23 Jul 2008

US market rallies

8:53 am on 23 July 2008

Stocks in the United States rose by more than 1% on Tuesday as oil prices slid by more than $US3 a barrel.

Oil prices fell to a six-week low as the US dollar rose. Consumer stocks like Coca-Cola and Wal-Mart and airlines gained.

However, several big companies reported results that reflected how consumers are struggling. Shares in American Express, a credit card company, fell 7.1%.

Shares of Apple fell 2.6% to $US162.02 on the Nasdaq after the maker of the iPod and the iPhone said late on Monday that current quarter earnings will be well below Wall Street's targets.

The Dow Jones industrial average rose 135.16 points, or 1.18%, to 11,602.50. Standard & Poor's 500 Index ended up 17.00 points, or 1.35%, at 1,277.00. The Nasdaq Composite Index was up 24.43 points, or 1.07%, at 2,303.96.

Trading was moderate on the New York Stock Exchange, with about 1.57 billion shares changing hands. About 2.56 billion shares were traded on the Nasdaq.

European shares lower

Weaker oil prices have cushioned a fall in European shares.

European indexes were also hit on Tuesday by weak forecasts from Apple and Texas Instruments.

Shares in Vodafone fell by around 14% after the company lowered its outlook for full-year revenue.

The FTSEurofirst 300 index ended down 0.4% at 1,165.04 points. The index previously gained about 5% in the previous four sessions.

But the fall was cushioned as the oil price fell by about $US5 a barrel as a tropical storm moving over the Gulf of Mexico was expected to miss major oil and gas installations.

US crude fell $US4.90 to $US126.14 a barrel by 1610 GMT.

In Frankfurt, the DAX index ended at 6,442.79 points, up 17.95 or 0.28%. In Paris, the CAC-40 index closed at 4,327.26 points, up 0.12. In Zurich, the Swiss market index closed at 6,922.25 points, up 64.03 or 0.93%.

In Britain, the FTSE 100 ended down 40.2 points, or 0.7% at 5,364.1. The index has fallen nearly 17% this year to date.

Banking shares fell again after US bank Wachovia Corp posted a loss of $US8.86 billion for the second-quarter and slashed its dividend for a second time this year due an increase in reserves for bad loans.

NZ & Australia flat

Trading activity was flat on the New Zealand share market, with the NZX 50 index closing down 4.4 points to 3144 on a turnover of $75 million.

Telecom ended the day down 5c to $3.40. Fletcher Building was unchanged at $6.51. Contact Energy was up 3c to $8.09, and Sky City Entertainment was up 1c to $3.02. Vector was also up 1c to $2.05. New Zealand Oil & Gas was up 2c to $1.56.

In the currency markets: at 8.25am on Wednesday, the New Zealand dollar was trading at US75.95 cents, 78.23 Australian cents, 38.13 pence, 81.44 yen and 0.4811 euro. The Trade Weighted Index was at 67.46.

The Australian share market was relatively flat. The S&P/ASX200 index fell 6.2 points to 5005.6, while the All Ordinaries added 0.5 points to 5075.9.