Global Markets Overview - 08/13/2012
U.S. STOCK MARKETS
Stocks rallied into Friday's close, with the S&P 500 capping its longest streak of gains since late 2010, as investors shrugged off an unexpected drop in China's trade surplus.
The Dow Jones Industrial average rose 42.76 points, or 0.3%, to 13207.95. The Standard & Poor's 500-stock index added 3.07 points, or 0.2%, to 1405.87, led by the telecommunications and industrial sectors. The gain was the index's sixth-straight, its longest such run since another six-day rally that ended Dec. 14, 2010. The closing level was the highest since April 3.
The Nasdaq Composite Index edged up 2.22 points, or 0.1%, to 3020.86. Investors said hopes of stimulus from officials such as European Central Bank President Mario Draghi bolstered stocks throughout the week. They're also awaiting the Federal Reserve's central banker symposium at the end of the month and the next meeting of the Fed's policy-setting committee, starting Sept. 12.
Stocks had traded lower for most of Friday, after China's July trade surplus fell to $25.1 billion from $31.7 billion a month earlier, bucking economists' projections for it to increase. Export and import growth both slowed sharply, indicating continued deceleration in the world's second-largest economy.
In the U.S., import prices for July slipped 0.6% from a month earlier, the Labor Department reported Friday. Economists expected it to rise 0.1%. Prices fell 3.2% from the year-earlier month, the biggest decline since 2009.
The U.S. federal budget deficit narrowed during the first 10 months of the government's fiscal year due to higher tax collections, the Treasury Department reported.
In corporate news, shares of Yahoo fell 5.4% after it said recently appointed Chief Executive Marissa Mayer intends to review, among other things, the company's previously announced plan to return nearly all of the proceeds from the sale of its stake in Alibaba to shareholders.
J.C. Penney climbed 5.9% after executives on a conference call detailed turnaround plans and said the department-store chain has ample cash to fund the changes. Monster Beverage tumbled 11%, the biggest decline among S&P 500 components, after reporting a smaller-than-expected increase in quarterly profit and disclosing a state attorney general probe into its marketing and ingredients.
EUROPEAN STOCK MARKETS
Weaker-than-expected data on Chinese exports Friday triggered selling across European markets, with the main benchmark halting a five-day winning streak, as oil, drug and food stocks led the way south. The Stoxx Europe 600 index fell 0.1% to 269.88.
For the week, Europe's benchmark closed up 1.6%. Still, she said it would take a big fall to derail European stocks from a string of weekly gains. Retailer Inditex SA dropped 1.8%, tracking rival and Stoxx 600 heavyweight Hennes & Mauritz AB, which fell 1%.
China is an important market for both companies. Energy-related stocks were among the weakest in Europe Friday as crude prices tumbled after the International Energy Agency warned of weak global demand.
French oil major Total SA fell 0.1%, which helped knock the French CAC 40 index 0.6% lower to 3,435.62.
Food-related stocks also fell across Europe, with French heavyweights Carrefour SA and Danone SA down 1.6% and 2%, respectively.
Those losses came as food major Nestle SA gave back a chunk of the prior day's 2%-plus gains fueled by well-received earnings results. Its shares fell 1%.
Banks were another sector taking a hit Friday, with shares of Commerzbank AG sliding 3.2% a day after a profit warning and disappointing results that knocked over 4% off shares.
The German DAX 30 index fell 0.3% to 6,944.56. Heavyweight drug and chemical company Bayer AG fell 0.6% amid broader weakness for the sector.
On the upside, shares of ThyssenKrupp AG rose 5.1% after the steelmaker reiterated its full-year guidance and reported third-quarter earnings that beat expectations.
In London, the FTSE 100 index fell 0.1% to 5,847.11, pressured by a 0.3% drop for miner Rio Tinto PLC. Spain's IBEX 35 index fell 0.9% to 7,047.7, with shares of Telefonica SA down 1%.
ASIA-PACIFIC STOCK MARKETS
Asian markets were lower Friday as Chinese exports and imports slowed sharply, while sourcing giant Li & Fung slumped 19.3% on poor half-year results.
Chinese trade data weakened an already lackluster session--the trade surplus narrowed sharply to $25.1 billion in July compared with a forecast $35.2 billion, while exports increased just 1% on-year against an expected 8%.
The disappointing data brought a dreary end to a generally buoyant weak for Asian stocks, as several markets posted hefty gains for the week up to Thursday.
Hong Kong's Hang Seng Index extended losses once the Chinese data was released, down 0.7% to 20136.12--eating into a 7.4% rally made over 11 sessions.
The Shanghai Composite gave up a modest rise from earlier in the day, turning negative, down 0.2% to 2168.81. The Hang Seng was also hurt by Li & Fung, which slumped 19.3% after announcing that its core operating profit declined 22% on the year in the first half, in part due to a slower-than-expected turnaround in its U.S. distribution business.
There were signs that investors were moving into safe haven utilities, with Hong Kong and China Gas up 0.7% and Power Assets Holdings up 0.6%. Japan's Nikkei was 1% down to 8891.44, as utilities and companies offering industrial services fell.
South Korea's Kospi was the only major market in the region to post a gain, up 0.3% to 1946.40. The Nikkei enjoyed its biggest weekly percentage rise since February. Olympus Corp. lost 1.5% in Tokyo after the firm announced that its first quarter net loss widened significantly on the year.
COMMODITIES
Base metals closed lower on the London Metal Exchange Friday, with investor sentiment dented by concerns over Chinese growth.
At the close, LME three-month copper was 0.6% lower on the day at $7,490 a metric ton. Aluminum was down 1.1% at $1,880/ton. Oil prices fell as a widely watched market forecaster lowered its estimate for growth in crude demand next year.
The decline left prices up only 1.6% on the week despite surging to a three-month high Tuesday. The International Energy Agency lowered--by 20%--its forecast for 2013 global demand growth.
The energy watchdog cited worries about the world's economy in cutting its expectations to 0.8 million barrels a day from its earlier estimate of 1 million barrels a day.
Light, sweet crude for September delivery fell 49 cents to settle at $92.87 a barrel on the New York Mercantile Exchange. Brent crude lost 27 cents, or 0.2% to settle at $112.95.
Gold futures ticked higher, as some investors bet China was more likely to ease monetary policy after data showed the country's economy continues to slow. The most actively traded gold contract, for December delivery, rose $2.60, or 0.2%, to settle at $1,622.80 a troy ounce on the Comex division of the New York Mercantile Exchange.