Global Markets Overview - 01 May 2013
U.S. STOCKS, BONDS
U.S. stocks overcame a morning slide to help the Standard & Poor's 500-stock index inch to a new record high, as Apple Inc. led a rally in technology stocks. The Dow Jones Industrial Average finished Tuesday with a gain of 21.05 points, or 0.14%, to 14839.80, after falling 84 points earlier in the day.
The Standard & Poor's 500-stock index rose 3.96 points, or 0.25%, to 1597.57, a new record high, while the Nasdaq Composite Index gained 21.77 points, or 0.66%, to 3328.79.
The rebound came on the last day of a month that marks the fifth consecutive month of gains for the Dow industrials and the sixth straight for the S&P 500 and the Nasdaq.
Meanwhile, the Russell 2000 index of small-capitalization stocks is on pace for its first monthly decline since October. In one unusual phenomenon, the Dow has risen for 16 consecutive Tuesdays, in a streak that dates back to Jan. 8.
The day started out on a weak foot, after disappointing earnings reports from Pfizer Inc. and a gloomy reading of the Chicago-area purchasing managers' index for April.
But the Conference Board's consumer-confidence index rose much more strongly than expected in April.
Separately, the employment-cost index for the first quarter rose less than expected from the fourth quarter, the latest confirmation that inflation remains in check.
Also, the S&P Case-Shiller 20-city home-price index for February rose a higher than expected 9.3% compared with the same period a year earlier.
Technology stocks led the S&P 500 sectors for a second day, after coming into the week as the worst sector in 2013. Apple climbed 2.9% to a one-month high as it prepared to sell $17 billion of bonds, a record amount for a U.S. investment-grade corporate offering, as part of an effort to return $100 billion to shareholders by the end of 2015.
Apple has risen about 14% since the beginning of last week. Microsoft Corp., which has run up more than 10% over that same period, rose 1.5%
Among other tech companies, International Business Machines Corp. led the Dow components, adding 1.7%, while Intel gained 0.8%. Weighing on the downside were health-care stocks.
Pfizer fell 4.5%, the most among the Dow industrials, after the drug maker missed first-quarter earnings and revenue estimates and cut its 2013 outlook. Merck & Co. and P&G were the next-worst performers, dropping 1.7% and 1.2% respectively.
EUROPEAN STOCKS, BONDS
European stocks rose for an 11th consecutive month in April, despite a small loss Tuesday triggered by downbeat economic news. The benchmark Stoxx 600 index fell 0.2% to 296.72.
Over the month, the index has gained 0.9%. The U.K.'s FTSE 100 index lost 0.4% to 6430.12, Germany's DAX advanced 0.5% to 7913.71, owing to strength in the banking sector, while France's CAC-40 shed 0.3% to 3856.75.
The euro zone's unemployment rate rose to a fresh high in March, while the annual rate of inflation fell to its lowest level since February 2010 in April.
While the economic setbacks have fueled expectations that the European Central Bank will reduce its main lending rate to a record low at its meeting Thursday, ECB officials have said a rate cut wouldn't provide much of a lift to the bloc's economy.
Earnings news buoyed sentiment in early trading. Shares in Deutsche Bank rallied 6.1% after the bank raised EUR2.96 billion ($3.87 billion) in capital and reported stronger-than-expected first-quarter earnings late Monday.
UBS posted a better-than-expected first-quarter profit, boosted by the performance of its investment bank.
Shares surged 5.7%. London-listed Lloyds Banking Group also performed strongly, reporting a net profit of 1.53 billion pounds ($2.4 billion) for the first three months of the year, compared with a GBP5 million loss in the year-earlier period.
The stock rose 1.6%. In the energy sector, BP advanced 2.1% as first-quarter profit nearly tripled from a year earlier. The result includes $12.5 billion of profit booked from the sale of TNK-BP to OAO Rosneft.
Strength in the banking and energy sectors helped to offset losses by Unilever and Anheuser-Busch InBev. Shares in Unilever retreated 0.4% after the consumer-products company offered to pay up to $5.4 billion to buy an additional 22.5% stake in its Indian unit, Hindustan Unilever Ltd. Anheuser-Busch InBev fell 1.2% after reporting less first-quarter revenue than analysts expected.
ASIA-PACIFIC STOCKS, BONDS
Asian stock markets were mostly higher Tuesday tracking gains in U.S. stocks, though the Nikkei was weighed by the yen's recent strength and weak earnings results.
Japan's Nikkei Stock Average fell 0.2% to 13,860.86 amid the dollar's recent weakness, and as the key Y100 level remained elusive. Despite taking a loss on the day, the benchmark still managed to post a monthly gain of nearly 12%, its best performance since December 2009.
The yen's strength along with disappointing results led to exporters declining. Fanuc, a heavily weighted component on the Nikkei, fell 5.6% after it reported operating profit for the fiscal year ended March 31 down 17% on the year at Y184.8 billion.
Ricoh fell 8.4% after its fourth-quarter operating profit came in at Y23.0 billion, substantially missing guidance and consensus forecasts.
However, Nomura Holdings added 4.1% after announcing its best quarterly net profit in seven years, while NTT DoCoMo gained 3.3% as fiscal year operating profit beat targets. South Korean technology stocks took a cue from their U.S. peers with Samsung Electronics up 2.6% and SK Hynix 1.2% higher, adding to the Kospi Composite's 1.2% rise to 1963.95.
In Hong Kong, the Hang Seng Index rose 0.7%, to 22,737.01, while mainland Chinese markets remained shut for a holiday.
COMMODITIES
Base metals on the London Metal Exchange closed lower Tuesday against a backdrop of disappointing data out of Europe and investors holding back from the market as they await key data readings and policy statements due Wednesday.
At the close of open-outcry trading, the flagship of the LME group, LME three-month copper, was 1.4% lower on Monday's settlement price at $7,055 a metric ton. Tin, the most thinly traded base metal, was down 2.5% at $20,365/ton.
Crude-oil futures prices settled lower Tuesday amid news of record-high unemployment in the euro zone and expectations of rising oil stockpiles in the U.S. Light, sweet crude oil for June delivery on the New York Mercantile Exchange posted the biggest drop in two weeks to settle 1.1%, or $1.04, lower at $93.46 a barrel.
June Brent crude oil on the InterContinental Exchange settled 1.4%, or $1.44, a barrel lower at $102.37. Gold futures edged higher as investors largely stuck to the sidelines while U.S. Federal Reserve officials began their regular policy meeting. The most actively traded contract, for June delivery, rose $4.70, or 0.3%, to settle at $1,472.10 a troy ounce on the Comex division of the New York Mercantile Exchange.