Global Markets Overview - 15 February 2013
U.S. STOCKS, BONDS
Blue chips remained in the red midday, but gains in energy and consumer-staples sectors helped pull the Standard & Poor's 500-stock index to the flat line in a deal-heavy day.
The Dow Jones Industrial Average declined 18 points, or 0.1%, to 13965. The Standard & Poor's 500-stock was largely flat, moving less than 0.1%, at 1520 and the Nasdaq Composite Index tacked on two points, or 0.1%, to 3199.
In deals news, H.J. Heinz soared 20% after the company agreed to be acquired by an investment group, including Berkshire Hathaway and 3G Capital, in a deal valued at $28 billion, including debt.
Berkshire's Class B shares ticked up 1%. Fellow food companies Kraft Foods Group, General Mills and Campbell Soup also rose, up 1.1%, 2.9% and 2%, respectively.
US Airways Group fell 6.7% after the air carrier and AMR, the parent of American Airlines, formally announced merger plans, which are expected to be completed by the third quarter of 2013. Its shares had been rising in recent weeks.
In other deals news, Constellation Brands surged 37% after agreeing with rival Anheuser-Busch InBev on revised terms of A-B InBev's divestiture of Grupo Modelo's U.S. assets in which Constellation will be granted perpetual rights for the Corona and Modelo beer brands in the U.S.
Constellation will also buy the rest of Crown Imports it doesn't already own. Anheuser-Busch InBev shares climbed 5.9%. In the economic arena, initial claims for U.S. jobless benefits fell more than expected during the latest week from the previous week, to 341,000 in the latest signal that the labor market is improving. Economists expected 360,000 new claims.
EUROPEAN STOCK MARKETS
The euro slid and European stocks weakened as disappointing economic statistics overshadowed more upbeat corporate news. The Stoxx 600 index closed down 0.2% at 287.79.
The U.K.'s FTSE 100 ended down 0.5% at 6327.36, France's CAC-40 ended 0.8% lower at 3669.60 and Germany's DAX slid 1% to 7631.19. Outside Europe's core, Spain's IBEX closed 0.7% lower at 8247.40, and Italy's FTSE MIB fell 1% to 16544.95, but Greece's ASE Composite ended up 0.5% at 1032.43.
Gross domestic product figures for Germany, France and the euro zone as a whole disappointed investors Thursday.
German's GDP shrank 0.6% in the fourth quarter from the third, following three consecutive quarters of growth. The country's statistics office had forecast a 0.5% quarterly contraction.
Economic activity in France shrank 0.3% in the quarter, and GDP for the euro zone as a whole shrank 0.6%. marking the fifth straight quarter in which the currency bloc's economy failed to grow. It was the deepest rate of contraction in nearly four years.
Electricite de France shares gained 2.2% after the company announced plans to cut as much as EUR1 billion in costs this year, with more to come in the next two years, in an attempt to lower debt. Pernod Ricard SA gained 2.1% after confirming its full-year profit target despite a challenging environment in Europe.
French car marker Renault surged 7.7% after saying its global vehicle sales would continue to grow this year despite a further contraction in the European market.
On the downside, Nestle shares slipped 2.3% despite reporting better-than-expected full-year earnings.
Shares of Spanish lender Bankia sank 12%. Spain's bank bailout fund said Bankia's shareholders face considerable losses, as restructuring efforts could end in a "significant reduction" in the nominal value of the shares. Barclays fell 2.2% after Investec Securities cut the bank to "hold" from "buy."
ASIA-PACIFIC STOCKS, BONDS
Asian markets ended higher Thursday, with Hong Kong stocks gaining on the first trading day in the year of the snake, and central banks in South Korea and Japan kept their monetary policies unchanged.
Hong Kong's Hang Seng Index was up 0.9% to 23413.25, coming back online after three days of public holidays held to celebrate the lunar New Year.
Cnooc was in focus, with the offshore oil producer up 1.9% after receiving approval in the U.S. for its $15.1 billion acquisition of Canadian oil and gas company Nexen.
Markets in Mainland China and Taiwan remained closed for Chinese New Year public holidays. The main events during the Asian session were announcements by central banks in South Korea and Japan, which both met expectations by leaving monetary policy unchanged.
There was no surprise in the Bank of Japan's decision, just one month after the central bank adopted a 2% inflation target. The major uncertainty regarding the central bank is who will take over after current governor Masaaki Shirakawa, who last week said he would step down in March.
In the short term, the market was also anticipating the meeting of the Group of Twenty, to be held in Moscow over the weekend. Japan's Nikkei rose 0.5% to 11307.28, partially recovering from Wednesday's 1.0% decline.
Asahi Group Holdings rose 5.8% in Tokyo after the drinks company reported a record profit late Wednesday for the fiscal year 2012 through to December, and forecast 15% growth in net profit for the current year. In addition, the company said that it would buy back up to 4.3% of its own shares. South Korea's Kospi was just 0.2% higher at 1979.61.
COMMODITIES
Base metals were little changed at the close of London Metal Exchange floor trading Thursday, consolidating in lackluster trade as investors weighed weak European growth data against a better-than-expected U.S. labor report.
At the close, the LME's flagship three-month copper contract was trading at $8,237 a metric ton, up just 0.1% on the day. Oil futures climbed Thursday, holding their ground above $97 a barrel, finding support after a drop in weekly U.S. jobless claims but with gains capped by strength in the dollar.
March crude tacked on 30 cents, or 0.3%, to settle at $97.31 a barrel on the New York Mercantile Exchange. Natural-gas futures, however, dropped after a decline in last week's U.S. natural-gas supplies came in a bit smaller than expected.
March natural gas fell 14 cents, or 4.3%, to $3.16 per million British thermal units, its lowest since Jan. 9. Gold slipped to a fresh five-month low as data showing a drop in demand last year underlined investor caution toward the precious metal.
The most actively traded gold contract, for April delivery, fell $9.60, or 0.6%, to settle at $1,635.50 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since Aug. 20. Compiled from MORRISON SECURITIES PTY. LTD.