A roundup of trading on major world markets:
NEW YORK – US stocks rose Monday on strong earnings from Caterpillar, a spate of merger activity, and signs that Europe is making progress in tackling the eurozone debt crisis.
The Dow Jones Industrial Average rose 104.83 points (0.89 per cent) to finish at 11,913.62.
The tech-heavy Nasdaq Composite added a hefty 61.98 points (2.35 per cent) to 2,699.44, while the S&P 500, a broader measure of the markets, advanced 15.94 points (1.29 per cent) to 1,254.19.
Caterpillar, the world’s leading construction and equipment maker, surged 5.0 per cent to $US91.77 after reporting a 44 per cent profit rise on robust revenues. It raised full-year estimates to the top end of its prior forecast.
Often considered a bellwether of the global economy, Caterpillar said it had its best-ever quarter for sales and an order backlog at an all-time high.
Adding to the upbeat Wall Street sentiment was an HSBC report on manufacturing activity in China, showing it hit a five-month high in October in the world’s second-largest economy.
Bond prices fell. The yield on the 10-year Treasury rose to 2.23 per cent from 2.21 per cent Friday, while that on the 30-year Treasury slipped to 3.28 per cent from 3.26 per cent.
LONDON – Europe’s major markets finished higher, picking up on apparent progress at a weekend EU summit on the eurozone debt crisis and welcoming positive Chinese growth data.
In London, the FTSE-100 index of top companies closed up 1.08 per cent to 5,548.06 points. In Paris, the CAC-40 gained 1.55 per cent to 3,220.46 points and in Frankfurt the DAX-30 rose 1.41 per cent to 6,055.27 points
Other European markets posted similar modest gains but Athens plunged 4.51 per cent, led down by the banking sector after the EU summit signalled that private investors would take a heavier hit on Greek debt.
Milan was lower for much of the day but finished with a gain of 0.72 per cent as Italian Prime Minister Silvio Berlusconi readied an emergency cabinet meeting to review new austerity measures demanded by EU leaders.
The euro soared to $US1.3954, hitting the highest level since September 8, and was still sharply higher in late trade at $US1.3944, up from $US1.3894 Friday.
European leaders, including French President Nicolas Sarkozy and IMF chief Christine Lagarde, on Sunday said “good progress” had been made in talks on the debt crisis that has threatened the world economy.
The eurozone wants to beef up its 440-billion-euro ($A592 billion) rescue fund, the European Financial Stability Facility (EFSF), to convince markets it has the means to protect highly indebted nations such as Italy and Greece.
HONG KONG – Asian shares surged after weekend meetings of European leaders resulted in “good progress” on tackling a regional debt crisis that has threatened to plunge the world economy into recession.
Investors were also keeping an eye on the yen, which reached a record post-war high of 75.78 against the dollar on Friday, before the greenback regained some ground to 76.15 yen in afternoon trade on Monday.
The surge prompted Japan’s finance minister to call for “decisive steps” to tame the currency’s rapid rise amid worries that a strong yen will hammer Japanese exports.
Tokyo closed 1.90 per cent, or 165.09 points, higher at, 8,843.98, while Sydney jumped 2.73 per cent, or 113.1 points, to 4,255 and Seoul rose 3.26 per cent, or 59.94 points, to 1,898.32.
Hong Kong climbed 4.14 per cent, or 746.10 points, to end at 18,771.82 while Shanghai added 2.29 per cent, or 53.06 points, to close on 2,370.30. Both markets were lifted by improved manufacturing data from China.
Eurozone talks have been mired in debate over how to increase the rescue fund’s firepower without increasing the guarantees each state puts into the fund – a sensitive issue for richer nations such as Germany, which are tired of bailing out the eurozone’s weaker members.
Investors were also given a lift by data from China showing manufacturing activity hit a five-month high in October, lifted by a pick-up in output and orders despite the global economic turmoil.
The preliminary HSBC purchasing managers’ index (PMI) stood at 51.1 in October, up from 49.9 in September, the British banking giant said, lifting hopes that the world’s second-largest economy can avoid a hard landing.
A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction.
The final reading for October is due on November 1.
WELLINGTON – The New Zealand market was closed for the Labour Day public holiday.
