2010 FinaVestment Commentary Archives.
Week of December 20, 2010
European stocks rose, erasing losses that followed Lehman Brothers Holdings Inc.’s 2008 bankruptcy, amid speculation that the economic recovery is strong enough to withstand the region’s sovereign-debt crisis. Volkswagen AG, Europe’s biggest automaker, soared 3.7 percent after saying it expects sales in China to grow as much as 15 percent next year. Abertis Infraestructuras SA added 1.3 percent as the Sunday Times said CVC Capital Partners Ltd. may bid for the Spanish highway operator. Retailers retreated as snow disrupted holiday shopping. The benchmark Stoxx Europe 600 Index climbed 0.7 percent to 278.38 at the 4:30 p.m. close in London, the highest level since Sept. 12, 2008, the last trading day before Lehman’s collapse. The gauge has advanced 6.3 percent this month as U.S. reports showed claims for unemployment benefits unexpectedly fell, builders began work on more homes and manufacturing in the New York region rebounded more than forecast.
Emerging-market stocks fell as South Korea commenced a live-firing drill that sparked North Korean warnings of retaliation and concern lingered that Europe’s debt crisis will spread. The MSCI Emerging Markets Index lost 0.3 percent to 1,111.81 at 11:44 a.m. New York time. South Korea’s Kospi Index sank as much as 1.5 percent before ending 0.3 percent lower after Agence France-Presse reported the North will allow nuclear inspectors to return. Brazil’s Bovespa stock index fell on speculation the incoming administration of president-elect Dilma Rousseff may implement economic policies that will quicken inflation. China’s Shanghai Composite Index lost 1.4 percent as drugmakers tumbled amid speculation the government will lower medicine prices. “Fears of escalating tension in South Korea and news flow on Europe’s debt problems are driving investors to the sidelines,” said Jonathan Ravelas, a strategist at Manila-based Banco de Oro Unibank Inc.
Week of December 13th, 2010
Stocks rallied, almost completing the Standard & Poor’s 500 Index’s recovery from its post-Lehman Brothers Holdings Inc. losses, and commodities such as copper gained after China refrained from raising interest rates. The U.S. dollar dropped. The S&P 500 rose 0.4 percent to 1,245.15 at 12:06 p.m. New York time. It closed at 1,251.70 on Sept. 12, 2008, the last trading session before Lehman’s collapse spurred a 46 percent drop through March 9, 2009. The MSCI All- Country World Index of shares in 45 nations gained 0.9 percent. Copper rose to a record $9,235.25 a metric ton in London. While Chinese inflation accelerated to the fastest pace in more than two years, the central bank kept its benchmark interest rate unchanged. The helped boost optimism that the world’s fastest growing major economy will keep fueling the global expansion.
European stocks climbed for a sixth day, extending a two-year high, after China refrained from raising interest rates even as inflation surged. Kazakhmys Plc paced gains in mining shares after copper surged to a record in London. Wellstream Plc jumped 5.8 percent after General Electric Co. agreed to buy the oilfield-services provider for about 800 million pounds ($1.3 billion). John Wood Group Plc rallied 6.7 percent after agreeing to acquire PSN Ltd. The benchmark Stoxx Europe 600 Index gained 0.3 percent to 276.99 at the 4:30 p.m. close in London, extending the longest winning streak since July. The gauge has risen 2.2 percent over the last six days, reaching the highest level since September 2008, as U.S. consumer confidence advanced to a six-month high and concern subsided that Europe’s sovereign-debt crisis will derail the economic recovery.
Week of November 1st, 2010
U.S. stocks rose, with the Standard & Poor’s 500 Index adding to its best September and October performance in 12 years, as Chinese manufacturing expanded and data on personal incomes and spending highlighted the pressure on the Federal Reserve to boost economic growth. Intel Corp., Pfizer Inc. and Microsoft Corp. advanced more than 1.8 percent, leading gains in the Dow Jones Industrial Average. Baker Hughes Inc. rallied 5.5 percent, the most in the S&P 500, after the oilfield- services company beat earnings estimates. Energy companies posted the biggest gain among 10 industries in the benchmark measure of U.S. stocks, with Range Resources Corp. rising 4.8 percent. The S&P 500 gained 0.6 percent to 1,190.51 at 11:10 a.m. in New York. It surged 13 percent in September and October, the largest rally for the two months since 1998, when it advanced 15 percent. The Dow climbed 79.96 points, or 0.7 percent, to 11,198.45 today.
The pound approached the highest level in nine months against the dollar on speculation the Bank of England will refrain from joining the Federal Reserve in renewed asset purchases this week. The British currency was within a cent of the strongest in almost a month versus the euro as data showed manufacturing unexpectedly accelerated in October. Bank of England policy makers meet this week to decide on interest rates and whether to expand a 200-billion-pound ($321 billion) quantitative- asing program. The pound had its biggest weekly gain in over a year last week after data showed gross domestic product growth was double analysts’ estimates. “In the wake of the GDP report last week, people have had a reassessment of the prospect for QE this week pushing up sterling against the dollar and the euro,” said Jeremy Stretch, head of foreign-exchange strategy at CIBC World Markets in London. “That leaves the pound vulnerable to a surprise.” The pound climbed 0.1 percent to $1.6048 at 4:01 p.m. in London, approaching Oct. 15’s peak of $1.6107, which was the highest since Jan. 29. Sterling was 0.5 percent stronger at 86.54 pence per euro and climbed 0.4 percent to 129.46 yen.
Week of October 4th, 2010
U.S. stocks drifted between gains and losses as Microsoft Corp. and Alcoa Inc. led technology and commodity companies lower after analysts cut ratings on their shares, while banks and telephone companies advanced. Microsoft slumped 2 percent after Goldman Sachs Group Inc. removed its “buy” rating on the shares, citing the company’s struggle to gain market share in mobile devices. Alcoa, the aluminum company that will unofficially start the third-quarter earnings season on Oct. 7, lost 1 percent as Deutsche Bank AG advised selling the shares. JPMorgan Chase & Co. and AT&T Inc. paced gains that sent banking and telephone companies higher. The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,145.84 at 10:17 a.m. in New York after rising 0.2 percent earlier today. The Dow Jones Industrial Average climbed 14.64 points, or 0.1 percent, to 10,844.32.
