World Market Overview Report 27/04/2011
U.S. Markets
Stocks powered to fresh multiyear highs, boosted by consumer optimism and strong earnings from industrial heavyweights.
The Dow Jones Industrial Average gained 115.49 points, or 0.93%, to finish at 12595.37, a fresh three year high.
The Standard & Poor's 500-stock index rose 11.99 points, or 0.90%, to 1347.24, while the Nasdaq Composite added 21.66 points, or 0.77%, to 2847.54. The broad advances put the S&P 500 at a fresh high since June 2008, while the Nasdaq Composite is just 12 points off a 10-year high.
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The Russell 2000 index of small-capitalization stocks, meanwhile, rose 1.04% to 853.04, putting it just a few points off its record close in July 2007. The gains came amid an uptick in U.S. consumer sentiment, with the Conference Board's index of consumer confidence registering its second-highest reading since the downturn in 2008. A decline in U.S. home prices in February was also largely in line with expectations.
Also fueling the gains were industrial stocks, which benefited from a spate of strong earnings numbers from 3M Co., Cummins Inc. and Ford Motor Co. Caterpillar Inc. rose 2.8% to lead the Dow components, while General Electric Co. gained 1.1%.
Consumer and industrial products company 3M added 1.9% after posting a 16% rise in quarterly earnings, while Ford gained 0.8% after the auto maker reported its largest first-quarter profit in 13 years. Cummins, a maker of truck engines, jumped 7.6% after first-quarter profit more than doubled amid strength in key international markets, and as the company raised its current-year sales forecast by $1 billion, to $17 billion.
European Stocks
European stock markets shook off early losses to end in positive territory Tuesday after a long holiday weekend, with UBS rallying on financial results and deal news driving shares of Parmalat SpA and Aegon NV. The Stoxx 600 index rose 0.3% to close at 281.23. Stocks in Europe drew some support from Wall Street, which rose after Ford Motor Co. and 3M Co. both topped market expectations with their first-quarter results.
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Shares of UBS AG jumped 3.9% after it reported first-quarter net income fell 18%, but the inflow of cash from wealthy clients rebounded to the highest levels since 2007. Parmalat soared 10.7% after unlisted French-based Groupe Lactalis launched an offer worth EUR3.375 billion ($4.93 billion) in cash for the 71% stake in the Italian dairy group that it doesn't already own. Shares of Aegon rose 3.3% after the financial services group said it will sell its Transamerica Reinsurance unit to Scor SE. Shares of French insurer Scor also rose, gaining 2%.
Miners were also in focus after precious metals prices pulled back from recent highs and amid worries about further tightening in China's monetary policy. Shares of Vedanta Resources PLC fell 0.9%. London's FTSE 100 index rose 0.8% to end at 6,069.36. Shares of luxury retailer Burberry rose 1.6% after last week's stronger than expected sales report for the latest three-month period.
Meanwhile, tech bellwether Infineon Technologies AG gained 3.2% in Germany, helping the German DAX 30 index add 0.8% to finish at 7,356.51. A top gainer in Frankfurt was Merck KGaA, up 3.1% after Commerzbank upgraded the shares to add from hold and lifted the price target. The France CAC 40 index rose 0.6% to finish at 4,045.29, led by auto-related stocks. Shares of tire maker Michelin SA rose 4% and automaker Renault SA added 2.7%.
Asian Markets
Asian stocks stumbled Tuesday, in line with a sharp pullback in commodities and a fall in many regional currencies against the U.S. dollar, as investors turned wary ahead of the U.S. Federal Reserve's monetary-policy decision Wednesday. Tokyo shares were dragged down as weak earnings reports from corporations such as Nintendo weighed, while stocks in Hong Kong were hurt by a decline in resource shares and concerns that Beijing's policy tightening has yet to run its course.
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Japan's Nikkei Stock Average fell 1.2% to 9558.69. China's Shanghai Composite gave up 0.9% to 2938.98, Hong Kong's Hang Seng Index gave up 0.5% to 24007.38, and South Korea's Kospi slid 0.4% to 2206.30. Investors were focused on the Fed's policy decision and Chairman Ben Bernanke's news conference for updates on the central bank's quantitative easing, known as QE2.
Citigroup strategists wrote in a note to clients Tuesday that for Asia, the biggest threat from the end of QE2 is a stronger U.S. dollar. In the past, Several resource-sector stocks fell as gold and silver, crude oil and base metals pulled back on caution ahead of the FOMC decision.
Gold miner Zijin Mining Group gave up 1.2%, PetroChina lost 1.9% and Jiangxi Copper shed 0.4% in Hong Kong; in Shanghai, they fell 3%, 0.5% and 2.7%, respectively. Elsewhere, Japan Petroleum Exploration dropped 1.4% and Korea Zinc tumbled 6.2%.
Base Metals
Copper led the base metal complex to a largely negative close on the London Metal Exchange Tuesday, although losses were pared by bargain hunting on dips and a weak U.S. dollar. Expectations of tighter monetary policy in both China and the U.S. weighed on the metals throughout the day, as investors fretted that tighter liquidity would impede the prospects of the industrial metals.
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Crude oil futures prices settled lower Tuesday, while gasoline prices climbed for a fourth straight day on refinery outages ahead of the start of the peak demand season. Light, sweet crude for June delivery on the New York Mercantile Exchange settled down 7 cents at $112.21 a barrel. ICE North Sea Brent crude settled up 48 cents at $124.14 a barrel.
Silver futures fell sharply, while gold fell more modestly as investors booked profits from record prices ahead of a Federal Reserve policy decision they worry could dent the metals' historic rally. Silver's rout was particularly savage. After setting records for seven out of the last eight sessions, silver ended Tuesday nearly 10% below Monday's intraday record $49.820.
The most actively traded silver contract, for May delivery, fell $2.099, or 4.5%, to settle at $45.050 a troy ounce on the Comex division of the New York Mercantile Exchange. Front-month April silver shed $2.093, or 4.4%, to finish at $45.058. Most active Comex June gold fell $5.60, or 0.4%, to settle at $1,503.50 a troy ounce while the nearby April contract dipped $5.60, or 0.4%, to end at $1,503.00
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