Stocks: Tuesday's review
Japanese stocks rose for the first time in four days as investors bought utilities amid increasing uncertainty about the strength of the global economic recovery after reports signaled growth is slowing in the U.S. and Europe.
Electricity and gas suppliers had the biggest gain on the Topix index. Chubu Electric Power Co. increased 3.6 percent. Nippon Yusen K.K., the country’s largest shipping line by sales, jumped 3.4 percent after cargo rates increased yesterday and a SMBC Nikko Securities Inc. analyst maintained his bullish stance on Japan’s shipping line sector. Toshiba Corp. (6502), an electronics maker, increased 2.1 percent after the company said it will target operating profit of 500 billion yen ($6.1 billion) for fiscal 2013.
European stocks advanced, with the benchmark Stoxx Europe 600 Index rebounding from a one-month low, as commodities rallied and a report showed that U.S. new- home sales increased more than forecast last month.
BHP Billiton Ltd. (BHP), the world’s biggest mining company, and Rio Tinto Group, the third largest, both gained more than 1.5 percent as metal prices rose. Travis Perkins Plc (TPK) climbed 2.7 percent after Jefferies Group Inc. recommended buying the company’s shares. Renewable Energy Corp. slumped 17 percent to the lowest price since its initial public offering in 2006.
German business confidence remained unexpectedly unchanged in May as booming exports and rising company spending boosted economic growth. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, held at 114.2, the same as in April.
U.S. stocks were little changed as regional Federal Reserve directors recommended a continuation of easy monetary policy and new home sales rebounded, offsetting a decline in financial shares.
Freeport-McMoRan Copper & Gold Inc. (FCX) and Occidental Petroleum Corp. (OXY) rallied more than 2.5 percent after Goldman Sachs Group Inc. signaled a positive outlook for commodities. Discover Financial Services slumped 2.3 percent to lead losses in financial shares. JPMorgan Chase & Co. (JPM) slid 0.8 percent as Fed Bank of Kansas City President Thomas Hoenig said banks’ businesses should be confined to loans and deposits.
The S&P 500 fell 3.4 percent through yesterday since climbing to a three-year high on April 29 amid a commodity slump and concern about Europe’s debt crisis. Still, the benchmark has rallied 4.8 percent from the end of 2010 amid government stimulus measures and higher-than-estimated earnings.
Early gains were today were triggered by a report that purchases of new houses rose in April to the highest level so far this year after plunging to a record low two months earlier. Sales climbed 7.3 percent to a 323,000 annual pace, figures from the Commerce Department showed. The median estimate in a Bloomberg News survey of economists called for sales at a 300,000 annual rate, unchanged from the prior month. Housing prices rose from a year earlier.