Global Markets Overview - 16 January 2013

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By Christine Gaylican | January 16, 2013 12:12 PM EST

U.S. STOCKS, BONDS

U.S. stocks edged lower as investors balanced upbeat retail sales data against a sluggish measure of New York-area manufacturing, and as Apple weighed on the technology sector.

The Dow Jones Industrial Average declined 17 points, or 0.1%, to 13491 in midafternoon trading. The Standard & Poor's 500-stock index lost three points, or 0.2%, to 1468.

The Nasdaq Composite Index gave up 14 points, or 0.4%, to 3104. Consumer shares rose after Commerce Department data showed retail sales rose more than economists had forecast last month.

The S&P Retail Select Industry index jumped 1.8%. Other economic data were mixed. New York-area factory activity started the year contracting at a faster pace than economists expected, according to a Federal Reserve Bank of New York's Empire State Manufacturing Survey.

U.S. wholesale prices slipped in December on lower food and energy costs. U.S. business inventories expanded in November at a pace that matched economists' projections, according to a Commerce Department report.

Technology shares led losses among S&P 500 sectors as Apple fell 2.6%, trading below $500 for the second day in a row. A close below that level would be the company's first since February. Homebuilder Lennar fell 1.9% even after reporting earnings and revenue that topped analysts' estimates.

The company's shares are up more than 80% the past year amid a rally in housing stocks. Facebook slipped 1%. The shares swung between gains and losses after Facebook Chief Executive Mark Zuckerberg unveiled a new search tool for its site.

Trading volume spiked after the announcement, with the number of shares traded overtaking any single stock in the S&P 500. Yelp, whose local-listings site competes with Facebook in enabling peers to share recommendations, tumbled 6.5%. Microsoft, which is partnering with Facebook in a new search effort, added 0.8%.

EUROPEAN STOCKS, MARKETS

European stocks flitted between gains and losses Tuesday, ending little changed amid worries over the U.S. debt ceiling and European growth. The Stoxx Europe 600 index closed little changed at 285.97.

Among individual bourses, the U.K.'s FTSE 100 ended up 0.2% at 6117.31 and France's CAC-40 slipped 0.3% to 3697.35. Germany's DAX fell 0.7% to 7675.91, underperforming its European peers and hitting a low for the year following disappointing results from software company SAP and uninspiring figures on gross domestic product.

Greece's ASE Composite ended down 1.8% at 951.05, and Spain's IBEX closed 0.4% lower at 8601.00, but Italy's FTSE Mib closed up 0.4% at 17,467.48.

Investors were on edge again after Mr. Bernanke failed to assuage fears about the outlook for the U.S. economy in a speech Monday at the University of Michigan.

German gross domestic product fell 0.5% in the fourth quarter of last year. Still, trade balance figures for the euro zone were a little cheerier, showing the region's surplus on its trade in goods with the rest of the world rose to a record high in November, while exports picked up.

Retailers were among the bright spots in Europe. Burberry Group rallied 4.6% in London after the luxury-goods merchant delivered stronger-than-expected third-quarter revenue growth on robust sales, despite lowering guidance for sales to department stores.

Swedish fashion retailer Hennes & Mauritz rose 3.6%. The company said same-store sales fell 2% year-on-year last month--analysts had forecast a 2.6% fall.

Tech stocks were the biggest drag. SAP dropped 3.9% following the release of fourth-quarter results, while the Stoxx 600 index for the sector ended down 2.1%.

Analysts said investors had been hoping for more after better-than-expected results last month from U.S. tech giant Oracle. In London, Anglo American, the world's largest platinum producer, fell 3.7% after announcing plans to cut 400,000 ounces of platinum production capacity, or 7% of global supply. Other industry players gained on the news, however, with Lonmin up 4% and Aquarius Platinum up 11%.

EUROPEAN STOCKS, BONDS

Japanese stocks hit a 32-month high early Tuesday ahead of the Bank of Japan's policy meeting next week, while other markets awaited fresh catalysts such as China's growth data out later this week.

Japanese markets reopened Tuesday after a public holiday Monday. The Nikkei reached 10,952.31, its highest level since April 30, 2010, in early trading, after the yen weakened Monday, but pared gains to end up 0.7% at 10879.08 after Economy Minister Akira Amari said that a yen that is too weak isn't good for the Japanese economy.

Some exporters managed to maintain their earlier gains. Several carmakers performed well: Suzuki Motor added 3% and Mazda Motor was 2.5% higher.

Companies in the electronics and device making sectors also rose, with Kyocera Corp. up 2% and Ricoh jumping 4.4% on news it will boost dividends for the fiscal year.

The next major event scheduled in Japan is the Bank of Japan's policy meeting, which will take place next Monday and Tuesday. Investors are eager to see whether the central bank bends to the new government's will and adopts a 2.0% inflation target.

More broadly, regional markets dropped lower in the absence of fresh catalysts. The main event this week will be the release of China's fourth-quarter growth figures, due Friday morning.

In recent months, Chinese stocks have rallied on hopes that the economy is picking up. Friday's data will be another chance to gauge whether the recovery remains on track.

The Shanghai Composite Index was up 0.6% at 2325.68 ahead of the data, moderating gains after a sharp 3.1% rise Monday sparked by comments by the securities regulator that the level of foreign participation in China's restricted local markets could be increased.

Hong Kong's Hang Seng Index was just 0.1% lower at 23381.51. South Korea's Kospi Composite dropped 1.2%, weighed down by foreign investors, who extended their selling streak into the fourth consecutive session.

Technology companies underperformed after reports that Apple had cut its component orders for the iPhone 5 due to weaker-than-expected demand: LG Display ended down 3.5% and SK Hynix was 3.7% lower. Index heavyweight Samsung Electronics also lost 2.6%.

COMMODITIES

Base metals closed mixed on the London Metal Exchange Tuesday, struggling for traction in either direction as investors avoided taking bold bets ahead of much-awaited Chinese growth data later in the week.

At the close, LME three-month copper was down 0.1% at $7,993 a metric ton. Tin was 0.5% higher at $24,880/ton. Oil futures settled lower Tuesday, after bobbing above and below the $94-a-barrel mark, as traders weighed ominous signs of demand prospects in the wake of a drop in production from the Organization of the Petroleum Exporting Countries last month.

Strength in the U.S. dollar also added pressure, although the market found some support ahead of data this week on domestic petroleum supplies. Crude oil for February delivery lost 86 cents to $93.28 a barrel on the New York Mercantile Exchange.

Platinum prices surged Tuesday, rising above gold for the first time in 10 months after the largest producer of the metal said it would halt operations at several mines in South Africa. The most actively traded platinum contract, for April delivery, rose $31.70, or 1.9%, to settle at $1,689.90 a troy ounce on the New York Mercantile Exchange, the highest settlement since Oct. 11. Gold for February delivery rose 0.9% to settle at $1,683.90 a troy ounce on the Comex division of the Nymex. Compiled from MORRISON SECURITIES PTY. LTD.

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