European stocks declined for a sixth day, the longest stretch of losses since January 2009, as reports on U.S. home sales and factory orders failed to ease concern about the strength of the world’s largest economy. Volkswagen AG and Daimler AG led a retreat in auto-industry shares as German car sales fell. Gas Natural SDG SA lost 3.3 percent after saying a ruling related to a gas dispute with Algeria’s Sonatrach may reduce profit by as much as 450 million euros ($619 million). The Stoxx Europe 600 Index dropped 0.5 percent to 257.83 at 4:32 p.m. in London. The gauge fell the most in three months last week amid concern the economy is slowing as Europe’s sovereign-debt crisis curbs growth, extending the slide from this year’s high in April to 4.8 percent.
Emerging-market stocks rose for a fourth day, sending the index to the highest since June 2008, after a report showed China’s service industries expanded and Premier Wen Jiabao said his nation will boost domestic demand. The MSCI Emerging Markets Index climbed 0.3 percent to 1,089.40 at 11:07 a.m. New York time. The MSCI China Index, which tracks Chinese shares traded in Hong Kong, rose 1.5 percent. Brazil’s real strengthened 0.2 percent versus the dollar and the Bovespa index of stocks climbed 0.1 percent as analysts said a presidential runoff between Dilma Rousseff and Jose Serra will be positive for the country’s financial markets.
Week of September 13, 2010
U.S. stocks rose, with benchmark indexes rallying to the highest levels in a month, after a surging Chinese output and forecast for faster growth in Europe boosted confidence in the economy. Banks jumped as regulators gave firms more time than expected to meet capital requirements. JPMorgan Chase & Co. and Bank of America Corp. rose more than 3.2 percent as regulators gave the world’s lenders as long as eight years to comply with capital rules. Alcoa Inc., Microsoft Corp. and Boeing Co. gained at least 1.6 percent on economic optimism. ArcSight Inc. jumped 25 percent as Hewlett- Packard Co. agreed to buy the software maker for $1.5 billion.
The S&P 500 climbed 1.1 percent to 1,121.89 at 11:15 a.m. in New York. The Dow Jones Industrial Average advanced 81.66 points, or 0.8 percent, to 10,544.43. Six stocks gained for each that fell on U.S. exchanges. “ The S&P 500 last week capped its first back-to-back weekly gain since June, as higher-than-forecast wholesale inventories and surging imports of oil in China boosted optimism about the global economic recovery. Concern about the economy has pushed the S&P 500 down 8.9 percent from its 2010 high in April as of Sept. 10, and sent the index to 12 times forecast earnings over the next year, near the lowest since March 2009.
European stocks climbed to a four- month high as regulators reached a compromise over new capital rules for banks and economic reports from China and Europe boosted confidence in the recovery. The Stoxx Europe 600 Index rallied 0.7 percent to 266.45 at the 4:30 p.m. close in London, its highest level since April 26. The benchmark gauge last week rallied 1.7 percent, extending a rebound from this year’s low in May to 14 percent after a slump in equities left the measure trading at the cheapest valuation in a year.
Asian stocks rose, driving up the MSCI Asia Pacific Index by the most in more than four months, after higher-than-forecast wholesale inventories in the U.S. and China’s industrial output increased at a faster pace than economists estimated. The MSCI Asia Pacific Index gained 1.4 percent to 123.55 as of 7:22 p.m. in Tokyo, set to close at its highest level since May 4. The measure has climbed 6.6 percent from a one-month low on Aug. 25 amid speculation the U.S. will avoid slipping back into recession. China’s Shanghai Composite Index rose 0.9 percent as the country’s currency, the yuan, advanced to a record high. Hong Kong’s Hang Seng Index climbed 1.9 percent, while Australia’s S&P/ASX 200 Index advanced 1.2 percent. Japan’s Nikkei 225 Stock Average and South Korea’s Kospi index increased 0.9 percent.
Week of August 16th, 2010
U.S. stocks fluctuated as gains in technology and commodity companies helped the market overcome an early slide triggered by concern the economic recovery is slowing. EBay Inc. gained 3.7 percent on speculation its PayPal service will be used by Google Inc.’s Android smartphone. Titanium Metals Corp. and Cliffs Natural Resources Inc. rallied at least 2.4 percent as metal prices increased and Goldman Sachs Group Inc. reiterated its “overweight” recommendation on commodities. Corinthian Colleges Inc. and Washington Post Co. sank on concern their for-profit colleges will lose access to government student loans. The S&P 500 climbed less than 0.1 percent to 1,080.25 at 10:59 a.m. in New York, recovering from an early 0.9 percent slump. The Dow Jones Industrial Average increased 7.64 points, or 0.1 percent, to 10,310.79, reversing a 94-point tumble.
Most European stocks declined as slower-than-forecast economic growth in Japan increased concern that the global recovery may be faltering. Bank of Ireland Plc and Allied Irish Banks Plc led a retreat in financial shares. BP Plc lost 1.6 percent after the energy company delayed its relief well amid risk of a new oil leak in the Gulf of Mexico. Hennes & Mauritz AB led gains in retail shares as sales increased. Cairn Energy Plc rose 5.3 percent after Vedanta Resources Plc agreed to buy as much as 60 percent of the company’s Indian oil unit. The benchmark Stoxx Europe 600 Index was almost unchanged at 255.61 as of the 4:30 p.m. close of trading in London as 301 stocks dropped and 277 rose. The gauge fell 1.2 percent last week after the U.S. Federal Reserve said the pace of recovery in the world’s largest economy will probably be “more modest” than forecast. The measure has retreated 6.1 percent from this year’s high on April 15.
Most Asian stocks fell, led by Japanese shares, after the country’s economy grew at the slowest pace in three quarters. The Shanghai Composite Index posted its biggest advance this month as China overtook Japan to be the world’s second-largest economy last quarter.Sony Corp., which makes Bravia televisions, retreated 3 percent, while Honda Motor Co. sank 0.9 percent in Tokyo. China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, jumped by the 10 percent daily limit in Shanghai as commodity-freight rates climbed. Hong Kong’s Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, slumped 4.1 percent after the government introduced measures to cool home prices.
