A roundup of trading on major world markets:
NEW YORK – US stocks surged strongly on Tuesday, boosted by growing hopes the US Federal Reserve will offer new stimulus measures to kick-start a sluggish economy.
The Dow Jones Industrial Average packed on 322.11 points (2.97 per cent) to finish at 11,176.76. The broader S&P 500 leaped 38.53 points (3.43 per cent) to 1,162.35, while the tech-heavy Nasdaq Composite added 100.68 points (4.29 per cent) to stand at 2,446.06.
Stocks dipped slightly after a rare US East Coast earthquake rattled Wall Street office buildings, but then resumed their rally and climbed higher to post their best gains in more than a week.
Hopes that Federal Reserve chairman Ben Bernanke will hint at a loosening of monetary policy in a speech later this week, plus better-than-expected economic data from China and Europe, helped power the rally, analysts said.
US stocks have slumped for the past four weeks amid fears of a new economic slowdown in the United States and fallout from the eurozone’s sovereign debt crisis.
Industrials and tech companies performed strongly on Tuesday, with Boeing up 4.1 per cent, Caterpillar up 3.9 per cent, IBM up 3.4 per cent and Microsoft up 3.1 per cent.
A jump in oil prices, sparked by uncertainty about the future of Libyan oil output, gave a big boost to energy firms. ExxonMobil surged 5.0 per cent, while Chevron jumped 4.3 per cent.
Bank of America tumbled 1.9 per cent as calls mounted for it to raise more capital. Investors reacted negatively to news that BofA was clinging to at least a five per cent stake in China Construction Bank.
Bond prices fell. The yield on the 10-year Treasury note climbed to 2.14 per cent from 2.09 per cent late Monday, while that on the 30-year bond rose to 3.48 per cent from 3.40 per cent.
Bond prices and yields move in opposite directions.
LONDON – Europe’s main stock markets rose on better-than-expected eurozone and Chinese economic data, although gains were capped by weak German sentiment and lingering fears of a return to recession.
London’s FTSE 100 index of leading shares rose 0.67 per cent to 5,129.42 points, while in Paris the CAC 40 rose 1.08 per cent to 3,084.37 points, and in Frankfurt the DAX added 1.07 per cent to 5,532.38 points.
Elsewhere in Europe, Amsterdam rose 0.71 per cent while Swiss stocks climbed 1.68 per cent. Brussels slipped 0.06 per cent, Lisbon ended down 0.16 per cent, Madrid was off 0.17 per cent and Milan fell 1.04 per cent.
Investors took their cue from the release of purchasing managers’ index (PMI) data for August pointed to signs of strength in the economies of the eurozone and China.
The eurozone’s PMI, compiled by London-based researchers Markit, held steady at 51.1, faring better than analysts had expected.
HSBC’s preliminary PMI for China rose to 49.8 in August from 49.3 in July, a slight pick-up which suggested that China’s export-driven economy was doing better than expected despite global economic jitters.
However Germany’s closely watched ZEW economic expectations index failed to inspire confidence, falling a whopping 22.5 points to stand at minus 37.6 points, far below the indicator’s historical average of 26.2 points. In July, it had slipped by just 6.1 points.
Approaching midday US stocks had extended their gains, the Dow Jones Industrial Average was up 2.01 per cent to 11,073.30 points. The broader S&P 500 rose 2.15 per cent to 1,147.97 points, while the tech-heavy Nasdaq Composite gained 2.57 per cent to stand at 2,405.70 points.
In Europe, Switzerland’s biggest bank UBS on Tuesday announced plans to slash 3,500 jobs to save some 2.0 billion Swiss francs (1.8 billion euros, $2.5 billion). In reaction, UBS shares won 2.09 per cent to 10.75 Swiss francs.
HONG KONG – Stock markets in Hong Kong and Shanghai surged after preliminary data showed a contraction in Chinese manufacturing was softening in August.
The benchmark Hang Seng Index gained 388.66 points to close at 19,875.53 on turnover of HK$74.48 billion ($9.55 billion).
HSBC’s preliminary purchasing managers’ index rose to 49.8 in August from 49.3 in July, according to a statement. A reading above 50 indicates the sector is expanding, while a reading below 50 suggests contraction. The figures also boosted regional markets, with Tokyo, Sydney and Seoul all soaring.
Macau casino stocks rebounded from a heavy selloff in the past three sessions. Wynn Macau rose 6.9 per cent to HK$23.40, followed by MGM China’s 5.7 per cent rise to HK$13.70. China Mobile added 0.77 per cent to HK$78.60 and HSBC added 0.98 per cent to HK$67.15.
However, Chinese steel maker Angang Steel fell 0.5% to HK$6.26.
Chinese shares closed up 1.52 per cent. The Shanghai Composite Index, which covers both A and B shares, ended up 38.16 points at 2,554.02 on turnover of 63.2 billion yuan ($9.9 billion).
WELLINGTON – The New Zealand share market’s modest gains in early trade were extinguished in a steady slide through the rest of the day.
The benchmark NZX50 index finished down nearly five points on yesterday. Halfway through the reporting season, the index finished at 3269.586 points, down 4.853 points (0.148 per cent).
Overall, 37 million shares changed hands today, valued at $105.2m, as the 107 shares traded notched up 35 rises and 36 falls.
