Stocks: Wednesday's review
The Nikkei 225 Stock Average rose to the highest level in more than two weeks after U.S. consumer confidence gained and companies including Daihatsu Motor Co. reported earnings that beat forecasts.
S&P cut Japan’s debt outlook to “negative” from “stable,” saying reconstruction costs are likely to add to a government debt that is already the largest among developed countries. S&P predicted rebuilding will cost as much as 50 trillion yen ($613 billion).
Canon Inc. (7751), which has lost 11 percent this year, jumped after Nomura Holdings Inc. said the camera maker’s growth prospects are “positive” even after last month’s record earthquake and tsunami damaged supply chains.
Daihatsu, an automaker majority owned by Toyota Motor Corp. (7203), leapt 6.5 percent. The automaker said net income rose to 52.6 billion yen in the year through March, exceeding the company’s forecast by 19 percent.
Fanuc Corp. (6954) advanced 3.6 percent after the maker of factory robots forecast a 22 percent gain in first-half profit.
Daiwa Securities Group Inc., Japan’s second-largest brokerage, had the biggest drop on the Nikkei. The company posted a loss of 37.3 billion yen for the year ended March 31, compared with a profit of 43.4 billion yen a year earlier
Sony Corp. (6758) fell 2 percent to 2,366 yen after the electronics maker warned customers who use its PlayStation Network that credit-card data and other personal information may have been stolen by a hacker.
European stocks advanced for a fifth day, led by technology and auto-industry shares, as companies from Ericsson AB to Volkswagen AG (VOW) and Porsche SE reported better-than-estimated earnings.
Ericsson surged 11 percent as the biggest maker of mobile- phone networks reported first-quarter profit that more than tripled.
Volkswagen, Europe’s largest carmaker, climbed 4.8 percent.
Porsche rallied 5.9 percent after its car-making division reported increased income.
Volvo AB (VOLVB), the world’s second-largest truckmaker, rose 2.1 percent after lifting this year’s industry sales forecasts.
European stocks erased an earlier drop as a report showed Britain’s economy rebounded in the first quarter by enough to erase the contraction of the previous three months on the strongest surge in service industry growth for four years.
Gross domestic product rose 0.5 percent from the previous three months, when it fell by the same amount, the Office for National Statistics said. The result matched the median forecast of 28 economists in a Bloomberg News survey.
Renault SA (RNO) climbed 3.8 percent to 40.92 euros. France’s second-biggest carmaker said revenue increased to 10.43 billion euros in the first three months from 9.07 billion euros a year earlier. That beat the 9.5 billion-euro median of six analyst estimates compiled by Bloomberg.
Nokia Oyj (NOK1V) gained 3.3 percent to 6.16 euros as the world’s largest maker of mobile phones agreed to farm out its Symbian software development to Accenture Plc as part of a job-reduction program as it switches to Microsoft Corp.’s platform.
Software AG (SOW) advanced 3 percent to 126.55 euros. Germany’s second-biggest maker of business software said first-quarter profit jumped 43 percent to 40 million euros, helped by cost savings from the integration of its IDS Scheer consulting business and a weaker euro. Earnings surpassed the 37.1 million- euro average estimate in a Bloomberg survey of analysts.
After waiting on the sidelines most of Wednesday in anticipation of the Federal Reserve's statement and Fed chief Ben Bernanke's first press conference, investors waded back in.
As expected, the central bank said it would keep interest rates low and end its $600 billion Treasury buying program in June, while Bernanke reassured investors that the nation's economic recovery is on track.
Companies: GE's (GE, Fortune 500) stock jumped 2.7%, leading the Dow's gainers. At an annual shareholder's meeting, the conglomerate's CFO said the company's profit growth over the next few years will be the fastest it has seen in a decade.
Shares of Merck (MRK, Fortune 500) rose 1.6% after the Dow component got the green light from its board for a $5 billion share buyback program.
Shares of Boeing (BA, Fortune 500) rose 0.8% after the aeronautics company reported a 13% increase in its first-quarter profit.
Amazon.com (AMZN, Fortune 500)'s stock was the biggest winner on the S&P 500 and Nasdaq, with shares rising 8%, even though the online merchant reported first-quarter earnings that fell by one-third compared to a year earlier and sharply missed Wall Street forecasts.
For-profit educator DeVry's (DV) stock was also a strong performer on the S&P 500 after popping more than 7%. Late Tuesday, DeVry reported a 14% rise in its quarterly profit
Meanwhile, shares of Broadcom (BRCM, Fortune 500) sank 12.3% after the semiconductor company issued a disappointing outlook. Broadcom was the worst performing company in the S&P 500 and Nasdaq.
After Tuesday's close, Starbucks (SBUX, Fortune 500) posted quarterly results roughly in line with expectations, but the coffee giant disappointed investors with a lower-than-expected outlook. Shares slipped 2% in after-hours trading.
Economy: The government said new orders for durable goods increased 2.5% in March, after a 0.7% rise the month before. Economists surveyed by Briefing.com expect an increase of 1.8% in March.