Week of July 5th, 2010
U.S. stocks plunged this week, giving the Dow Jones Industrial Average its first seven-day loss since 2008, after reports showing slower-than-estimated growth in jobs and factory orders and amid concern China’s economy has slowed. Alcoa Inc. and Boeing Co. slumped more than 9.9 percent this week after the Conference Board slashed its estimate of Chinese growth and U.S. government reports on employment and manufacturing trailed the median economist estimates. Financial institutions in the Standard & Poor’s 500 Index dropped 7.6 percent as a group after Moody’s Investors Service said JPMorgan Chase & Co. and Bank of America Corp. may face lost revenue. The S&P 500 fell 5 percent to 1,022.58 this week, slumping all five days and closing at the lowest level since Sept. 4. The Dow retreated 457.33 points, or 4.5 percent, to 9,686. It last fell seven days the month after Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy.
European stocks declined for a fifth day, the longest losing streak in a year, as a report showed growth slowed in the region’s services and manufacturing industries. BHP Billiton Ltd. and Rio Tinto Group paced a retreat among mining companies. Bilfinger Berger AG, Germany’s second-largest construction company, slid 3.3 percent after postponing the initial share sale of its Australian unit. BP Plc advanced 3.5 percent after the Sunday Times said the oil company is seeking a strategic investor that would help it thwart takeover bids. The Stoxx Europe 600 Index fell 0.3 percent to 236.68 after swinging between gains and losses at least 13 times today. The gauge has declined to the lowest level since May 25 as disappointing economic data from China and the U.S. fanned concern that the global recovery is faltering.
Most Asian stocks rose, following the MSCI Asia Pacific Index’s biggest weekly drop in more than a month, amid takeover news in Australia and as a weaker yen boosted the outlook for Japan’s exporters. Chinese banks dropped. Centennial Coal Co. surged 32 percent in Sydney after Banpu Pcl agreed to buy the 80 percent of Centennial it doesn’t own already own. Panasonic Corp., the world’s largest maker of plasma televisions, climbed 1.6 percent as the yen weakened against the euro. Bank of China Ltd., the nation’s No. 3 lender, sank 1.3 percent in Hong Kong after announcing a rights offer to bolster capital. The MSCI Asia Pacific Index gained 0.2 percent to 111.89 as of 7:18 p.m. in Tokyo, with five stocks advancing for every four that dropped. The gauge has fallen 13 percent from its high this year on April 15 on concern Europe’s debt crisis and Chinese steps to curb property prices will hurt global growth. Companies in the measure trade at an average of 13.6 times estimated profit, the lowest level since December 2008. Japan’s Nikkei 225 Stock Average rose 0.7 percent. Acom Co. led a surge in consumer lenders after the Mainichi newspaper reported the Osaka government will seek to start a business zone with looser lending rules than national laws.
Week of June 7th, 2010
U.S. stocks fluctuated as growth in German factory orders eased concern the European debt crisis was derailing the economic recovery, while banks fell after Goldman Sachs Group Inc. was subpoenaed in the financial-crisis probe. Goldman Sachs fell as much as 1.1 percent after the Financial Crisis Inquiry Commission said the subpoena was issued because the investment bank hasn’t complied with requests for documents. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. also dropped. Alcoa Inc. and Freeport-McMoRan Copper & Gold Inc. declined as industrial metal prices slumped. Bristol-Myers Squibb Co. jumped 7.7 percent after studies showed two of its cancer drugs may change the standard of care for patients with deadly skin and blood malignancies. The S&P 500 was little changed at 1,065.26 at 11:54 a.m. in New York after climbing as much as 0.6 percent. The Dow Jones Industrial Average increased 2.19 points, or less than 0.1 percent, to 9,934.16. European stocks fell as concern that the sovereign debt crisis will hold back the global recovery overshadowed better-than-estimated factory orders in Germany. BHP Billiton Ltd. and Rio Tinto Group declined with metal prices. Grifols SA fell 8.5 percent after agreeing to buy Talecris Biotherapeutics Holdings Corp. for $3.4 billion.
Adidas AG advanced 2 percent as analysts upgraded the shares. The benchmark Stoxx Europe 600 Index lost 0.7 percent to 242.71. The gauge has retreated 11 percent from this year’s high on April 15, as credit rating downgrades for Spain, Portugal and Greece triggered concern some European nations will struggle to fund their deficits. “We face a problem of low growth or no growth in 2011 due to fiscal problems in European countries,” said Philipp Musil, who helps oversee $10 billion at Semper Constantia Privatbank AG in Vienna. “A deflation scenario is really possible, which is very toxic for the equity market. We have reduced our exposure to European equities to ‘neutral.’” Stocks slumped on June 4 as U.S. payroll data missed economists’ estimates and comments by Hungarian officials that their economy is in a “very grave” situation fanned concern that the sovereign-debt crisis will spread further. Hungary’s government reversed course over the weekend, saying there was no danger of default.
Crude oil fluctuated near a one-week low in New York as the euro weakened amid concern the government debt crisis in Europe will spread and curtail the recovery in global fuel demand. Oil dropped as much as 2.8 percent as the euro tumbled to a four-year low against the dollar, curbing the appeal of commodities as an alternative investment. Finance chiefs from the Group of 20 failed to agree on steps to strengthen the recovery at a meeting in Busan, South Korea, that ended June 5. “We will be looking toward the dollar and equities at least over the next couple of days,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Right now the oil trade is all about risk appetite. When you’ve got a lot of risk being taken out of other asset classes, you tend to see the same thing happen in crude.” Crude oil for July delivery rose 22 cents, or 0.3 percent, to $71.73 a barrel at 12:08 p.m. on the New York Mercantile Exchange. Earlier, it touched $69.51, the lowest price since May 26. Oil has risen 4.8 percent in the past year. The euro retreated to $1.1877, the lowest level since March 2006, on concern Europe’s debt crisis will slow global growth. It decreased 0.2 percent to $1.1945 from $1.1967 on June 4.
