US Unemployment Boosts Brazilian Stocks

Brazilian equities jumped, aided by gains in Brazil’s real against the U.S. dollar, amid thought the U.S. economy may not be growing as fast as previously believed.

That consideration was spurred by news U.S. initial jobless claims rose by 10,000 to a three-month high of 367,000 in the week that ended January 8, raising worries about the health of the labor market. Economists had forecast a drop in claims of 19,000.


Brazil’s benchmark Bovespa Index jumped 296.14 points, or 1.21%. Brazilian shares extended their rise on strong gains in the mining and steel sector, which is expected to enjoy further advances in 2005 amid rising prices and solid metals demand.


The latest rally in Brazil’s market represented the third straight up session, after the Ibovespa stocks index shed nearly 8% last week.


Traders said the rally already underway was fed by yesterday’s outlook upgrade on the country’s debt by Moody’s Investors Service.


If and when the positive outlook results in an actual credit upgrade, it would make overseas borrowing cheaper for local firms and reduce financing costs for those already carrying foreign debt.


Amid research notes, a major investment house raised earnings forecasts on iron ore miner CVRD, stemming from a projection that iron ore prices will spike 40% this year. CVRD shares rocketed higher.


Also, a local brokerage restarted coverage on Brazilian waterworks utility Sabesp with a “buy” recommendation, noting that the stock is trading at a significant discount to its fair value.


In earnings news, Brazilian paper and pulp giant Aracruz Celulose SA reported that its fourth-quarter net profit spiked 174% to 423.1 million reais from the corresponding period last year.


The company lauded continued growth in the world economy, especially the U.S., with a resulting increase in sales of paper in all regions, and a drop in production costs of cellulose for the result.


Also, the company’s full-year 2004 net earnings rose 23% to 1.069 billion reais from 2003. Aracruz climbed in response.


Additionally, Companhia Brasileira de Distribuicao SA, Brazil’s largest grocer, said its net sales gained 20% on the year to 3.60 billion reais in the fourth quarter, due to an economic revival.


Also, CBD stated that 2004 net sales advanced 16% to 12.6 billion reais, with most of the sales gains coming in the latter half of the year when lower interest rates unleashed a growth spurt in Brazil.


CBD will post full results for the fourth quarter on February 2. The issues rose on the session.


Thomson Financial Corporate Group
http://www.thomsonfinancial.com/


PRNewswire

Tags:

You May Also Like

Brazil’s Dilma Keeps International Advisor. A Sign She’ll Maintain Lula’s Policy

Dilma Rousseff’s, Brazil’s president-elect, has confirmed president Lula’s international affairs special advisor Marco Aurélio ...

Brazil Has Created 700,000 New Jobs in 2014. One Million Are Expected Till End of Year

In August, 101,425 new jobs have been officially created in Brazil, as a result ...

Green Groups Take Brazil to Court for Approving Amazon Dam

The Environment minister from Brazil, Carlos Minc, announced he had granted a license for ...

American President George W. Bush goes to Brazil

Bush Is Kind All Over Calling Lula “My Friend” and Brazil, a World Player

Ethanol will be high on Bush's agenda when he talks to Brazilian President Luiz ...

Brazil’s Processed Beef Exports Up 20%. U.S. Number 1 Client.

Brazilian exports of processed beef amounted to US$ 429.4 million in the first nine ...

Past Bird Flu Scare Brazilian Firm Back to Killing One Million Chickens a Day

The world president of the Doux Group, Charles Doux, and the director for institutional ...

Brazilians Are Taught How to Oversee Public Spending

The Financial Oversight Commission in Brazil’s Chamber of Deputies (Comissão de Fiscalização Financeira e ...

After Record Year of Foreign Investment Brazil Braces for Slowing Down in 2012

Foreign direct investment (FDI) is expected to reach a new record this year in ...

Brazil Creates Record 1.5 Million Jobs But Primary Surplus Is Lowest Ever

Brazil has created a total of 212,952 registered jobs in June, according to reports ...

In the Light of the Kerosene in the Brazilian Amazon

Pará, Brazilian Amazon, 1936 – The trouble began with the pounding of the drums. ...