Global Markets Overview - 03/02/2012
FROM MORRISON SECURITIES PTY. LTD.
U.S. STOCK MARKETS
Stocks rebounded from the biggest decline in two weeks, rising after a strong reading on weekly U.S. jobless claims. The Dow Jones Industrial Average climbed 32 points, or 0.3%, to 13032, in Thursday afternoon trading.
The Standard & Poor's 500-stock index rose nine points, or 0.6%, to 1375, and the Nasdaq Composite added 25 points, or 0.9%, to 2992.
Financial and materials were the best-performing sectors in the S&P 500. Among blue chips, J.P. Morgan Chase added 2.7% and Pfizer gained 2%. Bank of America climbed 1.8% after The Wall Street Journal reported that it is working on changes that would require many users of basic checking accounts to pay a monthly fee.
Ford Motor rose 2.7%, and General Motors gained 2%, after the U.S. auto industry reported a second-straight month of robust sales.
Chrysler Group, which is majority-owned by Italy's Fiat SpA, led the way, reporting a 40% increase for February. In the labor market, data showed claims for initial jobless benefits fell slightly in the latest week; economists had been expecting a slight gain.
The four-week moving average of claims fell to its lowest level in nearly four years, a sign that employers are slowing the pace of layoffs.
The Dow was up 80 points before pulling back after the Institute for Supply Management's purchasing managers index fell last month.
Economists surveyed by Dow Jones had expected the February reading to increase. Elsewhere, spending on construction projects in the U.S. fell in January for the first time in half a year, an indication that the market for builders remains shaky.
In corporate news, retailers reported February same-store sales that were generally better than expected. Gap surged 6.8%, the S&P 500's biggest advance on a percentage basis, after it reported February same-store sales growth of 4%. The Buckle rallied 8.4% after reporting same-store sales growth of 15%, topping estimates of 5.8%. Zumiez rose 4.4% after reporting a 23% jump in February sales from the year earlier.
EUROPEAN STOCK MARKETS
European stock markets climbed Thursday, with banks extending gains in the wake of the previous day's injection of long-term liquidity by the European Central Bank before trimming those gains on a surprise drop in U.S. manufacturing data.
The Stoxx Europe 600 index closed 1% higher at 267.06, after trading as high as 267.33 earlier in the day.
The U.K. FTSE 100 index ended 1% higher at 5,931.25, France's CAC 40 index rose 1.4% to 3,499.73, and Germany's DAX 30 index was up 1.3% at 6,941.77.
Posting one of the biggest gains in Europe, C&W Worldwide surged 15% after Tata Communications Ltd. confirmed earlier speculation it was mulling an offer for the U.K. telecom firm.
Vodafone Group PLC, which said last month it was considering a bid for C&W Worldwide, rose 1.5%. Man Group PLC soared 13% after it reported an increase in funds under management for the first two months of 2012 and said investor sentiment had improved since the end of last year.
Also in the U.K., Barclays PLC advanced 2.5% and HSBC Holdings PLC rose 2.3%.
Elsewhere, Italian banks were among the best performers after reportedly tapping the ECB for 26% of the money borrowed Wednesday by the region's banks in the central bank's second three-year long-term refinancing operation.
UniCredit SpA jumped 5.8%, Banco Popolare SC surged 11%, Banca Monte dei Paschi di Siena SpA gained 5.5% and Unione di Banche Italiane SCpA was 6% higher.
The FTSE MIB index rose 2.9% to 16,830.60. In Greece, National Bank of Greece SA added 2.1%, supporting a 0.6% rise in the Athens General Index to 747.85 which came after the International Swaps and Derivatives Association said no credit event has yet occurred in Greece's effort to restructure its debt.
In France, BNP Paribas SA advanced 2% and Societe Generale SA rose 3.3%. Veolia Environnement SA rose 15% after it said it swung to a loss in 2011, but reaffirmed its debt reduction and said 2012 had gone off to a good start. In Germany, Deutsche Bank AG rose 2.2%, while Volkswagen added 2.1% and BMW AG gained 3% after Volkswagen's premium brand, Audi, reported a 69% increase in 2011 profit.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets ended mostly lower Thursday as Federal Reserve Chairman Ben Bernanke's cautious remarks on the U.S. economy overshadowed an improvement in China's manufacturing activity.
Hong Kong's Hang Seng Index fell 1.5%, Japan's Nikkei Stock Average shed 0.2%, and the Shanghai Composite slipped 0.1%.
Regional investors took some encouragement from China's official manufacturing Purchasing Managers Index for February, which rose to 51.0 from 50.5 in January.
But sentiment remained cautious after U.S. stocks faltered Wednesday as Federal Reserve Chairman Ben Bernanke dashed hopes of additional quantitative easing and expressed a cautious view on the domestic recovery.
Losses for many real-estate shares weighed in Hong Kong. China Resources Land fell 6.7%, Agile Property Holdings lost 5.7%, and Guangzhou R&F Properties dropped 8.1%.
Property firms also acted as a drag in Japan, with Tokyu Land down 3.8% and Tokyo Tatemono Co. off 4.2%.
The Japanese yen strengthened during the day, prompting some blue-chip exporters' earlier gains to melt away.
Among the larger movers, Mazda Motor dropped 3.0%, while Sharp gave up 3.2%. However, shares in Softbank added 2.0% after Kyodo News reported the firm's mobile-carrier unit won key spectrum which will allow it to better compete against larger rivals NTT DoCoMo Inc. and KDDI Corp. NTT DoCoMo shares added 0.5%, while KDDI rose 1.2%.
COMMODITIES
Base metals closed mostly higher on the London Metal Exchange Thursday, although gains were relatively muted.
At the close, the LME's flagship three-month copper contract was 1.5% higher on the day at $8,628 a metric ton.
Zinc lagged the complex, closing 0.3% lower at $2,105/ton. Oil futures hit a session high of $108.78 a barrel going into the close Thursday, as traders cheered news that manufacturing in China expanded and overlooked a manufacturing slowdown in the U.S.
Light, sweet crude for April delivery settled up $1.77 at $108.84 a barrel on the New York Mercantile Exchange. Brent crude futures earlier hit a fresh record high in euro terms Thursday, as the oil contract price climbed while the euro remained under pressure against the dollar.
Brent climbed to EUR93.41 Thursday, above the previous high of EUR93.31 set just last week.
Gold futures steadied and silver climbed, as investors bet the metals' steep drop the day before had pushed prices too low. Gold for April delivery, the most actively traded contract, rose $10.90, or 0.6%, to settle at $1,722.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Silver's most actively traded contract, for May delivery, rose 2.9%, or $1.019, to settle at $35.661 a troy ounce.