Global Markets Overview - 13 February 2013
U.S. STOCKS, BONDS
Blue chips approached five-year highs Tuesday amid upbeat earnings reports and a rally in financial shares. The Dow Jones Industrial Average added 62 points, or 0.5%, to 14034 in mid-afternoon trading, putting the benchmark on pace for its highest close since October 2007.
The Standard & Poor's 500-stock index gained four points, or 0.3%, to 1521. The Nasdaq Composite Index shed two points, or 0.1%, to 3191 as technology shares lagged behind.
Financial shares in the S&P 500 led gains across six of the index's 10 sectors. Barclays's U.S.-listed shares jumped 9.1% after the U.K. bank said it would slash several thousand jobs, mostly in its investment bank.
The lender is trying to reassure investors about future profitability and rebuild its reputation after admitting to trying to rig interbank lending rates.
Bank of America notched a 2.8% gain, the biggest increase among blue chips. J.P. Morgan Chase rose 1.3% and Travelers added 1%.
Avon Products jumped 21%, leading the S&P 500, after the cosmetics vendor reported a fourth-quarter profit that topped estimates.
Among decliners in the tech sector, Apple fell 1.7% following a three-session rally in the shares, the longest streak of daily gains since November. Chief Executive Tim Cook, speaking at an analyst conference, defended the company's distribution of cash to shareholders.
Investors awaited President Barack Obama's State of the Union address. The president is expected to prod Congress to move to spur the economy in his speech, slated to begin at 0200 GMT, and he will also touch on immigration, gun control and climate change.
On the economic front, the National Federation of Independent Business said its small-business optimism index for January rose less than economists expected.
Separately, the number of job openings in December ticked down from a month earlier to 3.6 million, the Labor Department reported.
Among other stocks, Coca-Cola fell 2.7% after reporting fourth-quarter revenue that fell short of analysts' expectations.
The world's largest beverage company by sales sold more drinks globally but faces price competition in Europe. Michael Kors Holdings leapt 9.7% after the luxury accessories seller reported fiscal third-quarter earnings and revenue that were well above expectations and gave an upbeat 2013 outlook.
EUROPEAN STOCKS, BONDS
European stocks gained ground as well-received profit figures from Barclays, combined with news of the lender's plans for an overhaul, pushed banking stocks higher.
The benchmark Stoxx 600 index ended up 0.5% at 287.07. Among regional benchmarks, the U.K.'s FTSE 100 index gained 1.0% to 6338.38, Germany's DAX rose 0.35% to 7660.19, and France's CAC-40 increased 1.0% to 3686.58.
Shares in Barclays jumped 8.6% after the British bank announced it would slash thousands of jobs to cut its costs in the next three years as part of an overhaul of its strategy.
Its shares finished just short of a two-year high, while the Stoxx 600 index for the banking sector ended up 2.0% at 178.17.
Shares in aerospace and defense company Finmeccanica dropped 7.3% after Italian police arrested the company's chief executive officer as part of an investigation into possible international corruption.
L'Oreal shares soared 3.8% after the company posted a strong rise in 2012 net profit and made an upbeat forecast about sales for 2013.
Aer Lingus shares dropped 4.3% after Ryanair Holdings was notified that European regulators intend to block its EUR694 million ($930.3 million) takeover of the Irish carrier. Ryanair said it will seek to appeal the decision in European courts.
Shares of Michelin dropped 4.3%. The tire maker said volumes fell 6.4% in 2012, and it expects those volumes to hold steady in 2013 "in a market environment that is uncertain in mature markets but still expanding in the new ones."
ASIA-PACIFIC STOCK MARKETS
Asian markets were mixed in holiday-thinned trade Tuesday, with Tokyo stocks boosted by a weaker yen, while the market in South Korea edged lower after news that North Korea had successfully tested a nuclear bomb.
With several regional markets still closed for Lunar New Year celebrations, trading was quiet, while dealers look ahead to a G-20 meeting at the end of the week.
Tokyo climbed 1.9% to 11,369.12, while Sydney closed flat, nudging down 0.5 points to 4,959.0 after peaking earlier in the day at a 34-month high.
South Korea's Kospi finished 0.3% lower at 1,945.79, with investors largely brushing off media reports of a much-anticipated third nuclear test by North Korea.
Hong Kong, Shanghai, Taipei, Singapore and Kuala Lumpur were closed for public holidays. Japanese shares were the big gainers as the yen tumbled against the dollar in New York on Monday after U.S. Treasury official Lael Brainard praised Tokyo's efforts to boost growth and counter deflation.
Analysts say Mr. Brainard's comments indicate Washington won't support any criticism of Japan's recent monetary easing measures at the G20 meeting on Friday. Tokyo's recent moves have stoked fears, especially in Europe, of a currency war between the major economies as policymakers seek to devalue their currencies to make exports more competitive.
COMMODITIES
Base metals on the London Metal Exchange closed higher Tuesday, tracking an upturn in the euro after a weak start. At the close of open-outcry trading, LME three-month copper--the flagship of the base metals complex--was 0.5% higher from Monday's settlement price at $8,236 a metric ton.
Oil futures rose Tuesday for a second straight session, after OPEC upped its forecast for oil demand this year and as traders awaited this week's updates on U.S. petroleum supplies.
March crude rose 48 cents, or 0.5%, to settle at $97.51 a barrel on the New York Mercantile Exchange. Gold futures saw a minor gain, buoyed by weakness in the dollar, but prices stayed below $1,650 an ounce. April gold added 50 cents to settle at $1,649.60 an ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD