Wall Street Advances After Big Drop in New Home Sales, Disappointing Earnings
A jittery Wall Street advanced Monday, reversing some of Friday's sharp losses as investors took a dismal new home sales report as a sign the Federal Reserve will lower rates this week.
The Dow Jones industrial average rose more than 176 points in a session that was relatively calm when compared to the turbulence of last week.
On the surface, the advance appeared surprising after the Commerce Department reported sales of new homes in December fell by 4.7 percent and that 2007 new home sales plunged by a record 26.4 percent compared to 2006. But while the report at first exacerbated the market's concern that the housing and mortgage crises are causing a recession, it also raised hopes that the Fed might cut rates again by a wide margin to stoke the weakening U.S. economy.
The mood suited well for Chinese stocks. The China ADR index (CAI) rose 4.46 points to 876.35. While NYSE listed Chinese equities rose, NASDAQ listed Chinese stocks ended the day down, the China NASDAQ Index (CQI) loosing -14.74 points.
Chinese stocks listed on American exchanges are down for the year 2008, tracking Wall Street sentiment relatively closely. CAI, CYI and CQI are market cap weighted indices and as such are tracking large cap companies very closely. China telecom sector got caught on fire in the afternoon on news of a possible industry revamp and its implications. China Unicom Ltd. (0762.HK: Quote, Profile , Research) (CHU: Quote, Profile, Research), China's smaller mobile carrier is expected to benefir from the industry reshuffle. China Unicom rose 2.2% to $22.78. China's premium mabile carrier and index heavyweight China Mobile (Hong Kong) Ltd. , (0941.HK: Quote, Profile , Research) (CHL: Quote, Profile , Research) rose 2.0% to $77.11. Fixed line carriers also rose, China Telecom (CHA: Quote, Profile, Research) (0728.HK: Quote, Profile , Research) ended up 0.4% to $77.06 and China Netcom (CN: Quote, Profile, Research) (0906.HK: Quote, Profile, Research) rose 3.0% to $62.10. Yanzhou Coal (1171.HK: Quote, Profile , Research) (YZC: Quote, Profile , Research), China's third largest coal producer rose 4.8% to $92.7 on news that Beijing froze coal exports to end power shortages in certain areas in China. Coal prices are out of the roof as producers find it difficult to keep up with demand. Spot price of coal more than trippled vs. a year ago when China became a net importer or coal vs. a long time expoter of the commodity.
|
Index |
Date |
Value |
Today |
YTD |
|
CAI |
1/28/2008 |
876.35 |
4.46 |
-12.37% |
|
CYI |
1/28/2008 |
878.37 |
5.22 |
-12.16% |
|
CQI |
1/28/2008 |
825.00 |
-14.74 |
-17.50% |
NASDAQ listed Chinese stocks lost some of the momentum from Firday morning. Baidu.com Inc. (BIDU: Quote Profile Research), China's search engine giant, lost 1.7% to finish the day at $291.32. Solar panel maker JA Solar Holdings Co. (JASO : Quote, Profile, Research) lost 4.5% or $2.69 to close down at $57.69. Ja Solar lost 17.35% since the beginning of 2008, following the overall weakness of Chinese solar companies.