contract's approaching expiration. Oil initially extended yesterday's journey higher, tapping a seven-week peak thanks to a rebound in the Chinese equities markets. However, black gold eventually pared most of those gains on the heels of a mixed bag of economic reports, which toyed with investors' hopes for an economic recovery. By the close, crude for September delivery settled on a modest gain of 12 cents, or 0.2%, to end at $72.54 per barrel.

 

Gold Futures

Gold futures also flirted with breakeven today, but eventually finished lower thanks to a strengthening dollar. The greenback gained ground against most of its foreign rivals, bolstered by economic uncertainty following the unexpected rise in initial jobless claims. In addition, the malleable metal was pressured lower by the latest demand-related data from India - the world's largest bullion consumer in 2008. According to Reuters, a dealer at a private bank in India said clients were looking to buy gold at $930 an ounce. Against this backdrop, December-dated gold surrendered $3.10, or 0.3%, to finish at $941.70 an ounce.

 

Singapore Market Recap

Singapore shares close 1.46% higher

Singapore shares closed 1.46 per cent higher Thursday, cheered by gains in Chinese stocks, dealers said.

The blue-chip Straits Timex Index (STI) climbed 36.79 points to 2,559.57 as it rebounded from the previous day's loss.

Volume totalled 2.35 billion shares worth S$1.61 billion. There were 357 gainers, 140 decliners and 791 issues were even.

"After such a big selloff (recently), there should be some base-building," a dealer with a local brokerage said.

"I see the STI coming down to about 2,400 eventually. If it can sustain above that level, the uptrend may resume, but if it goes below, people might start selling again."

Among the blue chips, Singapore Airlines gained 18 cents to S$12.90 and Singapore Telecom dipped one cent to S$3.13.

Property developer CapitaLand was up 10 cents to S$3.66, computer chip-maker Chartered Semiconductor added six cents to S$2.33 and container shipping company Neptune Orient Lines advanced one cent to S$1.62.

Bank stocks closed higher, with DBS up 10 cents to S$12.68, United Overseas Bank rising 24 cents to S$16.36 and Oversea-Chinese Banking Corp climbing 15 cents to S$7.83.

 

BUSINESS TIMES:

- With revisions to development charges (DC) due on Sept 1, some property pundits say that the Chief Valuer (CV) may have a challenge on her hands, given the shift in the direction of the residential property market.

- Singapore Petroleum Company - now a subsidiary of PetroChina - has suspended its hunt for two top honchos to head its oil and gas exploration and production (E&P) operations pending the completion of a mandatory general offer by the Chinese oil giant tomorrow, BT understands.

- Audit committees tend to seek auditors who are independent from management, able to meet deadlines, and who communicate openly on audit issues.

- ASL Marine Holdings posted yesterday a sharply reduced quarterly net profit due to an impairment loss on vessels.

- The difference between distributable income and distribution per unit (DPU) became sharply obvious to investors when Rickmers Maritime Trust (RMT) became the last of the three SGX-listed shipping trusts to release second-quarter results at the end of last week.

Hiring trends in the fast-moving consumer goods (FMCG) sector seem to suggest the industry is less affected by the recession than others. Experienced professionals with FMCG experience are still very much sought after, according to recruitment consultancy Robert Walters.

- Three senior lawyers here, including Rajah & Tann managing partner Senior Counsel Steven Chong, have been appointed judicial commissioners of the Supreme Court, the Prime Minister's Office announced yesterday.

- More than three quarters of the shops at the Marina Bay Sands (MBS) integrated resort have been let, the resort's management said yesterday.

 

THE STRAITS TIMES: 

- The chances of the region being shrouded in a bad haze this year have gone up a notch.

- Temasek holdings chief executive Ho Ching is 5th on Forbes magazine's new list of powerful women, beating First Lady Michelle Obama and Secretary of State Hillary Clinton, both of whom didn't break the top 30.

- Education Minister Ng Eng Hen on Wednesday responded in detail to Nominated MP Viswa Sadasivan's motion that the House stay mindful of tenets in Singapore's Pledge when it debates national policies.