Global Markets Overview – 06/15/2012
FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
U.S. stocks rallied as signs of a worsening U.S. labor market and European debt picture bolstered investors’ hopes that central bankers will again come to the rescue. The Dow Jones Industrial Average jumped 155.53 points, or 1.2%, to 12651.91.
The blue-chip benchmark rose after labor and inflation data sparked speculation the Federal Reserve would announce further economic-stimulus efforts.
The Dow briefly spiked in the final hour of trading, extending gains to as much as 202 points, after Reuters reported that central banks were preparing to provide liquidity to the markets if needed after the Greek election.
The Standard & Poor’s 500-stock index advanced 14.22 points, or 1.1%, to 1329.10. Telecommunications and energy companies paced advances across all of the index’s 10 sectors. Slot-machine maker International Game Technology jumped 14%, leading the index higher, after unveiling stock-buyback plans.
The Nasdaq Composite rose 17.72 points, or 0.6%, to 2836.33. The number of Americans making initial claims for unemployment benefits unexpectedly rose, while the prior week’s figure was revised higher.
Meanwhile, U.S. consumer prices fell in May, in line with expectations, as plunging gasoline costs offset higher rents and medical-care prices. Excluding food and energy, consumer prices rose 0.2% from April, also matching economists’ forecasts.
The weak employment data and lack of evidence of accelerating inflation were seen as improving the chances of the Fed unveiling further monetary stimulus after its Federal Open Market Committee meeting next week.
In other corporate news, U.S.-listed shares of Finland’s Nokia dropped 16% after the handset maker announced a shake-up of management and said it would cut an additional 10,000 jobs by the end of next year as it deals with increased competition. Smithfield Foods fell 5.7% after the pork processor reported fiscal fourth-quarter earnings that missed analyst expectations, according to FactSet Research.
EUROPEAN STOCK MARKETS
Italian and Spanish stocks surprised in late action Thursday, and Greece’s benchmark surged, after unofficial Greek polls pointed to a New Democracy victory in the upcoming election. However, pressure remained on southern European bond yields after a fresh Spain downgrade.
The Stoxx Europe 600 index closed 0.3% lower at 241.84, dropping for a second consecutive day. Most core markets moved lower, while peripheral markets posted solid gains.
Nokia Corp. posted the biggest drop in the pan-European index, tumbling 17.8% after the company said it would cut 10,000 jobs and shuffle top management.