Nikkei +498.43 +5.8% 9,081.43
Topix +37.65 +4.3% 916.65
FTSE +38.96 +0.89% 4,403.92
DAX +87.07 +1.76% 5,025.53
CAC +36.63 +1.06% 3,505.75
Dow -73.27 -0.82% 8,870.54
NASDAQ -30.66 -1.86% 1,616.74
S&P -11.78 -1.27% 919.2
S&P 500 -52.97 -5.27% 952.78
10yr Note -0.1800 -0.048% 3.760%
NYMEX Crude Oil +1.37 +2.24% 62.41
Gold +12.30 +1.68% 746.50
Japanese shares rose for the first time in three days, led by machinery
and shipping companies, after China announced a stimulus plan worth
almost a fifth of its economy, joining global efforts to stave off a
recession.
Komatsu Ltd. and Hitachi Construction Machinery Co.,
Asia's largest makers of earthmovers, soared more than 11 percent after
China pledged part of a 4 trillion-yuan ($586 billion) spending package
to improve infrastructure. Nippon Yusen K.K., Japan's biggest shipping
line, jumped 9.9 percent after the Group of 20 nations called for
interest-rate cuts and higher government spending. Sony Corp. rose 7.6
percent after the yen weakened.
The Nikkei 225 Stock Average added
498.43, or 5.8 percent, to close at 9,081.43 in Tokyo. The broader
Topix index rose 37.65, or 4.3 percent, to 916.65, with all its 33
industry groups gaining. The value of shares traded on the bourse was
three- fourths the six-month average and the lowest level since Sept.
1.
China's State Council yesterday announced a stimulus plan
equivalent to almost a fifth of last year's gross domestic product,
ranging from tax breaks on equipment to infrastructure spending. The
same day, the Group of 20 nations, which includes China, said it's
ready to act ``urgently'' to bolster growth.
Japanese machinery
orders rose 5.5 percent in September, more than the 5.2 percent
predicted by economists, in what the Cabinet Office today called a
``weak rebound.'' For the quarter, the decline in orders matched a
record, as the slowing global economy dragged on exports. The Nikkei
has fallen 41 percent this year and is coming off its worst month ever.
Komatsu, which counts China as its fastest growing market, leapt 12
percent to 1,254 yen, while smaller rival Hitachi Construction
Machinery soared 19 percent to 1,252 yen, making it the biggest winner
on the MSCI World Index. Kawasaki Heavy Industries Ltd., which makes
Japanese bullet trains, surged 14 percent to 211 yen.
China's
spending package, of which 100 billion yuan is earmarked for this
quarter, will go toward low-rent housing, roads, railways and airports,
as well as rural development.
Nippon Yusen jumped 9.9 percent to
500 yen, while closes rival Mitsui O.S.K. Lines Ltd. gained 12 percent
to 523 yen. A gauge of shipping lines, the worst performer among Topix
groups in the year to last week, was today's biggest winner.
The
spending package reinvigorated investor appetite for riskier assets,
causing the yen to weaken against the dollar to as much as 99.37 today
from 97.50 at the close of stock trading in Tokyo on Nov. 7. The
Japanese currency depreciated against the euro to as much as 127.91
from 124.13. A weaker yen boost the value of Japanese companies'
overseas sales.
Sony, an electronics maker that gets a quarter of
its sales from the U.S., surged 7.6 percent to 2,345 yen. Canon Inc.,
the world's biggest digital-camera maker, rose 5.2 percent to 3,440
yen, while Olympus Corp., an endoscope maker that derives the biggest
portion of overseas earnings from Europe, added 11 percent to 1,785
yen.
Drugmaker Shionogi & Co. jumped 10 percent to 2,045 yen
after a study showed its Crestor pill cut the risk of heart attacks in
people with low cholesterol, potentially expanding uses for the
treatment.
European stocks advanced for a second day after
China unveiled a $586 billion plan to stimulate the economy and world
leaders urged more cuts in interest rates.
BHP Billiton Ltd.
climbed 11 percent and Rio Tinto Group jumped 8.6 percent as copper
rallied. Deutsche Post AG added 6.9 percent after Europe's biggest mail
carrier confirmed its full- year profit target.
National
benchmarks gained in all 18 western European markets except Austria and
Spain. The U.K.'s FTSE 100 jumped 0.9 percent with Cable & Wireless
Plc advancing. Germany's DAX added 1.8 percent, while France's CAC 40
increased 1.1 percent.
