Global Markets Overview 09/14/2011
U.S. stocks notched a second-straight day of gains Tuesday, led by the industrial and technology sectors, even as investors kept a cautious eye on the latest developments regarding Europe's debt woes. The Dow Jones Industrial Average closed up 44.73 points, or 0.4%, at 11105.85, with the index only swinging in a 154-point range from its session lows to highs. The last time the Dow traded in that narrow a range was July 26, according to WSJ Market Data Group. General Electric led the blue chips higher, rising 40 cents, or 2.7%, to $15.41. Intel gained 48 cents, or 2.4%, to 20.76. The Standard & Poor's 500-stock index rose 10.60 points, or 0.91%, to 1172.87. All 10 of the S&P 500's sectors finished in positive territory. Industrial stocks made up the S&P 500's top-performing sector, led by Cummins, which rose 5.14, or 5.9%, to 92.20. The commercial-engine maker predicted its annual sales will grow by more than 60% to reach $30 billion in 2015. Meanwhile, the technology-oriented Nasdaq Composite surged 37.06, or 1.5%, to 2532.15. Cisco Systems rose 26 cents, or 1.6%, to 16.35, even as the networking-equipment giant's growth projections struck a considerably more conservative tone.
European markets ended a volatile session higher Tuesday, with previously battered bank stocks posting a rebound. Investors were encouraged by reports that Greek Prime Minister George Papandreou is scheduled to hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy Wednesday, fueling hopes there will be some clarity regarding Greece and whether it is about to default on its debt. As reports of the conference call emerged, European stocks made an about-turn, having traded in the red during the morning session. Earlier, European stocks were off by well over 1%. Speculation that China was buying Italian sovereign debt disappeared and Italy's EUR6.5 billion bond auction disappointed Tuesday on lackluster demand, which sent stocks and the euro into the red. However, reports of the conference call cheered investors, and the Stoxx Europe 600 ended up 0.9% at 220.87. It had traded in a range of 215.73 to 222.10. The U.K.'s FTSE 100 closed up 0.9% at 5174.25, Germany's DAX rose 1.9% to 5166.36, and France's CAC-40 closed 1.4% higher at 2894.93. Banks were among the top performers following heavy losses in the previous session. Shares of Societe Generale rose 15%, rallying after Chief Executive Frederic Oudea reportedly said the lender has plenty of liquidity buffers and that market declines were based on irrational fears. Shares of BNP Paribas rose 7.2% after falling by as much as 12% earlier in the day. The bank said it categorically denies claims made by an anonymous source in a Wall Street Journal op-ed article that it is having liquidity problems. Also Tuesday, German Chancellor Merkel reportedly sought to downplay fears of an imminent default by Greece, saying Europe is doing all it can to avoid disorderly processes. Among other banks, Deutsche Bank finished up 8.2%, and UniCredit was 7.4% higher. The Stoxx Europe 600 banks index finished 3.6% to the good.
Asian stock markets ended mixed Tuesday, with shares in Tokyo and Sydney staging a mild rebound after the previous session's steep losses, as anxiety over Europe's debt crisis calmed a little following a report that China might step in and buy Italian bonds. Japan's Nikkei Stock Average gained 1.0%, paring weekly losses to 1.4%. Mainland Chinese shares were weak, with the Shanghai Composite Index down 1.1% as investors played catch up following a three day weekend. South Korea's Kospi remained closed for a second day for the Chusok holiday, while Hong Kong's equity markets were shut Tuesday for the Mid-Autumn Festival. U.S. equity markets managed to stage a remarkable late-day turnaround to end higher Monday, after a Financial Times report that China could buy Italian bonds and invest in some companies there helped steady markets. Some exporting car makers also advanced Tuesday, with Mitsubishi Motors up 3.1%, and Honda Motor 1.3% higher. Suzuki Motor climbed 3.6% after it said late Monday that it wants to end its partnership agreement with Germany's Volkswagen AG. Volkswagen said it would seek to keep an agreement between the two firms' in place. Technology shares were also strong in Japan, with Elpida Memory jumping 13%, and Renesas Electronics gaining 5.1%. Investors may be hoping that the sector will see some deal activity after U.S. technology firms gained late Monday following news that Broadcom Corp. said that it would pay $3.7 billion for U.S. chip firm NetLogic Microsystems Inc.
Base metals closed mixed on the London Metal Exchange Tuesday as equity markets and the euro fluctuated, and investor concerns over Europe's debt crisis continued to dominate sentiment. LME three month copper closed up 0.2% at $8,770 a metric ton, while three month aluminum finished the day 0.3% lower at $2,369/ton. Copper spent the session hovering around $8,800/ton as equity markets with which the industrial commodities have shared a close correlation in recent weeks see-sawed. U.S. crude-oil futures finished above $90 a barrel for the first time in more than a month Tuesday, as traders looked to a likely drop in U.S. oil inventories and shrugged off forecasts calling for weaker oil demand. Light, sweet crude oil for October delivery settled up $2.02, or 2.3%, to $90.21 a barrel on the New York Mercantile Exchange. That was the highest settlement since Aug. 3. Its intraday high of $90.52 a barrel marked the highest trade since Aug. 3. October Brent crude oil on the ICE Futures Europe Exchange traded down 33 cents, or 0.3%, at $111.92 a barrel. Nymex crude oil pushed higher ahead of a government survey on U.S. oil inventories, due Wednesday. The survey is expected to show crude-oil stockpiles fell 3.1 million barrels last week, according to a poll by Dow Jones Newswires, which analysts attribute to disruptions to oil production and imports caused by Tropical Storm Lee. Gold rose as a sharply lower dollar and the metal's declines to two-week lows drew some buyers back to the market. The most actively traded gold contract, for December delivery, rose $16.80, or 0.9%, to settle at $1,830.10 a troy ounce on the Comex division of the New York Mercantile Exchange.