Markets

Global Markets Overview - 28 December 2011

From Morrison Securities Pty. Ltd.

U.S. Stock Markets

U.S. stocks edged higher, putting blue chips on track for a fifth straight day of gains, as investors welcomed a better-than-expected reading on consumer confidence.

The Dow Jones Industrial Average rose 20 points, or 0.2%, to 12314 in afternoon trading. The Standard & Poor's 500-stock index advanced three points, or 0.2%, to 1268 and the Nasdaq Composite gained 13 points, or 0.5%, to 2631. In a sign of continuing investor cautiousness, conservative utilities stocks led the day's gains.

The sector has been the best performer on the S&P 500 this year, gaining 15%. Technology stocks were also strong. Intel led the Dow components with a 1.1% rise. Energy stocks were also strong as crude-oil futures shot above $101 a barrel. Pulling on the downside were financial stocks.

Bank of America fell 1.3% to lead the Dow decliners, and J.P. Morgan Chase dropped 0.8%. The moves in the holiday-shortened week come after a week that saw the Dow gain 3.6%, including a 124-point rally Friday that sent the blue-chip index to a five-month high.

The S&P 500 also moved back into positive territory for the year, and is up 0.8% with just three full sessions remaining in 2011. Helping the rally was a reading on consumer confidence that showed the measure at an eight-month high of 64.5 in December, easily topping expectations for a reading of 56.0. More importantly, some said, a measure of perceived job prospects improved to its best level since early 2009.

The consumer-confidence number helped a handful of household brands push to all-time highs. McDonald's gained 0.5% after breaking above $100 a share level for the first time in its history Friday. Starbucks gained 0.9% and Intuitive Surgical rose 1.6% to reach new all-time highs.

European Stock Markets

European stocks edged higher in thin, post-holiday trading, with German shares eking out small gains after a government official's upbeat comments.

The Stoxx Europe 600 index ended the day with a gain of just 0.05 point at 241.91. The index closed 3.5% higher last week amid optimism over upbeat U.S. economic data, which took the focus off the sovereign-debt crisis. London markets remained closed Tuesday.

The French CAC 40 index ended the day virtually unchanged at 3103.11. The German DAX 30 index clung to the black, ending 0.2% higher at 5889.76.

German Economy Minister Philipp Roesler told the Handelsblatt newspaper that Germany's economy is very robust and well equipped for the coming year, even amid difficulties at the international and European levels.

Gainers in Frankfurt were buoyed by business-software group SAP AG, trading up 0.5%, and retailer Metro adding 0.8%. Autos were also higher. BMW rose 0.6%. On the downside in Frankfurt, shares of Allianz fell 0.7% and Commerzbank dropped 1.5% as yields rose on Italian debt and financial stocks declined across most of Europe.

In Italy, losses for bank stocks led the FTSE MIB index down 1% to 14,924. Shares of UniCredit fell 4.8% and Banco Popolare di Milano lost 4.2%. In an interview with Italian newspaper Il Sole 24-Ore over the weekend, Maria Cannata, director of public debt for Italy, said the government would need to auction around EUR450 billion in debt in 2012. Yields for 10-year government Italian bonds traded at 7%, up from around 6.85% Friday, according to FactSet Research data.

In Paris, Credit Agricole SA fell nearly 2%, and Societe Generale lost 2.1%. Portugal's PSI 20 index rose 1.1% to 5,461.77, after the Jornal de Negocios reported the government may recapitalize banks in Portugal without becoming a shareholder of the institutions. Banco Espirito Santo rose nearly 14% and Banco Comercial Portugues SA gained 7.7%.

Asia-Pacific Stock Markets

Chinese stocks fell to a fresh 33-month low to lead Asian markets further lower Tuesday, with losses spread across sectors in thin trading and tight liquidity conditions.

The Shanghai Composite Index fell 1.1% to 2,166.21, a level it hasn't seen since March 2009. The Shenzhen Composite Index fell even more, sliding 2.6% to 853.97. The two indexes are now down 22.9% and 33.9%, respectively, with recent losses coming amid worries about the country's economic growth outlook.

The Nikkei Stock Average dropped 0.5% to end at 8,440.56 in Tokyo, with some exporters supported by expectations for a strengthening U.S. economy. South Korea's Kospi reversed early gains to fall as much as 2.3% at one point in the thinly traded session.

The index recovered to finish 0.8% lower at 1,842.02, while Taiwan's Taiex fell 0.1% to 7,085.03, after changing direction a few times. The losses were spread across industries in Shanghai. Jiangxi Copper shed 2.1%, Poly Real Estate Group skidded 3.2% and China Construction Bank fell 0.9%.

Also recording sharp losses, shares of SAIC Motor fell 4.1%, shipping firm China Cosco Holdings dropped 3.4% and Anhui Conch Cement lost 2.4%. In Tokyo, some exporters outperformed the broad market on hopes of a brighter outlook for the U.S. Canon rose 0.3% and Elpida Memory gained 2.2%.

Shares of Toyota Motor fell 0.2%, less than the broad market, after unveiling a new hybrid car Monday. Toyota Motor said it had received some 60,000 pre-launch orders for the car. Sony finished 0.5% lower, following news late Monday that it was exiting its 50-50 joint venture for liquid-crystal displays with South Korea's Samsung Electronics. Samsung, which will pay approximately $940 million for Sony's share in the venture, climbed 0.7% in Seoul.

Commodities

Nymex futures turned strongly positive Tuesday morning, reaching as high as $101.22 a barrel on the New York Mercantile Exchange after encouraging consumer confidence data and the stock market resumed its climb. Light, sweet futures for February delivery settled up $1.45 at $101.13 a barrel. Gold fell to a one-week low in light trading volume as investors moved to cash out of precious metals as the dollar and U.S. equities held their ground. The most actively traded gold contract, for February delivery, fell $10.50, or 0.7%, to settle at $1,595.50 a troy ounce on the Comex division of the New York Mercantile Exchange, the first time futures have ended below $1,600 since Dec. 19.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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