US markets

Investors pushed the Standard & Poor's 500-stock index to about double off its financial crisis low as a fresh geopolitical worry weighed against an encouraging package of corporate earnings and takeover news. The S&P 500 was trading at 1334.59 Wednesday afternoon, up about seven points and hovering just above double its intraday low of 666.79 on March 6, 2009.

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The Dow Jones Industrial Average gained 51 points, or 0.4%, to 12278, while the Nasdaq Composite advanced 18 points, or 0.7%, to 2823. The gains came despite a midday pullback after Israel's foreign minister warned that two Iranian warships crossing the Suez Canal into the Mediterranean Sea were provocations that Israel couldn't ignore. That sent oil prices higher and stocks lower, though investors seemed to have shrugged off some of their initial concerns. With stock prices having doubled off the lows, the market capitalization of the S&P 500 is now about $12 billion, compared to the $6.9 billion during the selloff in early 2009.

The S&P 500's market capitalization, which reflects shifts in membership and share counts, needs to rise only another 11% to set a fresh all-time high, according to numbers from Standard & Poor's. Investors Wednesday were also closely watching minutes from the latest meeting of the Federal Reserve's policy setting Federal Open Market Committee, which showed officials more optimistic about the U.S. economic outlook, raising their growth outlook for 2011. Officials also expected inflation to stay muted and unemployment to remain high, which suggests the central bank will likely follow through with its current quantitative easing effort to support the economy.

Wednesday's stock gains were propelled by the materials and energy sectors, while J.P. Morgan Chase and Hewlett-Packard were the biggest gainers among the Dow components, rising 2.4% and 2.1%, respectively. Verizon Communications dragged on the downside, falling 1.3%. Providing the market with a boost was U.S. home construction, which rose 15% in January to the highest level since September. Producer prices also showed muted gains, which could temper inflation concerns.

European markets

European stocks rose for a fourth consecutive session Wednesday, as strong earnings reported by French bank Societe Generale buoyed the financial sector. Shares of Sanofi-Aventis SA rallied after the drug giant confirmed a deal to buy Genzyme Corp. The Stoxx Europe 600 index gained 0.4% to 290.72, its highest close since September 2008. Banks across Europe registered strong gains after Societe Generale said fourth quarter net profit surged to EUR874 million from EUR221 million in the year earlier period, boosted by a big decline in provisions. Shares of the French lender rallied nearly 5%, leading France's CAC 40 index to gain 1% to 4,151.26.

Among other French banks, Credit Agricole SA was also up nearly 5%, while BNP Paribas SA rose 2.9%. Shares in Sanofi-Aventis rose 3.5% after it confirmed a long-expected deal to buy U.S. biotech firm Genzyme for $20.1 billion in cash, plus a contingent value right related to the performance of certain drugs. The U.K.'s FTSE 100 index gained 0.8% to 6,085.27, as Resolution Ltd. soared 6.3%. Mining giant BHP Billiton slipped 1.4%. The firm reported a surge in fiscal first-half net profit, but the increase was in line with expectations. Germany's DAX 30 index gained 0.2% to 7,414.30, buoyed by a 3.5% gain for Deutsche Bank AG. However, shares of Daimler AG fell 4.4% after results showed it swung to a fourth-quarter net profit of EUR1.14 billion, below the consensus forecast of EUR1.4 billion.

Asian markets

Asian markets ended mostly higher Wednesday, with a weaker yen spurring gains in Japanese exporters, while easing concerns China would further tighten monetary policy bolstered shares in Hong Kong and on the mainland. The Nikkei Stock Average rose 0.6%, South Korea's Kospi dropped 1.1%, Hong Kong's Hang Seng Index tacked on 1.1% and China's Shanghai Composite added 0.9%. Japanese stocks rose for a third straight session as a weaker yen encouraged foreign investors to pick up exporters, while the improving domestic economic outlook helped financial stocks outperform. Among exporters, Sony added 2.5%, while TDK and Tokyo Electron also rose 2.3% and 2.0%, respectively.

Shares in Hong Kong and China posted gains as investors digested the milder than expected inflation data for January released on the mainland Tuesday showing China's consumer price index rose by 4.9% on the year last month, lower than the median forecast of 15 economists polled by Dow Jones Newswires for a 5.4% increase. Steelmakers rose on expectations of higher steel product prices after Baoshan Iron & Steel Tuesday raised prices of its steel products for March delivery. Mainland-listed Baoshan Iron ended 2.8% higher and Fangda Special Steel jumped 5.4% after it reported a nine fold rise in its net profit for last year. Angang Steel's Hong Kong shares added 1.2% and its mainland ones rose 1.6%.

Base metals

Copper closed in negative territory for the second day running on the London Metal Exchange Wednesday, undermined by a dip in risk sentiment and increasing inventories. LME three month copper closed at $9,841 a metric ton at the PM kerb close, down 1.7% on the day and $349 below Tuesday's record high. According to a daily report by the LME, copper inventories rose 3,375 tons Tuesday to 405,800 tons, the highest level for six months.

Tin made also made little progress Wednesday, though it held steadier than copper. Crude-oil futures rose Wednesday after reports that Iran is sending warships through the Suez Canal sparked fears about rising tensions in the region. Light, sweet crude for March delivery settled 67 cents higher at $84.99 a barrel on the New York Mercantile Exchange, after rising as high as $85.95 immediately following the report. The WTI-Brent crude spread neared $19.

After subdued trading on data showing an increase in U.S. oil inventories, Nymex volume jumped as Israel's foreign minister said Iran is sending two warships into the Mediterranean Sea on their way to Syria. The transit through the Suez Canal would be the first time since 1979 that warships from the country have used the key route. Israel's minister, Avigdor Lieberman, called the act a provocation the Jewish state couldn't ignore for long. Rising tensions between Iran and Israel temporarily boosted gold prices, helping the metal lock in its third consecutive day of gains. The thinly traded February delivery contract settled up 0.1%, or $1.10, at $1,374.70 a troy ounce on the Comex division of the New York Mercantile Exchange. The most actively traded contract, for April delivery, settled up 0.1%, or $1, at $1,374.20 per troy ounce.
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