Fed Pledges to Keep Rates Steady Until 2014

Outstanding earnings from Apple on Tuesday evening helped propel Asian markets higher on Wednesday. The Nikkei rallied 1.1% to 8840, as a drop in the Yen boosted exporters such as Sony, which surged 4.8%. The ASX 200 climbed 1.1%, and the Kospi inched up .1%. Markets in China and Hong Kong remained closed for the Lunar New Year.

Concerns over Greek’s debt situation pressured European banks, sending the FTSE down .5% and the CAC40 down .3%. Nonetheless the DAX managed a slight gain. The European mobile sector fell after Ericsson missed profit forecasts.

US stocks advanced in the afternoon, thanks to a commitment from the Fed not to raise interest rates for at least 2 years. Tech shares led the advance, as the Nasdaq gained 1.1% to 2818. The Dow rose 83 points to 12759, and the S&P 500 closed up .9%.

Currencies

The Australian Dollar jumped 1.2% to 1.0606, as the US Dollar fell against its peers. The Euro and Canadian Dollar both rose .6% to 1.3115 and 1.0039 respectively, and the Pound gained .3% to 1.5670. The Yen eased fractionally to settle at 77.72, and the Swiss Franc advanced .7% to 1.0858.

Economic Outlook

Pending home sales fell 3.5% in December, following November’s 7.3% advance. On the plus side, the OFHEO home price index rose by 1%, more than expected.

European Shares Rally on Hopes for Greek Debt Plan

Equities

Asian markets traded mostly higher, encouraged by the Fed’s commitment to keep interest rates unchanged through 2014. The Hang Seng soared 1.6% as Hong Kong’s markets returned from the Lunar New Year Holiday, although volume was light, since China’s markets will remain shut until Monday. The Kospi edged up .3% despite weak 4th quarter GDP data. Meanwhile, the Nikkei skidded .4% to 8849, and markets in Australia were closed

European markets posted strong gains on hopes that Greek debt negotiations were progressing. The DAX surged 1.8%, the CAC40 climbed 1.5%, and the FTSE gained 1.3%. Shares in retailer, Carrefour, jumped 7.5% on rumors of a change in management, and Nokia shares rallied 3.1% on strong earnings data.



Germany's DAX Jumps 1.8%

US stocks pared early gains to close lower. The Dow slipped 22 points to 12735, the Nasdaq dropped .5%, and the S&P 500 fell .6%.

Currencies

Currencies traded in narrow ranges, as the dollar fell modestly. The Australian dollar, Japanese Yen, and Canadian dollar all gained .3%, and the Pound edged up .2% to 1.5691. The Euro inched up 6 pips to 1.3106, while the Swiss Franc rose .2% to 1.0865.

Economic Outlook

Thursday’s economic data was mixed. Weekly jobless claims were 6K more than expected, rising to 371K from last week’s 351K reading, and new home sales fell to 307K from last month’s 314K. On the bright side, durable goods orders rose 2.1%,, and core durable goods order jumped by 3%, both better than forecast.

US GDP Improves, by Falls Short of Forecasts

Equities

Asian markets traded mostly higher on Friday. The Kospi advanced .4% to 1965, a 6-month high, boosted by Samsung’s record profits. Similarly, the ASX 200 gained .4%, as a rebound in metal prices lifted miners. The Nikkei eased a mere .1% to 8841, despite steep losses from NEC, Nintendo, and Elpida Memory. The Hang Seng closed flat, while China’s Shanghai Composite remained closed for the Lunar New Year.

Disappointing GDP data from the US weighed on European shares in the afternoon. The CAC40 fell 1.3%, the FTSE lose 1.1%, and the DAX slipped .4%.

US GDP grew at 2.8% in the fourth quarter, the fastest pace in nearly 2 years. The data was slightly below the 3% expected by analysts, but far better than last quarter’s 1.8% growth.

US indexes settled mixed, as the Dow lost 74 points to 12660, and the S&P 500 slipped .2%, while the Nasdaq gained .4%. Several disappointing earnings reports weighed on stocks. Dow-component, Chevron, fell 2.5% after reporting earnings that fell short of forecasts. Ford sank 4.2% on weak earnings, and Juniper Networks dropped 3% after issuing a weak outlook.



