Global Markets Overview - 09/20/2012

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By Christine Gaylican | September 20, 2012 11:21 AM EST

U.S. STOCKS, BONDS

U.S. stocks eked out slight gains Wednesday, supported by strength in the housing sector, as energy stocks dragged the market lower with oil futures tumbling.

The Dow Jones Industrial Average (DJI) closed up 13.32 points, or 0.1%, at 13,577.96, led by shares of Walt Disney Co. (DIS) and Home Depot Inc. (HD).

The index had earlier reached an intraday high of 13,626.48. The S&P 500 Index (SPX) finished up 1.73 points at 1,461.05, with consumer-discretionary stocks leading the way higher.

The Nasdaq Composite Index (RIXF) rose 4.82 points to 3,182.62. Energy shares were the worst performers, falling 0.9%. Oil futures started to fall sharply just before the release of an Energy Information Administration report on weekly oil inventories, and stayed down after it showed a larger-than-expected supply increase. Oil for October delivery  settled down 3.5% at $91.98 a barrel.

The EIA figures just confirmed that crude-oil prices have been a little overextended lately, according to Ken Tower, chief market strategist at Quantitative Analysis Service.

Stocks associated with housing did much of the heavy lifting in Wednesday's fractional gains, with easing efforts out of Japan providing a slight boost, according to Dan Greenhaus, chief global strategist at BTIG.

Home-builder stocks rallied with shares of PulteGroup Inc. (PHM) up 4.3%, D.R. Horton Inc. (DHI) rising 4.1% and Lennar Corp. (LEN) up 1.9%. Whirlpool Corp. (WHR) shares also rose 2.6%, and Sherwin-Williams Co. (SHW) advanced 2.5%.

Earlier in the day, the National Association of Realtors said sales rose 7.8% in August to a seasonally adjusted annual rate of 4.82 million, better than the 4.6 million expected by economists polled by MarketWatch.

Stocks started on a weak footing after the Commerce Department reported that housing rose 2.3% in August to an annual rate of 750,000, short of the expected 775,000 pace.

EUROPEAN STOCKS, BONDS

European stocks moved higher on Wednesday, after solid housing data from the U.S. and an unexpected extra jolt of monetary stimulus by the Bank of Japan's spurred cautious optimism.

The Stoxx Europe 600 index rose 0.4% to close at 274.90, snapping a two-day losing streak. Shares of Heineken NV posted one of the biggest gains in the pan-European index, rallying 6.4%. The Dutch brewer got closer to securing a deal to gain control of Asia Pacific Breweries Ltd. and its Tiger beer brand after a key shareholder agreed to support a $4.5 billion offer.

Spanish fashion retailer Inditex SA, owner of the Zara chain, rose 3.7%. First-half profit jumped 32%, boosted by growth in emerging markets.

Inditex net profit soars as expansion continues Drug makers were on the rise as well, with Sanofi SA 1.8% higher and Novartis AG gaining 0.6%.

Stocks found some support in a surprise move overnight by the Bank of Japan. The central bank said that it would increase its asset-purchase program by 10 trillion yen ($126.7 billion) to about JPY80 trillion to support domestic economic activity.

Energy shares helped support indexes in Europe. France's Total SA advanced 1.2%, while BP PLC gained 1.1% in London. The Financial Times, citing people familiar with the matter, reported that BP was in talks to sell its Texas City refinery to Marathon Petroleum Corp.

London's FTSE 100 index gained 0.4% to 5,888.48, further supported by some of the banks. Heavyweight HSBC Holdings PLC and Lloyds Banking Group PLC both added 1.7%.

In Germany, Commerzbank AG picked up 2%, while Deutsche Bank AG gained 1.5%. Shares of MAN SE rose 1.5%, as Fitch Ratings said European truck makers are better positioned than in 2009 to cope with a slowdown thanks to lower operational and financial gearing.

The DAX 30 index closed 0.6% higher at 7,390.76. Outside the main index in Frankfurt, Porsche Automobil Holding SE surged 7.2%, after a German court dismissed actions for damages against the car maker in relation to Porsche's failed attempt to take over Volkswagen AG in 2008. Shares of Volkswagen picked up 1.6%.

Among French stocks, STMicroelectronics NV dropped 1.9%, after S&P Equity Research cut its rating to sell from hold. The CAC 40 index, however, gained 0.5% to 3,531.82, lifted by the gains for Total and Sanofi.

ASIA-PACIFIC STOCK MARKETS

Asian stock markets rose Wednesday, with Japan's Nikkei ending at a four-month high, after the Bank of Japan expanded its asset purchasing program.

The Bank of Japan's move to expand its monetary policy, by increasing the size of its asset purchase program to Y80 trillion from Y70 trillion, comes just one week after the U.S. Federal Reserve announced another dose of quantitative easing.

Also in Japan, Japan Airlines climbed as much as 3.0% on its debut after relisting in Tokyo, before moderating back to a 1.1% gain. The company raised $8.5 billion in an initial public offering that marked a turnaround from its bankruptcy in 2010.

Investors were looking ahead to preliminary Chinese manufacturing data for September, due Thursday, as a barometer of the health of Asia's largest economy.

Japanese stocks that were sold on Tuesday in response to the anti-Japanese demonstrations in China, recovered on Wednesday.

Fast Retailing, the company behind the clothing store Uniqlo, bounced back 3.3%, regaining some of Tuesday's 7.0% loss.

Construction equipment manufacturer Komatsu recovered 1.2% and Toyota Motor regained 1.9%.

In Hong Kong, Chinese carmakers that have joint ventures with Japanese car companies were also higher. Dongfeng Motor Group added 3.4%, after losing 11.7% over the last two sessions, while Guangzhou Automobile Group was 2.1% higher.

Japanese-style ramen restaurant Ajisen (China) Holdings also rebounded 2.6%. Hong Kong's Hang Seng Index was 1.2% higher at 20841.91 and the Shanghai Composite Index was up 0.4% to 2067.83. Spot iron ore was down 0.1% at US$109.50/dry metric ton.

COMMODITIES

Base metals closed mostly slightly lower on the London Metal Exchange Wednesday, as investors weighed another addition to the recent stream of central banks easing policy against an uncertain fundamental outlook.

The metals initially rose in early trading, before diverging. At the close, LME three-month copper was 0.4% higher on the day at $8,349 a metric ton.

Zinc held on to gains, while aluminum had fallen 0.9% at $2,139/ton. Gold futures ended flat Wednesday as steep losses in crude oil tempered the supportive influence from Japan's overnight announcement of additional stimulus measures.

The most actively traded gold contract, for December delivery, settled up 50 cents at $1,771.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

Front-month oil futures slumped 3.5% to $91.98 a barrel on data showing higher U.S. inventories and as Saudi Arabia, the world's biggest oil exporter, said it wants to see lower prices and will meet customer demand for its oil. COMPILED FROM MORRISON SECURITIES PTY. LTD.

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