Global markets rallied on renewed hopes that Europe will succeed in improving its bailout plan. In Asia, the Nikkei jumped 1.6% to 8287, the Kospi rallied 2.2%, and Australia’s ASX 200 climbed 1.9%. Hong Kong’s Hang Seng gained 2% to 18037, while the Shanghai Composite lagged the region, edging up a mere .1%.
European markets soared, with the CAC40 leading the advance, gaining 5.5% to 3013. The DAX jumped 4.6% and the FTSE advanced 2.9%. The Stoxx European banking index posted gains of 5.7%, as financials bounced strongly.
The rally continued in the US, with the Dow gaining 291 points to 11523. The Nasdaq and S&P 500 both snapped a 7-day losing streak, climbing 3.5% and 2.9% respectively.
Currencies
The US Dollar declined as a spike in optimism encouraged risk taking, but settled well of its lows. The Australian Dollar soared 1.9% to .9898 after trading as high as .9976, and the Canadian Dollar jumped 1.1% to 1.0354. The Euro gained .6% to 1.3312, the Swiss Franc rose .8% to 1.0834, and the British Pound closed up .4% to 1.5505. The Japanese Yen declined .3% to 77.95, bucking the trend.
Economic Outlook
New home sales rose by 4000 to 307K, but were below expectations of 313K.
Equities Continue to Rise on European Bailout Hopes
Equities
Asian markets rallied, encouraged by a strong rally in Western shares on Monday. The Nikkei soared 2.3% to 8488, the Kospi advanced 2.3%, and the ASX gained 1.1%. Both the Hang Seg and the Shanghai Composite rose 1.2%.
In Europe, markets rose moderately, lifted by a jump in consumer confidence in the US. The DAX gained 1% to 5800, while the CAC40 and FTSE closed up .5%. Policymakers approved a $10.7 billion bailout payment to Greece in an effort to slow the spiraling debt crisis.
Back in the US, the major indexes closed mixed, as the Nasdaq skidded .5%, while the Dow gained 33 points to 11556 and the S&P 500 rose .2%.
Nasdaq Closes Down .5% Continuing the Recent Slide
American Airlines parent, AMR, filed for bankruptcy, sending shares plunging 84% to .26. The company cited high labor costs and rising fuel prices as causes for the company’s cash shortage.
Currencies
The Australian Dollar soared for a second day, jumping 1.2% to 1.0026 as investors slowly recovered their risk appetite. The Pound gained .7% to 1.5609, and the Euro inched up .1% to 1.3328. The Canadian Dollar rose .4% to 1.0302, and the Swiss Franc settled up .3% at 1.0872.
Economic Outlook
Tuesday’s economic data was a mixed bag. Consumer confidence soared to 56 from 40.9, blowing past analyst forecasts. The Case-Shiller home price index dropped 3.6%, more than expected, but the FHFA house price index rose .9%, painting a mixed picture of the housing market.
Central Banks Unite to Boost Liquidity, Western Markets Soar
Equities
China’s Shanghai Composite tumbled 3.3% due to growing concerns the country’s growth with slow, and the Hang Seng fell 1.5% to 17989. China’s central bank cut reserve requirements for the first time in nearly 3 years in an effort to keep the economy on track. In Japan, the Nikkei slipped .5% to 8435, while Olympus shares recovered from a sharp 10% loss at the open after the company affirmed it would release its December earnings report on time. Korea’s Kospi declined .5%, but Australia’s ASX managed to buck the trend, closing up .3%.
A coordinated move by global central banks to increase liquidity sent Western markets sharply higher. The DAX spiked 5%, the CAC40 soared 4.2% and the FTSE climbed 3.2%. Miners jumped 6% amid hopes the easing efforts will boost demand for raw materials.
Dow Soars Nearly 500 Points
Netflix shares slumped 4.5% after the company was downgraded to sell from neutral by Wedbush Securities.
Currencies
The Australian Dollar surged 2.4% to 1.0284 as the recent rally accelerated. The Canadian Dollar jumped 1% to 1.0198, and the Euro gained .8% to 1.3436. The Pound rose .5% to 1.5695, while the Yen declined .5% to 77.55.
Economic Outlook
Wednesday’s reports were exceedingly upbeat. Data from the ADP employment report blew past forecasts, with the economy adding 206K jobs last month, up from 130K in the previous report. Chicago PMI rose to 62.6 from 58.4, well above estimates, and the Challenger job-cut report showed planned layoffs declined by 12.8%.
US Stocks Consolidate after Wednesday’s Rally
Equities
Asian markets opened sharply higher on Thursday in response to the announced cooperative central bank liquidity effort. The Hang Seng soared 5.6%, climbing 1013 point to 19002, leading the region. The Shanghai Composite rose 2.3%, the ASX 200 gained 2.6%, and the Nikkei advanced 1.9%. In Korea, the Kospi rallied 3.7% as Samsung Electronics surged 7% to a new record closing high.
Hong Kong's Hang Seng Index Surges 5.6%
In Europe, the major indexes closed lower after Wednesday’s sharp rise. The DAX fell .9%, the CAC40 dropped .8%, and the FTSE slipped .3%, as investors locked in gains from the previous session.
US stocks closed mixed after a choppy session, with the Nasdaq gaining .2%, while the Dow and S&P 500 declined .2%.
Currencies
The currency market ended mixed after Wednesday’s steep dollar selloff. The Euro edged up .2% to 1.3459, and the Canadian Dollar advanced .5% to 1.0142. The Australian Dollar slipped .4% to 1.0226, and the Swiss Franc and Japanese Yen both declined by .2%.
Economic Outlook
Weekly unemployment claims unexpectedly rose to 402K from last week’s 396K reading. ISM manufacturing PMI was slightly better than expected at 52.7 vs. 51.6, and monthly auto sales rose to 13.6M from 13.3M last month.
US Unemployment Rate Drops to 8.6%
Equities
Asian markets closed mixed as investors awaited key US payroll data later in the day. The Nikkei rose .5% to 8644, gaining 5.9% for the week, its largest jump in 2 years. Australia’s ASX 200 climbed 1.4%, soaring 7.6% for the week. In China, the Shanghai Composite fell 1.1%, while the Hang Seng ticked up .2%.
European markets advanced, as the banking sector surged 4.2% amid hopes for the upcoming EU summit. The FTSE gained 1.2%, the CAC40 rose 1.1%, and the DAX closed up .7%.
US markets closed little changed, surrendering earlier gains, despite an upbeat jobs report. The Dow had risen more than 125 points earlier in the session, but settled at 12019, down 1 point.
Dow Forfeits Early Gains to Close Flat
Blackberry-maker Research in Motion plunged 9.7% after warning it would fall short of forecasts due to struggling sales of its Playbook tablet.
Currencies
The US Dollar advanced against global currencies. The Euro, Pound, and Swiss Franc each fell .6%, while the Yen eased .3% to 77.98. The Australian Dollar edged lower .1% to 1.0216, reversing a morning spike up to 1.0304.
Economic Outlook
Non-farm payrolls rose by 120K last month, slightly less than the 126K forecast, but stronger than last month’s 100K reading. The unemployment rate unexpectedly dropped to 8.6%, from 9.0% previously. The recent data suggests the US recovery is picking up steam.