Global Markets Overview - 30 April 2013
U.S. STOCKS, BONDS
Stocks kicked off the week with a broad charge higher led by a rally in technology shares, as the Standard & Poor's 500-stock index notched a new all-time closing high.
The Dow Jones Industrial Average advanced 106.20 points, or 0.7%, to close at 14818.75 Monday. The S&P 500 added 11.37 points, or 0.7%, to 1593.61, with all 10 sectors higher. It closed a hair above its record high of 1593.37, reached April 11.
The tech oriented Nasdaq Composite Index rose 27.76 points, or 0.8%, to 3307.02, its highest level since 2000. The tech sector notched the biggest gains in the S&P 500, adding 1.6%, followed by materials, which gained 1.5%, and energy, which advanced 1%.
Hewlett-Packard and Microsoft were the biggest blue-chip gainers, both rising 2.6%, followed by International Business Machines, which rose 2.5%. With the day's gains, the tech sector is down 0.3% for the month and energy is down 0.8%.
Materials are now up 0.4% on the month, but the sector is still underperforming the broader market, which is up 1.6%. Dow components Pfizer and Merck are slated to report earnings Tuesday and Wednesday, respectively.
More than half of the index has reported results, and 73% of companies have beat Wall Street profit forecasts, according to FactSet. But fewer than half of companies are beating analysts' estimates for sales, known as the top line.
Investors are also waiting for the Federal Reserve, which will begin a two-day policy setting meeting Tuesday, with a statement to be released Wednesday. In economic news, the number of prospective homeowners agreeing to buy previously owned properties in March rose more than expected, to the highest level in three years. A Commerce Department report showed consumer spending increased in March, while no change was forecast. Personal income rose by less than expected.
EUROPEAN STOCKS, BONDS
European stocks rose on a rally in Italian shares that followed Prime Minister Enrico Letta and his new cabinet being sworn in over the weekend after two months of political gridlock. Italy's FTSE Mib advanced 2.2% to 16929.68, while the benchmark Stoxx 600 index rose 0.5% to 297.39.
The formation of the Italian administration ends a stalemate that followed inconclusive elections in February. Two votes of confidence are scheduled for parliament this week, but the government is expected to win both.
The yield on the 10-year Italian bond fell 0.15 percentage point to 3.91%, close to November 2010 lows, according to Tradeweb. Italian bank shares rallied. Intesa Sanpaolo advanced 2.7% and UniCredit surged 2.5%.
Elsewhere, the U.K.'s FTSE 100 index gained 0.5% to 6458.02, Germany's DAX advanced 0.75% to 7873.50 and France's CAC-40 added 1.5% to 3868.68.
European economic news added to hope that the European Central Bank could cut interest rates following a meeting of policy makers this week.
The European Commission's business climate indicator, a measure of confidence, fell to -0.93 in April from -0.75 in March, its lowest level since November.
Meanwhile, Germany's annual inflation rate eased for the fourth straight month in April to its lowest level since September 2010. Corporate news in Europe was generally upbeat.
Shares in Banco Santander rallied 2.6% after the resignation of Chief Executive Alfredo Saenz. Mr. Saenz had been criminally convicted in 2009 of having made false accusations against indebted clients in a case that arose 15 years earlier, when he headed a different bank.
Shares in Lloyds Banking Group surged 1.1% after news it sold its unprofitable Spanish retail banking operations to Banco Sabadell. People familiar with the matter said the British lender is also looking to sell part of its international wealth-management operations. Aberdeen Asset Management rose 8%.
The investment manager posted better-than-expected first-half results. Fiat bucked the trend, retreating 1.2%. The car maker swung to a net loss in the first quarter from a profit in the same period a year earlier.
ASIA-PACIFIC STOCKS, BONDS
Asian shares were mostly higher Monday in tepid trade. Although investors shrugged off weaker-than-expected U.S. growth, the closure of Japanese and mainland Chinese markets for holidays kept money on the sidelines.
Company earnings continued to be a focus in Hong Kong with the Hang Seng Index up 0.2% at 22,580.77. Industrial & Commercial Bank of China rose 0.2% and China Construction Bank tacked on 1.1% after both reported a solid set of earnings for the first quarter.
But China Coal Energy dropped 6.2% after announcing a 38% on-year slide in first quarter net profit. South Korea's Kospi Composite Index was off 0.2% at 1940.70 but automakers offered some support, with Hyundai Motor gaining 1.6% after its unionized workers agreed to resume weekend duty following a slump in first-quarter profits. Kia Motors added 3.0%.
Elsewhere in the region, Taiwan's Taiex added 0.1% to 8029.74 and Singapore's Straits Times Index was up 0.4% at 3361.92, its highest close since Jan. 4, 2008.
COMMODITIES
Base metals on the London Metal Exchange closed higher Monday, helped by political progress in Italy which buoyed equities, and by a weaker dollar against the euro, which lifted the appeal of the dollar-denominated LME metals.
At the close of open-outcry trading, LME three-month copper was 1.3% higher on Friday's settlement price at $7,153.50 a metric ton.
Crude-oil futures rose 1.6% Monday, helped by gains in stock markets and a falling dollar as traders looked to other markets for signals on the broader economy, and energy demand.
Light, sweet crude-oil futures for June delivery settled $1.50 higher at $94.50 a barrel on the New York Mercantile Exchange, the highest settlement since April 10.
Gold futures ended higher Monday as the dollar eased against the euro and investors took a more optimistic outlook on the upcoming Federal Reserve policy-setting meeting.
Platinum prices, meanwhile, rose to a two-week high amid concerns that supply of the metal would be reduced if South African authorities approve Anglo American Platinum Ltd.'s plans to close some of its mines.
The most actively traded gold contract, for June delivery, rose $13.80, or 1%, to settle at $1,467.40 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement in two weeks. Platinum for July delivery settled at its highest level since April 11, up $30.90, or 2.1%, at $1,507.40 a troy ounce