Global Markets Overview -10/05/2012
U.S. STOCK MARKETS
Financial and materials shares led stocks on a broad march higher and boosted the blue chips, which posted their biggest gains in three weeks. The Dow Jones Industrial Average rose 80.75 points, or 0.6%, to 13575.36, the largest single-day gain since Sept. 13., when the Federal Reserve sparked a 1.5% rally in the Dow industrials by announcing a new bond-buying program.
The Standard & Poor's 500-stock index increased 10.41 points, or 0.72%, to 1461.40, marking the index's fourth consecutive day of gains. The Nasdaq Composite gained 14.23 points, or 0.45%, to 3149.46.
Stocks saw strong gains in the first 30 minutes of trading, as weekly jobless claims and factory-order data came in slightly better than expected, though both reflected some slowing in the U.S. economy, and as a Spanish bond auction saw a hearteningly strong response.
After the morning's gains, investors mostly sat on their hands ahead of Friday's monthly employment report. Stocks traded within a relatively narrow range through the remainder of the day. Initial claims for jobless benefits edged up to 367,000 during the latest week, slightly better than expected.
Economists expected claims to increase to 370,000. August factory orders also came in just better than expected, falling 5.2% from July. That was better than the 6% drop expected by economists, but still was the largest monthly decrease in three years.
Stocks held their gains after the release of the minutes to the Federal Reserve's last policy-setting committee. Since Thursday's economic reports were only slightly better than expected, and reflected some worsening of the U.S. economy, some traders said Wednesday evening's debate between President Obama and his Republican challenger, Mitt Romney, could have played a part in the rise.
EUROPEAN STOCKS, BONDS
European stock markets struggled for direction most of Thursday as the European Central Bank and the Bank of England kept their respective interest rates on hold, while U.S. jobless claims ticked higher.
The Stoxx Europe 600 index slipped less than 0.1% to finish at 271.33, after swinging between small gains and losses throughout the session. Among notable movers, Nobel Biocare Holding AG gave up 4.3% after saying a further deterioration in its Japanese market will materially affect revenue and profit for 2012.
Spain IBEX 35 index fell 0.2% to 7,812.80, with Telefonica SA down 0.7% after S&P Equity Research cut the stock to sell from hold. Elsewhere, energy shares lost ground. BP PLC fell 1.1%, dragging the sector lower.
A representative from BP Azerbaijan said that the gas flows from Azeri Shah Deniz fields to Turkey were halted Wednesday night. Norway's Statoil ASA gave up 1.9%, France's Total SA lost 1.1% and Italy's Eni SpA fell 0.6%. In London, Royal Dutch Shell PLC lost 1.1%.
The FTSE 100 index gained less than 0.1% to 5,827.78, with HSBC Holdings PLC up 0.9%. French stocks traded mixed, although Societe Generale SA gained 1.7%.
The CAC 40 index closed 0.1% lower at 3,401.20. In Germany, the DAX 30 index dropped 0.2% to 7,305.21, with Deutsche Telekom AG down 4.1% as UBS lowered the firm's earnings-per-share forecast for 2014 by 4%. But shares of Volkswagen AG added 2.9% after deliveries at its premium brand, Audi, rose 20%, in China in September. BMW AG jumped 3.2%. The luxury-car maker said sales in China surged 59% on the year in September.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets were mostly higher Thursday, with Japanese auto firms standing out as a weakened yen spurred the nation's exporters, while regional energy shares were hit by a sharp fall in oil prices.
The broad advance came as U.S. stock index futures climbed after the first presidential debate between President Barack Obama and Republican party challenger Mitt Romney.
Japan's Nikkei Stock Average rose 0.9% to 8,824.59, snapping a four-session losing streak. Hong Kong's Hang Seng Index ended up 0.1% at 20,907.95, South Korea's Kospi declined 0.2% to 1,992.68, and Taiwan's Taiex ended fractionally lower at 7,682.34.
Markets on the Chinese mainland remain closed for the Golden Week holidays. A drop in the Japanese yen against the U.S. dollar aided shares of exporters, with auto firms doing particularly well.
Toyota Motor Corp. climbed 3%, Honda Motor Co. jumped 3.2%, and Nissan Motor Co. soared 5.1%. Canon Inc. dropped 2.2%, however, after Credit Suisse cut its price target and profit forecast.
In Hong Kong, a 1.8% advance for top Hang Seng Index component HSBC Holdings PLC after Wednesday's higher finish on Wall Street helped support the market benchmark. Among energy sector shares Inpex Corp. fell 1.6% in Tokyo, while Cnooc Ltd. and PetroChina Co. shed 1.6% and 0.6%, respectively, in Hong Kong.
COMMODOTIES
Base metals closed mostly a touch higher on the London Metal Exchange Thursday, with market participants casting their gaze to a key U.S. employment data reading due Friday.
At the close of open-outcry trading, LME three-month copper was 0.1% higher on the day at $8,299 a metric ton. However, zinc and lead had both slipped into negative territory toward the market close, as prices continued to tread water amid quiet conditions.
Base metals have largely been consolidating since they made substantial gains in the wake of central banks' economic stimulus measures last month.
Oil futures rallied sharply Thursday, reversing much of the previous day's losses, as disruptions to the gasoline market and a border skirmish between Turkey and Syria pulled prices higher.
Light, sweet crude for November delivery settled $3.57, or 4.1%, higher at $91.71 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled $4.41, or 4.1%, higher at $112.58 a barrel.
A rally in the gasoline market pulled oil prices higher after Exxon Mobil Corp. reported a fire at a unit of its Baytown, Texas, refinery. Also lifting gasoline was a partial shutdown of the Colonial Pipeline.
Gold futures set an 11-month high and took aim at $1,800 on comments by the European Central Bank that hinted that new bailouts may be on the way. The most actively traded contract, for December delivery, rose $16.70, or 0.9%, to settle at $1,796.50 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement price since Nov. 8, 2011. COMPILED FROM MORRISON SECURITIES PTY. LTD.