Global Markets Overview 05/04/2011
US Stocks
U.S. blue-chip stocks finished virtually unchanged as investors dumped energy and materials stocks and headed for the safety of bonds and telecommunications companies. The Dow Jones Industrial Average finished just 0.15 point higher at 12807.51, while the Standard & Poor's 500-stock index shed 4.60 points, or 0.34%, to 1356.62.
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The Nasdaq Composite declined 22.46 points, or 0.78%, to 2841.62. Pfizer was the biggest decliner on the Dow, slumping 58 cents, or 2.8%, to $20.44 a share after the pharmaceutical company topped earnings expectations but reported revenue that fell shy of analysts' views. Energy stocks also weighed on the market as crude oil tumbled. Chevron fell 2.01, or 1.9%, to 106.17 while Exxon Mobil shed 1.35, or 1.6%, to 85.62.
Pulling on the upside were telecommunications stocks, after MetroPCS Communications' first-quarter earnings more than doubled, thanks to the best-ever quarter for customer additions at the prepaid wireless provider. MetroPCS surged 1.67, or 10%, to 18.15, while AT&T gained 65 cents, or 2.1%, to 31.86.
European Stocks
European stock markets ended mostly lower Tuesday, as Deutsche Bank AG fell sharply on news of a lawsuit, while the U.K.'s main equities index bucked the negative trend to finish higher. The Stoxx Europe 600 index dropped 0.5% to end at 282.43. The blue-chip Stoxx 50 fell 0.3% to 3,000.39. The German DAX 30 index was 0.4% lower at 7,500.70, with Deutsche Bank down 2.1%. U.S. authorities said they have filed a civil suit alleging mortgage fraud against the German bank and its MortgageIT subsidiary over what they called reckless lending practices.
Auto-related stocks also fell in Frankfurt, with shares of Volkswagen AG and BMW AG both down 1.7% and Daimler AG 1.6% lower. In France, shares of oil group Total SA slipped 0.7%, weighing on the CAC 40 index, which ended down 0.3% at 4,096.84. Shares of France Telecom SA fell 0.6% after the carrier reported first-quarter earnings before interest, taxes, depreciation and amortization that slightly missed expectations.
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In London, the FTSE 100 Index rose 0.2% to end at 6,082.88, as shares of Man Group PLC leaped 3.3% after the hedge-fund manager said it raised $1.5 billion from the successful launch of an open ended fund in Japan. Shares of AstraZeneca PLC also rose, up 2.4%, after the company said Monday that the U.S. Food and Drug Administration had approved the use of its injectable version of its heartburn drug Nexium IV in children older than one month for short-term treatment of gastroesophageal reflux disease.
Asian Markets
Asian markets ended mostly lower, though mainland Chinese stocks defied the trend to edge higher, after data indicated that manufacturing growth in China had slowed, easing concerns of further monetary tightening. Hong Kong's Hang Seng Index fell 0.4% to 23633.25, South Korea's Kospi fell 1.3% to 2200.73, Taiwan's Taiex gave up 0.7% to 8946.08 and India's Sensex tumbled 2.4% to 18534.69. China's Shanghai Composite rose 0.7% to end at 2932.19. The broad declines came as investors scaled back bets on risky assets amid extended declines by many commodities.
In addition, European Central Bank Vice President Vitor Constancio said Monday that restructuring Greek debt isn't an option, renewing doubts over the euro zone's ability to manage its trouble spots. Markets in Japan were closed for a public holiday. Mainland Chinese shares rose after as concerns over further tightening measures eased after data showed manufacturing growth eased in April. Cement producers and steelmakers rose after China President Hu Jintao and Premier Wen Jiabao said separately over the weekend that Beijing remains determined to ensure a sufficient supply of public housing.
China is targeting the construction of 10 million public housing units this year. Anhui Conch Cement rose 2.3%, Tangshan Jidong Cement was up 2.9%, while Inner Mongolia Baotou Steel Union rose by the 10% daily limit. The Sensex, which was volatile ahead of the Reserve Bank of India's decision, fell sharply after the central bank raised its policy interest rates by 0.5 percentage point to bring inflation under control. Several interest rate-sensitive stocks fell after the RBI move, with Tata Motors down 5.3% and real estate major DLF off 2.6%. Stocks in Hong Kong ended lower. Shares of merchandise-trading firm Li & Fung dropped 3.4%, China Resources Land gave up 1.8% and China Coal Energy shed 1.7%. Gold miners lost ground, with Zijin Mining Group falling 1.6% in Hong Kong and 2.1% in Shanghai.
Base Metals
Base metals closed mostly higher on the London Metal Exchange Tuesday, led out of an earlier slump by a weaker dollar and strong manufacturing and construction data out of the U.S. LME three month copper traded 0.3% higher at the PM kerb close at $9,350 a metric ton, well above the near-five-week low of $9,194.75/ton it hit in earlier trade. Along with a weaker greenback, which makes dollar denominated metals appear cheaper to foreign currency buyers, the U.S. reported stronger than expected manufacturing figures Tuesday, reflecting solid demand prospects for the base metals, which have a wide range of industrial uses.
Crude oil futures tumbled Tuesday, as traders focused on a plunge in silver prices and signs of weakening U.S. fuel demand. Light, sweet crude for June delivery settled down $2.47, or 2.2%, at $111.05 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled down $2.67, or 2.1%, at $122.45 a gallon. Oil prices nose-dived late in the session Tuesday, settling at their lowest price since April 20. Several market participants singled out a sharp drop in silver futures as the catalyst behind the sudden pullback. Gold for June delivery also ended lower, down $16.70, or 1.1%, to $1,540.40 an ounce. That was gold's biggest one-day drop since March 15. U.S.
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