FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
U.S. stocks marched higher Tuesday on rising optimism about Greece's prospects to remain in the euro zone, which offset a disappointing reading on U.S. consumer confidence.
Solid U.S. jobs and consumer-confidence data and upbeat reports on Chinese manufacturing were behind a rally in European stock markets Thursday, with bank and resource shares leading the way.
The Dow Jones Industrial Average rose 125.86 points, or 1.0%, to 12580.69. The Standard & Poor's 500-stock index climbed 14.60 points, or 1.1%, to 1332.42, and the Nasdaq Composite added 33.46 points, or 1.2%, to 2870.99.
Materials and technology stocks paced Tuesday's advance, as all 10 of the S&P 500 sectors rose. Bank of America, which tacked on 4.1%, was the Dow's biggest percentage gainer.
Alcoa rose 3%, while Caterpillar added 2.9%. Tuesday's rise in the broader market failed to boost Facebook, which fell 9.6% and slid below $30 for the first time.
The decline coincided with Facebook's debut in the options market while there was speculation the company may be considering a takeover of Norway's Opera Software. The stock is trading 24% below its initial-public-offering price of $38 a share.
In the U.S., consumers were less confident in May than the previous month, according to the Conference Board. Tuesday's unexpected drop in consumer confidence marked the measure's third monthly decline in a row.
Separately, data showed housing prices continued falling in March but not as sharply as in earlier months, according to the S&P/Case-Shiller home-price index.
In corporate news, Vertex Pharmaceuticals slumped 11% after the company revised the success rate of clinical-trial testing of a cystic-fibrosis treatment.
Chesapeake Energy rose 3.4% after activist investor Carl Icahn reported a 7.6% stake in the company Friday and called for a shake-up on the natural-gas company's board. The company said it would carefully review his request. In deal news, LeCroy surged 55% after the maker of electronic signal-testing equipment agreed to be acquired by Teledyne Technologies in a cash deal valued at $291 million.
EUROPEAN STOCK MARKETS
Greek polls published over the weekend showed a pro-euro zone party leading an antibailout party ahead of next month's election.
Worries about Spanish debt lingered. Egan-Jones Ratings downgraded Spain's credit rating for the third time in a month, compounding concerns following the effective nationalization last week of one of the country's largest banks.
Spanish stocks tanked on continuing concerns about the country's banking sector and a plunge in domestic retail sales, even as other European markets generally rose on hopes about the U.S. and Chinese economies.
The IBEX 35 index skidded 2.3% to 6251.70, bringing its losses so far this month to nearly 11%. Losses in the market have been accelerating in the wake of the government's decision last week to rescue Bankia, one of the country's biggest lenders, because of soured real-estate loans.
Its shares sank another 16% Tuesday as bank analysts downgraded the stock, and investors fear other banks will also need large amounts of cash that Spain simply can't afford.
Among other lenders, Banco de Sabadell and Bankinter each dropped 4.3%. Underscoring the country's economic problems, retail sales dropped for a 22nd consecutive month, tumbling 9.8% in April on an annual calendar-adjusted basis, as consumers reined in spending on such things as clothing and footwear.
Repsol YPF dropped 7.2% after the oil company said it would slash its dividend-payout ratio to conserve cash after the nationalization of its Argentine unit YPF.
Overall, the Stoxx Europe 600 index rose 0.8% to 244.30, its highest closing level in a week. Investors were encouraged by speculation of more stimulus measures to fuel growth in China as well as U.S. home prices, which broke a five-month streak of declines. U.S. stocks also were higher. Steelmaker ArcelorMittal added 4.1% in Paris.
Among mining companies, Evraz climbed 4.3% and Rio Tinto advanced 2.3%, both in London.
After European markets closed, Egan-Jones, a small U.S. ratings firm, downgraded Spain to single-B from double-B-minus and left the country on negative watch.
Meanwhile, Ewald Nowotny, a member of the European Central Bank's governing council, said there are no talks of reinstating government bond purchases or providing more long-term loans to banks, according to Reuters.
