Tags: S&P 500 Futures Jump on Bin Laden’s Death

S&P 500 Futures Jump on bin Laden’s Death

Monday, 02 May 2011 08:09 AM

Stocks and U.S. equity-index futures gained, the Dollar Index snapped a nine-day slump and oil dropped the most in two weeks after President Barack Obama said Osama bin Laden is dead. Silver sank after CME Group Inc. raised the amount of cash traders need for speculative positions.

Standard & Poor’s 500 Index futures advanced 0.5 percent at 7:16 a.m. in New York. The Stoxx Europe 600 Index rose 0.2 percent, an eighth day of gains. The Dollar Index added 0.1 percent after falling 3.4 percent during its losing streak, South Korea’s won rose against its 16 most-traded peers, and the Swiss franc weakened. Oil lost 1.5 percent in New York. Silver futures plunged as much as 13 percent. The yield on the two-year German note climbed four basis points.

Bin Laden, who helped found al-Qaeda, was killed in a U.S. operation, Obama said in a televised address. Economic reports showed European manufacturing growth accelerated more than estimated in April and South Korean exports climbed to a record, while a U.S. manufacturing index is forecast to signal expansion. Warren Buffett said Berkshire Hathaway Inc. would be “delighted” to invest in Japan and elsewhere in Asia.

“This is a positive development in the campaign against terrorism,” said Jonathan Ravelas, chief market strategist at Manila-based Banco de Oro Unibank Inc. in Manila. “In the last 10 years, bin Laden’s presence has been a serious threat to global stability. The flipside is this could be followed by retaliation activities from his supporters.”

Pakistan Firefight

Futures indicate the S&P 500 may advance when markets open today, following a fourth day of gains on April 29 after companies such as Caterpillar Inc. and Goodyear Tire & Rubber Co. reported earnings that topped analysts’ estimates. Chesapeake Energy Corp., Anadarko Petroleum Corp. and Loews Corp. are among 13 companies in the S&P 500 scheduled to release quarterly earnings today.

Shares of Cephalon Inc. were halted after Teva Pharmaceutical Industries Ltd. announced plans to buy the drugmaker for $6.8 billion.

Bin Laden was killed by U.S. operatives after a firefight at a compound in Pakistan, Obama said. The news comes almost 10 years after the Sept. 11 attacks on the World Trade Center in New York and the Pentagon in Virginia just outside of Washington. The KSE 100 Index, Pakistan’s benchmark stock gauge, slipped 0.2 percent after rising 0.6 percent earlier.

European, Asian Stocks

The gain in the Stoxx Europe 600 pushed it to a two-month high. The eight-day advance is the measure’s longest winning streak in 10 months. Grifols SA surged 7.7 percent as the Spanish maker of blood-plasma products won tentative U.S. antitrust approval to buy Talecris Biotherapeutics Holdings Corp. for $4 billion. Danisco A/S rose 4.3 percent after DuPont Co. raised its bid for the Danish maker of ingredients and enzymes.

U.K. equity markets were closed for a holiday today, along with those in China, Hong Kong and Singapore. The MSCI Asia Pacific Index added 0.7 percent, bound for its highest close since Jan. 19, while the Nikkei 225 Stock Average gained 1.6 percent, closing above 10,000 for the first time since March 11, the day Japan was struck by its largest earthquake and subsequent tsunami.

The MSCI Emerging Markets Index climbed 0.3 percent, poised for the highest close since June 2008. The Kospi index jumped 1.7 percent to a record, the most among equity markets worldwide. Persian Gulf shares rose, with Dubai’s benchmark index gaining for the first time in three days.

Dollar Rebound

The Dollar Index, which tracks the currency against those of six trading partners, rose as much as 0.5 percent, while the won rose 0.3 percent against its U.S. counterpart to near the highest level since August 2008. The franc weakened against 10 of its 16 most-traded counterparts, depreciating 0.4 percent versus the euro and 0.1 percent against the dollar.

The Australian dollar fell 0.2 percent versus the greenback after appreciating to $1.10 for the first time since the currency began trading freely in 1983. The euro rose 0.5 percent versus the yen, snapping a two-day loss, and 0.3 percent versus the dollar.

A gauge of manufacturing in the 17-nation euro area climbed to 58 from 57.5 in March, London-based Markit Economics said in a report, fueled by higher German and French output. The reading was above an initial estimate on April 19. South Korea’s exports rose almost 27 percent from a year earlier to a record $49.77 billion, the government said yesterday, increasing pressure on the central bank to boost borrowing costs next week.

Economic Reports

U.S. manufacturing probably cooled in April to a pace consistent with steady growth in the industry that’s leading the expansion. The Institute for Supply Management’s manufacturing index fell to 59.5 last month from 61.2 in March, according to a Bloomberg News survey. Figures greater than 50 signal expansion. In February, the gauge reached 61.4, the highest since May 2004.

The yield on the 10-year German bund rose three basis points, while the U.S. 10-year Treasury yield advanced less than one basis point to 3.30 percent.

Silver for July delivery dropped as much as 13 percent to $42.20 an ounce before paring losses to trade down 6.1 percent at $45.620 after the CME increased the so-called initial margin by 13 percent to $14,513 per contract from $12,825 after the close of business on Friday. Margins were $4,250 a year ago.

Oil for June delivery fell as much as 2.7 percent to $110.82 a barrel before trading at $112.17 in electronic trading on the New York Mercantile Exchange. Futures retreated from the highest settlement since September 2008 and are poised for the biggest loss since April 18.

Copper for July delivery fell 1 percent to $4.1355 a pound on the Comex in New York, extending a 1.9 percent drop on April 29. There is no trading of industrial metals on the London Metal Exchange, which is closed for a holiday.

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Stocks and U.S. equity-index futures gained, the Dollar Index snapped a nine-day slump and oil dropped the most in two weeks after President Barack Obama said Osama bin Laden is dead. Silver sank after CME Group Inc. raised the amount of cash traders need for speculative...
S&P 500 Futures Jump on Bin Laden’s Death
Monday, 02 May 2011 08:09 AM
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