US markets

US stock markets' bull run stuttered during the week to Friday even though the Dow held firm on the final day of weekly trade to score its highest close since June 2008. Solid earnings from many blue-chips on the New York Stock Exchange and the Nasdaq buoyed the markets during the holiday-shortened week, against warnings from some analysts that a correction was nigh and amid inflation worries across Asia, Europe and the Americas.

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The Dow Jones Industrial Index closed 0.7 percent higher than the previous Friday's close at 11,871.84, after touching 11,905.48 in early trading. The key index shrugged off poor earnings from Bank of America and let industrial powerhouse General Electric's stellar quarterly and annual profits report drive the new high. GE shares climbed 5.5 percent after the company announced 2010 profit jumped to $12.6 billion dollars, up 15.6 percent from $10.9 billion in 2009.

The broader S&P struck its best level since late August 2008 on Tuesday, when it finished at 1,295.02. But, hit in part by disappointing earnings from major banks, the S&P tailed off over the following three sessions to suffer its first lower week-on-week close in seven weeks. Closing at 1283.35, it was down 0.8 percent from the previous Friday. Nasdaq meanwhile hit its highest point since November 2007 on Tuesday, reaching 2,765.85. But the tech-heavy bourse then dropped off to finish Friday at 2,689.54, for a 2.4 percent loss for the week. After strong runups, Apple fell 1.79 percent on Friday, Google dropped 2.38 percent andMicrosoft pared 1.17 percent. Google and Apple's better-than-expected profit reports were offset by news about their chief executives: that Apple's Steve Jobs would take another extended sick leave and that Google's Eric Schmidt would cede his slot to company co-founder Larry Page. US economic indicators released during the week had a mildly positive impact at best.

The earnings season will peak next week and dominate market sentiment. Monday will open with results from McDonalds and Halliburton, and after the close, American Express and Texas Instruments will release their data. Economists foresee no large surprises on the data front, even with the year's first meeting of the Federal Reserve Open Market Committee on Tuesday and Wednesday and GDP figures on Friday. The earnings parade continues this week, as a number of Dow Jones Industrial Average companies are expected to report their latest quarterly results.

A handful of Dow Jones Industrial Average companies--including Halliburton Co. (HAL), American Express Co. (AXP) and McDonald's Corp. (MCD)--are among those reporting their latest quarterly results. The trio--all due to report their results. Monday--are all forecast to post improved top and bottom line results from a year ago, according to analysts polled by Thomson Reuters. Other companies from the Dow 30 planning to report their results next week include 3M Co. (MMM), Johnson & Johnson (JNJ), Verizon Communications Inc. (VZ), Boeing Co. (BA), Caterpillar Inc. (CAT) and Bristol-Myers Squibb Co. (BMY). U.S. President Barack Obama will deliver the State of the Union address Tuesday, while U.S. House Budget Committee Chairman Paul Ryan (R, Wis.) was selected to deliver the Republican party's response. Meanwhile, Rep. Sander Levin of Michigan, a top U.S. House Democrat, is planning to introduce as early as Monday legislation targeting China's management of its currency, according to aides.

European markets

European stock markets climbed Friday on bargain-hunting ahead of the weekend as investors shrugged off a mixed showing in Asia and took heart from news of soaring German investor confidence. London's FTSE 100 index of leading shares rose 0.48 per cent to 5,896.25 points, while in Paris the CAC 40 jumped 1.33 per cent to 4,017.45 points and in Frankfurt the DAX climbed 0.54 per cent to 7,062.42 points. Business confidence in eurozone powerhouse Germany began the new year at record highs, the Ifo institute said on Friday. Ifo's closely tracked reading of business sentiment climbed to 110.3 points in January from 109.8 points in December, an eighth consecutive increase and second straight record high since the country's reunification in 1990. The Ifo survey came just days after Germany's ZEW research institute said financial market confidence soared as investors welcomed strong industrial orders, low interest rates and positive US data. The ZEW's index jumped to 15.4 points from 4.3 points in December, its highest level since July 2010 as the biggest economy in Europe geared up for more growth in 2011. Bank stocks got boosts in several countries due to reduced tensions over the eurozone debt crisis. Elsewhere in Europe, Lisbon added 0.27 per cent, Swiss stocks rose 0.83 per cent, Brussels climbed 1.06 per cent, Amsterdam and Milan each gained 1.38 per cent, and Madrid jumped 1.81 per cent.

Asian markets

Most Asian markets declined Friday as concerns about inflation in the region sparked a wave of selling in some countries. Indonesian, Japanese and South Korean shares suffered big declines, while Chinese stocks finished higher on bargain buying. Japan's Nikkei Stock Average fell 1.6%, South Korea's Kospi dropped 1.7%. Indonesian shares fell 2.7% and India's Sensex lost 0.2%. Hong Kong's Hang Seng index closed 0.5% lower and Taiwan's Taiex gave up 0.8%. China's Shanghai Composite index rose 1.4%, after shedding 2.9% Thursday as stronger-than-expected economic data fueled fears of more monetary-tightening measures. But some analysts said the upside was likely to be limited. Shares in Indonesia, among the best performers in Asia last year, continued to fall as investors fretted about likely interest-rate increases by the nation's central bank in coming months to check rising prices. Shares of Unilever Indonesia dropped 6.6% and Bank Mandiri (Persoro) fell 5.2%, while Bank Central Asia lost 4.4%. The Indonesian index has lost more than 9% so far in 2011. Commodity-related shares in the region were hit hard on worries that Beijing's policy tightening could dampen the country's consumption and dent commodity prices.

Base metals

Base metals closed mostly higher on the London Metal Exchange Friday, trimming some of the losses of the past two sessions as the euro and equities climbed. LME three-month copper rebounded to end the week at $9,441 a metric ton, up 0.9% on the day. The red metal was, though, still down 2.5% on the start of the week. While commodities gained amid continued euro strength, fears over further monetary tightening in China--which had dragged metal prices lower in recent days--continue to cap gains, industry participants said. Tin was the star performer, rising to fresh record highs on solid fundamental and technical buying. The thinly traded metal hit an all-time high of $27,750/ton in late European trade. Tin, along with the LME's flagship metal copper, is expected to be a standout for price gains in the year ahead as its market deficit grows.

Oil prices

US oil prices dropped for the fourth straight day in New York Friday, after weekly data showed a surprisingly higher level of US stockpiles than expected. The price for a barrel of light sweet crude for March delivery fell 48 cents to $89.11, and was off $2.43 from the closing price a week earlier. In London, however, a barrel of North Sea Brent crude pulled up $1.02 to $97.60, though well off its the $99.20 level struck a week earlier, it highest since October 2008. Gold futures extended two-month lows Friday as positive sentiment about the global economic recovery continued. The most actively traded gold contract, for February delivery, fell $5.50, or 0.4%, to settle at $1,341 a troy ounce on the Comex division of the New York Mercantile Exchange. Thinly traded nearby January gold also fell $5.50, to $1,341, losing 1.4% on the week to close at its softest price since Nov. 17.

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