Global Markets Overview 08/16/2011

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August 16, 2011 9:41 AM EST

US Markets

U.S. stocks advanced Monday, wiping out last week's losses, as corporate deal making helped send the market to the biggest three-day winning streak since March 2009. The Dow Jones Industrial Average finished 213.88 points higher, or 1.90%, to 11482.90, closing near session highs for a third straight advance.

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The Dow's first three-day string of gains since July 1 was also its biggest three-day percentage rise since March 12, 2009, and the biggest in point terms since Nov. 25, 2008. The Standard & Poor's 500-stock index ended with a 25.68-point gain, or 2.18%, at 1204.49, led by the utility and energy sectors. The technology-oriented Nasdaq Composite gained 47.22 points, or 1.88%, to 2555.20. Like the blue-chip Dow, both indexes posted their biggest percentage gain since March 2009. All three wiped out their losses from last week's volatile trading.

Motorola Mobility Holdings soared 13.65, or 56%, to 38.12, leading the S&P 500, after Google agreed to acquire the company for about $12.5 billion in cash. The move was seen helping Google compete more directly with Apple in the competitive mobile-communications industry. It also gives Google a trove of coveted mobile-device patents.

Google's shares lost 6.54, or 1.2%, to 557.23. Bank of America rose 57 cents, or 7.9%, to 7.76, leading blue-chip stocks after another instance of Monday deal making. The company sold an $8.6 billion Canadian credit-card portfolio to Toronto-Dominion Bank for an undisclosed amount. It also announced plans to shed its much-larger consumer credit-card operations in the U.K. and Ireland.

In a third deal, Time Warner Cable said it plans to acquire cable operator Insight Communications in a cash deal valued at $3 billion, edging out a line of bidders that included Cablevision Systems. Time Warner Cable's stock shed 49 cents, or 0.8%, to 65.02, while Cablevision advanced 39 cents, or 2.1%, to 19.13. The deals overshadowed data that showed a third consecutive drop in New York-area manufacturing activity, undershooting economists' expectations and pointing to continued sluggishness in the broader economy. Separate data, released 30 minutes after the opening bell, showed U.S. home builder confidence remained weak in August, as the National Association of Home Builders' housing index held steady at 15.

European Markets

European stock markets rose Monday, with shares of mobile handset maker Nokia Corp. rallying after Google Inc. announced a deal to acquire Motorola Mobility Holdings Inc. The Stoxx Europe 600 index ended up 0.2% at 237.85. Trading remained choppy, though the swings were more muted than in recent days. Markets in Italy, Greece and Austria were closed for a holiday, while trading volumes in other European countries were well below average. French bank stocks rose, adding to gains from the end of last week, when France and other European countries introduced a short-selling ban.

The French CAC 40 index rose 0.8% to 3,239.06. Shares of Credit Agricole SA rallied 3.3% and Societe Generale SA gained 2.1%. Germany's DAX 30 index closed up 0.4% at 6,022.24, buoyed by a 3.4% gain for Commerzbank AG as well as a 2.2% rise for Deutsche Bank AG. The gains came ahead of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy Tuesday. The two leaders will be looking for ways to stem the recent market turmoil. Over the weekend, Giulio Tremonti, Italy's minister for economy and finance, added his voice to the growing call for greater fiscal consolidation in Europe, which could include issuing eurobonds that spread the debt burden across the euro zone.

The best performer on the Stoxx 600 index was mobile handset maker Nokia, which surged 9.1% in Helsinki after Google Inc. announced a deal to buy another handset maker, Motorola Mobility Holdings Inc., for $12.5 billion. Shares of Norwegian drilling rig operator Aker Drilling ASA soared in Oslo after Transocean Ltd. agreed to buy the firm in a $2.23 billion deal that also includes the assumption of $800 million of debt.

Shares of Transocean rose 6.3% in Swiss trading, while Aker ASA, which holds a 41% stake in Aker Drilling, rallied nearly 12%. Oil and gas engineering firms were also among the top gainers in London, including a 1.6% advance for John Wood Group PLC and a 4.8% move higher for Amec PLC. Mining stocks traded higher in London as well, including a 3.5% gain for Kazakhmys PLC. The FTSE 100 index rose 0.6% to 5,350.58.

Asian Markets

Asian stock markets ended higher Monday, with investors welcoming the release of better than expected Japanese economic data and watching for upcoming talks to tackle Europe's debt troubles. Japan's Nikkei Stock Average closed up 1.4%, Hong Kong's Hang Seng Index jumped 3.3%, the Shanghai Composite Index finished 1.3% higher, and Taiwan's Taiex climbed 2.4%. South Korea was closed for the Liberation Day holiday.

Data out Monday showed Japan's gross domestic product contracted by 0.3% in the April-June quarter, or 1.3% on an annualized basis--much less of a fall than expected. That helped Tokyo-listed exporters take back some recent losses, with Toyota Motor rallying 2.9%, and Honda Motor ending the day up 3.4%. Investors were also buying up battered banks, with Hong Kong-listed HSBC Holdings PLC up 4%, while China Construction Bank rose 4.9%, with its Shanghai shares up 1.1%. Among Hong Kong-traded insurers, China Life Insurance rose 6.1%, while Ping An Insurance Group jumped 8.9%. Ping An last week reported a 19% rise in life premiums year to date.

Commodities

Base metals closed mixed after drifting sideways in quiet trade throughout most of Monday's session, and market participants say they expect prices to await cues from macro developments and world equity markets in the days ahead. Copper for three-month delivery on the exchange finished the afternoon open outcry at $8,907 a metric ton, up 0.5% on Friday. In other metals, three-month zinc closed 0.3% higher at $2,183/ton, while three-month aluminum finished 1% lower at $2,374.5/ton.

Crude oil futures prices settled higher Monday, guided by weakness in the dollar and a strong showing by U.S. equities. Light, sweet crude oil for September delivery on the New York Mercantile Exchange settled $2.50 a barrel, or 2.9%, higher at $87.88 a barrel, the most since Aug. 3. ICE September Brent crude settled $1.88 higher, at $109.91 a barrel ahead of its expiration Tuesday.

Gold snapped a two-day losing streak to finish higher as a weaker dollar mitigated selling pressure triggered by stronger risk appetite. The most actively traded contract, for December delivery, settled up $15.40, or 0.9%, at $1,758.00 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold for August delivery, the thinly traded front-month contract, gained $15.30, or 0.9%, to settle at $1,755.50 a troy ounce.

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