World Market Overview
Strong earnings from J.P. Morgan and Intel helped lift the broader market even as the two companies stumbled, putting U.S. stocks on pace for a fourth straight day of gains.
The Dow Jones Industrial Average added 102 points, or 0.9%, to 11122, in late trading Wednesday. The Standard & Poor's 500 stock index gained 10 points, to 1180, while the Nasdaq Composite advanced 28 points, to 2446.
Investors were buoyed by better than expected earnings from blue chips Intel and J.P. Morgan Chase, though the two stocks were the Dow's two worst performers on the day, with Intel falling 2.6% and J.P. Morgan falling 1.8%. J.P. Morgan's softness came despite reporting a 23% rise in third quarter profit to $4.42 billion, or $1.01 a share, comfortably beating consensus expectations of earnings of 90 cents a share.
However, revenue and loan balances continued to show pain from the financial crisis as consumers and businesses continue to pay off loans faster than the bank makes new ones. J.P. Morgan's stumble dragged down Bank of America, which fell 1.6%, while credit card companies benefited from J.P. Morgan saying consumers spent more on credit cards.
American Express gained 2.2%, Visa rose 3.4% and MasterCard added 3.5%. Even so, financial stocks were the worst-performing sector on the S&P 500. Intel's decline came despite announcing late Tuesday a better than expected 59% jump in third quarter profit.
Other technology stocks rallied, as Intel reported upbeat comments on business technology spending growth. Cisco Systems added 3.1%, Hewlett-Packard rose 2.6% and International Business Machines gained 0.8%.
The day's gains were mostly driven by industrial and material stocks after China's trade surplus fell to a five-month low for September, as commodity imports staged an unexpected rebound. Oil imports hit a monthly record in volume terms. Alcoa gained 1.1%, while Caterpillar added 1.6%.
European market
European stocks ended with strong gains Wednesday, buoyed by rising expectations that the U.S. Federal Reserve will take further measures to boost the slowing economic recovery. The Europe Stoxx 600 index rose 1.4% to close at 266.22.
After the close of European markets Tuesday, minutes from the Fed's latest meeting showed that central bankers believe additional easing may be needed before long.
Banks, miners and oil firms led the way to higher ground. In London, the heavyweight mining sector drove a 1.5% gain for the FTSE 100 index, which closed at 5,747.35.
Shares of Vedanta Resources PLC gained 5.9%, while Anglo American PLC jumped 5.4%. Shares of Xstrata PLC added 4.4%. Shares of miner Fresnillo PLC rose 3.3% after the firm reported an increase in third quarter silver production and gave a bullish outlook.
In Paris, shares of STMicroelectronics NV rose 2.5%, leading gains for the CAC 40 index,, which ended 2.1% higher at 3,828.34. Shares of Infineon Technologies AG jumped 2.6% in Germany, helping lift the DAX 30 index 2.1% to finish at 6,434.52.
Asian market
Asian stock markets ended mostly higher Wednesday, with Hong Kong's market rising to a 28 month high while Japanese stocks gained after upbeat machinery orders data.
Sentiment in the region received a boost after the minutes of the September Federal Open Market Committee meeting released Tuesday only served to reinforce the view that the central bank would soon adopt more quantitative easing measures.
Japan's Nikkei Stock Average added 0.2%, South Korea's Kospi tacked on 0.4%, Hong Kong's Hang Seng Index rose 1.5%, and China's Shanghai Composite gained 0.7%. Japanese stocks were boosted by a surprise 10.1% on month rise in August core machinery orders.
A poll of economists by Dow Jones Newswires and Nikkei had tipped a fall of 4.5%.Chip related stocks were generally higher after a solid earnings report from Intel. In Tokyo, Advantest rose 0.2% and Tokyo Electron was up 1.3%, while in Seoul, LG Electronics was up 1.3% and Hynix Semiconductor added 3.5%.
Commodities
Base metals on the London Metal Exchange ended mostly higher Wednesday on a weaker dollar and expectations that supplies would tighten if exchange traded base metals funds are created.
A strong performance in European and U.S. stock markets also gave the metals a lift. Lead posted the biggest gains, rising 2.5% to its highest since January. Copper rallied to a 27 month high but pared gains to end below $8,400 a metric ton.
ETF Securities announced Monday it plans to launch base metals ETFs. Coming at the start of LME Week, the industry's biggest annual event, the announcement stirred expectations and worries that metals markets that are close to deficit, or in deficit, could become substantially tighter.
Crude oil futures settled higher Wednesday, breaking a two day slide after data showed China's oil imports hit record levels and the dollar weakened. Light, sweet crude for November delivery settled $1.34, or 1.6%, higher at $83.01 a barrel on the New York Mercantile Exchange.
Brent crude on the ICE futures exchange traded $1.15 higher at $84.65 a barrel. Gold futures settled above $1,370 for the first time as heightened expectations of Federal Reserve money printing and wider reaching concerns about global monetary easing increased the metal's allure as not only a dollar hedge but also a broader alternative currency.
The most actively traded gold contract, for December delivery, rose $23.80, or 1.8%, to settle at a record $1,370.50 a troy ounce on the Comex division of the New York Mercantile Exchange. It reached as high as $1,375.70, the strongest ever intraday price for a most active contract. Thinly traded front month October gold also posted a record settlement, $1,369.50.