Stocks: Wednesday's review
Japanese stocks fell the most in a week after Nintendo Co. and Nidec Corp. (6594) reported earnings that missed estimates and Standard & Poor’s cut its rating outlook on Toyota Motor Corp. (7203) and other Japanese carmakers.
Nintendo, the world’s largest maker of video-game players, retreated 1.6 percent. Nidec, the No. 1 manufacturer of motors for hard-disk drives, slumped 2.1 percent. Toyota, the world’s biggest carmaker, dropped 2.4 percent after S&P reduced its credit rating outlook on the country’s automakers in the wake of last month’s earthquake and tsunami.
The yen’s appreciation also weighed on carmakers, as it reduces the outlook for earnings outside Japan.
European stocks climbed for a fourth day as better-than-estimated earnings from UBS AG (UBSN) outweighed a report that China tightened capital targets for its biggest banks.
UBS surged 3.9%, the most in more than two months as Switzerland’s largest lender attracted the most new money from wealthy customers since the end of 2007. Parmalat SpA (PLT) jumped 11 percent after Groupe Lactalis said it will bid for the rest of Italy’s biggest dairy company.
Micro Focus International Plc (MCRO) rallied 6.8 percent to 360.8 pence after the U.K. software company said it has received a preliminary takeover approach.
Michelin & Cie. led gains in auto-industry shares, surging 5.1 percent to 66.95 euros. The world’s second-largest tiremaker said first-quarter revenue rose 28 percent, led by surging demand for specialty tires to equip construction equipment and agricultural vehicles.
Smaller rival Pirelli & C. SpA advanced 4 percent to 7.03 euros.
Basic-resource companies limited gains as commodities snapped a four-day winning streak.
U.S. stocks rose, sending the Standard & Poor’s 500 Index to its highest level since June 2008, as companies from United Parcel Service Inc. (UPS) to Ford Motor Co. (F) and 3M Co. (MMM) beat analysts’ profit estimates.
UPS, the world’s largest package-delivery company and considered a proxy for economic growth, added 1.3 percent after also raising its earnings forecast. Ford, the second-largest U.S. automaker, gained 1.9 percent after reporting a 22 percent jump in profit. 3M, the maker of products including Scotch tape and Post-it Notes, rose 2 percent. AK Steel Holding Corp. (AKS), the nation’s third-largest producer of the metal by 2010 volume, rallied 5.8 percent after posting an unexpected profit.
Before today, the S&P 500 had failed to surpass its 2011 high from Feb. 18 after closing within 1 percent of that level eight times in April. The S&P 500 fell as much as 6.4 percent from Feb. 18 through March 16 as Japan was struck by its strongest earthquake on record, straining the third-largest economy, and concern grew about budget deficits in European countries including Greece and Portugal.
The index is now up 7.2 percent from its 2011 low amid government stimulus measures and higher-than-estimated corporate profits. Earnings-per-share beat estimates at 79 percent of the 154 companies in the S&P 500 that have reported results since April 11, according to data compiled by Bloomberg.
Federal Reserve policy makers are holding two days of meetings beginning today, and will likely say they’ll complete a second round of scheduled bond purchases worth $600 billion through the end of June to help sustain the recovery. While companies including General Electric Co. (GE) and Apple Inc. (AAPL) are among those benefiting from gains in spending on equipment and software, households are feeling the pinch of higher food and fuel prices.