US stimulus package sends markets soaring

US President-elect Barack Obama’s stimulus package sent stock markets soaring around the world yesterday, with the Irish market advancing by 144.89 points or 5.8 per cent, to close up at 2,625.95.

CRH is likely to benefit from the US’ biggest public-works spending package since the 1950s, and it rose steadily yesterday, adding €1.20, or 6.9 per cent, to finish up at €18.70. The expectation is that some analysts might now upgrade the stock on the back of Obama’s infrastructure package.

Elsewhere the rest of the market was also pretty buoyant, with Ryanair rising despite a jump in oil prices. It added 26 cent, or 8.5 per cent, to climb to €3.27. As Aer Lingus’ cabin crew voted to accept its redundancy plan, the stock stayed flat on the day, closing at €1.55.

Bank stocks also got a boost yesterday, although one broker noted that there was “no real conviction” in the bounce, and that it was a “pure mark-up on the back of the US boost”.

AIB was best on the day. It gained 30 cent, or 15.2 per cent, to advance to €2.27. Bank of Ireland was also strong on the day, and it added 13 cent, or 13.3 per cent to climb to €1.11, while Irish Life & Permanent advanced steadily all day to close up by 17 cent, or 10.4 per cent at €1.80.

Anglo Irish Bank was the laggard amongst financial stocks, although it still closed up by 4 cent, or 8.1 per cent at €0.55, despite having traded closer to €0.51 for most of the day.

Kerry Group was hit by the ban on Irish pork products announced at the weekend, and it lost 80 cent, or 4.8 per cent, to close down at €15.90. Other food groups with less exposure to pigmeats performed better, with Greencore adding 5 cent, or 6.3 per cent, to climb to €0.85 and Glanbia climbing by 5 cent or 2.6 per cent to finish at €1.94.

Drinks group C&C also rallied yesterday, adding 14 cent, or 13.2 per cent, to finish the day up at €1.17.

Tullow Oil was very strong on the back of speculation that it has been approached to sell an oil field in Uganda. It advanced by 30 cent, or 5.8 per cent to €5.55.

In the US, Obama’s public spending package sent the S&P 500 to a one-month high, as U.S. Steel Corp. and Alcoa Inc. climbed at least 16 per cent, and Chevron Corp added more than 5 per cent. By 11.31, the S&P 500 was up by 3.5 per cent to 906.94, while the Dow Jones Industrial Average had added 300.51 points, or 3.5 percent, to climb to 8,935.93.

Across Europe, stocks also rallied on the back of the plan. The Dow Jones Stoxx 600 Index gained 6.7 per cent to rise to 202.61, the most in two weeks, while France’s CAC 40 rose by 8.7 per cent, with Total SA jumping 11 percent. Germany’s DAX added 7.6 per cent, led by Siemens and Deutsche Boerse AG.

In the UK, firms with exposure to commodities benefited from the plan, with Royal Dutch Shell Plc, BP Plc and Anglo American Plc all rallying by more than 6 per cent. Overall, the FTSE 100 gained 250.69, or 6.2 per cent, to advance to 4,300.06.