World Market Overview Report 12/01/2011
U.S. stocks rose Tuesday as worries eased over the euro zone debt crisis, but the gains were pared in the afternoon as a shaky start to the earnings season made investors hesitant to leave big bets in the market ahead of an expected snowstorm in the New York metropolitan area.
The Dow Jones Industrial Average was up 19 points, or 0.2%, at 11657.
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Hewlett-Packard was among the measure's best performers, up 1.7%, after UBS raised its investment rating on the stock to buy from neutral.
But Alcoa declined 1%.
The aluminum giant kicked off the earnings reporting season with a swing to a fourth-quarter profit on rising demand and prices for aluminum, but its sales growth wasn't as strong as expected.
The Dow was also weighed down by its telecommunications components, with Verizon Communications down 1.7% and AT&T off 1.6%.
The slump came as Verizon Wireless unwrapped its version of the Apple iPhone, ending AT&T's exclusive hold over the blockbuster smartphone.
The Nasdaq Composite advanced 0.2% to 2713.
The Standard & Poor's 500 index added 0.3% to 1273, with its energy sector leading the advance.
Chevron climbed 1.4% and Halliburton added 3.3% as crude oil futures rose above $91 a barrel.
The stock indexes pared gains in the afternoon and briefly dipped into the red.
Traders said the pullback was brought on in part because investors began to get jittery about leaving some of their bigger bets in the market ahead of an expected snowstorm.
Tuesday's stock gains came as investors were encouraged to see the European Central Bank step in to buy under pressure euro-area government bonds for the second consecutive day.
Also, Japanese Finance Minister Yoshihiko Noda said Tokyo may buy more than 20% of the securities issued by the European Financial Stability Facility in its initial round.
The announcement follows reports that China is ready to buy EUR4 billion to EUR5 billion of Portuguese debt.
European Markets
Stocks in Europe rallied Tuesday, as tensions eased after Japan pledged to buy European debt and Portugal's prime minister reiterated that the country doesn't need a bailout.
The Stoxx Europe 600 index gained 1.3% to end at 281.98.
Markets were boosted after Japan said it will buy more than 20% of the amount of European Financial Stability Facility bonds that will be issued later this month.
Lisbon's PSI 20 index jumped 2.4%, as Banco Comercial Portugues SA shares rallied more than 5% and Portugal Telecom gained 2.6%.
The European Central Bank late Monday reportedly bought Portuguese debt, further underpinning sentiment.
Germany's DAX 30 index rose 1.2% to 6,941.57, as chip maker Infineon Technologies AG surged 5.1%.
Shares of Siemens AG gained 3% after the electronics and engineering group said it expects a very strong increase in new orders in the fiscal first quarter.
The U.K.'s FTSE 100 index advanced 1% to 6,014.03, lifted by the financial sector. Societe Generale upgraded European banks to overweight, saying it believes the sector can achieve more profitability than the market expects.
In London, Barclays rallied 5.5% and Lloyds Banking Group rose 1.5%. Shares of HSBC Holdings PLC jumped 2.4% after Citigroup upgraded the investment bank to hold from buy, citing strong new management and expectations for robust growth from Asian operations.
In Paris, shares of Credit Agricole rose 2.4%, helping the CAC 40 index gain 1.6% to 3,861.92.
Asian Markets
Asian stock markets ended mixed Tuesday, with higher crude-oil prices supporting energy producers in Hong Kong, while Australian shares were held back by massive flooding in the state of Queensland.
Japan's Nikkei Stock Average ended down 0.3%, South Korea's Kospi Composite rose 0.4%, China's Shanghai Composite gained 0.5%, and Hong Kong's Hang Seng Index was up 1.0%.
Leading the gains in Hong Kong, offshore oil producer Cnooc rose 2.3% after crude oil prices jumped back above $89 a barrel in U.S. trading Monday following the closure of the Trans Alaska Pipeline, a major route for oil delivery, raising concerns about supply constraints.
PetroChina rose 1.8% after China's largest listed oil firm by capacity said Monday it agreed with Ineos Group Holdings on the basic principles of a joint venture that will engage in crude oil refining and trading using assets at Scotland's Grangemouth refinery and France's Lavera refinery.
In Japan, worries about euro-zone debt weighed on stocks, though the market came off its lows, helped by the euro's gains against the Japanese yen.
The euro rose to a high of about 107.86, compared with 107.10 in late New York trade Monday, spurred by comments from Japanese finance minister Yoshihiko Noda that Japan planned to buy European debt. Resona Holdings slumped 7.3%; the company said Friday it will issue about 1.24 billion in common shares, including an over allotment arrangement, which will enable it to raise around $7.2 billion in capital.
Property shares jumped on mainland Chinese bourses as cheap valuations attracted buying interest, despite continuing concerns about possible policy tightening.
Gemdale jumped 7.8%, Poly Real Estate Group rose 5.6% and China Vanke gained 3.3%.
Base Metals
Base metals closed higher on the London Metal Exchange Tuesday as the complex pared the losses of recent days amid dip buying and a more risk-friendly outlook in the euro zone.
Copper recovered from a five-day losing streak, closing the day up 2.0% at $9,510 a metric ton, with the rest of the complex tracking its gains.
Japanese Finance Minister Yoshihiko Noda's announcement that Tokyo may buy more than 20% of the securities issued by the European Financial Stability Facility in its initial round injected life in the industrial metals, which react favorably to economic growth.
A strengthening euro against the greenback also provided support for the dollar denominated metals, which appear cheaper when the dollar falls.
On the corporate side, aluminum mining giant Alcoa Inc. (AA) unofficially opened the earnings season late Monday, posting better-than-expected fourth-quarter results, as the economic recovery boosted aluminum prices.
The company also projected 2011 global aluminum demand rising 12%, and doubling by 2020.
Crude futures rose Tuesday, pushing above $91 a barrel as traders remained fearful of supply disruptions from the closure of a major Alaskan pipeline.
Light, sweet crude for February delivery settled $1.86 higher at $91.11 a barrel on the New York Mercantile Exchange, having risen as high as $91.33.
The Trans Alaska Pipeline, shut down Saturday after workers discovered a leak, is expected to be up and running by the end of the week.
Because of the quick turnaround, refineries on the U.S. West Coast, which rely heavily on oil flowing along this route, aren't expected to face supply issues.
But any delays could cause short-term disruptions.
Gold futures closed with a gain of more than $10 an ounce, helped by renewed concerns about European sovereign debt and by increased seasonal demand for physical bullion.
Gold for February delivery climbed $10.20, or 0.7%, to settle at $1,384.30 an ounce on the Comex division of the New York Mercantile Exchange.
The contract, which had touched a high of $1,386.80 during the trading session, ended at its highest level in just more than a week.
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