Dow Jones closed up 257. Biggest rise in two weeks, up 2.1%. First two day rise in over a week. Closed close to its high of 263. Huge night – a big injection of conviction about the market bottoming – rises across all sectors from Financials to Resources to tech stocks (NASDAQ up 2.8%). Even gold was up. Intel the main driver up 5.8% on huge volumes on results including earnings of 29c against estimates of 24c. Outlook statement also good and IBM has had results after hours and jumped 2.84% on top of the 2.82% in the normal session. Weak Housing and Building permits numbers ignored. As were Fed comments about an anaemic housing market.
The big story is the rumour that BHP will raise its scrip bid for RIO from 3.4-for-1 to 4-for-1, valuing RIO at $US200bn+. The story was out of the UK last night. Some scepticism about that this morning. RIO hit an 18 year high in the UK (the currency means it has yet to do so in A$).
BHP up 5.37% in the UK and RIO up 5.99%. Up 3.1% and 4.0% in ADR form in the US. BHP up 2.2% or 93c to 4375c and RIO up 590c to 14650c. Rio announced OK productions numbers yesterday. Charlie Aitken at Southern Cross calls BHP a $50 stock today.
Metal prices well up in the UK as well. Zinifex up 34c to 1034c. Gold up overnight despite the market rally – Newcrest up 73c to 3410c. US dollar hit a record low against the Euro. Oil price hit another record on a drop in inventories.
