Global Markets Overview - 02/27/2012
From MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
The Standard & Poor's 500-stock index squeaked out its highest close since 2008, as most stocks traded higher after better-than-expected reports on home sales and consumer sentiment.
The Dow Jones Industrial Average fell 1.74 points, or 0.01%, to 12982.95, after reaching above the 13000 mark earlier in the session.
The S&P 500 tacked on 2.28 points, or 0.17%, to 1365.74, its highest close since June 5, 2008. The Nasdaq Composite added 6.77 points, or 0.23%, to 2963.75. Technology and utility stocks led the advance, while financial stocks lagged behind.
American Express topped the Dow, up 66 cents, or 1.3%, to $53.33, while Bank of America fell 14 cents, or 1.8%, to 7.88. Stocks edged higher after upbeat readings on the U.S. economic data front, but gave up gains in the afternoon.
Data showed U.S. consumers turned more upbeat about the economy at the end of February. The Thomson Reuters/University of Michigan consumer-sentiment index rose to 75.3, better than the 73 expected by economists surveyed by Dow Jones Newswires.
Sales of new homes fell in January, but managed to beat expectations. In corporate news, American International Group rose 42 cents, or 1.5%, to 28.41, after the insurer reported a fourth-quarter operating profit late Thursday that was well above estimates, and said it was likely to report sustainable profits in the years ahead.
Salesforce.com rallied 11.87, or 9%, to 143.64 after the business-software maker reported fiscal fourth-quarter earnings and revenue that exceeded forecasts and lifted its full-year revenue outlook. El Paso rose 39 cents, or 1.5%, to 27.16 after The Wall Street Journal reported that private-equity firm Apollo Global Management was nearing a deal to buy El Paso's oil-and-gas exploration unit for about $7 billion. In other deal news, Kenneth Cole Productions ran up 2.42, or 19%, to 15.49 after Kenneth Cole offered to take his namesake company private in a deal that values the apparel maker at about $280 million.
EUROPEAN STOCK MARKETS
Most European stock markets ended higher Friday in choppy action, led by banks and oil firms, as upbeat earnings boosted investor optimism and U.S. consumer-sentiment and housing data surprised on the upside.
The Stoxx Europe 600 index broke a three-day losing streak to close 0.3% higher at 264.77, after trading as high as 265.46 earlier in the session and as low as 263.79. Eiffage SA, the biggest gainer in the index, surged 16% after reporting a decline in 2011 profit but noting the second half of the year was upbeat.
Telecom Italia SpA added 6.8% in Milan after reporting better-than-expected earnings and proposing a dividend payout of EUR900 million for the year. Stoxx 600 heavyweight Statoil ASA rose 1.4% after the Norwegian oil and gas group said it made a significant offshore gas discovery in Tanzania, its fifth biggest find in the past 12 months.
The broader oil sector added to the positive mood in Europe as crude futures for April delivery rose above $108 a barrel. BG Group PLC added 1.3% in London as the FTSE 100 index ended with a loss of 2.76 points, or less than 0.1%, at 5,935.13. Shares of Lloyds Banking Group PLC shed 2.3% after reporting a sharply wider loss in 2011 and warning of a tough year ahead.
In France, the CAC 40 index rose 0.6% to 3,467.03. Oil major Total SA added 0.6%, while banks Societe Generale SA and BNP Paribas SA rose 6.2% and 1.7%, respectively. In Germany, Deutsche Bank AG rose 4.5%, helping lift the DAX 30 index 0.8% higher to 6,864.43. The index was further supported by business software firm SAP AG, up 1.5%, after it announced a sharp dividend increase for 2011, along with a one-time dividend payout following record profit last year.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets ended modestly higher after a choppy session Friday, with some energy shares supported as oil prices continued to rise, while recent strength limited sharper gains.
China's Shanghai Composite rose 1.3%, South Korea's Kospi ended up 0.6% and Hong Kong's Hang Seng Index added 0.1%. Japan's Nikkei Stock Average rose 0.5%. Surging oil prices helped boost some Asian energy shares.
Tokyo-listed Inpex rose 5.1% and Japan Petroleum Exploration added 3.0%. AGL Energy traded down 4.7% after the firm posted a drop in first-half net profit and said it will raise A$1.5 billion from share issues to help buy Tokyo Electric Power's interest in the Loy Yang power station. Shares of Tokyo Electric Power, better known as Tepco, lost 2.4% in Japan trading.
But metals shares moved higher in Tokyo, with Nippon Steel gaining 3.5% and Sumitomo Metal Industries up 3.7%. Among exporters making ground in Tokyo, Sony got a 3% bounce, Pioneer rose 2.5% and Mazda Motor climbed 0.7%.
In Hong Kong, Esprit Holdings recovered from an earlier slump to end fractionally higher. Several brokers, including UBS and Citigroup downgraded the stock after the fashion retailer posted a 74% drop in first-half net profit on Thursday. Property developers dragged in Hong Kong. Sino Land dropped 1.1% and Hang Lung Properties fell 1.0%.
COMMODITIES
Base metals closed mostly higher on the London Metal Exchange Friday, with industry bellwether copper lifted 1.7% by a strong euro and heavy short covering, market participants say.
LME three-month copper ended the PM kerb at $8,530.50 a metric ton, up $140.50 on the previous close and well off an earlier low of $8,330/ton. Metal prices were lifted as the euro rose to its highest level against the dollar since December, rallying after Greek cabinet members approved the details of a debt restructuring.
The metals are priced in U.S. dollars, and as such a stronger euro makes them cheaper for buyers using the single currency. Following rather subdued trade early in the session, and a range-bound day Thursday, a flurry of activity sent copper above the closely watched $8,500/ton level mid-afternoon in Europe.
Traders attributed the move to the covering of a large short position, originally booked around $7,000/ton in mid-2011. Aluminum outperformed heading into the kerb close and finished the session up 2.4% at $2,327/ton.
Oil futures rallied to a fresh nine-month high Friday, hitting nearly $110 a barrel, as mounting tensions with Iran raised fears about a possible supply disruption.
Light, sweet crude for April delivery rose for the seventh-straight session, to as high as $109.95 a barrel, before pulling back slightly to settle up $109.77 a barrel on the New York Mercantile Exchange.
The contract gained 6.3% during the week, lifted largely by worries about Iran. Gold futures fell for the first time in the week, as traders cashed out to profit from the precious metal's rise to three-month highs. Gold for April delivery, the most actively traded contract, fell $9.90, or 0.6%, to settle at $1,776.40 a troy ounce on the Comex division of the New York Mercantile Exchange.