Week of May 10th, 2010
U.S. stocks rallied, with the Standard & Poor’s 500 Index gaining the most intraday since April 2009, after European policy makers announced a loan package valued at almost $1 trillion to contain a sovereign-debt crisis. Citigroup Inc., Bank of America Corp. and Morgan Stanley jumped at least 4.2 percent. Schlumberger Ltd. and Chevron Corp. followed oil prices higher, while Alcoa Inc., the largest U.S. aluminum producer, rallied with metal prices. The S&P 500 jumped 4.2 percent to 1,156.93 at 11:03 a.m. in New York. The Dow Jones Industrial Average climbed 402.14 points, or 3.9 percent, to 10,782.57. The VIX, the benchmark index for U.S. stock options, tumbled 38 percent to 29.55, earlier dropping 37 percent for the biggest intraday drop in its two-decade history. Seventeen stocks rose for each that fell on U.S. exchanges. “It’s a relief rally,” said Michael Levine, a money manager at New York-based Oppenheimer Funds Inc., which oversees about $165 billion. “Europe seems to be more proactively addressing its debt problems. The selloff is overdone. The valuations and the economic trends in the U.S. support stocks moving higher.” U.S. stocks fell the most in 14 months last week, erasing their 2010 advance, as concern about Greece’s finances and a breakdown in U.S. market systems spurred the most volatile trading in a quarter century. S&P 500 futures earlier rallied as much as 55 points, the overnight limit set by the CME Group Inc., the world’s largest futures and options exchange. At the beginning of each quarter, the CME sets new maximum amounts by which stock-index futures are allowed to rise or fall. Dow futures jumped as much as 421 points, less than their second-quarter limit of 550 points.
European stocks rallied the most in more than 17 months after policy makers unveiled an unprecedented loan package worth almost $1 trillion to contain the region’s sovereign-debt crisis. BNP Paribas SA, France’s largest bank, surged 21 percent as the nation’s CAC 40 soared 9.7 percent. Banco Santander SA jumped 23 percent, leading Spain’s IBEX 35 index 14 percent higher for the biggest gain on record. BHP Billiton Ltd., the world’s largest mining company, and Rio Tinto Group climbed more than 6 percent as copper increased. The Stoxx Europe 600 Index soared 7.2 percent to 254.14, the biggest gain since Nov. 24, 2008, as only two stocks declined. The gauge last week posted the biggest drop in 18 months as concern grew that the region’s leaders will be unable to halt the spiraling government debt crisis. The measure has fallen 6.6 percent from its 2010 high on April 15.
Japanesestocks rose for the first time in three days after the European Union agreed to an unprecedented loan package to bail out Greece and prevent the debt crisis from spreading. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, gained 1.7 percent. Inpex Corp., the nation’s biggest energy exploration company, advanced 3.4 percent after oil prices increased. Kawasaki Kisen Kaisha Ltd., the No. 3 shipping line in Japan by sales, jumped 3.6 percent after commodity cargo rates climbed. The Nikkei 225 Stock Average rose 1.6 percent to 10,530.70 at the 3 p.m. market close in Tokyo, the sharpest climb in two weeks. The broader Topix index climbed 1.4 percent to 944.64 with more than four times as many stocks advancing as falling. “Now that the EU has agreed on a plan to rescue Greece, I’m not overly concerned that the countrys fiscal problems will spread and the global economy will slow,” said Hideo Arimura, a senior fund manager at Mizuho Asset Management Co., which oversees the equivalent of $36 billion in Tokyo. Stocks have been battered globally this month on concern European leaders won’t do enough to keep indebted nations from defaulting. European Union finance ministers agreed on a loan package worth as much as 750 billion euros ($962 billion) to prevent Greece’s debt crisis from spreading.
Week of April 26th, 2010
Most U.S. stocks rose, with benchmark indexes hovering near 19-month highs, as improving earnings at Caterpillar Inc. and Whirlpool Corp. overshadowed concern proposed legislation will hurt banks. Caterpillar gained 5.2 percent after posting its first earnings increase in seven quarters and raising its full-year forecast. Whirlpool rallied 13 percent as the appliance maker boosted its forecast. JPMorgan Chase & Co. and Goldman Sachs Group Inc. led financial shares lower on concern new legislation will bar swaps dealers from bank privileges such as access to the Federal Reserve’s discount window. About seven stocks advanced for every five that fell on U.S. exchanges. The Standard & Poor’s 500 Index increased less than 0.1 percent to 1,217.3 at 11:37 a.m. in New York. The Dow Jones Industrial Average advanced 34.84 points, or 0.3 percent, to 11,239.12. Stocks in Europe and Asia also rose. “We thought earnings would be very strong,” Tobias Levkovich, New York-based Citigroup Inc.’s top U.S. equity strategist, told Bloomberg Television. “We’re pretty convinced we have the makings of a sustainable, durable recovery. The question is what’s getting priced in to the market. And a lot of this good news is already starting to get priced in.” Earnings estimates for S&P 500 companies climbed 9.1 percent on average in April, twice the gain in their prices and the largest monthly increase since at least 2006, data compiled by Bloomberg show. The benchmark gauge for U.S. equities is trading at 14.2 times forecasts for its companies’ profits, lower than any time since 1990, except for the six months after Lehman Brothers Holdings Inc. collapsed.
European stocks rose for a second day as higher commodity prices boosted raw-material producers and earnings reports provided evidence the economic recovery is strengthening. BHP Billiton Ltd. and Xstrata Plc increased as metals prices rallied in London. TomTom NV soared the most since July after Europe’s biggest maker of portable navigation devices reported an unexpected profit. Weir Group Plc jumped to a 21- year high as the world’s largest maker of pumps for the mining industry increased its profit forecast. The Stoxx Europe 600 Index gained 1.1 percent to 270.23 at 4:40 p.m. in London, extending this year’s advance to 6.4 percent. The measure has rallied 71 percent from a 12-year low in March 2009 amid signs the global economy is recovering from the worst recession since World War II. “We remain bullish,” JPMorgan Chase & Co.’s head of European equity strategy Mislav Matejka wrote in a report to clients today. “The recovery will prove sustainable.” He maintained an “overweight” stance on European stocks relative to U.S. equities. Per-share earnings at western European companies have topped analysts’ estimates by an average o 14 percent since the U.S. earnings season began on April 12, according to data compiled by Bloomberg.
