World Market Overview
U.S. stocks bounced higher in a day of choppy trading Thursday as encouraging corporate earnings overshadowed jitters over recent currency fluctuations. The Dow Jones Industrial Average was recently up 30 points, or 0.3%, to 11138, reversing an afternoon slump. Stocks rebounded in a late rally after Federal Reserve Bank of St. Louis President James Bullard suggested that the central bank could announce Treasury purchases in small increments at its November meeting.
McDonald's gained 1.4% after its third-quarter earnings rose 10%, topping analysts' forecasts, and the company's chief executive predicted same store sales would rise between 5% and 6% in October, as momentum continues from the previous quarter. Home Depot was also strong, climbing 3.7%. Travelers added 0.8% after its third quarter earnings and revenue topped Wall Street estimates and the property casualty insurance firm raised its full year guidance.
The Dow's worst performer was Bank of America, which fell 3.2% as investors continued to worry over banks' liabilities connected to investigations into foreclosure practices. Caterpillar was also weak, sliding 1.5%, despite a surge in its third quarter profit. Caterpillar cautioned that the world's developed economies won't grow enough next year to alleviate persistently high unemployment levels.
The Nasdaq Composite edged up less than one point to 2458. The Standard & Poor's 500 share index added 0.1% to 1179. The consumer discretionary sector led the S&P 500, while the telecommunications sector lagged.
European market
European stocks ended higher Thursday, helped by a well-received clutch of earnings from big companies such as Nokia Corp. and Fiat, as well as signs of growth in Germany's economy. The Europe Stoxx 600 index gained 0.6% to close at 267.62. The index has gained 3% so far this month. Shares of Nokia jumped 6.3% in Helsinki after it swung to a third quarter net profit, beating forecasts. In Italy, shares of Fiat SpA jumped 4.4% after the car maker reported third quarter profit jumped to EUR190 million from EUR25 million a year earlier.
Danone SA shares, meanwhile, rose 4.8%, gaining after the French dairy giant reported a rise in quarterly sales and confirmed its full year targets. Food and beverage was a leading sector Thursday, helping to explain strong gains for the French CAC-40 index, which rallied 1.3% to end at 3,878.27.
German stocks traded at levels not seen since mid 2008, drawing support after data surprised to the positive. The DAX 30 index rose 1.3% to close at 6,611.01. Germany's preliminary composite PMI increased to 56.0 in October from 54.7, with the services index up to 56.6 from 54.9 and the manufacturing index up to 56.1 from 55.1. In London, shares of HSBC Holdings PLC rose 1.6%, helping to boost the FTSE 100, which ended 0.5% higher at 5,757.86.
Asian market
Asian markets ended mostly higher Thursday, with India's shares jumping after the book building for Coal India's initial public offering, set to raise as much as $3.5 billion, came to an end, but Chinese stocks declined after data showed the country's economic growth slowed in the third quarter. China's Shanghai Composite shed 0.7% and India's Sensex climbed 2.0%. Among other markets, Hong Kong's Hang Seng Index advanced 0.4%, Japan's Nikkei Stock Average edged down 0.1%, and South Korea's Kospi advanced 0.2%.
Banks and brokerage houses led losses in China as investors took profit after official data showed the nation's gross domestic product rose 9.6% from a year earlier in the third quarter, slowing from 10.3% growth in the second quarter, as Beijing continued to withdraw stimulus and took measures to cool sectors such as the property market. The expansion was slightly above market expectations for a 9.5% rise, according to the median forecast of 14 economists.
Other indicators such as September inflation data suggested that China's economy is still heading for a soft landing. Among China listed financial stocks, Agricultural Bank of China shed 3.4%, China Construction Bank lost 1.9% and Citic Securities fell 3.2%. The underlying strength of the economic data boosted China focused blue chips traded in Hong Kong, with Ping An rising 3.0%, Tencent adding 2.4% and China Resources Enterprise gaining 2.3%.
Base metals
Base metals closed mostly lower on the London Metal Exchange Thursday after U.S. stocks pared early gains and the euro pulled back against the dollar. Zinc and lead were the only metals to close higher, after being boosted by unconfirmed reports of the closure of a key smelter in China's Guangdong province. The smelter, operated by Shenzhen Zhongjin Lingnan Nonfernet Co. Ltd. (000060.SZ), produces some 6% of China's zinc output and 3% of its lead production. Market players described Thursday's session as choppy and volatile.
Data out of the U.S. were mixed, with a better than expected weekly jobless claims report, an index of leading economic indicators for September that matched economists' expectations, and disappointing figures in the Philadelphia Federal Reserve Bank's business activity index.
Crude oil futures prices fell Thursday amid renewed worries about the pace of global economic growth and a late rebound in the value of the dollar. A mid afternoon selloff in equities prices and buoyancy in the dollar pushed crude oil futures down within pennies of $80 a barrel, a key level which, if broken, could spur a deeper drop, traders said.
Light, sweet crude oil for December delivery settled down 2.4%, or $1.98 a barrel, at $80.56 a barrel. The contract hit a late session low of $80.09 a barrel. Comex gold prices fell as a stronger dollar accelerated traders' rush to cash in record gains. The most actively traded contract, for December delivery, settled down 1.4%, or $18.60, at $1,325.60 per troy ounce on the Comex division of the New York Mercantile Exchange.
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