World Market Overview Report 19/1/2011
US markets
Materials and industrial stocks gained following a rise in New York manufacturing activity, but shares of banks weakened after disappointing earnings from Citigroup. The Dow Jones Industrial Average rose 63 points, or 0.5%, to 11850, with Caterpillar and Boeing making up more than half of the measure's climb.
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Boeing rose 3.1% after saying it expects to deliver its first 787 Dreamliner in the third quarter. Caterpillar climbed 2.6%, while Alcoa, another proxy for views on global growth, rose 1.9%.
The Nasdaq Composite rose 4 points to 2759 despite a 1.7% drop in Apple. Shares of the consumer electronics company stumbled after Apple disclosed that chief executive and company visionary Steve Jobs would take another medical leave. Apple is the world's most valuable technology company with a stock-market value of about $321 billion, as of Friday's close. Apple will release quarterly results after the market closes. Boosting materials and industrials, the Federal Reserve Bank of New York survey of regional manufacturing activity showed improvement in January, coming in just below economists' forecasts. But traders noted a significant improvement in the key new orders index.
The Standard & Poor's 500-stock edged up less than one point at 1294. Leading materials and industrials higher, specialty metals company Titanium Metals rose 4.6% and defense company Northrop Grumman rose 3.2%. Bank stocks softened after Citigroup's fourth-quarter earnings report. Shares of Citigroup slid 5.9% after the bank swung to a profit, but its earnings missed analysts' estimates. Morgan Stanley was off 0.8%, while Bank of America shed 1.8%. Still, some investors brushed off Citigroup's earnings in the larger context of banks' gradual improvement.
European markets
European stocks advanced Tuesday, helped by gains for banks as worries over sovereign-debt issues eased, while a strong trading update drove up shares of luxury retailer Burberry Group PLC. The Stoxx Europe 600 index rose 0.9% to settle at 286.70, after touching levels not seen since late summer 2008. Banks were among the sectors getting a boost after a euro-zone finance ministers meeting in Brussels Monday was seen as backing a bigger bailout fund, though more details have yet to be worked out. Spain outperformed European markets Tuesday, with the IBEX 35 index rallying 3% to 10,583.40. The index was led higher by gains of 5.4% and 4%, respectively, for BBVA SA and Banco Santander SA. News that Russia may lift a ban it imposed on purchases of Spanish sovereign debt by its two sovereign-wealth funds also boosted sentiment. The Portugal PSI 20 index rose 1.4% to 7,668.44, with shares of Banco Espirito Santo SA up 1.8%. Spanish daily Expansion reported Tuesday that the bank is in tie-up talks with Spanish lender Banco Pastor, a report that was denied by both banks. Nonetheless, shares of Banco Pastor rose more than 5% in Madrid.
In London, shares of Burberry rallied 5.3% after the luxury retailer reported revenue growth of 30% in the third quarter, excluding the business it is discontinuing in Spain. The FTSE 100 index advanced 1.2% to close at 6,056.43. Miners reinforced gains for the FTSE 100. Shares of Kazakhmys PLC rose 3% and Vedanta Resources PLC gained 2.5%. The German DAX 30 index rose 0.9% to settle at 7,143.45, led by shares of chip maker Infineon Technologies AG, which advanced 5.4%. In Paris, the CAC 40 index finished 0.9% higher at 4,012.68, with Credit Agricole SA up1.6% and BNP Paribas SA gaining 1.8%.
Asian markets
Most Asian markets ended higher Tuesday, with a strong outlook for nonferrous and precious metals driving several stocks in the sector, while hopes for better semiconductor memory prices boosted shares of chip makers. Those gains helped regional stocks end on a mostly positive note, overcoming weakness among several steelmakers on concerns about their earnings. Japan's Nikkei Stock Average gained 0.2%, South Korea's Kospi slipped 0.2% and Taiwan's Taiex advanced 0.7%. In Hong Kong, the Hang Seng Index finished little changed, while China's Shanghai Composite, which tumbled 3% the previous session and traded lower for most of Tuesday on the central bank's move Friday to tighten banks' reserve requirements, ended 0.1% higher on bargain buying in banking stocks. Shares of China Construction Bank Corp. climbed 0.6% and Industrial & Commercial Bank of China added 0.7% in Shanghai. Nonferrous metal stocks broadly climbed across the region after Morgan Stanley issued robust outlooks for aluminum, zinc, gold and silver, while keeping a positive view on copper prices. Shares of Aluminum Corp. of China climbed 0.7% in Shanghai and surged 5.5% in Hong Kong, while Korea Zinc added 2.2% in Seoul. In Tokyo, Nippon Steel lost 1.4% after the Nikkei reported that higher raw material costs could see the company post a group pretax profit for the current fiscal year of around Y220 billion ($2.65 billion), roughly Y30 billion below the firm's forecast.
Base metals
Base metals closed mixed on the London Metal Exchange Tuesday after some long liquidation during afternoon trade in Europe dragged the commodities down from the higher end of their ranges. While the metals had gained strongly early in the session on the back of a rebound in the euro and rising equities, market participants said investors remain cautious on many of the metals amid growing inventories and the prospect of further tightening in China, the world's top metals consumer. LME three-month copper--which briefly touched $9,736 a metric ton in the middle of the European day, less than $20 below its recent record--slipped from early highs to close the session at $9,700/ton. Other metals experienced greater pullbacks, though, with zinc dropping from an intraday high of $2,477/ton to close at $2,435.50/ton, and lead falling from its peak of $2,672/ton to end the day at $2,623/ton.
Futures and commodities
Crude futures settled nearly flat Tuesday on mixed supply data. Light, sweet crude for February delivery settled 16 cents lower at $91.38 a barrel on the New York Mercantile Exchange. On Monday, workers restarted the flow of oil through the 800-mile Trans Alaska Pipeline after crews installed a new section of pipe to bypass a damaged segment, reducing concerns about supply disruptions in the world's largest oil consumer. Gold futures rose as bargain buying and speculation about a corresponding boost to physical demand lifted a market that had recently fallen to seven-week lows. The most actively traded gold contract, for February delivery, settled up $7.70, or 0.6%, at $1,368.20 an ounce on the Comex division of the New York Mercantile Exchange, breaking a streak of three consecutive sessions of losses.