Stocks: Wednesday's review
Asian stocks rose, driving up a regional benchmark index by the most in two months, after companies reported higher earnings and U.S. manufacturing expanded, boosting confidence in a global economic recovery.
Toyota Motor Corp., the world’s biggest carmaker, advanced 3.3 percent in Tokyo after saying U.S. sales rebounded. Mitsubishi Electric Corp., a maker of factory equipment and home appliances, surged 7.4 percent in Tokyo after profit exceeded analysts’ estimates. BHP Billiton Ltd., the world’s largest mining company, rose 2.4 percent in Sydney after metal prices climbed. Paladin Energy Ltd., a uranium miner, gained 5.8 percent after the company completed an acquisition.
All major benchmark equity indexes that were open for trading in the Asia-Pacific region rose. Japan’s Nikkei 225 Stock Average gained 1.8 percent, Australia’s S&P/ASX 200 Index increased 0.9 percent and India’s Sensitive Index added 0.4 percent. Hong Kong’s Hang Seng index advanced 1.8 percent and Singapore’s Straits Times Index climbed 0.8 percent in half-day trading ahead of the Lunar New Year holiday.
Most European stocks fell as companies from Electrolux AB to Scania AB announced results that disappointed investors.
Electrolux led a selloff in Swedish stocks, sinking 7.9 percent after forecasting “modest” growth in North America and Europe this year, while Scania slid 2 percent after warning the stronger kronor will hurt the first quarter. Imperial Tobacco Group Plc rose 5.9 percent as it plans to pay more in dividends.
The Stoxx Europe 600 Index gained 0.1 percent to 284.59 at the 4:30 p.m. close in London, even as four stocks fell for every three that rose. Equities climbed yesterday, sending the Stoxx 600 up the most since Dec. 2, after reports showed manufacturing expanded in the U.S. and China. The benchmark gauge dropped 1 percent over the previous two days as anti- government protests rocked Egypt, causing airline and travel companies to fall.
Today’s earnings reports are “in-line with expectations or slightly negative,” said Ricciardo Ricciardelli, a fund manager at Unifortune Asset Management SGR SpA in London. “Investors wait for confirmation of the recovery of the U.S. labor market. Conviction was still low in January and the market’s rally surprised the majority of managers.”
Most U.S. stocks fell, with the Standard & Poor’s 500 Index dropping from near its highest valuation since June, as earnings reports from companies including Broadcom Corp. and Aflac Inc. disappointed investors and anti-government protests in Egypt worsened.
Broadcom slumped 5.6 percent after the biggest maker of chips for television set-top boxes reported margins that missed analysts’ estimates. Aflac, the world’s largest seller of supplemental health insurance, dropped 2.4 percent as operating income trailed forecasts. Electronic Arts Inc., the second- biggest U.S. video-game maker, jumped 16 percent and Time Warner Inc. rose 8.6 percent as profits beat projections.
About seven stocks declined for every five that advanced on U.S. exchanges. The S&P 500 retreated 0.3 percent to 1,304.03 at 4 p.m. in New York after yesterday reaching a level that was 15.7 times its companies’ reported operating income. The Dow Jones Industrial Average increased 1.81 points, or less than 0.1 percent, to 12,041.97.