US markets

U.S. stocks were mixed Monday as oil prices paused from their recent rally while investors were encouraged by comments from a top Federal Reserve official. Investors were relieved to see that oil futures traded below last week's highs of around $100 a barrel, as oil producers Saudi Arabia and Kuwait appeared ready to make up for crude supplies lost due to unrest in Libya. Investors have fretted about how consumer spending and business spending might be impacted by higher energy costs.

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Monday's round of economic data came in mixed. The Institute for Supply Management-Chicago's business barometer showed U.S. economic activity accelerated in February to its highest reading in 22 1/2 years. However, its employment index pulled back in February. Pending-home sales fell, but the decline was slightly smaller than feared. And consumer spending rose less than expected last month even as personal income rose 1.0%, the largest gain since May 2009, boosted by income-tax cuts from the federal government. Investors chose to focus on the brighter spots in the data as they looked for buying opportunities after the Dow suffered its biggest weekly point drop last week since August.

Among stocks in focus, Berkshire Hathaway's Class A shares climbed 2.5% while its Class B shares jumped 2.8% after Chairman Warren Buffett said in his widely followed annual letter to shareholders that he is prepared for more major acquisitions. The conglomerate reported a 61% jump in 2010 earnings and a growing cash hoard. Nationwide Health Properties jumped 10% after Ventas agreed to acquire the company in an all stock deal valued at $5.79 billion, creating a large health care real estate investment trust as demand for senior housing continues to grow. Ventas slipped 2.9%. Amazon.com shed 2.3%, weighing on the Nasdaq Composite, which fell 0.3% to 2772. UBS cut its investment rating on Amazon's shares to neutral from buy, saying while it expects the company will continue to dominate e-commerce, it is concerned about margin pressures from increased distribution costs and new distribution deals with hardware providers.

European markets

European stocks rose Monday, buoyed by upbeat U.S. economic data and as buyers took advantage of last week's heavy selling, but HSBC Holdings PLC fell sharply after the bank's financial results left investors disappointed. The Stoxx Europe 600 index gained 0.8% to end at 286.49, paced by gains in Frankfurt. The equities benchmark slumped 2.4% last week, the worst weekly performance since July 2010, as concerns over unrest in North Africa and the Middle East weighed heavily on sentiment.

Lending support for Europe's gains, economic data from across the Atlantic showed an increase in the income of American workers as well as a jump in a Chicago manufacturing gauge. The German DAX 30 index rose 1.2% to 7,272.32, as shares of engineering conglomerate Siemens AG surged 3.6%. Volkswagen AG gained nearly 3%, while shares of truck maker MAN SE rallied 2.8%. European chip stocks posted broad gains, with Infineon Technologies AG closing up 1.9% in Frankfurt. In London, chip designer ARM Holdings PLC gained 1.5% after Dutch-based NXP Semiconductors NV said it expanded a strategic licensing agreement for ARM's microcontrollers. And in Paris, STMicroelectronics NV rose 1.2%, as the CAC 40 index climbed 1% to 4,110.35.

Notable gainers included shares of Societe Generale SA, closing up 2.9%, and automaker Renault SA, gaining 3.4%. London's FTSE 100 index fell 0.1% to end at 5,994.01, as HSBC shares slumped 4.7%. The bank said 2010 net profit more than doubled, to $13.16 billion from $5.83 billion in the prior year, but this was still shy of analyst expectations. Also lower in London, shares of Associated British Foods PLC shed nearly 6%. The owner of retail chain Primark and British Sugar Group said that interim results will be in line with forecasts but that operating profit for Primark will be lower due to a rise in value-added tax and higher raw-material prices. It also spoke of weaker U.K. consumer demand. Shares of retailer Next PLC fell 2.4% and William Morrison Supermarkets PLC sank 2.1%.

