Nikkei +300.66 +3.3% 9 306.25
Topix +29.27 +3.2% 956.64
FTSE -52.94 -1.24% 4,229.73
DAX -50.60 -1.05% 4,784.41
CAC +26.89 +0.78% 3,475.40
Dow -231.77 -2.50% 9,033.66
NASDAQ -73.35 -4.14% 1,696.68
S&P -30.35 -3.08% 955.05
10yr Note -1.8300 -0.471% 3.703%
NYMEX Crude Oil -3.36 -4.53% 70.89
Gold -22.00 -2.78% 768.00
Japan stocks climbed a third day on speculation stimulus plans will
jump-start economic growth in the U.S. and at home, and as a rise in
oil boosted resource shares.
Honda Motor Co., Japan's
second-biggest carmaker, climbed 6.8 percent. Oil explorer Inpex Corp.,
which has lost more than half of its value in the past five months,
added 9.6 percent. Mitsubishi Estate Co., Japan's second-biggest
developer, jumped 9.2 percent to a three-week high after a lending rate
between banks fell the most in nine months, easing funding concerns.
The
Nikkei 225 Stock Average jumped 300.66, or 3.3 percent, to close at
9,306.25 in Tokyo, bringing its three-day gain to 10 percent. The
broader Topix index rose 29.27, or 3.2 percent, to 956.64, with more
than three stocks rising for each that slumped.
Federal Reserve
Chairman Ben S. Bernanke yesterday said U.S. lawmakers should consider
new measures to improve access to credit for consumers and businesses.
Meanwhile, tax cuts in a proposed economic stimulus package in Japan
may reach 2 trillion yen ($19.7 billion), the Mainichi newspaper said
today.
Today's rise extends the Nikkei's 5 percent gain last week,
which followed its record 24 percent plunge in the five days ending
Oct. 10. The gauge has slumped more than a third this year as the
collapse of the U.S. mortgage market toppled financial companies and
slowed global economic growth.
Honda, which derives about half its
profit from North America, added 6.8 percent to 2,435 yen, while Toyota
Motor Corp. gained 5 percent to 3,790 yen. Canon Inc., which gets a
third of its sales from the Americas, rose 5.5 percent to 3,460 yen.
Inpex,
the nation's biggest oil and gas explorer, advanced 9.6 percent to
683,000 yen after having fallen 56 percent from a record 1.4 million
yen on May 19. Mitsubishi Corp., a trading house that gets more than
half its profit from commodities, rose 6.2 percent to 1,848 yen, while
smaller rival Mitsui & Co. jumped 7.5 percent to 1,074 yen.
Mitsubishi
Estate surged 9.2 percent to 2,055 yen, while market leader Mitsui
Fudosan Co. rose 6 percent to 1,937 yen. Nomura Real Estate Office Fund
Inc. soared 15 percent to 621,000 yen, its steepest increase on record.
European stocks fell for the first time in three days as
disappointing earnings and lowered forecasts deepened concern the
economic slowdown will curb profit, overshadowing government efforts to
shore up banks.
STMicroelectronics NV and Infineon Technologies
AG, the region's biggest computer-chip makers, sank more than 3 percent
after Texas Instruments Inc.'s earnings forecast missed analysts'
estimates. Logitech International AG slumped 8.8 percent as the world's
biggest maker of computer mice cut its prediction for sales. Hannover
Re tumbled 13 percent after posting a loss and abandoning its earnings
target.
National benchmark indexes fell in 10 of the 18 western
European markets. Germany's DAX Index decreased 1.1 percent. The U.K.'s
FTSE 100 lost 1.2 percent, and France's CAC 40 added 0.8 percent.
STMicroelectronics
slid 3.2 percent to 6.39 euros. Infineon, Europe's second-largest
chipmaker, dropped 5.4 percent to 2.615 euros.
Texas Instruments
reported a 27 percent decline in third- quarter profit and said sales
will fall as much as 20 percent this period.
Logitech slumped 8.8
percent to 18.25 francs. The company cut its forecasts for sales and
profit, citing concerns over slowing economic growth.
Hannover Re
sank 13 percent to 19.22 euros. Germany's second-biggest reinsurer
abandoned its profit target after losing money in the first nine months
of the year on declining stock investments and above-average
catastrophe claims.
Societe Generale SA and BNP Paribas SA climbed
as the French government said it will buy subordinated debt issued by
the country's six biggest banks and money-market rates fell.
