Stocks: Monday's review
The Nikkei average nudged lower on Monday after reports of soaring radiation levels at a damaged nuclear plant, with the benchmark tethered in a narrow range for over a week, ыupported by ex-dividend date buying and bargain-hunting by foreigners and short-term investors.
Japanese shares have lost 7.6 percent since the earthquake, tsunami and threat of a nuclear disaster triggered the biggest two-day rout on the market since 1987. In comparison, MSCI's
index of Asian shares outside Japan has fallen 2.5 percent since the quake.
Underscoring worries that Japan is in for a long fight to contain the radiation threat from the stricken Fukushima nuclear plant on its northeast coast, readings on Sunday showed contamination 100,000 times normal in water at the plant's reactor No.2 and 1,850 times normal in seawater nearby.
Tokyo Electric Power Co (TEPCO) nosedived 17.7 percent to 696 yen on Monday, following the reports.
But some analysts said bargain-hunting by foreigners could help the Nikkei in the long term, as Japan stocks are still oversold, with the benchmark trading about 6 percent below its 25-day moving average of 10,061.
JFE Holdings Inc climbed 1.5 percent to 2,399 yen after the Nikkei business daily reported
that its unit JFE Steel Corp will boost output of materials for temporary housing by about 70 percent by extending operating hours at a Kobe facility that makes lightweight steel H-beams.
Automakers have underperformed the Nikkei in the two weeks following the quake, with Nissan Motor losing 12 percent, and Toyota Motor Corp and Honda Motor both more than 8 percent lower.
Most European stocks rose, extending last week’s rally, as U.S. consumer spending topped forecasts and the Federal Reserve signaled the world’s biggest economy may be strong enough to consider ending stimulus.
Alcatel-Lucent SA and Nokia Oyj led gains in technology shares, each climbing more than 3 percent, after upgrades from Goldman Sachs Group Inc.
Vestas Wind Systems A/S led renewable- energy companies higher after the anti-nuclear Greens’ vote surged to a record in German state elections.
Nokia advanced 3.6 percent to 6.19 euros. Goldman Sachs also upgraded the world’s biggest maker of mobile phones to “buy,” saying the company’s “back-to-basics” strategy creates a long-term opportunity for value investors.
Gamesa Corporacion Tecnologica SA, Spain’s largest wind- turbine maker, jumped 5.6 percent to 7.31 euros and Renewable Energy Corp. ASA, a Norwegian maker of solar energy components, advanced 4.7 percent to 19.53 euros.
Continental AG rose 4 percent to 63.40 euros after Schaeffler Group sold 1.8 billion euros ($2.5 billion) of shares in Europe’s second-largest tiremaker to reduce its own debt. M.M. Warburg and Bankhaus Metzler sold 29.7 million shares at 60 euros apiece in the tiremaker held on Schaeffler’s behalf, reducing the stake controlled by the closely held company to 60.3 percent from 75.1 percent.
InterContinental Hotels Group Plc, owner of the Holiday Inn chain, slumped 3.8 percent to 1,229 pence after rival Marriott International Inc. predicted that sales will rise at the lower end of its current forecast in the first quarter. Accor SA, Europe’s largest hotelier, lost 3.3 percent to 30.80 euros.
Royal Philips Electronics NV retreated 1.8 percent to 22.18 euros after the company forecast a first-quarter loss of 100 million euros to 120 million euros from its television division, close to the loss the unit had in all of 2010.
U.S. stocks advanced for a fourth straight session Monday, but the gains were modest as investors remained cautious and continued to focus on global developments.
In afternoon trading, the Dow Jones industrial average (INDU) was up 35 points, or 0.3%. The blue chip index's best performers included AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500). Both telecom giants were upgraded to "outperform" by Robert W. Baird.
The S&P 500 (SPX) added 3 points, or 0.3%, and the Nasdaq (COMP) increased 4 points, or 0.2%. First Solar (FSLR), Netflix (NFLX) and Nvidia Corp. (NVDA) were among the best performers on both indexes.
Energy stocks, including Schlumberger (SLB), Baker Hughes (BHI, Fortune 500) and Halliburton (HAL, Fortune 500), were also big gainers among the S&P 500.
All three indexes managed to head higher last week, as investors turned their attention to strong corporate earnings and shrugged off geopolitical concerns. The Dow gained more than 3%, the S&P 500 rallied 2.7% and the Nasdaq surged 3.8%.
Economy: The Commerce Department reported that spending by individuals increased 0.7% in February, topping a forecasted 0.5% rise. Personal income rose 0.3% in the month, matching expectations.
The National Association of Realtors said pending home sales rose 2.1% in January. Economists were expecting sales to edge up 0.3%, according to economists surveyed by Briefing.com.
Companies: Shares of Eastman Kodak (EK, Fortune 500) jumped 9% after a federal agency said Friday that it would review the company's patent-infringement claim against Apple (AAPL, Fortune 500) and BlackBerry maker Research in Motion (RIMM).
Shares of Marriott International (MAR, Fortune 500) slumped 5% after the hotelier warned that its revenue per available room for the first quarter of the year will come in at the low end of its initial guidance. Marriott added that the figure has been lower than expected in North America, especially in large markets such as New York, Atlanta, Orlando and Washington.