Asian stocks rose, driving up the MSCI Asia Pacific Index by the most in almost six weeks, as Toyota Motor Corp. and Canon Inc. led gains on speculation earnings will increase as the global economy recovers.
Toyota, the world’s largest carmaker, jumped 3.4 percent in Tokyo after the Nikkei newspaper said the company had an annual operating profit instead of the loss Toyota forecast. Canon, a camera maker that gets 79 percent of sales outside Japan, climbed 3.5 percent as the dollar strengthened after U.S. sales of new homes gained faster than estimated. Taiwan Semiconductor Manufacturing Co. climbed 2.9 percent in Taipei. The MSCI Asia Pacific Index climbed 1.5 percent to 127.22 as of 7:14 p.m. in Tokyo, the biggest increase since March 17. The gauge lost 2.3 percent last week after the U.S. filed a lawsuit against Goldman Sachs Group Inc. and China stepped up measures to curb property prices. Stocks in the index traded at 16.2 times estimated earnings on April 23, the lowest level since January 2009, according to data compiled by Bloomberg.
Week of April 12th 2010
U.S. stocks rose, sending the Dow Jones Industrial Average above 11,000, as a $61 billion rescue package for Greece and takeovers bolstered equities before Alcoa Inc. starts the first-quarter earnings season. Alcoa gained 2.5 percent before reporting results after financial markets close. Palm Inc. surged 20 percent as the creator of the Pre smartphone was said to be seeking bids for the company. DynCorp International Inc. rallied 49 percent following an agreement to be bought by Cerberus Capital Management LP. Mirant Corp. and RRI Energy Inc. jumped more than 12 percent on plans to combine in a $1.6 billion merger. The Standard & Poor’s 500 Index increased 0.3 percent to 1,197.73 at 11:03 a.m. in New York after capping a sixth straight weekly advance, the longest stretch of gains in a year. The Dow Jones Industrial Average rose 24.72 points, or 0.2 percent, to 11,022.07 today. “We do expect to see earnings gains for most companies in the cyclical sectors,” said Fred Dickson, chief market strategist at D.A. Davidson in Lake Oswego, Oregon, which manages around $25 billion. “The story will be the margin by which companies top estimates and the extent of upward revisions in their second-quarter revenue and earnings guidance.” Alcoa is due to report first-quarter earnings after the close of trading today, becoming the first Dow company to post results for the three months through March. Combined profit for S&P 500 companies will increase 30 percent in the first quarter from a year earlier, according to analyst estimates compiled by Bloomberg
European stocks fell as a $61 billion bailout plan for Greece failed to allay investors’ concerns that levels of sovereign debt across the region may derail the economic recovery. Eurazeo SA dropped 4.1 percent after Les Echos reported the company is considering raising about 500 million euros in a rights offer. National Bank of Greece SA climbed 5.2 percent, sending the benchmark index for Greek stocks higher. UBS AG gained 3.1 percent after the Swiss bank reported the highest quarterly earnings in almost three years. The Stoxx Europe 600 Index slid 0.1 percent to 269.36, having swung between gains and losses at least 10 times today. The gauge has climbed 6.1 percent in 2010 as the European Union agreed a contingency rescue plan to help Greece tackle the region’s biggest budget deficit. “Greece has certainly been on everyone’s minds,” said London-based David Hussey, head of European equities at MFC Global Investment Management, which manages about $287 billion in assets. “Looking further out you’ve got to be worried that a similar situation could happen later in the year” elsewhere. National benchmark indexes advanced in 16 of the 18 western European markets. The U.K.’s FTSE 100 added 0.1 percent with France’s CAC 40 and Germany’s DAX both closing little changed. Eurazeo dropped 4.1 percent to 52.53 euros in Paris, the worst performer on the Stoxx 600, after French daily Les Echos reported the investment company is considering raising about 500 million euros in a rights offer to use for acquisitions. The newspaper cited four unidentified people. The company declined to comment, Les Echos said.
Most Asian stocks gained, lifting the MSCI Asia Pacific Index for the seventh time in eight days, as a rescue package for Greece overshadowed concerns of tighter lending standards in China. Billabong International Ltd., which gets almost a quarter of its revenue in Europe, increased 3.4 percent in Sydney. BHP Billiton Ltd., the world’s largest mining company, rose 1.3 percent. Nintendo Co., which receives about 34 percent of revenue from Europe, advanced 4.3 percent in Osaka as the euro strengthened against the yen. Poly Real Estate Group Co., China’s second-largest developer, declined 4.3 percent after banks tightened mortgage requirements. An agreement by European governments to offer Greece a rescue package worth as much as 45 billion euros ($61 billion) helped reduce concern a public default would spur losses in credit markets and pose a threat to global growth. Gains in metals and energy markets and a report showing U.S. manufacturers are boosting production also helped Asian shares.
Week of March 15th, 2010
U.S. stocks fell for a second day amid growing concern lawmakers will limit trading at banks and speculation that China will restrict economic growth to curb inflation. Exxon Mobil Corp. and Chevron Corp. paced a drop in all 40 energy companies in the Standard & Poor’s 500 Index as oil retreated below $80 a barrel. Goldman Sachs Group Inc. and Morgan Stanley lost at least 1.9 percent as Senate Banking Committee Chairman Christopher Dodd prepares to introduce a financial-regulation bill. Boston Scientific Corp. plunged 16 percent after halting defibrillator sales, while Google Inc. sank 4 percent on speculation it will withdraw from China. The S&P 500 slipped 0.6 percent to 1,142.86 at 12:18 p.m. in New York. The Dow Jones Industrial Average lost 31.44 points, or 0.3 percent, to 10,593.25. Four stocks dropped for each that rose on the New York Stock Exchange and Nasdaq Stock Market. “If they’re going to get tough on the financial sector, and this bill gets passed, I think you’re going to see a lot of liquidity coming out of the market,” said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages about $2.5 billion in San Antonio. Benchmark indexes extended declines as CNBC reported that Dodd’s bill will include the Volcker Rule that limits banks trading activities. S&P 500 financials lost 1 percent as a group, falling for a second day following a record 10-day winning streak. Losses in equities were limited earlier on reports showing growth in industrial production and New York manufacturing.
