egolinews.com

Wall Street returned from holiday with a triple-digit rally for the Dow, which reached 15-month highs. Health care and tech stocks led gains as quarterly results continued to filter through.

The Dow Jones climbed 115.78 points, or 1.09%, to 10,725.43, the S&P's 500 advanced 14.2 points, or 1.25%, to 1,150.23 and the NASDAQ put on 32.41 points, or 1.42%, to 2,320.40.

Citigroup rallied 3.5% after posting a US$7.6 billion quarterly loss, which was in line with expectations and largely attributed to the bank paying back US$20 billion in government bailout funds. However, the company did report a fall in consumer credit losses.

Morgan Stanley, Bank of America and Wells Fargo rose 2.6%, 0.4% and 0.7% respectively ahead of the release of their results later in the week.

Another company to report this week, American Express advanced 1.3%.

IBM gained 1.8% ahead of the release of its quarterly report after the close. The company beat earnings and revenue estimates and forecast full-year earnings to be at the high end of previous guidance. 

Apple jumped 4.4% as Microsoft added 0.8%.

Kraft shed 0.6% after Cadbury’s board accepted a US$19.5 billion takeover offer.

Health care stocks rallied as the Obama administration’s healthcare reforms may be placed in jeopardy if it loses an election in the state of Massachusetts. Merck & Co and Pfizer put on 2.9% and 2.6%.

Johnson & Johnson closed 1.2% dearer.

Machinery makers Deere & Co and Caterpillar gained 2.4% and 1.4%.

NYMEX light crude oil for February delivery rose US$1.02 to settle at US$79.02 a barrel.

ConcoPhillips put on 1.3%.

COMEX gold for February delivery rose US$9.50 to settle at US$1,140 an ounce.

European Markets

A second day of gains saw European markets reach 15-month closing highs Tuesday as Cadbury finally accepted a takeover offer from Kraft. Drugmakers were consistently higher, while financials and commodity stocks were mixed.

The UK benchmark FTSE 100 advanced 18.75, or 0.34% to 5,513.14. Germany’s DAX gained 57.93, or 0.98% to 5,976.48, while the French CAC40 rose 32.21, or 0.81% to 4,009.67.

Cadbury accepted an improved US$19.5 billion offer from Kraft Foods, creating the largest confectionary company in the world. Cadbury shares climbed 3.6%.

Among the British banks Royal Bank of Scotland jumped 3%, while Lloyds and Barclays lost 2.6% and 1.8%.

On the continent BNP Paribas and Deutsche Bank added 0.4% and 0.9% as Societe Generale slid 0.8%.

Pharmaceuticals GlaxoSmithKline, AstraZeneca and Sanofi-Aventis added between 1.7% and 1.9% ahead of the election in Massachusetts.

UK retailer Burberry surged 8.3% after beating third quarter sales estimates. The company also forecast fill-year profit would be at the top end of forecasts.

Alstom fell 2.5% after the train-maker missed analysts’ third-quarter sales estimates.

Automakers Daimler and Renault weakened 1.1% and 2.2% after Nomura Holdings downgraded both stocks to “neutral”.

Miners followed a similar pattern to metals prices, which were mixed. Aussie peers Rio Tinto and BHP Billiton added 0.2% and 0.3%.

Total led energy stocks higher with a 1.2% rally.

Japanese Markets

Japan’s Nikkei lost ground as investors locked in profits following the recent rally. Exporters struggled as the yen reached a one-month high against the greenback.

The Nikkei 225 shed 90.18, or 0.83% to 10,764.90.

Automakers Honda and Toyota fell 2.1% and 1.2% as electronics companies Panasonic and Canon weakened 2.6% and 1.4%. 

Semiconductor related stocks slid as a result of a fall in chip prices for the sixth consecutive day. NEC Electronics Corp., Advantest Corp and Elpida Memory lost 1.7%, 1.3% and 4.5% respectively.

Among financials Mitsubishi UFJ Financial and Sumitomo Mitsui Financial dropped 2.4% and 3.1%.

Japan Airlines was unchanged at the end of the day despite being heavily traded. The company has lost over 90% of its market capitalisation since the beginning of the month and is set to file for bankruptcy.

Hitachi rallied 2.7% on the back of a broker upgrade to “buy”, citing the company’s stronger financial position as a result of a recent equity raising.

Hong Kong Market

The Hong Kong stock exchange halted a five-day slide, adding over 1%. The rally, while other Asian markets lost ground, was spurred by the speculation of new rules that would allow investing abroad.

The Hang Seng climbed 217.97, or 1.02% to 21,677.98.

The banks were beneficiaries of the news with Bank of China surging 4.1% and heavyweight lender ICBC putting on 3.1%.

Europe’s largest bank HSBC shed 0.6%.

The shippers also gained. China Cosco surged 3.6%, while container line Orient Overseas put on 6.2%.

Clothes manufacturers Yue Yuen and Li & Fung put on 3.9% and 1.2% respectively.

It wasn’t all positive news with Tencent Holdings, an online game operator shed 5% after its stock was downgraded by a broker.

Foxconn, the world’s largest third-party mobile, shed 6% for the same reason, this time from Australia’s Macquarie Group.

Filed under:
Market Watch by egoli