PMI data from China showed industrial activity slowed for a fifth straight month, reinforcing concerns of a slowdown in the region. Nonetheless, consumer stocks gained after the Ministry of Commerce in China said consumption is likely load growth in China. The Shanghai Composite eased .1%, and the Hang Seng rose .2% to 20902. The Nikkei rose .4% to 10127, the ASX 200 advanced .5%, and the Kospi closed down fractionally.
European markets skidded, as negative news from China and and the eurozone unsettled investors. The CAC40 tanked 1.6%, the DAX sank 1.3%, and the FTSE shed .8%. PMI data from Germany and France, a showed an unexpected drop in manufacturing, stoking fears of another recession. Materials stocks tumbled, dropping 3.4%.
US stocks closed lower, but fared better than their European counterparts. The Dow lost 78 points to 13046, the S&P 500 dropped .7%, and the Nasdaq fell .4%.
Currencies
The yen surged 1% to 82.57 as growth currencies triggered a flight to safety. The Australian dollar fell .6%, to 1.0396 and the Canadian dollar slumped .7% to .9992 as the two commodity currencies dropped. The euro and Swiss franc both eased .1%, and the pound declined .3% to 1.5820.
Economic Outlook
Despite the weakness overseas, the US economy continues to show signs of a modest recovery. Weekly jobless claims fell to 348K, 5K better than last week, and leading indicators rose .7%, better than forecast.
Bernanke’s Comments Trigger Stock Market Rally
EquitiesAsian markets traded mixed on Monday following Friday’s disappointing home sales data from Wall Street,. The Nikkei rose .1% to 10018, the ASX 200 slipped .2%, and the Kospi dropped .4%. In China, the Shanghai Composite rose fractionally, and the Hang Seng settled flat.
European markets rallied in the afternoon as comments by Fed Chairman, Bernanke, suggested further economic easing was likely. Bernanke said the economy must grow quicker to produce more jobs, and suggested that process could be aided by government policies.
The DAX climbed 1.2%, the FTSE advanced .8%, and the CAC40 gained .7%. Germany’s IFO business activity report rose unexpectedly, contributing to the gains.
US stocks posted large gains, encouraged by the Bernanke’s remarks. The Nasdaq surged 1.8%, the S&P 500 climbed 1.4%, and the Dow advanced 161 points to 13242.
Nasdaq Spikes 1.8%
Lions Gate Entertainment jumped 4.5% after the new movie, “The Hunger Games,” netted $214 million in its opening weekend.
Currencies
The dollar tanked in the currency markets. The Australian dollar led the gains, rising 1.3% to 1.0536. In Europe, the euro gained 1.2% to 1.3356, the Swiss franc rose 1.1% to 1.1074, and the pound advanced .9% to 1.5968. The yen bucked the trend, slipping .3% to 82.88.
Economic Outlook
Continuing Friday’s dreary housing news, pending home sales unexpectedly fell .5%. Analysts had forecast a gain of 1% after last month’s 2% jump.
Asia Spikes, West Consolidates, After Monday’s Rally
EquitiesAsian markets jumped in response to Monday’s Wall Street rally, inspired by Bernanke’s suggestion of another round of government stimulus. The Nikkei surged 2.4% to 10255 its highest close in more than a year. The Hang Seng rallied 1.8% to 21047, the ASX 200 climbed .9%, and the Kospi advanced 1% to 2040. The Shanghai Composite bucked the trend, easing .2% to 2347.
In Europe, markets declined, surrendering some of Tuesday’s gains after US consumer confidence data came in below forecasts. The CAC40 slumped .9%, the FTSE slid .6%, while the DAX closed flat. The Royal Bank of Scotland advanced 3.3% on rumors of a possible investment by Abu Dhabi’s ruling family.
US stocks closed lower after hovering near break even for most of the session. The Dow declined 44 points to 13198, the S&P 500 lost .3% to 1413, and the Nasdaq settled down .1% at 3120.
Dow Slips 44 Points
Bank of America skidded 3.3% after Baird downgraded the stock.
Currencies
The dollar traded modestly higher on Tuesday, as currency markets traded in a narrow range. The Australian dollar shed .5% to 1.0482, the Canadian dollar lost .3% to .9944, and the pound traded flat. The euro and Swiss franc both declined .2%, and the yen dropped .3% to 83.10.
Economic Outlook
The Case Shiller home price index showed prices remained flat in January,. Consumer confidence fell to 70.2 from 71.6 last month, slightly below expectations.
Global Stocks Slide On Mounting Economic Concerns
EquitiesAsian markets closed mostly lower on Wednesday, led by heavy losses in China. The Shanghai Composite tumbled 2.7% to 2285, a 2-month low as disappointing earnings weight on the index. The Hang Seng fell .8%, the Kospi slid .4%, and the Nikkei dropped .7% to 10183. Australia’s ASX 200 escaped the losses, rallying 1%, after the country’s central bank reported that the nation’s banking sector is in good shape.
European markets skidded, weighed down by weak economic data. The CAC40 and DAX slid 1.1%, and the FTSE dropped 1% to 5809. Data suggested that Spain is now in another recession, and the UK’s GDP shrank more than forecast.
US stocks opened sharply lower but recovered much of their losses throughout the day. The Dow shed 72 points to 13126, while the S&P 500 and Nasdaq both fell .5%. Caterpillar shares sank 3.5% to 104.26, pressured by a disappointing durable goods report.
Currencies
The currency markets traded mixed on Wednesday. The pound fell .3% to 1.5894, the Australian dollar declined .6% to 1.0393, and the Canadian dollar slipped .3% to .9980. The yen advanced .5% to 82.78, while the euro and Swiss franc closed flat.
Economic Outlook
Durable goods orders rose 2.2% last month, less than the 3% hoped for by analysts. Weekly mortgage applications rose while refinancing applications fell, a positive sign for the housing industry.
Asian And European Stocks Skid, Energy Sinks
EquitiesAsian markets fell on Thursday as mounting fears of a global slowdown weight on investors’ nerves. The Nikkei slid .7% to 10115, the Kospi slumped .9%, and the ASX 200 eased .1%. The Shanghai Composite tumbled for a second day, skidding 1.4% to 2252, and the Hang Seng sank 1.3% to 20609.
Selling pressure intensified in Europe, as the DAX tanked 1.8% to 6875, the CAC40 fell 1.4%, and the FTSE dropped 1.2%. Financial shares fell nearly 3%, and Italy’s MIB index plunged 3.3%.
Germany's DAX Drops 1.8%
In contrast, US stocks continued to show their resilience, as the major indexes bounced back from a 1% slide to close mixed. The Dow rose 20 points to 13146, 113 points off its low for the day. The Nasdaq declined .3%, and the S&P 500 eased .2% to 1403.
Sprint jumped 5.3% after Deutsche Bank raised its outlook for the company.
Health care stocks rallied as the Supreme Court listens to hearings concerning the legality of Obamacare. Aetna surged 6.5%, and Coventry Health sprinted 5.9% higher.
Currencies
The currency markets traded mixed with no clear direction. The yen advanced .5% to 82.44, the pound rose .4% to 1.5952, and the Canadian dollar edged up .2% to .9965. The euro, Swiss franc, and Australian dollar all slipped .1%.
Economic Outlook
Weekly unemployment claims fell to 359K, a 4-week low, but fell short of analyst forecasts for 351K. GDP for the 4th quarter rose at 3%, as expected.