Stocks, Copper, Euro Gain on Optimism Over Europe Debt; Yen Reaches Record
Friday, October 21, 2011
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Stocks advanced, driving European shares up the most in two weeks, as commodities and the euro rose on optimism policy makers are moving closer to containing the debt crisis. Spain and Italy’s government bonds gained.
The Standard & Poor’s 500 Index added 1.2 percent at 1:06 p.m. New York time, climbing to what would be the highest closing level since Aug. 3. The Stoxx Europe 600 Index added 2.5 percent, erasing a weekly loss. Copper futures surged 5.3 percent after falling 10 percent in four days, and oil soared 2.5 percent. The euro added 0.5 percent to $1.3847. The yen climbed to a post-World War II high versus the dollar. Spain’s 10-year debt broke a nine-day losing streak, and the yield on Italian 10-year notes dropped below 6 percent.
European finance ministers started a six-day negotiation among the region’s leaders over how to save Greece from default, shield banks from the fallout and build more powerful defenses against the debt crisis. As much as 940 billion euros ($1.3 trillion) might be deployed, two people familiar with the discussions said yesterday.
“The market is really looking for something to grasp as the European saga continues,” Malcolm Polley, who oversees $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania, said in a telephone interview. “They are saying that we may have a resolution. We don’t know that it will be the case because we’ve heard that story before. Hopefully they will finalize it.”
Greece, Ireland
Aid packages of 256 billion euros for Greece, Ireland and Portugal have failed to stabilize markets or prevent the turmoil spreading as far as France, co-anchor with Germany of the European economy. With President Barack Obama stressing the urgency of a fix, divisions between Germany and France festered as finance ministers arrived in Brussels. As a first step, they are set to approve releasing the next aid payment for Greece.
Banks in the Stoxx Europe 600 Index advanced 3.8 percent for the third-biggest advance among 19 industries. UniCredit SpA (UCG) and BNP Paribas SA, the biggest banks in Italy and France, climbed more than 6.2 percent.
The S&P 500 climbed for a second day as all 10 industries advanced. McDonald’s Corp. rallied 2.7 percent as the world’s largest restaurant chain beat the average analyst profit projection. Honeywell International Inc. rose 5.5 percent as a recovery in commercial aerospace helped earnings climb 44 percent.
Emerging Markets
The MSCI Emerging Markets Index climbed 1.4 percent, after yesterday’s 2.7 percent drop. Brazil’s Bovespa Index increased 2.2 percent. South Korea’s Kospi Index (KOSPI) added 1.8 percent on speculation company earnings will withstand a slowing global economy. The Shanghai Composite Index retreated 0.6 percent, capping the benchmark index’s steepest weekly drop in five months, on speculation slowing economic growth and the nation’s tighter monetary policies are hurting earnings.
The S&P GSCI Index of 24 commodities rose 1.3 percent as coffee futures climbed 4.9 percent while lead, nickel and zinc added more than 3.6 percent.
Japan’s currency appreciated 0.7 percent to 76.23 yen versus the dollar after touching a record 75.82. The euro almost erased its weekly retreat against the U.S. currency.
Italy’s 10-year bond yield dropped 12 basis points to 5.89 percent. Spanish 10-year bonds snapped a nine-day decline, with yields falling six basis points to 5.47 percent. The European Central Bank bought small amounts of Spanish and Italian government debt today, according to two people with direct knowledge of the transactions, who asked not to be identified because the deals are confidential.
Source : bloomberg.com
The Standard & Poor’s 500 Index added 1.2 percent at 1:06 p.m. New York time, climbing to what would be the highest closing level since Aug. 3. The Stoxx Europe 600 Index added 2.5 percent, erasing a weekly loss. Copper futures surged 5.3 percent after falling 10 percent in four days, and oil soared 2.5 percent. The euro added 0.5 percent to $1.3847. The yen climbed to a post-World War II high versus the dollar. Spain’s 10-year debt broke a nine-day losing streak, and the yield on Italian 10-year notes dropped below 6 percent.
European finance ministers started a six-day negotiation among the region’s leaders over how to save Greece from default, shield banks from the fallout and build more powerful defenses against the debt crisis. As much as 940 billion euros ($1.3 trillion) might be deployed, two people familiar with the discussions said yesterday.
“The market is really looking for something to grasp as the European saga continues,” Malcolm Polley, who oversees $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania, said in a telephone interview. “They are saying that we may have a resolution. We don’t know that it will be the case because we’ve heard that story before. Hopefully they will finalize it.”
Greece, Ireland
Aid packages of 256 billion euros for Greece, Ireland and Portugal have failed to stabilize markets or prevent the turmoil spreading as far as France, co-anchor with Germany of the European economy. With President Barack Obama stressing the urgency of a fix, divisions between Germany and France festered as finance ministers arrived in Brussels. As a first step, they are set to approve releasing the next aid payment for Greece.
Banks in the Stoxx Europe 600 Index advanced 3.8 percent for the third-biggest advance among 19 industries. UniCredit SpA (UCG) and BNP Paribas SA, the biggest banks in Italy and France, climbed more than 6.2 percent.
The S&P 500 climbed for a second day as all 10 industries advanced. McDonald’s Corp. rallied 2.7 percent as the world’s largest restaurant chain beat the average analyst profit projection. Honeywell International Inc. rose 5.5 percent as a recovery in commercial aerospace helped earnings climb 44 percent.
Emerging Markets
The MSCI Emerging Markets Index climbed 1.4 percent, after yesterday’s 2.7 percent drop. Brazil’s Bovespa Index increased 2.2 percent. South Korea’s Kospi Index (KOSPI) added 1.8 percent on speculation company earnings will withstand a slowing global economy. The Shanghai Composite Index retreated 0.6 percent, capping the benchmark index’s steepest weekly drop in five months, on speculation slowing economic growth and the nation’s tighter monetary policies are hurting earnings.
The S&P GSCI Index of 24 commodities rose 1.3 percent as coffee futures climbed 4.9 percent while lead, nickel and zinc added more than 3.6 percent.
Japan’s currency appreciated 0.7 percent to 76.23 yen versus the dollar after touching a record 75.82. The euro almost erased its weekly retreat against the U.S. currency.
Italy’s 10-year bond yield dropped 12 basis points to 5.89 percent. Spanish 10-year bonds snapped a nine-day decline, with yields falling six basis points to 5.47 percent. The European Central Bank bought small amounts of Spanish and Italian government debt today, according to two people with direct knowledge of the transactions, who asked not to be identified because the deals are confidential.
Source : bloomberg.com
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