Stocks: Tuesday's review
Japanese stocks fell for a third day, sending the Topix to its lowest level in a month, after Standard & Poor’s cut the U.S. long-term credit outlook to negative, fueling concern the global economic recovery will slow.
Toyota Motor Corp. (7203), the world’s biggest carmaker, slid 3.1 percent.
Canon Inc. (7751), the world’s biggest camera maker, slid 1.8 percent 3,555 yen.
Fanuc Corp. (6954), a manufacturer of factory robots which earns about 80 percent of revenue overseas, lost 1.8 percent to 12,890 yen.
Exporters also declined after the yen rose against the dollar and euro for a fourth day, as investors flocked to safer assets on concern Europe’s debt crisis is worsening and after the downgrade to U.S. credit-rating outlook.
Tokyo Electric Power Co., operator of the crippled Fukushima nuclear plant, sank 4.3 percent after the utility said two of its reactors are still too radioactive to allow workers inside.
TDK Corp. (6762), the largest maker of magnetic heads for disk drives, tumbled 7.6 percent after brokerages said a possible buyout of one of its customers could hurt sales.
Isuzu Motors Ltd. (7202), Japan’s largest maker of light trucks, gained 1.9 percent to 324 yen after Deutsche Bank AG initiated coverage of Isuzu with a “buy” rating and set the stock price estimate for 12 months at 450 yen.
Upbeat corporate results helped European shares to rebound on Tuesday from hefty falls a day earlier, led by strong sales figures from luxury goods groups.
Robust quarterly earnings bolstered confidence in the corporate outlook, with better-than-expected sales helping luxury firms Burberry (BRBY.L) and LVMH (LVMH.PA) gain 6 and 5 percent.
Upbeat results from manufacturing bellwether SKF (SKFb.ST) helped alleviate worries about the impact of rising raw material prices on industrial firms' margins, with the world's top bearings maker rising 6.4 percent to the top of the leaderboard.
Despite the gains in equities, some caution about the euro zone's debt troubles prevailed in wider financial markets, with growing talk that Greece would have to restructure its debt lifting short-dated Greek bond yields.
The Greek banking index .FTATBNK rose 1.2 percent after hefty falls in the previous session, though the index trades around its lowest levels since early 1997.
Stocks posted modest gains on Tuesday, following Monday's sharp selloff, as investors' attention turned to corporate earnings and the latest housing reports.
Johnson & Johnson (JNJ, Fortune 500) was the top performer on the Dow, with shares rising more than 3.5%, after the company reported better-than-expected sales and earnings. Alcoa (AA, Fortune 500), Caterpillar (CAT, Fortune 500) and DuPont (DD, Fortune 500) wer other big gainers.
Traveler's (TRV, Fortune 500) was the biggest drag on the blue-chip index, falling 1.4%.
Shares of Harley Davidson (HOG, Fortune 500) sank nearly 5%, making it the S&P 500's biggest loser on disappointing earnings, while the Nasdaq was weighed down by Seagate Technology (STX), which reported an 82% drop in quarterly profit.
Investors also focused on commodities, with oil climbing more than $108 a barrel, and gold striking $1,500 an ounce for the first time ever.
Stocks logged their biggest decline in a month Monday, after investors were spooked by the outlook for U.S. debt getting slashed by Standard & Poor's.
Economy: The Commerce Department said housing starts and building permits both increased more than expected in March.
Housings starts jumped 7.2% to an annual rate of 549,000 in March, while building permits climbed 11.2% to a rate of 594,000.
Homebuilders rose on the news, with Pulte Homes (PHM) shares rise 5% and KB Homes (KBH) shares up 3% among others.
Companies: Shares of Wall Street giant Goldman Sachs (GS, Fortune 500) fell 1.3%. The firm reported a 21% drop in net income to $2.7 billion, and said it sees "encouraging indications" for global economic activity.
Texas Instruments (TXN, Fortune 500) shares fell 0.7%, after the company reported first-quarter earnings that missed analysts' estimates late Monday. The company cited the earthquake in Japan, saying it impacted consumer demand and production during the quarter.