World Market Overview 07/03/2011
Worries about the potential impact of oil's climb above $100 a barrel sent U.S. stocks lower Friday, but came short of wiping out gains recorded earlier in the week. The Dow Jones Industrial Average fell 88.32 points, or 0.72%, to 12169.88, halting a two day advance. Leading the drop, General Electric fell 1.8%, while Hewlett-Packard shed 1.4% and American Express declined 1.3%. The Nasdaq Composite declined 14.07, or 0.50%, to 2784.67.
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The Standard & Poor's 500-stock index fell 9.82, or 0.74%, to 1321.15, with all its sectors in negative territory. The financial and industrial sectors posted the biggest drop. Still, the measures managed to post modest weekly gains, with the Dow rising 0.33% on the week while the S&P 500 edged up 0.1% and the Nasdaq Composite added 0.13%, thanks to gains posted earlier in the week. Friday's declines in U.S. stocks came as crude-oil futures topped $104 a barrel.
Investors were uninspired by government data showing nonfarm payrolls rose 192,000 last month while the unemployment rate fell to 8.9%, the first time it has slipped below 9% since April 2009. The data also showed average hourly earnings of all employees increased by a penny to $22.87.
European markets
European bourses closed lower Friday as oil prices rose again, returning investors' attention to the volatile situation in the Middle East and North Africa. The Stoxx Europe 600 index spent the morning in the green, hitting an intraday high of 285.4, but turned decidedly lower after the release of U.S. nonfarm payrolls. It closed down 0.6% at 281.9, bringing weekly losses to 0.8%. Top losers on the European benchmark included French retail giant Carrefour SA, which slumped 4.4% after a Citigroup downgrade to sell from neutral. French electronics company Legrand SA sank more than 5% after funds managed by private equity firms Kohlberg Kravis Roberts & Co. and Wendel conducted the joint sale of Legrand shares. Losses on the Stoxx 600 were cushioned by oil-services companies. Dutch listed maritime oil and gas engineer SBM Offshore rose 6.3% after it delivered a better than expected increase in operating profit in 2010. Peers Petrofac and Technip SA rose 3.2% and 1.3%, respectively. In France, the CAC 40 index lost 1% to 4,020.21, weighed down by a decline in defensive utility stocks such as Veolia Environnement SA and GDF Suez SA, both of which fell more than 2.5%. In Germany, the DAX 30 lost 0.7% to 7,178.90, led by a 2.2% decline in Deutsche Bank AG and a 1.9% drop in car maker Daimler AG. Shares of airline Deutsche Lufthansa AG fell 2% on concerns fuel prices will rise. In the U.K., the FTSE 100 index finished down 0.2% to 5,990.39. Advertising and media giant WPP PLC fell 2.6% after it reported a 34% increase in 2010 net profit and forecast organic revenue growth of around 5% this year.
Asian markets
Asian stock markets posted solid gains Friday, cheering an overnight charge on Wall Street and on optimism over U.S. jobs data due later in the day, though concerns over high crude-oil prices remained. South Korea's Kospi jumped 1.7% on the back of continued foreign buying, Japan's Nikkei Stock Average rose 1%, China's Shanghai Composite index gained 1.4%, Hong Kong's Hang Seng index advanced 1.2% and Taiwan's Taiex edged 0.5% higher. South Korean stocks added to Thursday's significant gains as foreign investors remained buyers, with gains led by construction shares that had posted heavy losses in the wake of the Libyan turmoil. Hyundai Engineering & Construction Co. rose 2.8%, while Samsung Engineering Co. edged up 5.3%. In Tokyo, shares of Sumitomo Electric Industries surged 8.1% on a Nikkei report that the company had developed a new rechargeable molten-salt battery. Konica Minolta Holdings added 4.2% on a separate Nikkei report that it had signed a major office-equipment-supply deal with Germany's Allianz. Exporters with strong business exposure to Europe climbed after the euro jumped overnight on hopes the European Central Bank would raise interest rates soon. Shares of Mazda Motor Corp. added 3.5% and Nikon Corp. gained 1.9%. Chinese banks were mostly higher on expectations they will report strong full-year 2010 earnings. China Merchants Bank Co. rose 3% and Industrial & Commercial Bank of China added 1.7% in Hong Kong; in Shanghai, they gained 1.4% and 1.2%, respectively.
Base metals
Copper closed lower on the London Metal Exchange Friday, weakened by a rallying oil price and bearish equity markets. A collection of encouraging economic data from the U.S. failed to maintain the red metal's early gains, though positive payroll and unemployment reports did spur a brief rally to $9,999 a metric ton before investors began to book profits. At the PM kerb close, LME three-month copper was down 0.2% at $9,890/ton. The rest of the complex closed mixed, with only tin, lead and aluminum alloy trading in positive territory at the PM kerb close. Crude-oil futures settled at their highest level in 2 1/2 years Friday, spurred by reports of violence near Libya's oil facilities. Light, sweet crude for April delivery settled up $2.51, or 2.5%, at $104.42 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 26, 2008. Brent crude on the ICE futures exchange settled up $1.18, or 1%, at $115.97 a barrel. More violence in Libya, the member of the Organization of Petroleum Exporting Countries that has been consumed by armed revolt in recent weeks, again lifted crude prices Friday. Gold futures rallied and silver hit its highest point in nearly 31 years Friday as jitters about rising oil prices amid Middle East tensions boosted the metals as refuge investments. The most actively traded gold contract, for April delivery, rose $12.20, or 0.9%, to settle at $1,428.60 a troy ounce on the Comex division of the New York Mercantile Exchange. Nearby March gold also gained 0.9%, to $1,428.20.
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