Global Markets Overview - 08/10/2012
U.S. STOCK MARKETS
Stocks closed little changed, with the S&P 500 ending slightly higher in mixed trading for its fifth straight gain, the longest streak since March. The Standard & Poor's 500-stock index added 0.58 point, or less than 0.1%, to 1402.80.
The Dow Jones Industrial Average declined 10.45 points, or 0.1%, to 13165.19, and the Nasdaq Composite Index added 7.39 points, or 0.25%, to 3018.64.
Materials and energy stocks gained the most ground, while consumer staples, typically viewed as defensive stocks, fell most sharply.
Cisco Systems led the Dow, jumping 3.2% after analysts at Goldman Sachs Group and Piper Jaffray raised recommendations for the stock. Goldman labeled Cisco a conviction buy, its highest rating.
American Express was the Dow's biggest decliner, falling 2.5% after a report from processor First Data showed credit- and debit-card spending grew in July at the slowest rate in 12 months. The report follows an update from American Express Wednesday that showed slowing growth in customer spending.
Visa fell 2%. J.P. Morgan Chase fell 0.7% after the largest U.S. bank by assets said it would delay a share-buyback program into early 2013. Thursday's gains inched the S&P 500 to three-month highs.
The index is cruising toward its fifth straight weekly gain and sits just 1.2% below what would be a four-year high. Investors said hopes that U.S. and European central bankers will take additional action to shore up economic growth and hold together the euro have sustained the recent advance.
Thursday, diminished expectations for inflation in China prompted speculation that Beijing, too, stands ready to stimulate growth. In U.S. economic headlines, initial jobless claims, an indicator of cuts to the labor force, fell 6,000 last week to a seasonally adjusted 361,000.
Economists had forecast a rise to 370,000. Claims from the prior week were revised slightly higher. A separate report showed the U.S. trade deficit in June fell to its lowest level since 2010, as exports reached a record. Inventories at U.S. wholesalers fell slightly in June, versus expectations for a rise.
EUROPEAN STOCK MARKETS
Europe's benchmark stock index gained ground for a fifth consecutive session Thursday, finding support from Chinese economic data and well-received results from heavyweights Novo Nordisk AS and Nestle SA.
The Stoxx Europe 600 index closed 0.4% higher at 270.26. The drug and diversified food sectors led the way higher, while telecoms pushed on the downside.
Novo Nordisk shares rose 1.3% after the insulin maker lifted its full-year earnings and sales guidance and posted a 29% rise in second-quarter net profit.
Fellow heavyweight Nestle SA also helped out, rising 2.3% after the food and nutrition group maintained its outlook for the year and reported a stronger-than-forecast 8.9% rise in first-half net profit.
The results provided momentum for a market awash in trader vacations and low volume. Also providing some support, China data showed an easing in price pressures as well as slowing industrial production and retail sales, which analysts said opened the door for Beijing to further loosen monetary policy.
Germany's DAX 30 ended the day down 1.16 points, or less than 0.1%, at 6,964.99. On the downside, shares of Commerzbank AG fell 4.2%.
The bank warned on second-half net profit, citing pressure on its revenue and loan books from challenging market conditions. Heavyweight Deutsche Telekom AG fell 2%.
The telecommunications group said it's on track to reach its targets for the full year after a sharp rise in second-quarter net profit, but also warned that business in Europe is unlikely to see any near-term improvement.
The French CAC 40 index rose 0.5% to 3,456.71. Utility GDF Suez SA weighed with a 1.4% drop, followed by a 1% fall for Electricite de France SA. Shares of luxury-goods group LVMH Moet Hennessy Louis Vuitton SA rose 2.8%.
In London, the FTSE 100 index gained 0.1% to end at 5,851.51, supported by a 3.6% gain for Standard Chartered PLC, which continued to claw back from a rout earlier in the week. Shares of Randgold Resources Ltd. rose 1.6% after the gold producer said second-quarter earnings beat forecasts.
ASIA-PACIFIC STOCK MARKETS
Asian markets climbed Thursday as more signs of a slowdown in China raised hopes Beijing may step up efforts to stimulate the economy. Hong Kong's Hang Seng Index was up 1% at 20269.47, hitting a fresh three-month high after China reported lower inflation and weaker industrial production.
The Shanghai Composite was 0.6% higher at 2174.10. Japanese companies with a strong exposure to China ended the day higher: Factory automation company Fanuc climbed 1.8% and construction machinery manufacturer Komatsu was 0.8% higher.
Central banks were in the spotlight, as the Bank of Korea held off from changing interest rates after a surprise cut last month.
The Bank of Japan left its monetary policy unchanged, as expected, as the central bank maintained its assessment that the Japanese economy has started picking up moderately as domestic demand remains supported by reconstruction demand. The Nikkei was up 1.1% at 8978.60.
South Korea's Kospi climbed 2% to 1940.59, after foreign purchases of local stocks reached their highest level for more than a year. Steel, chemical and construction stocks all rose on hopes of greater stimulus out of China.
In company news, Nikon Corp skidded 8.1% in Japan after it cut its profit guidance for the year, reflecting a change in its foreign-exchange assumptions.
In Hong Kong, West China Cement fell 1.5% following a research report by short-seller Glaucus Research suggesting that the company is a "blatant fraud." West China Cement said the allegations "are groundless or misstatements."
COMMODITIES
Base metals closed mostly lower on the London Metal Exchange Thursday, paring gains amid a stronger U.S. dollar against the euro and lingering doubts about further Chinese stimulus.
At the close, LME three-month copper was down 0.2% at $7,533 a metric ton. Aluminum was down 0.7% at $1,900/ton, zinc was down 0.5% at $1,860/ton, lead was 0.6% higher at $1,921/ton, and tin was 1.6% lower at $17,900/ton. Nickel was down 1.7% at $15,475/ton.
Crude-oil futures eked out the slimmest of gains in quiet trading Thursday, edging higher alongside equities after weekly jobless claims unexpectedly dropped.
Light, sweet crude for September delivery rose one cent, or 0.01%, to settle at $93.36 a barrel on the New York Mercantile Exchange.
Brent crude on ICE Futures Europe rose $1.08, or 1%, to settle at $113.22 a barrel. Gold futures ended higher, buoyed by thin trading volumes and lingering hopes of more accommodation from central banks. The most actively traded contract, for December delivery, climbed $4.20, or 0.3%, to settle at $1,620.20 per troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.