Global Markets Overview – 06/14/2012
FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
Stocks sank into the red in late trading Wednesday, as worries about Europe and weak U.S. data eclipsed earlier optimism about financial stocks’ outlooks. The Dow Jones Industrial Average dropped 0.6%, or 77.42 points, to 12496.38. Midday, it briefly edged above 12598.
The Standard & Poor’s 500-stock index fell 9.3 points, or 0.7%, to 1314.88, and the Nasdaq Composite fell 24.46 points, or 0.9%, to 2818.61.
Concerns about the strength of Europe’s economy moved to the forefront in late afternoon trading, as the Dow Industrial Average fell more than 100 points to its intraday lows.
Major indexes recouped some of their losses before the close, but stocks remained in negative territory on jitters about demand for Italian bonds in an upcoming auction and reports of more Greek bank withdrawals ahead of the country’s elections this Sunday.
U.S. retail sales slipped for the second consecutive month in May, the first consecutive-month decline in nearly two years. While the measure fell by less than expected in May, April retail sales were revised down into negative territory.
Stocks saw gains in the first half of the day, as J.P. Morgan Chase Chief Executive James Dimon testified in front of a Senate panel. The questioning was less contentious than expected, which stoked hopes that banks wouldn’t see extensive regulatory fallout from J.P. Morgan’s trading loss of more than $2 billion.
In corporate news, Dell led companies in the S&P 500, rising 2.6% after the computer maker said it plans to start paying a quarterly cash dividend of 8 cents a share. Johnson & Johnson gained 2.2%. The blue chip health-care company said it received regulatory clearance to close its $19.7 billion bid for medical-device maker Synthes.
EUROPEAN STOCK MARKETS
Losses in shares of big manufacturing companies and miners drove Europe’s stock markets lower Wednesday amid weak euro-zone and U.S. data, though Spanish stocks bucked the trend after retailer Inditex SA zipped higher on upbeat results.
The Stoxx Europe 600 index closed 0.4% lower at 242.56. Markets dipped deeper into negative territory in afternoon action after U.S. retail sales fell for a second month in May, marking the first back-to-back drop in two years.
SKF AB dropped the most in the pan-European index, off 7.3%, after the maker of rolling bearings cut its second-quarter forecast due to weaker market conditions in Western Europe and Asia.
The announcement stirred concerns that profit warnings from other industrials such as Swedish machinery firm Sandvik AB and Atlas Copco AB would follow.
Shares of Sandvik dropped 5.3%, while those of Atlas Copco fell 3.4%. Major industrial companies and miners were also weighed by news of a 0.8% drop in euro-zone industrial production in April from March.