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05.12.2011 07:59

Stocks: Weekly’s review

Asian stocks ended mostly higher, as hopes rose for strong results from the key U.S. jobs report due out later in the global day.

The moves came ahead of the key monthly U.S. nonfarm payrolls report. While economists’ median forecast called for the addition of 125,000 jobs and a steady unemployment rate of 9.0%, strong private-employment data from ADP earlier in the week raised hopes for an upside surprise.

Japan’s Nikkei  rose 0.5%, and Australia’s S&P/ASX 200 index rallied 1.4%. Hong Kong’s Hang Seng Index turned around late in the session to end 0.2% higher, helped by gains for bank shares, but the Shanghai Composite Index  which closes trade an hour earlier — failed to catch the updraft and ended with a 1.1% loss.

Australian banks staged a late rally to push the benchmark higher by the close, with Westpac Banking Corp. (+1,4%) and Commonwealth Bank of Australia (+1,6%). The gains for the banks came despite a Standard & Poor’s credit downgrade for Westpac, CBA and others, as the agency applied new rating standards for banks worldwide.

In Tokyo, stock in Nissan Motor Co. added 1,1% after the auto maker posted an almost 20% gain in its November U.S. sales. Shares of Toyota Motor Corp.— which posted a more modest rise in U.S. sales — also added 1,1%.

Many Japanese retailers also advanced, with J. Front Retailing Cogaining adding 2,1%, and convenience-store operator Seven & I Holdings Co. adding 2,3%.

In Hong Kong, banking shares added to their large gains in the previous session on hopes of Chinese policy easing, driving the Hang Seng Index into positive territory late in the day. Bank of China (+4,5%), China Merchants Bank (+2.02%), and HSBC Holdings (+1,6%).

On the downside, shares of Belle International Holdings Ltd fell 6,6% in Hong Kong after reports said shareholder CDH Investments will sell 50 million shares of the footwear firm.

In Seoul, Samsung Electronics Co. dropped 2,2% after Australia’s top court extended a sales ban on its Galaxy Tab 10.1 computer for at least another week, as the Korean firm fights patent-infringement charges from Apple.

European stocks climbed, with the Stoxx Europe 600 Index extending its largest weekly rally since November 2008, after a report showed that the U.S. unemployment rate fell below 9 percent last month. A Labor Department report showed unemployment in the U.S. unexpectedly dropped in November to a two-year low, while employers added fewer workers than projected and earnings eased, indicating the labor market is making limited progress.

The jobless rate dropped to 8.6 percent, the lowest since March 2009, the release showed. Payrolls climbed 120,000, with more than half the hiring coming from retailers and temporary- help agencies, after a revised 100,000 increase in October that was more than initially estimated. The median estimate in a Bloomberg News survey had called for a gain of 125,000.

German Chancellor Angela Merkel said earlier today that only fiscal union will tackle the euro area’s debt crisis at its roots, as she used a speech to lawmakers in Berlin to outline her position before a European Union summit on Dec. 9. The euro area needs fiscal oversight that’s “binding” and punishes states that persistently breach debt and deficit rules.

A European proposal to channel loans from national central banks through the International Monetary Fund may deliver as much as 200 billion euros ($268 billion) to fight the debt crisis, two people familiar with the negotiations said.

National benchmark indexes climbed in every western- European market except Norway. France’s CAC 40 Index advanced 1.1 percent and the U.K.’s FTSE 100 Index rose 1.2 percent. Germany’s DAX Index increased 0.7 percent.

Commerzbank surged 11 percent to 1.50 euros as Die Welt said Germany’s second-biggest bank could generate about 1 billion euros by retaining profit through June 30. The lender could boost its core capital by 3 billion euros by offloading some 30 billion euros in risk-weighted assets, the newspaper said, citing options that its supervisory board will discuss today. The lender could also generate as much as 6 billion euros by converting hybrid capital, according to Die Welt. The German newspaper cited banking officials.