When asked about Spain's banking problems, he said rescuing those institutions is the responsibility of national governments. Among other national benchmarks, France's CAC-40 gained 1.4% to 3084.70, Germany's DAX rose 1.2% to 6396.84 and the U.K.'s FTSE 100 index advanced 0.6% to 5391.14. Italy's FTSE MIB added 0.3% to 13107.13.
ASIA-PACIFIC STOCK MARKETS
Asia markets extended their rally Tuesday, largely buoyed by hopes for fresh policy stimulus from Beijing, while Taiwanese shares soared after the government made changes to a proposed capital gains tax.
China's Shanghai Composite climbed 1.2%, Taiwan's Taiex jumped 2.9%, and Japan's Nikkei Stock Average added 0.7%. Elsewhere in the region, South Korea's Kospi gained 1.4% as trading resumed after a three-day weekend, while Hong Kong's Hang Seng Index added 1.4%.
Among other notable gainers in the region, the Philippine stock index climbed 1.4%, accompanied by gains for its currency, after Moody's raised the nation's rating outlook to positive.
Among the notable gainers, Anhui Jianghuai Automobile Co. rose 4.1%, China Eastern Airlines Corp. climbed 4.2% and Chongqing Brewery Co. spiked by the day's 10% limit in Shanghai.
Shares of Guoyuan Securities Co. rose 4% and telecommunication equipment maker ZTE Corp. gained 2.8% in Shenzhen; in Hong Kong, shares of Chinese department store operator Golden Eagle Retail Group Ltd. jumped 4.9%, while Lianhua Supermarket Holdings Co. added 4.8%.
Several financial and property firms also advanced. China Vanke Co. rose 1.1% in Shenzhen, while Cinda Real Estate Group Co. rose 1.1% and Agricultural Bank of China Ltd. each gained in Shanghai.
In Hong Kong, China Resources Land Ltd. soared 5.1% and Agile Property Holdings Ltd. spiked 6.9%, while Ping An Insurance Group Co. climbed 3.2%.
Growth-linked resource firms also notched sharp gains across Asia, amid expectations that major buyer China would ramp up spending. Shares of Aluminum Corp of China Ltd. jumped 5.6% in Hong Kong and 1.5% in Shanghai.
In Tokyo, several technology exporters advanced, with Advantest Corp. rallying 4.1% and Sony Corp. rising 2.3%. Shares of Panasonic Corp. jumped 3.9% after a Nikkei report that the firm plans to cut up to 4,000 jobs from its headquarters. Renesas Electronics Corp. extended sharp losses, slumping another 16.4% after saying it will outsource chip production to Taiwan Semiconductor Manufacturing Co. TSMC climbed 0.9% in Taipei.
Base metals closed mixed on the London Metal Exchange Tuesday as investors weighed disappointing U.S. data against the possibility of fresh economic stimulus in top metals consumer China. At the close of open outcry trading, LME three-month copper was just 0.2% lower at $7,669 a metric ton.
Tin put in the strongest performance, closing 1.9% higher at $20,175/ton. Crude oil futures prices ended little changed Tuesday after broad swings triggered by fresh worries over European economic problems and concerns over the next step in the ongoing talks between western powers and Iran over its nuclear program.
Returning from a three-day holiday, the market soared to a one-week high above $92 a barrel, before finding support above $90 a barrel after the euro dropped to its lowest level since July 2010 against the dollar.
Light, sweet crude oil for July delivery on the New York Mercantile Exchange settled 10 cents lower, at $90.76 a barrel. The contract hit a high of $92.21 a barrel, the most for the front month since the June contract expired a week ago.
ICE Brent crude for July settled down 43 cents at $106.68 a barrel. Gold prices ended lower after Spain's credit rating was downgraded and the euro weakened against the dollar. The most actively traded contract, for June delivery, fell $20.20, or 1.3%, to settle at $1,548.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
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