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World markets rally after Wall Street biggies post better-than-expected earnings

This article was posted on Apr 20, 2011 and is filed under Market News

BANGKOK (AP) — An energetic rebound on Wall Street spurred by strong earnings reports and better-than-expected housing starts sent world stocks higher Wednesday.

Oil prices rose above $109 a barrel after a report showed U.S. gasoline supplies fell for a second week, suggesting higher fuel costs haven’t yet curbed demand. The dollar gained against the yen but was lower against the euro.

European shares opened robustly, with Britain’s FTSE 100 jumping 1.5 percent to 5,986.12 and Germany’s DAX rising 1.6 percent to 7,154.51. France’s CAC-40 was also higher, by 1.4 percent to 3,964.86. Wall Street was also headed higher, with Dow Jones industrial futures up 0.5 percent to 12,288 and S&P 500 futures ahead 0.8 percent to 1,318.80.

Earlier in the day, Asian equities were on the upswing with sentiment perked up by good company news out of the world’s No. 1 economy.

Japan’s Nikkei 225 climbed 1.8 percent to close at 9,606.82 despite a government report showing that exports for March dropped for the first time in 16 months — one of many consequences felt from the mammoth earthquake and tsunami that devastated the country’s industrial northeast last month. The index is down more than 6 percent since the March 11 disaster.

South Korea’s Kospi added 2.2 percent to 2,169.91, and Hong Kong’s Hang Seng rose 1.6 percent to 23,896.10.

Australia’s S&P/ASX 200 gained 1.4 percent to 4,859. Mainland China’s Shanghai Composite Index rose 0.3 percent to 3,007.04. Benchmarks in Singapore, Taiwan and New Zealand also rose.

“It was all about earnings news overnight, with some very positive results significantly boosting overall sentiment,” said Ben Potter of IG Markets in Melbourne.

South Korean tech giant Samsung Electronics Co. Ltd. jumped 4.7 percent after an announcement Tuesday that Seagate Technology PLC agreed to buy Samsung’s hard drive business for $1.38 billion. The cash-and-stock deal would give Samsung a stake of nearly 10 percent in Seagate, one of the few remaining makers of hard disk drives, which store data in traditional PCs.

In New York on Tuesday, health care giant Johnson & Johnson rose 3.7 percent, leading the 30 companies in the Dow Jones industrial average, with earnings that beat Wall Street’s expectations. Yahoo Inc. and IBM Corp. also posted strong results.

In Washington, the Commerce Department reported that builders broke ground in March on more new homes than analysts expected. Home construction rose 7.2 percent from February.

The Dow Jones industrial average rose 0.5 percent to close at 12,266.75. The Standard & Poor’s 500 index rose 0.6 percent to 1,312.62. The Nasdaq composite rose 0.4 percent to 2,744.97.

Major stock indexes posted their largest one-day drop in over a month Monday after S&P said it might lower its rating on U.S. government bonds if Washington failed to tackle its mounting debts. While the rating agency kept its U.S. debt rating at AAA, the highest possible, it warned that there was a one-in-three chance it would downgrade U.S. debt within two years.

After the market closed, tech heavyweight Intel Corp. said earnings jumped 29 percent, surpassing estimates. Business spending on new computers offset a design error in one of its chips. That helped boost high-tech shares in Asia. Seoul-listed Hynix Semiconductor Inc., the world’s second-largest manufacturer of computer memory chips, soared 4.6 percent, while rival LG Electronics jumped 3.8 percent. In Japan, Elpida Memory Inc. bumped up 1.9 percent.

A flurry of major U.S. companies will release quarterly financial results later Wednesday, including American Express Co., Apple Inc. and AT&T Inc.

The dollar strengthened to 82.84 yen from 82.37 yen late Tuesday in New York. The euro rose to $1.4442 from $1.4340.

Benchmark crude for June delivery was up $1.17 to $109.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 59 cents to settle at $108.28 per barrel on Tuesday.

Source: Yahoo Finance

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