Stocks: Tuesday's review
Japanese stocks rose, driving up the Topix index for the first time in three days, as fiber makers and property developers advanced after brokerages boosted share- price targets and oil companies gained on the outlook for demand.
Toray Industries Inc. and Teijin Ltd., which make fiber, gained at least 2.9 percent following price upgrades at Goldman Sachs Group Inc. Mitsubishi Estate Co. and Mitsui Fudosan Co., Japan’s biggest real-estate companies, climbed at least 1.4 percent after Nomura Holdings Inc. raised its target prices on the shares. Inpex Corp., Japan’s largest oil and gas explorer, jumped 4.2 percent.
The Nikkei 225 Stock Average rose 0.2 percent to 10,518.98 at the close in Tokyo. The broader Topix climbed 0.3 percent to 931.58, with almost twice as many shares advancing as falling. The Topix has gained 3.6 percent this year, driving the average price of its shares to 16 times estimated earnings, near the highest level since August.
The Topix sank 1 percent in 2010 as the yen at its strongest annual average level against the dollar since 1971 dimmed the outlook for export earnings, and as Europe’s debt crisis, China’s steps to curb inflation and concern about U.S. growth damped confidence in a global recovery.
European stocks rose to a two-year high as euro-area finance ministers pledged to strengthen the safety net for the region’s indebted countries.
Daimler AG rose 2.8 percent as the world’s second-biggest maker of luxury cars was upgraded at Morgan Stanley. ARM Holdings Plc and CSR Plc advanced as Goldman Sachs Group Inc. recommended buying the shares. SABMiller Plc gained 1.7 percent after reporting third-quarter sales that beat analysts’ estimates. Burberry Group Plc jumped 5.3 percent as it reported that three-month sales rose 27 percent and it said that adjusted full-year profit will exceed its previous forecast.
The Stoxx Europe 600 Index rose 0.9 percent to 286.7 at the close in London, the highest level since September 2008. The gauge advanced 1 percent last week as investors speculated that European leaders will increase their efforts to contain the region’s debt crisis.
Finance ministers from six countries with AAA credit ratings met to discuss how to best use the 750 billion-euro ($1 trillion) rescue fund, rather than setting aside some of the money as collateral. They ruled out boosting the size of the fund for now.
U.S. stocks rose, extending a seven- week rally, as gains in commodity producers and a pledge by European finance chiefs to support the region overshadowed lower-than-estimated profit at Citigroup Inc. and concern about Apple Inc.’s leadership.
Alcoa Inc. and Sunoco Inc. rose at least 1.9 percent as the U.S. dollar fell, sending commodity prices higher. Boeing Co. climbed 3.4 percent after pushing back the 787 Dreamliner’s delivery into third quarter, matching some analyst expectations. Citigroup declined 6.4 percent after earnings were hurt by charges related to tightening of the bank’s credit spreads. Apple slumped 2.3 percent as Chief Executive Officer Steve Jobs took a leave of absence for medical reasons.
The Standard & Poor’s 500 Index rose 0.1 percent to 1,295.03, its highest level since Aug. 28, 2008, at 4 p.m. in New York. The Dow Jones Industrial Average rose 50.55 points, or 0.4 percent, to 11,837.93.