Global Market Overview

U.S. stocks bounced back after a sharp two-day selloff, as investors took hope in the Federal Reserve's pledge to support the economy and looked ahead to a meeting of world leaders in Cannes. In a reflection of recent volatility, the blue-chip Dow gained 219 points in morning trading before slashing those gains in half by the afternoon. Stocks then pushed higher after Fed chairman Ben Bernanke reiterated at a press conference that the Fed stood ready to ease further if growth stalled, saying the central bank was prepared to take action as appropriate. In its policy-setting meeting, the central bank kept interest rates unchanged and appeared to show little movement toward further monetary easing, which some in the markets had expected. Separately, the Fed lowered its gross domestic product forecast for 2012 to 2.5%, from 2.9%. It now also expects the unemployment rate to be between 8.5% and 8.7% in 2012, higher than its previous forecast of between 7.8% and 8.2%. Amid the broad-based gains, all 10 S&P 500 sectors and all but one of the 30 Dow components traded in positive territory. The heavily battered financial sector was among the day's leaders. Bank of America rose 4.4%, while American Express advanced 2.5% and J.P. Morgan Chase rose 2.4%. Investors said the stock gains were due after the previous days' declines. The gains were also helped by U.S. private sector hiring, which came in slightly stronger than expected. Encouraging earnings reports were also in the mix, boosting energy and materials stocks after positive signals from EOG Resources and Pioneer Natural Resources. Alcoa gained 3.1%, Chevron rose 2.4% and Exxon Mobil climbed 1.9%. Some of the afternoon selloff was triggered by headlines suggesting the European Union and International Monetary Fund could withhold further bailout money to Greece until a referendum is held. On Monday and Tuesday, the Dow tumbled a combined 573 points after Greek Prime Minister George Papandreou called for a referendum on the terms of a debt bailout for the troubled nation. In economic news, Automatic Data Processing said the U.S. added 110,000 new private-sector jobs in October, a touch above expectations for 100,000 new jobs. The September number was revised upward to 116,000, bringing some cheer to the market ahead of Friday's closely watched monthly nonfarm payrolls report. In corporate headlines, MasterCard surged 6.2%, putting its share price on track for a new record close, after the card company reported a 38% jump in third-quarter profit as spending and transactions made with its credit and debit cards increased. The company also posted a 27% increase in net revenue, which it derives primarily from processing transactions for banks. EOG Resources jumped 13% after its production of more-lucrative liquid fuels continued to surge. Pioneer Natural Resources gained 11% after third-quarter earnings more than tripled amid a bigger-than-expected revenue gain. JDS Uniphase climbed 8.6% after reporting better than expected fiscal first quarter earnings and revenue, offsetting a lowered current-quarter revenue outlook because of the flooding in Thailand. Garmin rallied 5.4% after the satellite-navigation company reported better than expected third quarter results and provided an upbeat outlook for the full year. Comcast edged up 0.1% as the cable company slowed defections in pay-TV subscribers for the fourth straight quarter. Time Warner shed 1.3% after third-quarter earnings and revenue topped forecasts. The media giant lifted its view on earnings growth for this year. Diamond Foods slumped 18% after the company said the closing of its $1.5 billion purchase of Procter & Gamble's Pringles business will be delayed until the first half of 2012. MF Global, which filed for bankruptcy protection Monday, dropped 79% in heavy trading after its trading suspension was lifted.