European stocks dropped on concern China will take more steps to cool its economy and as Moody’s Investors Service said the U.S. and U.K. are closer to losing their AAA credit ratings. BHP Billiton Ltd., the world’s largest mining company, led a gauge of basic-resource producers to the biggest decline among 19 European industry groups as metals fell. Deutsche Telekom AG, Europe’s biggest phone company, and Scor SE, France’s largest reinsurer, retreated as analysts downgraded the shares. The Stoxx Europe 600 Index declined 0.7 percent to 256.65 at 4:36 p.m. in London. The measure has risen for the past two weeks, reaching the highest level in more than seven weeks, as concern eased that Greece will fail to contain the euro region’s biggest budget deficit. “We had a good move to the upside last week and the market is taking a breather today to evaluate whether the move was justified,” said Philipp Musil, a fund manager at Semper Constantia Privatbank AG in Vienna, who helps oversee about $13 billion. “That China could take money out of the market is also weighing on sentiment. We need a new catalyst from earnings or economic data.” European Union leaders are “ready to table a proposal for a coordinated framework for coordinated and conditioned assistance,” Economic and Monetary Commissioner Olli Rehn told reporters before a meeting of euro-region finance ministers in Brussels today. Options for shoring up Greece include selling bonds guaranteed by euro-region
governments or having individual governments grant Greece loans, three people briefed on preparations for the meeting said on March 12.
Asian stocks fell for the first time in three days, led by energy and commodity producers, on concern China will boost measures to cool economic growth that has been driving a global recovery. PetroChina Co., China’s biggest oil company, and China Shenhua Energy Co., the nation’s largest coal producer, dropped more than 2 percent. China Southern Airlines Co. fell 3 percent in Shanghai, pacing declines by airlines, after Chinese Premier Wen Jiabao said the country will keep the yuan’s exchange rate “basically stable.” Newcrest Mining Ltd., Australia’s biggest gold producer, slumped 1.5 percent after prices of the precious metal dropped last week in New York.”The MSCI Asia Pacific Index fell 0.5 percent to 122.63 as of 7:27 p.m. in Tokyo, with about twice as many stocks dropping as advancing. The index has retreated 3.3 percent since reaching a 17-month high on Jan. 15 amid concern governments from China to India will withdraw economic-stimulus measures and that Greece will struggle to curb its budget deficit.
Week of February 22nd, 2010
U.S. stocks fell for the first time in five sessions as declines in natural gas and industrial metal prices dragged down commodity producers, overshadowing gains in financial companies. Exxon Mobil Corp. and Newmont Mining Corp. declined as natural gas and copper prices fell at least 2 percent. H&R Block Inc., the biggest U.S. tax preparation firm, dropped 5.4 percent after an analyst downgrade. Wells Fargo & Co. and Bank of America Corp. led financial shares higher on speculation the Federal Reserve will signal plans to leave its benchmark interest rate at a record low. The Standard & Poor’s 500 Index slipped 0.2 percent to 1,106.64 at 11:39 a.m. in New York. The Dow Jones Industrial Average lost 21.84 points, or 0.2 percent, to 10,380.51. The two indexes climbed at least 3 percent last week, their biggest gains since November. “The market might be a little overbought after last week’s rally,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees about $73 billion in client assets. “I wouldn’t be surprised if this week becomes a consolidation week and then continues to go up next week.” Fed Chairman Ben S. Bernanke may tell Congress this week that an interest rate increase isn’t imminent amid a weak jobs market, said Ethan Harris, head of economics for North America at Bank of America Merrill Lynch. New York Fed President William Dudley said on Feb. 19 that policy makers need to focus on growth rather than inflation, citing a smaller-thanforecast increase in consumer prices in January, a day after the Fed raised its discount rate to 0.75 percent from 0.5 percent.
European stocks declined after the biggest weekly advance in seven months for the Dow Jones Stoxx 600 Index as retailers and health-care companies retreated. Inditex SA, the world’s largest clothing retailer, and Carrefour SA fell more than 2 percent after Exane BNP Paribas downgraded the shares. GlaxoSmithKline Plc led drugmakers lower after a report raised concern it may be more vulnerable to lawsuits over its Avandia diabetes medicine. Fonciere des Regions jumped 5.2 percent after announcing a plan moving its Italian unit toward tax-exempt status. The Stoxx 600 slipped 0.3 percent to 249.67, the first decline in six days. The benchmark index for European equities has fallen 4.1 percent from this year’s high on Jan. 19 amid concern that efforts by Greece, Spain and Portugal to curb their budget deficits will harm the economic recovery and as China moved to restrict lending to stop its economy from overheating. “After the strong rally of the past weeks a consolidation is a healthy development,” said Peter Braendle, who helps oversee about $50 billion at Swisscanto Asset Management in Zurich. “Concerns about whether Greece will be able to refinance and what happens in China are not over.” Western European companies that have reported earnings since Jan. 11 have beaten analysts’ forecasts for net income by an average of 15 percent, according to Bloomberg data. In the U.S., more than 400 companies in the S&P 500 have posted quarterly results in the same period, and about 76 percent have topped net income estimates, the data show.