The
cost of borrowing in euros for three months fell to the lowest level
since Lehman collapsed. The euro interbank offered rate, or Euribor,
for such loans dropped 3 basis points to 4.97 percent today, the
European Banking Federation said.
The comparable London interbank
offered rate, or Libor, for dollar loans slid to 3.83 percent from 4.06
percent, the British Bankers' Association said. The overnight dollar
rate slid 23 basis points to 1.28 percent, below the Federal Reserve's
target for the first time since Oct. 3.
Societe Generale, France's
second-biggest bank, climbed 10 percent to 48.425 euros. BNP Paribas,
the nation's largest bank, added 7.5 percent to 59 euros. Societe
Generale and BNP along with four other banks will get 10.5 billion
euros ($14 billion) from the French government, tapping for the first
time the 360 billion-euro state rescue package unveiled this month.
BNP
and Societe Generale led a decline in the cost of protecting bank bonds
from default. Credit-default swaps on the Markit iTraxx Financial index
of contracts linked to 25 European banks and insurers fell 3 basis
points to 101, according to JPMorgan Chase & Co. prices.
Volkswagen
AG fell 12 percent to 242.75 euros, extending yesterday's 23 percent
plunge as investors short-sold the shares on speculation that the price
will decline once Porsche SE gains control of Europe's biggest
carmaker.
Actelion Ltd. climbed 3.2 percent to 57.4 francs as
Switzerland's biggest biotechnology company said third-quarter profit
rose because of increased sales of the Tracleer lung disease medicine.
The
stock market posted a large loss on Tuesday as several companies posted
quarterly earnings misses and cautious outlooks that overshadowed signs
of improvement in the credit markets. In addition, investors digested
news the U.S. government plans to take additional steps to shore up
money market mutual funds.
The S&P 500 spent the entirety of the
session in negative territory, although it did see large swings. The
Index traded near the unchanged mark with an hour of trade left, but a
surge of selling interest sent it to session lows to settle with a loss
of 3.1%.
It was an extremely busy session on the earnings front.
Results were mixed -- of the 77 companies that reported earnings after
yesterday's close and before this session's open, 52% topped estimates,
35% missed and 13% were in-line. Outlooks were cautious -- of the 49
companies that issued guidance, 45% were negative, 30% were in-line,
21% were mixed and only 3% were positive.
Some notable names that
topped third quarter earnings estimates include 3M (MMM 60.02, +2.51),
American Express (AXP 26.33, +1.98), DuPont (DD 33.32, -2.85), Pfizer
(PFE 17.35, +0.01) and Lockheed Martin (LMT 84.43, -8.79). DuPont and
Lockheed, however, issued downside earnings guidance for their fourth
quarter and full year.
The more widely held companies that missed
estimates include BlackRock (BLK 129.24, -13.98), Caterpillar (CAT
38.84, -2.06), Freeport-McMoRan (FCX 32.81, -3.91) and Texas
Instruments (TXN 16.85, -1.13). Texas Instruments also gave a downside
fourth quarter earnings outlook, citing a slowdown in orders.
With
regard to the government's latest effort, the Fed will buy commercial
paper -- which is short-term corporate debt that many businesses rely
on -- from money market mutual funds. The Fed said it created the
facility because money market mutual funds and other investors have had
difficulty selling assets to satisfy redemption requests and meet
portfolio rebalancing needs. The Fed had already announced plans to buy
commercial paper directly from companies.
While the need to have the
Fed shore up money market funds shows that the financial markets remain
considerably strained, there continue to be signs of improvement. The
rates banks charge each other for short-term dollar loans, measured by
Libor, decreased across all terms.
In the end all ten sectors posted
a decline in broad-based weakness. Volume was on the light side with
1.16 billion shares exchanging hands on the NYSE, which is short of the
one-year average of 1.49 billion.
The tech sector (-5.6%) posted a
large decline due to the 6.3% drop in Texas Instruments. An earnings
warning from Sun Microsystems (JAVA 4.78, -1.00) also weighed on the
sector.
The energy sector fell 4.3% as crude prices dropped 4.5% to
$70.89 per barrel. The drop in crude prices was fueled by global
economic concerns and a 1.5% surge in the dollar.
The materials sector declined 5.7% after copper producer Freeport-McMoRan plunged 11%.
The
financial sector outperformed on a relative basis with a loss of 1.8%.
Strength in American Express helped offset weakness in BlackRock and
Citigroup (C 14.17, -0.92), with the latter company being added to the
Conviction Sell list at Goldman Sachs, according to reports.