Global Trading Wrap: U.S. Equities Move Higher As Oil Trades Near $65

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Wall Street: U.S. stocks closed much higher on Thursday as the markets erased early losses on higher crude oil prices and news that the government’s Treasury auction was met with strong demand. Financials moved higher led by JPMorgan and Bank of America, however Citigroup declined on the day. General Motors, which is headed for bankruptcy, reached a debt for equity deal with bondholders. GM shares lost 2.6%. Oil stocks, including ExxonMobil and Chevron moved higher after a report showed U.S. crude inventories dropped much more than expected last week. The DOW gained 103.78 points to close on 8403.80. The S&P gained 13.77 points, closing on 906.83. The NASDAQ gained 20.71 points, closing on 1751.79.

Europe: European markets closed lower on Thursday, in volatile trading, led by financials. The markets were heavily influenced by the U.S. markets which opened higher before turning negative after reports on new home sales and durable goods. ING, AXA and Deutsche Bank led the financial stocks lower. ArcelorMittal and Sanofi-Aventis posted gains. The DAX lost 68 points, the CAC 40 lost 31 points and the U.K.’s FTSE dropped 29 points.

Asia: Asian markets closed Thursday mixed as trading was full of stops and starts and lacked overall momentum and direction. Concerns continue to grow about rising yields on U.S. government debt pushing borrowing costs higher, hindering a possible recovery in the economy. Chinese and Hong Kong markets were closed for a holiday and will re-open on Friday. The Japanese Nikkei gained 13 points.

Financial Sector: In trade on Thursday the XLF, the financial sector ETF, gained 0.29 points (2.48%) to trade at 11.97. It moved higher on strong volume; 163.5m ETF's changed hands, slightly below the ten day average of 172.6m. Equity markets closed higher on Thursday, after a strong turnaround during the afternoon session as crude oil prices gained.
 
Treasuries:  Ten year Treasuries were little changed after an auction of $26 billion of seven year securities. Yields on ten year notes rose one basis point to 3.74%. Yields on five year notes rose seven basis points to 2.51%. Two year notes were little changed, yielding 0.99%. Yields on ten year Treasuries have risen almost half a percentage point over the past five trading days on concern foreign investors will shy away from buying U.S. debt.
 
Crude oil: Oil prices continued to rise on Thursday, gaining more than 2%, settling above $65 a barrel on a steep drop in U.S. inventories and news that OPEC decided to leave the cartel’s output levels unchanged. U.S. crude inventories fell by 5.4 million barrels last week, well above analysts’ expectations of a 700,000 decline.

Gold Bullion: Gold prices rose on Thursday as the dollar dropped against most of the other major currencies. Bullion gained more than $5 an ounce to close just below $959 an ounce. Traders often buy gold as a safe haven when the dollar falls.