Asian stocks gained, driving the MSCI Asia Pacific Index up the most since November, after a smaller-thanestimated increase in U.S. consumer prices eased concern the Federal Reserve will increase interest rates. BHP Billiton Ltd., Australia’s top oil producer and the world’s largest mining company, gained 2.8 percent after metal and oil prices rose. United Co. Rusal Ltd., the world’s largest aluminum producer, surged 6.9 percent in Hong Kong on plans to boost output. Suruga Bank Ltd. surged 7.4 percent in Tokyo on stock buy-back plans. The MSCI Asia Pacific Index gained 2.5 percent to 118.16 as of 7:32 p.m. in Tokyo, the most since Nov. 30. The gauge sank 2.1 percent on Feb. 19 after the Fed raised the cost of direct loans to banks. The index has lost 6.8 percent from a 17-month high on Jan. 15 on speculation central banks will tighten monetary policy, and that Greece, Spain and Portugal will struggle to curb deficits. “Markets were spooked last week by the U.S. Federal Reserve’s decision to lift the discount rate,” said Tim Schroeders, who helps manage about $1.1 billion of equity investments at Pengana Capital Ltd. in Melbourne. “The news on the U.S. consumer-price index is a net positive which should allow markets to push higher.” Japan’s Nikkei 225 Stock Average advanced 2.7 percent to 10,400.47 and South Korea’s Kospi Index rose 2.1 percent. China’s Shanghai Composite Index dropped 0.5 percent after a one-week holiday for the Lunar New Year.
Week of February 8th, 2010
U.S. stocks fluctuated as analyst upgrades lifted Home Depot Inc., Google Inc. and Amazon.com Inc. while a weaker dollar boosted commodities, offsetting concern over deteriorating European government finances. Home Depot rallied 3 percent as Morgan Stanley advised buying the shares, while Google climbed as Bank of America Corp. added the company to its “U.S. 1” list of favorite stocks. Alcoa Inc. and Exxon Mobil Corp. rose at least 1.1 percent as oil and metal prices rebounded from last week’s slide. JPMorgan Chase & Co. and Bank of America had the biggest declines in the Dow Jones Industrial Average. The Standard & Poor’s 500 Index increased 0.2 percent to 1,068.48 at 12:03 p.m. in New York. The Dow decreased 19.49 points, or 0.2 percent, to 9,992.74. The Nasdaq Composite Index rose 0.3 percent to 2,146.82. “There’s risk aversion,” said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. “Good economic and corporate data points in the U.S. are being offset by uncertainties in Europe. Investors should continue to be mindful. I wouldn’t be surprised to see the market flat to down this week.” U.S. stocks have retreated for four straight weeks, the longest losing streak since July. Stocks rallied in the final hour of trading on Feb. 5, with the Dow Jones Industrial Average erasing a 167-point drop, on speculation the European Union would devise a solution for the budget deficits. European Central Bank President Jean- Claude Trichet said the ECB is “confident” Greece will cut its deficit below the limit of 3 percent of gross domestic product in 2012 from 12.7 percent.
European stocks rebounded from the biggest weekly drop in 11 months as investors snapped up food and mining companies and a technical indicator showed equities may have fallen too far. SABMiller Plc and Nestle SA led gains among food producers. Xstrata Plc led mining companies higher after reinstating its dividend and saying the outlook for commodities demand is “very promising.” National Bank of Greece SA and EFG Eurobank Ergasias SA, the country’s biggest banks, sank more than 8 percent. The Dow Jones Stoxx 600 Index added 0.7 percent to 239.04 at 4:49 p.m. in London after earlier dropping as much as 0.9 percent. The measure has retreated 8.2 percent since this year’s high on Jan. 19. The gauge lost 3.9 percent last week on concern that efforts by Greece, Spain and Portugal to reduce their budget deficits will harm the economic recovery.
Asian stocks fell, dragging the MSCI Asia Pacific Index 10 percent below its January peak, as electronics makers posted losses and European finance ministers failed to announce detailed plans to tackle budget deficits. Panasonic Corp. and Casio Computer Co. slumped more than 5 percent in Tokyo. Jupiter Telecommunications Co. sank 9.6 percent on concern KDDI Corp. may trim its planned investment in the cable operator. HTC Corp. lost 6.7 percent in Taipei after a newspaper said the phone maker may cut prices by 40 percent. The MSCI Asia Pacific Index dropped 0.5 percent to 114.06 as of 7:22 p.m. in Tokyo, with twice as many stocks declining as advancing. The gauge has fallen 10 percent from a 17-month high on Jan. 15, entering a so-called correction, on concern central banks from China to India will tighten monetary policy to curb inflation, and that Greece, Spain and Portugal will have difficulty curbing deficits. “The correction we’re seeing is likely to go further, but I still regard these recent sell-offs as a bump in the road,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which oversees about $90 billion globally. “Despite the anxiety in recent weeks, the global growth recovery remains intact.” Today marked the MSCI index’s third-straight drop. Japan’s Nikkei 225 Stock Average fell 1.1 percent. Kirin Holdings Co. dropped 7.4 percent as merger talks with Suntory Holdings Ltd. stalled. Hong Kong’s Hang Seng Index lost 0.6 percent. The Jakarta Composite Index sank 1.7 percent, the biggest retreat in the Asia-Pacific, on declines in some commodity prices.
Week of January 25th, 2010
U.S. stocks rose, rebounding from the biggest three-day decline since the rally began in March, amid signs Ben S. Bernanke will be reconfirmed as Federal Reserve chairman. Bank of America Corp. and Goldman Sachs Group Inc. climbed at least 1 percent after the White House and the Senate’s senior Republican predicted Bernanke will keep his job. Intel Corp. gained 1.5 percent on speculation consumers and businesses will replace older computers. AK Steel Holding Corp. rallied as much as 8.7 percent after posting profit that topped analysts’ estimates and predicting steel prices will increase. The Standard & Poor’s 500 Index advanced 0.3 percent to 1,095.24 at 11:12 a.m. in New York, trimming a 1 percent gain after a report showed sales of existing homes fell more than estimated. The Dow Jones Industrial Average gained 6.8 points, or less than 0.1 percent, to 10,179.78. “The good news today is that the chances of Bernanke getting confirmed seem to be better Monday morning than they were even Sunday afternoon,” said Komal Sri-Kumar, who helps manage $118 billion as chief global strategist at TCW Group Inc. in Los Angeles. “The negative is that the existing home sales show that the housing sector is still under severe pressure. And I can’t see how the economy can avoid a double-dip recession if housing doesn’t improve.” The S&P 500 plunged 5.1 percent in the previous three sessions as President Barack Obama called for a limit on risk- taking by banks and concern mounted that China will take measures to stem economic growth. Wavering support for Bernanke among some Democrats helped drive stock prices lower on Jan. 22, triggering a 2.2 percent plunge in the S&P 500.