Indian stocks jumped on Monday after the nation's finance minister said the next financial year's fiscal deficit and government borrowings will be less than the market expected. Most major Asian markets also ended higher, with stocks in Shanghai and Hong Kong both up, shrugging off a rise in Nymex crude-oil prices and Beijing's lower target for economic growth over the next five years. The Shanghai Composite rose 0.9%, Hong Kong's Hang Seng index gained 1.4% and Japan's Nikkei Stock Average added 0.9%, while India's Sensex was up 0.7%. The broad advance came despite crude-oil futures traded in New York hovering around $100 a barrel, as some analysts said the selling on concerns oil prices would surge further on turmoil in the Mideast and North Africa were overdone. The front-month April futures were recently up $1.11 at $98.99 a barrel on Globex. Ranking among the day's losers, South Korea's Kospi fell 1.2% on fears that a continuing military drill could provoke fresh aggression from North Korea. Meanwhile, Australia's S&P/ASX 200 slipped 0.1%, with trading halted prematurely because of a technical glitch. Dow Jones Industrial Average futures fell 21 points in screen trade. Chinese and Hong Kong markets looked past China's downgrade of its medium-term growth forecast, even as Premier Wen Jiabao said on Sunday the government's official target for average gross-domestic-product growth over the next five years will be 7% annually, down from a target of 7.5% in the past half decade. Chinese airline stocks rose despite the high crude-oil prices, with Air China rising 1.1% in Shanghai and 3.3% in Hong Kong. Also ranking among gainers, Anhui Jianghuai Automobile Co. added 5.6%, Jiangxi Copper Co. rose 1.4% and China Coal Energy Co. added 1.3% in Shanghai.

Asian markets

In Hong Kong, shares of heavyweight HSBC Holdings PLC climbed 1.5%, while Sun Hung Kai Properties added 1.2% ahead of their 2010 earnings reports. The Tokyo market reversed early declines to end higher, as relief over the relative resilience of the China market encouraged modest buying interest. Shares of Casio Computer Co. rose 4% and Fanuc added 3.8%. Mizuho Securities jumped 12% and Mizuho Investors Securities climbed 7% on a Nikkei report that Mizuho Financial Group is mulling acquiring full ownership of the units. Namco Bandai Holdings added 3.9% on news it will buy back up to 20 million, or 8%, of its own shares by the end of this year. Bucking the broad trend, NEC Corp. fell 3.4% after slashing its full-year profit forecast. Meanwhile, Indian shares rose sharply in afternoon trade after Finance Minister Pranab Mukherjee unveiled a proposal to cut the government's budget deficit for the next financial year starting April 1 to 4.6%, from an estimated 5.1% for the current financial year. The minister also said the government will borrow less than the market had expected, easing worries that a rise in government debt would push interest rates higher.

Leading the advance in Mumbai, shares of Coal India surged 10% after the company said it has raised product prices by up to 30% for select customers. Tractor and utility vehicle maker Mahindra & Mahindra jumped 2.7%, while heavyweights Reliance Industries and Oil & Natural Gas Corp. added 0.7% and 2%, respectively. The Seoul market underperformed regional bourses as investors became nervous that North Korea may launch new attacks as a joint military exercise by South Korea and the U.S. got under way. The drills went ahead amid threats from the North to retaliate against any provocation. Shares of Korea Kumho Petrochemical Co. lost 4.3% and Korea Life Insurance Co. declined 2.8%, while Hyundai Heavy Industries Co. gave up 3.7%. In Sydney, energy-sector shares outperformed the market, although the session was also marked by unease over the continuing geopolitical tensions in the Mideast and North Africa. Shares of Woodside Petroleum rose 1.6% and Santos added 2.4%. Elsewhere in the region, New Zealand's NZX 50 gained 0.2% and Philippine shares finished 0.8% higher; Singapore's Straits Times index slipped 0.5%, Thailand's SET fell 0.2%, and Indonesian shares rose 0.8%. Traders remained cautious as they kept a wary eye on the fluid situation in the Mideast and North Africa amid the continued tick up in oil prices.

Base metals

Base metal prices continued to rebound on the London Metal Exchange Monday, closing higher across the board as improving sentiment and month end fund buying spurred a recovery in the markets. The gains came, though, amid more subdued volumes, as geopolitical uncertainties kept some players sidelined, market players said. LME three month copper closed at $9,880 a metric ton, up 1.2% on Friday's PM kerb. During late European trade, the red metal hit an intraday high of $9,897.25/ton more than $585 higher than its Thursday nadir, when the price slumped to its lowest in a month. The industrial metals found solid support from a rally in the euro, which rose to its highest level against the dollar since the start of the month. Crude futures were slightly lower Monday as traders weighed actions by oil producers to make up for lost Libyan crude supplies against spreading Middle East unrest. Light, sweet crude for April delivery recently traded 27 cents, or 0.3%, lower at $97.61 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 5 cents higher at $112.19 a barrel. Gold futures rose slightly Monday as investors continued to seek refuge while tensions persisted in the Middle East. The most actively traded gold contract, for April delivery, rose 60 cents to settle at $1,409.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

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