Global Markets Overview - 03/26/2012
FROM MORRISON SECURITIES PTY. LTD.
U.S. STOCK MARKETS:
Companies including drugstore operator Walgreen Co. (WAG) and electronics retailer Best Buy Co. (BBY) are scheduled to report their latest quarterly results this week.
A former MF Global Holdings Ltd. (MFGLQ) employee is expected to appear before a U.S. House subcommittee this week to answer questions about the transfers of millions of dollars before the failed broker-dealer's bankruptcy filing.
Also, packaged-foods company Annie's Inc. will be part of what could be the busiest week of initial public offerings in more than a year.
U.S. stocks rose on Friday, but the Dow Industrials and the S&P 500 notched their biggest weekly declines this year, as investors shifted their focus to slowing growth in China.
For the week, the Dow fell 1.2%, and the S&P 500 declined 0.5%, amounting to both the steepest point and percentage declines for both measures since December.
On Friday, stocks overcame a flat open and drifted higher through the afternoon. The Dow Jones Industrial Average added 34.59 points, or 0.3%, to 13080.73. The Standard & Poor's 500-stock index climbed 4.33 points, or 0.3%, to 1397.11. The Nasdaq Composite rose 4.6 points, or 0.2%, to 3067.92, and rose for the sixth straight week. Friday's stock rise ended a three-session slide that knocked stocks from multiyear highs.
Declines began Tuesday, after an executive from mining giant BHP Billiton warned of flattening iron-ore demand from China. A weak reading manufacturing in the world's second-largest weighed on the market Thursday.
Friday's biggest gains came from energy and materials stocks. However, the rebound wasn't enough to prevent energy-sector stocks on the S&P 500 from posting their biggest weekly percentage declines since December.
Growth-sensitive industrial stocks also suffered their biggest weekly drop this year. Friday's strongest-performing Dow components were Hewlett-Packard, which rose 60 cents, or 2.6%, to $23.63, and Bank of America, which added 25 cents, or 2.6%, to 23.64.
Chevron rose 10.1, or 1%, to 106.36. Apple fell 3.29, or 0.6%, to 596.05 following a brief mid-morning trading halt triggered by erroneous trades on the BATS Global Markets exchange.
The Apple trades were canceled and trading resumed. Meanwhile, BATS Global Markets was forced to pull its initial public offering after systems issues caused a day filled with canceled trades and uncertainty.
U.S. housing data showed sales of new homes fell for the second consecutive month in February, a sign the market remains shaky. New-home sales fell, missing the expectations for a slight increase.
EUROPEAN STOCK MARKETS
European stock markets edged out modest gains on Friday at the end of a week of steady losses driven by concerns of a slowdown in global growth.
London's benchmark FTSE 100 index climbed 0.16 percent to 5,854.89 points, while in Frankfurt the DAX 30 added 0.21 percent to 6,995.62 points and in Paris the CAC 40 edged up 0.11 percent to 3,476.18 points.
The euro firmed to $1.3263 from $1.3196 in New York late on Thursday. Over the past week, London shares fell by 1.9 percent, Frankfurt by 2.3 percent and Paris by 3.3 percent, ending a recent rally.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets finished mixed Friday, with Shanghai, Hong Kong and Tokyo capping some of their biggest weekly losses for the year as fresh signs of an economic slowdown in China spooked investors.
After rallying at the start of the year on upbeat data from the U.S. economy, China spoiled the mood with a recent string of negative headlines, including a downgrading of its growth outlook for 2012.
Thursday's data showing a slowdown in Chinese factory activity roiled markets, forcing investors out of exporters and resources stocks amid worries of a sharp downturn in demand.
Adding to the drum beat of bad news, data on Thursday showed euro-zone manufacturing activity fell short of expectations, raising concerns of a far deeper recession in Europe just when policy makers there seem to be getting a handle on the debt crisis.
The Hang Seng Index lost 1.1% on the day, and was off 3% for the week, marking the biggest weekly loss since late November; the benchmark Shanghai Composite Index ended 1.1% lower. The index fell 2.3% for the week, its worst weekly performance this year. The Nikkei lost 1.1% and was off 1.2% for the week, capping the largest weekly loss in over three months.
COMMODITIES
Base metals closed mostly higher on the London Metal Exchange Friday, underpinned by a stronger euro. Showing resilience despite a dip across regional equity markets, the dollar denominated metals held firmly in positive territory throughout the session as the single currency rose against the greenback, making the materials cheaper for European buyers.
Other commodity markets, including crude oil, gold and coffee, also rose. Three-month copper closed afternoon ring trading at $8,380 a metric ton, up 1.1% on Thursday's PM kerb close.
Oil futures rose 1.4% Friday following a report that Iran had reduced its oil exports, as worries about supply disruptions continue to roil the oil markets.
Benchmark U.S. crude rose sharply following the report from Reuters that Iranian exports in March had fallen 300,000 barrels a day, or 14%, citing industry sources.
The report prompted a sudden run-up, sending oil prices spiking as much as 3% to their highest level in three weeks, before paring much of those gains to end the day modestly higher.
Gold futures settled higher Friday, mirroring gains in crude oil amid worries about Iran and as a weaker dollar fanned interest in gold among investors using other currencies. The most actively traded contract, for April delivery, gained 1.2%, or $19.90, to settle at $1,662.40 a troy ounce on the Comex division of the New York Mercantile Exchange.