Dow Sinks 74 Points

A report in the Wall Street Journal said Facebook may file for an IPO as soon as next week.

Currencies

The Dollar sank against global currencies, as the disappointing GDP data pressured the greenback. The Euro and Swiss Franc advanced .9% to 1.3220 and 1.0958 respectively. The Yen jumped 1% to 76.68, reversing its losses from earlier in the week. The Pound and Australian Dollar both edged up .3%.

Economic Outlook

Consumer Sentiment rose to 75 from last month’s 74, more than expected.

Greece Debt Deal Remains Elusive, Consumer Spending Disappoints

Equities

The week opened on a soft note as Asian markets declined. The Nikkei sagged .5% to 8793, as Mitsubishi Electric tumbled 15% after the government suspended dealings with the machinery-maker, due to accusations of overcharging. The Kospi and Hang Seng skidded 1.2%, and the Shanghai Composite dropped 1.5% as trading resumed after the week-long Lunar New Year. Australia’s ASX 200 posted a modest .4% loss.

Greece failed to reach a deal with private debt holders, pressuring European indexes. Banking shares fell 3.1%. The CAC40 slumped 1.6%, the FTSE fell 1.1%, and the DAX lost 1%. French Banks bore the brunt of the selling, as BNP Paribas, Societe Generale, and Credit Agricole each fell at least 6.5%. Yields on Portuguese debt continued to climb, amid mounting concerns that the country may need another bailout.

US stocks opened sharply lower, but they recovered most of their losses by the close. The Dow eased a mere 7 points to 12654, after falling as much as 130 points in the first hour of trading. The S&P 500 fell .3% to 1313, and the Nasdaq declined .2%.



Dow Pares Losses in Afternoon Advance

Bank of America dropped 3% after Goldman Sachs downgraded the stock to “neutral” from “buy”. Goldman Sachs upgraded Morgan Stanley, but the stock still fell 1.9%.

Currencies

The Yen soared 1.4% to 76.34, a 3-month high, while the Dollar traded modestly lower against most other currencies. The Euro ticked up .2% to 1.3130, the Swiss Franc advanced .3% to 1.0896, and the Pound edged up 8 pips to 1.5701. The Australian Dollar eased .3% to 1.0596, as a drop in commodity prices weighed on the currency.

Economic Outlook

Personal income rose by .5% last month, slightly more than expected, but personal spending, which is considered more important, remained flat, falling short of forecasts for a .2% increase.

January Closes Quietly as Stocks Post Large Monthly Gains

Equities

Asian markets advanced moderately on Tuesday. The Kospi climbed .8% to 1956, the Hang Seng rallied 1.1%, and the Shanghai Composite added .3% to 2293. Lagging behind, the Nikkei inched up .1% to 8803, while the ASX 200 slipped .2%.

European markets gained as well, despite weaker than expected data from the US. The CAC40 posted a solid 1% gain, while the DAX and FTSE rose a modest .2%. Hopes lingered on for a Greek debt deal, while pressure mounted on the heavily-indebted country to undertake steep spending cuts.

US stocks closed little changed, overcoming earlier losses. The Dow slipped 21 points to 12634, the S&P 500 closed flat at 1312, and the Nasdaq gained 2 points to 2814. Nonetheless, January was an extremely strong month for stocks, as the Dow climbed 3.4%, the S&P 500 advanced 4.4%, and the Nasdaq soared 8%.



Nasdaq Soars 8% in January

RadioShack tumbled 30% after issuing a profit warning, dropping to a 3-year low. Mattel advanced 5% on strong earnings, while UPS slipped .7% despite exceeding analyst forecasts.

Currencies

The Dollar was mixed as US growth concerns weighed against European debt troubles. The Euro ticked down .4% to 1.3080, and the Swiss Franc shed .3% to 1.0864. The Pound and Australian Dollar both gained .3% to 1.5760 and 1.0617 respectively, and the Yen rose .2% to 76.22.

Economic Outlook

Tuesday’s sobering economic data reawakened doubts over the pace of the US economic recovery. The Case Shiller home price index fell by 3.7%, significantly worse than last month’s 3.4% drop. Chicago PMI dropped to 60.2 from 62.5. Consumer confidence slumped to 61.1 from 64.8, whereas analysts had expected an increase to 68.2.