Global Markets Overview 03/08/2012
US MARKETS
Stocks rose ahead of a U.S. consumer-credit report and on news of progress toward Greece's debt restructuring and consideration by the Federal Reserve of further measures to aid the economy. The Dow Jones Industrial Average was up 79 points, or 0.6%, to 12838 in recent afternoon trading. The Standard & Poor's 500-stock index was up 10.30 points, or 0.8%, at 1352, and the Nasdaq Composite added 27 points, or 0.9%, at 2937. Eight of the S&P's 10 sectors were higher, led by financial and industrial shares. Bank of America led blue chips higher, rising 2.9%. The market's rise marked a partial recovery from Tuesday's rout, when the Dow fell more than 200 points in its biggest decline since November. It was the first triple-digit point drop of the year. Several reports said Greece's debt swap was continuing to secure more support, approaching the level where Greece could make the deal binding on holdouts and complete the transaction by Thursday's deadline. And a report in The Wall Street Journal said Fed officials were weighing a new form of stimulus, a long dated bond buying program designed to alleviate near-term inflation fears, if they decide to act again. Meanwhile, a new round of economic data provided further support to the market. Data on private-sector job growth released by Automatic Data Processing and consultancy Macroeconomic Advisers showed payrolls outside of the farm sector expanded by 216,000 in February. Economists surveyed by Dow Jones Newswires expected an increase of 215,000 jobs, up from 170,000 in January. The ADP report is seen as a preview to the closely watched government employment report set for release Friday. Also, productivity grew 0.9% in the fourth quarter, meeting the consensus estimate, and unit labor costs rose at a 2.8% annualized rate, revised upward from the increase of 1.2% originally reported, the Labor Department said. Economists expected the revised rate to remain flat; still, it was lower than the third-quarter annualized increase of 3.9%. A new report on January consumer credit is due. In corporate news, General Electric confirmed its 2012 financial outlook and its expectations for continued double-digit-percentage revenue increases in global growth regions this year and next. Shares of the blue-chip conglomerate were up 2.2%. Pandora Media reported a wider-than-expected fiscal fourth-quarter loss and less revenue than anticipated, providing a first-quarter outlook that was well below current projections. The Internet radio service's shares dropped 24%.
EUROPEAN MARKETS
European stocks closed with small gains Wednesday as investors totted up the emerging number of willing participants in the Greek debt-swap deal ahead of Thursday's deadline and also took the opportunity to pick up a few bargains following the sharp declines in the previous session. Reports throughout the session suggested that participation in the debt-swap deal was creeping up, but there were still doubts that Greece could secure the 90% voluntary participation it requires before having to use collective action clauses to force reluctant bondholders to join in. The Stoxx Europe 600 index closed up 0.6% at 260.11. In the previous session, the index fell 2.7%, its biggest fall since November 2011. However, many investors have taken the recent pullback in markets as an opportunity. Elsewhere, the U.K.'s FTSE 100 closed 0.4% higher at 5791.41, Germany's DAX gained 0.6% to 6671.11 and France's CAC-40 closed up 0.9% at 3392.33. Sentiment was also boosted, a tad, by an employment report by payroll giant Automatic Data Processing Inc. The data showed private-sector employment increased by 216,000 in January, just a little ahead of expectations of a 215,000 increase. In terms of corporate news, London-listed insurer Admiral surged 10% after its full-year results beat expectations. The company posted a 14% rise in 2011 net profit, citing a growing customer base. Cobham PLC surged 12.6% as it reported a 23.8% rise in profit for 2011. On the downside, Adidas dropped 3% despite reporting higher net profit for the year. Analysts said that guidance for 2012 looked cautious and a little light of expectations. Thursday will be an incredibly busy day for market participants with both the European Central Bank and the Bank of England's scheduled monthly rate announcements. The deadline for private-sector holders of Greek government bonds to agree to participate in the debt exchange is 2000 GMT.
ASIAN MARKETS
Asian stock markets ended lower Wednesday, with banks and resource firms among the worst performers, as renewed concerns over the global growth outlook and uncertainty over the debt swap process in Greece dented investor confidence. Hong Kong's Hang Seng Index lost 0.9% and Japan's Nikkei Stock Average fell 0.6%. South Korea's Kospi gave up 0.9%, while China's Shanghai Composite fell 0.7%. In Hong Kong, China Life Insurance fell 6.5%, a day after the insurer issued a profit warning. Index heavyweight HSBC Holdings PLC declined 1.5% and the Industrial & Commercial Bank of China shed 1.1%. Tokyo-listed Nomura Holdings shed 2%, Daiwa Securities Group fell 2.4% and Sony Financial Holdings declined 1.7%. Among major Japanese exporters losing ground, Sony dropped 2.4%, Nikon declined 0.7% and Mazda Motor lost 3.8%. Korean exporters also stumbled. Hyundai Motor fell 1.6% and Kia Motors traded 1.4% lower. Concerns about global growth pushed commodity prices lower in New York Tuesday and weighed on resource stocks across Asia. In Hong Kong, China Coal Energy shed 1.0% and Jiangxi Copper lost 1.9%.
COMMODITIES
Base metals ended mixed on the London Metal Exchange Wednesday, coming off earlier lows amid cautious optimism on Greece's debt restructuring, but still unable to recoup much of their recent losses in nervous trading. LME three-month copper closed up $4, or 0.05%, at $8,293 a metric ton, while three-month zinc closed $2, or 0.1%, higher at $2,014/ton. Three-month aluminum the technical picture for which has turned negative after its recent tumble from five-month highs finished 1.2% lower, at $2,209/ton. Copper had traded as low as $8,176.75/ton and zinc as low as $1,981.50/ton during the session. Crude-oil futures prices followed other markets higher Wednesday on speculation about potential Federal Reserve easing measures and increasing commitments by investors to swap Greek debt. In addition, a weekly inventories report showed a smaller-than-expected increase. Light, sweet crude for April delivery settled $1.46 higher at $106.16 a barrel on the New York Mercantile Exchange after trading as low as $104.35 earlier in the session. Gold futures gained, looking poised to break a three-session decline that shaved nearly 3% off the metal's prices as markets cheered upbeat data on private-sector jobs and news surfaced that U.S. Federal Reserve officials are considering a new bond-buying program. Gold for April delivery rose $11.50, or 0.7%, to $1,683.80 an ounce on the Comex division of the New York Mercantile Exchange.