European stocks bounced back Wednesday, but investors were keeping a wary eye on the situation in Europe, ahead of an emergency meeting between the German Chancellor, French President and Greek Prime Minister following the shock announcement earlier in the week that Greece could hold a referendum on its latest debt deal and before the Group of 20 leaders summit in France. Markets were choppy, with the Stoxx Europe 600 index trading in a wide range. It closed up 0.9% at 237.22. The U.K.'s FTSE 100 closed 1.2% higher at 5484.10. Germany's DAX increased 2.2% to 5965.63 and France's CAC-40 closed up 1.4% at 3110.59. At the close of European equity markets, the Dow Jones Industrial Average and Standard & Poor's 500-stock index were both up 1.4%. Tuesday's hefty losses also provided market participants with an opportunity to pick up stocks at lower prices. In addition to this, many investors were hoping the Federal Open Market Committee would at least hint at further stimulus measures to boost the U.S. economy. This helped to buoy sentiment. The FOMC opted to keep rates on hold as expected and there were no changes to its maturity extension program operation twist. The announcement came at the close of European equity markets. Meanwhile, basic resources and banks, which suffered the brunt of the selling on Tuesday, posted healthy gains. The Stoxx Europe 600 basic resources index rose 2.6%, while the index for banks added 0.7%. BNP Paribas rose 3.9% in Paris and Commerzbank added 2.9% in Frankfurt. However, Lloyds Banking Group fell 4.4% in London on news that its chief executive, Antonio Horta-Osorio, has taken a leave of absence from his role as head of the part state owned bank for health reasons. Meanwhile, shares of Randgold Resources rallied 7.4% after the gold miner reported a sharp rise in third-quarter profit. Silver miner Fresnillo climbed 7.7%, as gold and silver prices rose. On Thursday, the focus will inevitably be on the outcome of the emergency meeting among European leaders. In addition, all eyes will be on the European Central Bank rate announcement at 1245 GMT and press conference, hosted for the first time by new ECB President Mario Draghi.

Asian markets were mixed Wednesday, with fears a Greek referendum on its bailout deal could derail Europe's plan to fix its debt crisis, while Chinese shares rose on hopes for looser monetary policy. Tokyo skidded 2.21 percent, or 195.10 points, to 8,640.42, Sydney ended 1.14 percent, or 48.3 points, lower at 4,184.6 and Seoul lost 0.61 percent, or 11.62 points, to 1,898.01. However, Hong Kong closed 1.88 percent, or 363.75 points, higher at 19,733.71 and Shanghai gained 1.38 percent, or 34.09 points, to 2,504.11. The Greek prime minister's call for a referendum and the possibility that the country's voters would reject the EU bailout plan sent US and European shares sharply downward Tuesday, while also taking a toll on oil prices. Japan's finance minister said Wednesday that the referendum move had confused people, ahead of a Group of 20 meeting in France Thursday where the issue was expected to top the agenda.

Base metals closed mostly higher on the London Metal Exchange Wednesday after equities and the euro regained ground, however the mood across the markets was generally cautious as investors awaited a press conference by U.S. Federal Reserve chairman Ben Bernanke. In its policy-setting meeting, the Federal Open Market Committee decided to keep interest rates unchanged, and appeared to show little movement toward further monetary easing, which some in the markets had expected. Bernanke is now due to hold a media briefing. Metal prices climbed as European stock markets rebounded from three sessions of steep losses, with the Stoxx Europe 600 index ending 0.9% higher at 237.22. Base metals trade in line with other perceived risk assets as they have wide industrial applications, so tend to be sensitive to news on economic growth. LME three-month copper rallied as high as $8,005.25 a metric ton during the day, and closed the afternoon kerb up 1.9% at $7,875/ton. However, with uncertainty over Europe's debt crisis clouding the metals' demand outlook, industry analysts were questioning just how long the push higher can be sustained. Crude futures settled slightly higher Wednesday, paring an early rise after a surprise increase in U.S. oil stockpiles dug in to investor optimism. Crude stocks rose by 1.8 million barrels last week, the Energy Information Administration reported, topping analysts' average estimate that called for a 900,000 barrel build. The surprise build cut through early hopes that had resulted from improving U.S. jobs data. Gold futures rose Wednesday as a weaker dollar and the Federal Reserve's steady view on its easy-credit policies fueled demand for the precious metal as an alternative asset. The most actively traded contract, for December delivery, rose $17.80, or 1%, to settle at $1,729.60 a troy ounce on the Comex division of the New York Mercantile Exchange.

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