The government of China, the world's
fourth-largest economy, announced infrastructure spending, tax
deductions and farming subsidies. The central bank has already cut
interest rates three times in two months, joining policy makers from
Washington and Tokyo to Frankfurt and London in efforts to lower
borrowing costs and inject cash to avoid recession.
Retailers also
dropped after Tesco Plc, Britain's largest retailer, reported
deteriorating sales in China and South Korea, while Circuit City Stores
Inc., a U.S. electronics chain, filed for bankruptcy.
The Group of
20 nations said yesterday that it is prepared to act ``urgently'' to
bolster growth and called on governments to cut interest rates and
raise spending as the world's leading industrialized economies battle
the economic slump.
Money market rates in Europe fell today
indicating measures taken by authorities across the globe are unlocking
credit markets. The London interbank offered rate, or Libor, the rate
banks charge each other for three-month loans in dollars, slid almost 6
basis points to 2.24 percent, according to British Bankers'
Association. It was the 21st consecutive decline and the lowest level
in four years.
BHP Billiton, the world's biggest mining company,
rose 11 percent to 1,123 pence. Rio Tinto, the world's third-largest
mining company, added 8.6 percent to 2,844 pence.
Copper jumped 3.5 percent on the London Metal Exchange.
ArcelorMittal, the world's largest steelmaker, climbed 6 percent to 18.54 euros.
Deutsche
Post rose 6.9 percent to 10 euros after saying it plans to widen
workforce cuts by 9,500 jobs. Third-quarter net income more than
doubled to 805 million euros ($1.04 billion) from 350 million euros.
Cable
& Wireless, the U.K.'s second-biggest phone company, gained 5.4
percent to 142 pence. Earnings before interest, taxes, depreciation and
amortization are now predicted to reach at least 780 million pounds
($1.2 billion) in the 12 months ending March 31, 2009. The previous
forecast was for Ebitda of 702 million pounds to 725 million pounds.
US stocks
fell Monday as concerns regarding financial and automaker companies
overshadowed news of a massive Chinese fiscal stimulus and a
restructuring of AIG's (AIG 2.28, +0.17) government bailout.
The
S&P 500 opened 2.3% higher as overseas markets rallied on the
Chinese fiscal stimulus plan, but gave up those gains as the financial
sector faltered. In the end, the S&P 500 fell 1.3% in below average
volume with eight of the ten economic sectors posting a loss.
China
will spend $586 billion, equal to a 18% of its GDP, in a plan to
support its domestic economy and restore global economic health. The
two-year package will target a broad range of industries, including
housing, infrastructure and health care.
In corporate news, AIG rose
8% on word its bailout from the U.S. government has been amended,
including an expansion in aid to $150 billion from $123 billion and
better loan terms. The move is meant to give AIG more time to sell
assets after losing $24.5 billion in the third quarter, and stands to
reassure investors that the insurance giant will be able to satisfy its
counterparty obligations.
Despite the strength in AIG, the financial
sector dropped 4.4%, with notable weakness in Goldman Sachs (GS 70.94,
-6.87). Goldman had its fourth quarter earnings estimate cut to a loss
of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited
dramatic equity market declines. On average, analysts expect Goldman to
post fourth quarter earnings of $1.46 per share.
General Motors (GM
3.29, -1.07) tumbled to its lowest level in six decades after it was
downgraded to Sell from Hold and had its price target cut to $0 from $4
at Deutsche Bank. GM may not be able to fund its U.S. operations beyond
December without government intervention, Deutsche Bank said. Ford (F
1.94, -0.08) fell 4%.
The financial market turmoil and slowdown in
consumer spending is taking a toll on retailers (-2.0%). Circuit City
(CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to
stiff competition and financial market disruptions that limited the
retailer's access to credit.
UPS (UPS 53.66, +1.74) and FedEx (FDX
66.27, +1.69) gained on news that they will have less competition in
the U.S. starting early next year. DHL U.S. Express said it will
discontinue domestic-only air and ground services to only focus on
international offerings. The shipping company, owned by Germany-based
Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400
jobs it has already eliminated.
On a positive note, McDonald's (MCD
56.58, +1.11) continues to benefit from its relatively low price
offerings. The company said October U.S. same-store sales increased by
5.4% and global same-store sales rose by 8.2%. U.S. sales, which
accounted for 35% of McDonald's 2007 revenue, were aided by the
popularity of the Monopoly game.
In commodity trading, oil surged as
high as 7.4% and gold gained as much as 4.7% as traders speculated that
the Chinese stimulus plan would spark increased demand. Commodities
(+1.7%) gave up much of those gains by the end of the session, however,
with oil settling up 1.9% to $62.22 per barrel and gold advancing 1.6%
to $746.10.