7 Aug 2008

US market rises

9:05 am on 7 August 2008

Stocks in the United States rose on Wednesday, building on big gains the previous day after a further drop in oil prices.

Oil briefly fell below $US118 a barrel after government data showed that crude oil supplies rose much more than expected last week. Crude finished the session at $US118.58 per barrel.

Cisco Systems, the maker of equipment that directs Web traffic, posted a stronger-than-expected quarterly profit and said it expects the weak economic environment to be relatively short lived. Its shares jumped almost 6%.

Earlier, a wider-than-expected loss was reported by Freddie Mac, which said it was doubling the money set aside for bad loans. Its shares fell 19.3% to $US6.49.

The Dow Jones industrial average rose 40.30 points, or 0.35%, to 11,656.07.

Standard & Poor's 500 Index gained 4.30 points, or 0.33%, to 1,289.18. The Nasdaq Composite Index rose 28.54 points, or 1.21%, to 2,378.37.

Trading was thin on the New York Stock Exchange, with about 1.19 billion shares changing hands. About 2.24 billion shares were traded on the Nasdaq.

European stocks higher

European stocks rose on Wednesday. The FTSEurofirst 300 index of top European shares closed 0.9% higher at 1192.99 points, following a 2.6% rally on Tuesday.

Commodities rallied after Xstrata launched a $US10 billion bid for Lonmin, the world's third-biggest platinum producer. Lonmin rejected the bid.

Banks were among the biggest risers. Investors are now awaiting rate decisions by both the Bank of England and the European Central Bank, due on Thursday.

Both are expected to hold rates steady at 5% and 4.25% respectively and the focus will be on a statement by ECB president Jean-Claude Trichet.

On Tuesday the US Federal Reserve left its key lending rate unchanged at 2%.

Around Europe: Germany's DAX was up 0.7% and France's CAC up 1.4%.

In Britain, the FTSE 100 gained 31.6 points, or 0.6% at 5,486.1. However, the index is still down by over 15% for the year to date.

NZ & Australian markets

The New Zealand share market surged upwards on Wednesday, with the NZX 50 index rising 57 points, or 1.7%, to 3352 on turnover of $114 million.

Telecom finished the day up 1 cent to $3.68. Contact Energy was up 17c to $8.53 and Fletcher Building was up 26c to $6.61.

Sky City Entertainment was up 9c to $3.58, and The Warehouse was up 5c to $3.45.

Richina Pacific was unchanged at 41c after half-year profit fell 43% to $2.7 million.

Millenium and Copthorne was unchanged at 54c after its half-year profit rose 3% to more than $13 million.

The dollar was buying 72.56 US cents, 79.14 Australian cents, 37.06 pence, 78.58 yen and 0.4681 euro. The Trade Weighted Index was 65.66.

The Australian share market made strong gains on Wednesday - in contrast with heavy losses on Tuesday when the bourse slumped to a two-and-a-half-year low.

The S&P/ASX200 index closed up 148.7 points, or 3.08%, to 4969.1, while the All Ordinaries climbed 136.1 points, or 2.79%, to 5018.1.

The September share price index futures contract was up 114 points to 4942 on a volume of 27,812 contracts.