Global Markets Overview - 04/27/2012
FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
Investors shrugged off disappointing readings on the job market and euro-zone economic confidence, sending the Dow Jones Industrial Average more than 100 points higher for the third time this month.
The benchmark rose 113.90, or 0.9%, to 13204.62, gaining ground after better-than-expected housing data Thursday morning and rising further in the afternoon for its third-straight increase.
The Standard & Poor's 500-stock increase jumped 9.29 points or 0.7%, to 1399.98, after touching 1400 in intraday trading for the first time in nearly three weeks. Telecommunications and consumer discretionary led gains in eight of the S&P 500's 10 sectors.
The Nasdaq Composite added 20.98, or 0.7%, to 3050.61. Homebuilder PulteGroup climbed 10%, the most since October, after reporting its first quarter loss was slimmer than a year earlier.
Software maker Citrix Systems jumped 12% after raising its 2012 profit forecast and reporting better-than-expected earnings.
Meanwhile, Exxon Mobil slid 0.9% and United Parcel Service, considered a barometer of global trade because of the breadth of its air and truck delivery operations, retreated 1.8% after both reported profits that missed analysts' expectations.
The number of U.S. home buyers who signed contracts to purchase previously owned homes rose sharply more than expected in March to the highest level in nearly two years. The National Association of Realtors said its seasonally adjusted index for pending sales of existing homes jumped 4.1% from a month earlier to 101.4.
Economists expected a 1.3% increase, according to a Dow Jones Newswires survey. Meanwhile, new applications for unemployment benefits fell less than analysts expected last week, a sign the labor market's recovery is slowing.
Initial jobless claims decreased by 1,000 to a seasonally adjusted 388,000, the Labor Department said. Economists expected a decline to 376,000, according to a Dow Jones Newswires poll. The department also revised the prior week's reading slightly higher.
The Kansas City Fed's manufacturing composite index, an average of the indexes covering production, new orders, employment, delivery times and raw materials inventories, fell to 3 in April from 9 in March. The April index is the lowest since a -2 reading in December 2011. Readings above zero denote expansion. On a year-over-year comparison, the composite index remained at 24.
EUROPEAN STOCK MARKETS
European shares ended mostly higher, as well-received earnings from Royal Dutch Shell and Volkswagen helped counter a steeper-than-expected drop in euro-zone economic sentiment and weak earnings from other companies.
The Stoxx Europe 600 index edged up 0.1% to 257.20, its third consecutive gain.
The European Commission reported that its overall economic sentiment indicator fell sharply to 92.8 in April, the lowest level in over a year and down from 94.5 in March. The drop reflected a weaker outlook across all but one of the sub-sectors.
The U.K.'s FTSE 100 gained 0.5% to 5748.72, Germany's DAX added 0.5% to 6739.90 and France's CAC-40 slipped 0.1% to 3229.32.
Among stocks, Volkswagen surged 8.7% after the auto maker beat analyst expectations for first-quarter earnings and confirmed its forecast for the year.
Royal Dutch Shell jumped 3.5% as its adjusted profit for the first quarter topped expectations. But Alcatel-Lucent plunged 17%. The company reported a 12% drop in first-quarter revenue and warned that the outlook for Europe and North America remains uncertain.
Deutsche Bank shed 2.8% after reporting a 33% drop in first-quarter profit. Banco Santander dropped 3.4% after reporting a 24% drop in first-quarter profit as its provisions for bad loans jumped.
Among other banks, Commerzbank fell 1.7% in Frankfurt, while Credit Agricole lost 3.2% and Societe Generale gave up 3.5%, both in Paris.
Vivendi rose 4% following a Bloomberg News report that the company may split into two units. In a statement, Vivendi denied it was planning such a move. Fresenius recovered from early losses after it made an all-cash offer for hospital operator Rhoen-Klinikum and ended up 2.8%. Rhoen-Klinikum skyrocketed 44%.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets finished mostly higher Thursday as the Federal Reserve left the door open for more stimulus measures, though many bourses retreated from session highs as investors digested a mixed bag of earnings reports.
Japan's Nikkei Stock Average ended flat, Hong Kong's Hang Seng Index rose 0.8%, the Shanghai Composite Index lost 0.1% and South Korea's Kospi rose 0.1%.
Gains were pared in many markets, however, amid a mixed batch of earnings. In Tokyo, Canon dropped 2.2%, after the camera maker reported its quarterly profit rose 11%.
Index-heavyweight Fanuc Corp. slumped 6.1% after its quarterly results disappointed. Other Japanese industrial and manufacturing firms also suffered falls.
Notably, Kawasaki Heavy Industries fell 3.6%, and Hitachi Construction Machinery dropped 3.7%. Losses for another major Nikkei component, Fast Retailing, also weighed, with shares losing 1.1%. Major electronics firms were weaker in Seoul. LG Electronics fell 5.8% and LG Display declined 3.7%.
Still, some earnings offered an upside Thursday, with results helping select shares in Hong Kong. Shares in China Life Insurance added 1.5%, after reporting a 29% drop in net profit, amid expectations for improvement in coming quarters.
Mobile telecom China Unicom Hong Kong jumped 4% after posting a seven-fold gain in first-quarter profit. Gains for property firms also lent support in Hong Kong. Agile Property Holdings jumped 2.8% and China Overseas Land & Investment added 2%.
COMMODITIES
Base metals closed higher on the London Metal Exchange Thursday, extending the previous session's gains, but are expected to struggle for sustained upward momentum amid persistent macroeconomic risks.
At the close, LME three-month copper was 1.4% higher at $8,320 a metric ton, while nickel gained the most, closing 3.4% higher at $18,200/ton.
Base metals drew support Thursday from U.S. Federal Reserve statements the previous day that left the door open for further economic stimulus, while a weaker greenback made the dollar-denominated metals more attractive to other currency holders.
U.S. crude futures rose Thursday, helped by gains in stock markets and fuel products that pushed oil to the highest settlement in three weeks.
Light, sweet crude for June delivery settled 43 cents higher at $104.55 a barrel on the New York Mercantile Exchange, the highest settlement price since April 2.
Brent crude on the ICE futures exchange settled 80 cents higher at $119.92 a barrel. Gold futures popped to the highest level in two weeks as investors bet that the Federal Reserve's steady hand on its current slate of monetary policies would support prices.
The most actively traded contract, for June delivery, rose $18.20, or 1.1%, to settle at $1,660.50 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest ending price since April 12.