European stocks fell for a fourth day, the longest losing streak in two months, after U.S. home sales slid more than forecast and Ericsson AB reported disappointing earnings. Ericsson retreated 1.2 percent after the world’s biggest maker of wireless networks reported profit that missed analysts’ estimates. Swedbank AB, the largest lender in the Baltic region, declined 2 percent after Deutsche Bank AG advised selling the shares. EFG Eurobank Ergasias SA and Piraeus Bank SA jumped more than 3 percent in Athens as demand for Greece’s first bond sale of the year eased funding concerns. The Dow Jones Stoxx 600 Index dropped 0.5 percent to 248.69 at 4:38 p.m. in London, having swung between gains and losses at least 18 times. The gauge tumbled by the most in three months last week, erasing its advance for the year, after U.S. President Barack Obama called for a limit on risk-taking by banks and concern mounted that China will take measures to stem economic growth.
Asian stocks fell for a sixth day, dragging Hong Kong’s Hang Seng Index 10 percent below its November high, on concern Chinese banks need more capital and that profit growth won’t be enough to justify equity valuations. Bank of China Ltd. lost 2.1 percent in Hong Kong on plans to raise $5.86 billion from selling convertible bonds. BHP Billiton Ltd., the world’s largest mining company, sank 1.1 percent in Sydney as copper and oil futures declined. Honda Motor Co., which receives 42 percent of its sales from North America, declined 1.7 percent on speculation U.S. measures to restrict risk-taking at banks will derail the global recovery. The MSCI Asia Pacific Index lost 0.7 percent to 121.57 as of 7:42 p.m. in Tokyo. The index sank 4.1 percent in the past six days on U.S. President Barack Obama’s bank proposal and growing concern China will take further steps to rein in growth. Companies on the gauge are priced at 1.6 times book value, near the highest level since September 2008. “Asian markets are correcting over concerns the trajectory of growth is insufficient to justify some valuations,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. Hong Kong’s Hang Seng Index dipped 0.6 percent, as financial shares led the gauge into a so-called correction. The Shanghai Composite Index lost 1.1 percent, led by PetroChina Co. as crude oil fell. Japan’s Nikkei 225 Stock Average and Australia’s S&P/ASX 200 Index each retreated 0.7 percent.
Week of January 4th, 2010
U.S. stocks advanced following the market’s biggest annual rally in six years after a gauge of manufacturing increased more than estimated and freezing weather sent oil prices higher. Caterpillar Inc. and United Technologies Corp. gained at least 2.2 percent as the Institute for Supply Management’s factory index rose to a more than three-year high. Exxon Mobil Corp. and Chevron Corp. climbed as crude rallied above $81 a barrel. Newmont Mining Corp. and Alcoa Inc. increased on higher metals prices, while Morgan Stanley jumped 3.8 percent after analysts advised buying the shares.
The S&P 500 added 1.4 percent to 1,131.03 at 10:43 a.m. in New York. The Dow Jones Industrial Average increased 141.17, or 1.4 percent, to 10,569.22. Intel Corp. led gains in technology shares after Robert W. Baird & Co. forecast increased demand for personal computers. Shares in Asia and Europe rallied.
U.S. equities extended a global advance spurred by an increase in a barometer of Chinese manufacturing. The Chinese purchasing managers’ index rose to a seasonally adjusted 56.1 in December, data compiled by HSBC Holdings Plc and Markit Economics showed. A $586 billion stimulus package, subsidies for consumer purchases and record new loans have driven the nation’s recovery from the slowest growth in almost a decade.
Benchmark indexes extend gains after the ISM’s factory index for the U.S. rose to 55.9 in December from 53.6. Readings greater than 50 signal expansion. The median estimate of economists in a Bloomberg survey was 54.3. Caterpillar, the world’s largest maker of construction equipment, rose 2.4 percent to $58.37. United Technologies, the maker of Otis elevators are Carrier air conditioners, gained 2.1 percent to $70.85. 23 Percent Rally
The S&P 500 climbed 23 percent last year, including a 65 percent rebound from a 12-year low in March, after governments around the world enacted stimulus measures to end the recession. Stocks fell in the last trading session of 2009 after the biggest annual rally in six years left the S&P 500 trading at about 24 times its companies’ earnings, the most expensive level since 2002, according to Bloomberg data.
Exxon, the biggest U.S. oil producer, added 1 percent to $68.88 as crude for February delivery rose as much as $2.32, or 2.9 percent, to $81.68 a barrel. Heating oil climbed to the highest in 14 months. Chevron, the second-largest U.S. energy producer, gained 2.5 percent to $78.91. The stock may advance as much as 20 percent over the next 12 months as oil prices climb and the company’s global exploration projects proceed, Barron’s said, citing analysts and investors.
European stocks rose to a 15-month high as Chinese manufacturing grew the most in five years in December and U.S. factory production expanded at a faster pace than forecast.
The Dow Jones Stoxx 600 Index added 1.4 percent to 257.31 at 4:35 p.m. in London, the highest close since Oct. 3, 2008. The measure soared 28 percent last year, its biggest annual gain since 1999, on mounting evidence the global economy is recovering from the worst recession since World War II.
The Stoxx 600 has surged 63 percent since March, boosted by record-low interest rates in the U.S. and Europe and about $12 trillion of commitments from governments worldwide to revive credit markets and stimulate growth. The benchmark index for European equities may end 2010 at 280, from a 2009 close of 253.89, as the economy expands and stocks that underperformed last year catch up, Citigroup Inc. strategists wrote in a report distributed today. Benchmark Indexes.
Nestle, the world’s largest food company, rose 1.4 percent to 50.90 Swiss francs after Novartis offered to buy the rest of Alcon from Nestle and minority shareholders for about $39.3 billion. Nestle also announced an additional share buyback worth 10 billion Swiss francs ($9.65 billion). Novartis slipped 2.8 percent to 54.9 francs.