Stocks: Tuesday's review
Japanese stocks gained as better earnings outlook among Japanese companies overshadowed concerns about the Europe’s debt crisis and the weaker euro.
Sumitomo Heavy Industries Ltd. (6302), a maker of heavy electric machinery, surged 12 percent after forecasting profit will rise. Denki Kagaku Kogyo K.K., a chemical products maker, soared 8 percent after saying it expects higher profit this fiscal year. Toyota Motor Corp. (7203), the world’s biggest carmaker, led gains in carmakers after the Nikkei newspaper reported its output may return to normal earlier than expected. Nintendo Co., a video- game console maker that gets a third of its revenue from Europe, retreated 1.6 percent.
European stocks climbed as InterContinental Hotels Group Plc (IHG) and Deutsche Post AG (DPW) posted increased earnings, helping to reassure investors that the global economic recovery remains intact.
InterContinental Hotels surged 3.9 percent after reporting a 28 percent jump in first-quarter profit as travel recovered in the Americas. Deutsche Post gained 1.3 percent after the world’s biggest carrier of air and sea freight by volume reported first- quarter earnings before interest and taxes that exceeded the average of 14 analyst estimates compiled by Bloomberg.
Per-share profit at the 234 companies that have reported results in the Stoxx 600 index since April 11 has expanded 8.8 percent, with 59 percent beating analysts’ estimates, according to data compiled by Bloomberg.
U.S. stocks rose for a third day as higher-than-estimated profit forecasts and Microsoft Corp. (MSFT)’s purchase of Skype Technologies SA bolstered optimism that earnings and takeovers will continue to fuel the rally.
Dean Foods Co. (DF), the largest U.S. milk processor, jumped 12 percent after its earnings forecast beat analysts’ estimates. Microsoft fell 1.4 percent after agreeing to buy Skype for $8.5 billion to expand its Internet presence after past failures. Titanium Metals Corp. (TIE) gained 1.7 percent, pacing gains in raw- material producers, as metal prices advanced before the release of figures that may show weaker inflation in China.
The S&P 500 gained 0.6 percent to 1,353.99 at 2 p.m. in New York. The benchmark gauge for American equities rose for a second day yesterday as commodities rebounded from the biggest weekly drop since 2008. The Dow Jones Industrial Average advanced 53.66 points, or 0.4 percent, to 12,738.34 today.