Global Markets Overview - 19/10/2012
U.S. STOCK MARKETS
Stocks traded lower, threatening to snap a four-day streak of gains for the Dow Industrials, as a measure of U.S. layoffs rose more than expected and a surprise earnings report from Google weighed on the technology sector. The Dow Jones Industrial Average fell 22 points, or 0.2%, to 135536 in late-afternoon trading Thursday.
The Standard & Poor's 500-stock index fell five points, or 0.3%, to 1456. Technology shares led declines across five of the index's 10 sectors. The technology-oriented Nasdaq Composite Index tumbled 31 points, or 1%, to 3073.
Indexes reversed earlier gains after Google's third-quarter results were published ahead of schedule and showed earnings short of analysts' mean forecast.
The search company's earnings report appeared hours earlier than expected, in what Google said was a mishap due to its financial printer, R.R. Donnelly, filing the report with regulators without Google's authorization.
Google's shares tumbled 8.5%. Shares in R.R. Donnelly, which said it is "fully engaged" in investigating the early release of Google's earnings, declined 0.5%.
In other earnings news, American Express slipped 3.1% after reporting third-quarter revenue that fell short of analysts' estimates.
Travelers gained 3.7%, the biggest advance in the Dow, after the insurer reported better-than-expected earnings amid a drop in catastrophe claims. Verizon Communications rose 2.1% after reporting higher profit amid a surge in new wireless connections. Economic data painted an uneven picture.
The number of Americans filing initial claims for unemployment benefits rose more than expected last week, the Labor Department reported. Manufacturing activity in the mid-Atlantic region expanded in October, according to a Federal Reserve Bank of Philadelphia report.
The reading was better than economists had expected. The Conference Board's index of leading economic indicators for September rose more than expected, following a slight decline in August.
EUROPEAN STOCKS
European stocks ended at their highest level since early June 2011 Thursday, rising in a volatile trading session that saw a mixed bag of U.S. data and earnings reports send bourses swinging between gains and losses.
The Stoxx Europe 600 index rose 0.2% to close at 276.18, the fourth consecutive daily gain. Among notable movers, Swiss food major Nestle SA dropped 1.7% after nine-month results showed a slowdown in growth in emerging markets.
Dutch paints firm Akzo Nobel NV lost 4% as it swung to a loss in the third quarter. The broader stock market struggled for direction in afternoon action, after a round of U.S. data gave different assessments of the economy.
Attention turned to Brussels, where the European Council was due to start a two-day meeting. Investors also digested data from China, where third-quarter gross domestic product figures showed the economy grew by 7.4%, as expected, down from 7.6% in the second quarter.
However, September data pointed to a pickup in growth. Mining firms rose following the data, with Rio Tinto PLC up 2.4% and BHP Billiton PLC rising 1.7%.
The FTSE 100 index added 0.1% to 5,917.05, although food and drinks makers were on the decline. SABMiller PLC gave up 2.1%, after it flagged slowing demand in Latin America as it reported half-year earnings.
In France, Pernod Ricard SA gave up 2.4%. Peer Remy Cointreau SA slumped 8% outside the main index after the liquor producer reported second-quarter organic revenue growth slowed to 5.3%.
The CAC 40 index closed 0.2% higher at 3,535.18, with Societe Generale SA up 2.5%. In Spain, the yield on 10-year government bonds dropped 14 basis points to 5.32%, according to electronic trading platform Tradeweb.
The IBEX 35 index, however, lost 0.3% to 8,100.30, with Banco Santander SA down 1.6%. Among German shares, ThyssenKrupp AG gained 1% after Exane BNP Paribas lifted the stock to neutral from underperform. The DAX 30 index picked up 0.6% to 7,437.23.
ASIA-PACIFIC STOCK MARKETS
Asian markets climbed Thursday after China released third-quarter growth data that showed growth of 7.4%, in-line with the median forecast of 14 economists surveyed by Dow Jones Newswires.
Growth data was just part of a data deluge from China. Industrial output in September and fixed asset investment in the January to September period were slightly better than expected.
Chinese Premier Wen Jiabao said Wednesday that he was confident China would reach its economic targets for the year and that the economy was in relatively good shape in the third quarter, according to a statement posted on the central government's website.
Hong Kong's Hang Seng Index peaked just before the release of the data and moderated to a 0.5% gain, while the Shanghai Composite advanced 1.2%.
The mood was firmly risk-on in Asia, before the Chinese data release, as was evident in the weakening of the yen. The Nikkei started the session higher due to the weaker yen and accelerated its gains after the Chinese data.
The index rose 2.0%, gaining for the fourth consecutive session. Exporters performed well: Toyota Motor advanced 2.5% and Sony added 2.8%. South Korea's Kospi was up 0.2%. In Hong Kong, China Life Insurance dropped 1.1% after it warned that its profits for the January to September period will likely drop by 55% on-year.
COMMODITIES
Base metals on the London Metals Exchange closed little changed but were overall buoyant amid some improved positive sentiment. Gains were capped, however, as caution persisted.
At the close of open-outcry trading, LME 3-month copper was flat on the day at $8,219 a metric ton. U.S. crude-oil futures settled nearly where they began Thursday, as traders spent another session weighing rising oil supplies against concerns about slumping demand growth.
Light, sweet crude for November delivery settled 2 cents lower at $92.10 a barrel on the New York Mercantile Exchange after swinging as low as $90.66 a barrel earlier in the session.
Gold futures retreated amid concerns about Europe's debt problems and pressure from a stronger dollar. The most actively traded contract, for December delivery, fell $8.30, or 0.5%, to settle at $1,744.70 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.