Stocks: Monday's review
Japanese stocks rose for the first time in three days, led by automakers, after Nomura Holdings Inc. raised its rating on Honda Motor Co. to “buy,” and after General Electric Co. of the U.S. beat earnings estimates.
Honda climbed 3.8 percent. Elpida Memory Inc., the world’s third-largest maker of computer-memory chips, jumped 5.1 percent after Goldman Sachs Group Inc. boosted its investment rating. Yaskawa Electric Corp., a maker of electronic controls, leapt 4.5 percent after the company swung to profit. Tokyo Tomin Bank Ltd., a regional lender based in Japan’s capital, tumbled 6.1 percent, leading a decline by banks.
The Nikkei 225 Stock Average increased 0.7 percent to 10,345.11 at the close in Tokyo. The broader Topix index also gained 0.7 percent to 917.18, after earlier falling as much as 0.1 percent. About three shares rose for each that fell on the Topix.
European stocks rose as optimism that economic reports later this week will show faster growth in the U.S. economy offset declines in carmakers and earnings that missed estimates from Royal Philips Electronics NV.
Northern Foods Plc surged 17 percent following a report that Greencore Group Plc was considering whether to make a higher bid for the maker of Fox’s biscuits and Goodfella’s frozen pizzas. Philips, the world’s biggest maker of patient- monitoring systems, sank 5.5 percent. Porsche SE lost 3 percent, leading automakers lower.
The Stoxx 600 increased 0.3 percent to 281.99 euros at the 4:30 p.m. close in London. The gauge lost 0.9 percent last week amid speculation that the Chinese government will lift interest rates and as Goldman Sachs Group Inc. posted earnings that failed to beat analysts’ estimates. Still, the gauge has risen 2.2 percent this year as reports suggested the global economy has continued to recover and investors bet that European leaders will take further measures to contain the debt crisis.
National benchmark indexes rose in 14 of the 18 western European markets today. Germany’s DAX Index gained 0.1 percent and France’s CAC 40 Index advanced 0.4 percent. The U.K.’s FTSE 100 Index rose 0.8 percent.
U.S. stocks advanced, sending the Dow Jones Industrial Average to the highest level since June 2008, as acquisitions, share-buyback plans and dividend prospects bolstered investors’ optimism.
Intel Corp. gained 2 percent, spurring a rally in technology shares, after the world’s largest chipmaker added $10 billion to its buyback plan. Smurfit-Stone Container Corp. jumped 27 percent as Rock-Tenn Co. agreed to buy the packaging company for $3.5 billion. Warren Buffett’s Berkshire Hathaway Inc. advanced 3.2 percent, the most since June, amid speculation the company may start paying a dividend this year.
The Standard & Poor’s 500 Index climbed 0.6 percent to 1,290.84 as of 4 p.m. in New York, a second straight gain. The Dow rose 108.68 points, or 0.9 percent, to 11,980.52, extending gains after an eight-week rally.
The S&P 500 rebounded today following its first weekly drop since November. The benchmark gauge for American equities rose as much as 91 percent since March 2009 amid government stimulus measures and higher-than-estimated corporate profits. The benchmark gauge for U.S. equities is currently trading for 15.7 times its companies’ reported earnings, compared with a 10-year average of 18.23.