Global Markets Overview - 02/11/2012
U.S. STOCK MARKETS
An assortment of positive economic reports strengthened investor optimism ahead of Friday's key employment report, and stocks held onto broad morning gains heading into the market's close.
The Dow Jones Industrial Average gained 115 points, or 0.9%, to 13212. The Standard & Poor's 500-stock index rose 14 points, or 1%, to 1426, and the Nasdaq Composite gained 40 points, or 1.4%, to 3018.
Technology, materials and industrials shares were the top performers. The materials sector led the S&P 500, with gains paced by U.S. Steel.
A climb in industrial shares was led by Masco, a provider of building supplies, which was one of the top gainers in the index. Masco has risen 10% since Superstorm Sandy hit the East Coast.
Tech giants Intel and Microsoft propped up the Dow's gains, posting some of the largest increases in the average. The rally was sparked by a line-up of economic reports, mostly positive, that pushed blue chips to a triple-digit increase in morning trade.
A pair of labor-market reports boosted optimism ahead of Friday's key employment report. The Institute of Supply Management's reading on the manufacturing sector indicated that it remained in expansion in October, and came in slightly higher than economists expected.
The Conference Board reported that consumer confidence rose to its highest level since early 2008. Spending on construction projects rose in September as home building jumped, the Commerce Department reported. Automatic Data Processing reported 158,000 new private-sector jobs were created in October.
The report didn't have a consensus expectation, since ADP switched to a new methodology. The report is seen as a preview to the closely watched government employment report due Friday. In earnings news,
Pfizer fell 1.3% after the pharmaceutical giant's third-quarter earnings and revenue came in solidly below analyst expectations. Exxon Mobil was 0.2% higher, after its third-quarter earnings and revenue exceeded analyst expectations.
Solid U.S. jobs and consumer-confidence data and upbeat reports on Chinese manufacturing were behind a rally in European stock markets Thursday, with bank and resource shares leading the way.
EUROPEAN STOCK MARKETS
The Stoxx Europe 600 index jumped 1.3% to close at 273.70. Among notable gainer in Europe, shares of Etablissements Maurel & Prom surged 8.3% in Paris.
Sinopec Group is considering buying the French oil explorer, according to a Bloomberg News report. Also higher, shares of BT Group PLC jumped 6.8% in London, after the telecommunications firm declared a dividend of 3 pence a share, up 15% from a year earlier.
In Greece, most stocks tumbled after lawmaker Michalis Kassis reportedly left the Socialist Pasok Party ahead of a vote next week on 13.5 billion euros ($17.5 billion) worth of spending cuts and tax increases.
The Athens General Index tanked 5% to 761.24 with shares of National Bank of Greece SA down 12%. Shares of car makers rose in Germany following upbeat Chinese PMI data, with BMW AG adding 3%, Volkswagen AG closing up 2.8% and Daimler AG adding 1.3%. The DAX 30 index picked up 1% to 7,335.67.
In France, shares of car maker Renault SA gained 1.2%. The CAC 40 index rallied 1.4% to 3,475.40, with shares of Credit Agricole SA gaining 3%. Among U.K. stocks, shares of Lloyds Banking Group PLC scored the biggest gains in the benchmark index, up 8.3%, after a well-received earnings report.
Other U.K. banking shares also rose: Royal Bank of Scotland Group PLC advanced 4.1%, while HSBC Holdings PLC added 2.7%. The FTSE 100 index picked up 1.4% to 5,861.92.
ASIA-PACIFIC STOCK MARKETS
Asian markets were mixed Thursday, with sentiment helped by a recovery in Chinese manufacturing activity, while Panasonic tumbled in Tokyo after slashing its earnings outlook.
The key data point Thursday was the official Chinese manufacturing Purchasing Managers Index. The official reading came in at 50.2 in October, up from 49.8 in September but a touch lower than the 50.3 forecast from a Dow Jones poll.
HSBC's China Manufacturing PMI rose to its highest level in eight months--at 49.5 in October compared to 47.9 in September.
Despite a cautious start to the day, Chinese stocks found support as the manufacturing data filtered through. The Shanghai Composite Index added 1.7% to 2104.43, while Hong Kong's Hang Seng Index was 0.8% higher at 21821.87.
The Hang Seng Index was also supported by a mild recovery in Hong Kong property developers, which were sold heavily this week after the government introduced measures to cool down the housing market: Henderson Land Development was 0.6% higher and Sun Hung Kai Properties added 0.7%.
More broadly, there were other reasons for caution, ahead of a series of major near-term political and economic events, with the U.S. set to release employment data on Friday just days before holding its presidential election.
China's Party Congress, set to commence next week, was also in focus as the country is expected to unveil the next generation of Chinese leaders.
Japan's Nikkei Stock Average was 0.2% higher at 8946.87, supported by a weaker yen, though some weak earnings reports helped cap the gains.
Panasonic tumbled 19.5% after the electronics company said that it expects to post a Y765 billion loss for the year, reversing from its July forecast for a Y50 billion profit.
In the second quarter, the company posted a net loss of Y697.98 billion, stemming mostly from restructuring costs. Among other earnings-related decliners, Fujifilm Holdings dropped 4.4% after posting below-view second-quarter operating profit and lowering its full-year guidance, while Toshiba slipped 0.7% after lowering its full-year outlook.
Japan's third-largest mobile network operator Softbank added 3.6% after announcing that it expects its operating profit to exceed Y700 billion for the year, compared to Y675 billion in the previous fiscal year. South Korea's Kospi Composite was 0.7% lower at 1898.44.
COMMODITIES
Base metals on the London Metal Exchange closed higher after positive economic data sparked a buoyant session and dollar weakness helped to underpin gains.
At the close of open-outcry trading, LME three-month copper was 0.9% higher on the day at $7,826 a metric ton. Lead posted standout gains, up 3.2% on the day and climbing back above $2,100/ton to $2,126/ton.
Oil futures advanced Thursday after the U.S. government said oil stockpiles unexpectedly fell last week, while analysts warn that tighter fuel supplies could be on the way in the wake of Hurricane Sandy. Energy Information Administration data showed U.S. oil inventories fell 2 million barrels last week.
The figure bucked expectations for a decline of 1.7 million, according to a survey by Dow Jones Newswires. Light, sweet crude for December delivery settled 85 cents, or 1%, higher at $87.09 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange recently fell 68 cents, or 0.6%, to $108.02 a barrel.
Gold futures settled lower, giving up earlier gains as the dollar strengthened against the euro and brighter economic data damped investor appetite for the haven asset. The most actively traded contract, for December delivery, fell $3.60, or 0.2%, to settle at $1,715.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.