Banking shares were the best-performing industry today, soaring 4.3 percent. HSBC Holdings Plc rose 3 percent to 510.7 pence in London, while BNP Paribas SA surged 9.4 percent to 31.60 euros in Paris.

BHP Billiton Ltd. and Rio Tinto Group, the world’s biggest mining companies (BLT), paced gains in commodity stocks, rising 4 percent to 2,000.5 pence and 1.3 percent to 3,346.5 pence, respectively. The industry was among the best performers in the Stoxx 600 this week, surging 12 percent. Aluminum, copper, lead, nickel and zinc all climbed on the London Metal Exchange today.

Daimler AG advanced 1.7 percent to 33.93 euros. A report from Autodata Corp. yesterday showed that U.S. light-vehicle sales accelerated to their fastest pace in 2011. Daimler sells more than 17 percent of its vehicles in the U.S., Bloomberg data shows. Separately, Daimler plans to cut production costs by 10 percent annually in 2012 and 2013, Reuters reported, citing Wolfgang Nieke, a works council member.

ThyssenKrupp AG fell 6.4 percent to 17.80 euros, the biggest decline in the Stoxx 600 today, after Germany’s biggest steelmaker posted a fiscal full-year loss because of 2.9 billion euros of impairments charges, mostly after it delayed the construction of a plant in Brazil.

U.S. stocks were little changed, after wiping out an early rally, as a drop in the jobless rate to a two-year low wasn’t enough to extend the biggest weekly advance since March 2009 for the Standard & Poor’s 500 Index.

The benchmark index for American equities has trimmed its decline for 2011 to 1.1 percent after rebounding 13 percent from its low for the year on Oct. 3. Improving U.S. economic data has helped alleviate concern that the world’s largest economy will relapse into a recession as Europe’s debt crisis threatens to derail the recovery.

Today’s jobs data showed that payrolls climbed 120,000, with more than half the hiring coming from retailers and temporary help agencies, after a revised 100,000 rise in October that was more than initially estimated. The median estimate in a Bloomberg News survey called for a gain of 125,000. The jobless rate declined to 8.6 percent, the lowest since March 2009, from 9 percent, Labor Department figures showed.

Equity futures rose earlier following a report that as much as 200 billion euros ($270 billion) of national central bank loans may be channeled through the IMF. Germany and France are pushing for closer economic ties among euro-area nations and tougher enforcement of budget rules to counter the region’s debt crisis.

Financial stocks posted the largest gains out of 10 groups in the S&P 500, climbing 1.4 percent. JPMorgan (JPM) surged 6.1 percent, the biggest rise in the Dow, to $32.33, while Morgan Stanley rallied 7 percent to $15.52. Citigroup Inc. jumped 4.4 percent to $28.17 and Goldman Sachs Group Inc. added 3 percent to $97.25.

Caterpillar (CAT), the world’s largest construction and mining- equipment maker, slid 0.6 percent to $96.29, after rallying as much as 1.2 percent. Chevron Corp. slumped 0.1 percent to $101.69, after rising as much as 1.3 percent.

Western Digital jumped 7.5 percent, the most in the S&P 500, to $31.44. The disk-drive maker raised its quarterly revenue forecast after sales rebounded from a flood in Thailand that devastated factories and constrained supplies.

Hospital and medical device stocks tumbled after a report that insurers who handle Medicare payments in 11 states will perform audits on hospital stays related to heart and orthopedic procedures. Hospitals will have to wait 30 to 60 days while hospital records are reviewed to determine whether procedures performed during the stay were medically necessary, the Wells Fargo Securities note said today.

Health-care companies posted the biggest losses as a group today, falling 1.3 percent. Tenet Healthcare plunged 11 percent to $4.18. Boston Scientific erased 6.8 percent to $5.50.

05.12.2011 07:40

Tech on USD/JPY

Market Focus

  • The Bank of Japan decided by a 7-2 majority vote to hold the interest rate at -0.10%
  • Earnings Season in U.S.: Major Reports of the Week
  • U.S. commercial crude oil inventories decreased by 4.7 million barrels from the previous week
  • Australian unemployment rate stable at 5.6% in June
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