Global Markets Overview 08/03/2011

U.S. Markets

U.S. stocks advanced on Tuesday as oil prices eased to below $105 a barrel and financials rallied after Bank of America announced plans to increase dividends in the second half of the year.

The S&P 500 Index gained 12.76 points, or 0.97 percent, to trade at 1,322.77 at 12:42 p.m. EDT. The Dow Jones Industrial Average advanced 135.97 points, or 1.12 percent, to trade at 12,226.00. The Nasdaq Composite Index gained 1.01 percent.

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Crude prices declined 0.7 percent to$104.70 a barrel on reports that OPEC may boost production. Kuwait's oil minister said OPEC was in talks to boost production for the first time in more than two years.

Bank of America led the rally in financial sector after its chief executive Brian Moynihan said he believes the bank has the ability to earn between $35 billion and $40 billion a year in pretax earnings when the business normalizes. He also reiterated bank’s plans to increase dividends in the second half of the year.

Among the Dow components, Bank of America surged 4.35 percent and American Express gained 3.57 percent, while JP Morgan advanced 2.89 percent.

Sprint Nextel Corp (NYSE:S) shares surged 4.46 percent on news that Deutsche Telekom AG has been in talks to sell T-Mobile USA to Sprint in exchange for a stake in the combined entity.

Urban Outfitters Inc. (NASDAQ:URBN) shares plunged 15.40 percent as its fourth quarter earnings fell short of analysts’ expectations. Its quarterly net income declined to $75.2 million or $0.45 per share compared to $77.7 million or $0.45 per share in the same quarter last year, while analysts expected a net profit of $0.52 per share.

Expedia Inc. (NASDAQ:EXPE) shares gained 3.05 percent after the company stock was upgraded to “buy” rating from “hold” rating at Citi.

The euro declined 0.44 percent to 1.3907 against dollar, as concerns over the sovereign debt crisis re-emerged in the region, ahead of the European Union’s summit on Friday.

European Markets

European stock markets ended higher on Tuesday as oil prices eased to below $105 a barrel amid OPEC may boost production.

The Stoxx Europe 600 Index rose 0.4 percent to 281.81. DAX30 advanced 2.82 points or 0.02 percent to 7,164.75, CAC 40 gained 25.50 points or 0.64 percent 4,015.91 and the FTSE 100 advanced 0.98 points or 0.02 percent to 5,974.76.

The euro weakened against the dollar on Tuesday, as concerns over the sovereign debt crisis re-emerged in the region, ahead of the European Union’s summit on Friday.

On the economic front, German new factory orders rose more than expected in January, boosted by strong domestic demand. Factory orders in the eurozone’s largest economy increased by 2.9 percent compared with the revised figure of 3.6 percent decline in orders in December last year while markets had expected the orders to rise by 2.5 percent in January.

Volkswagen AG gained 2.84 percent to 109.64 euros after the company stock was upgraded to “buy” rating from “neutral” rating at UBS.

Old Mutual Plc. gained 4.4 percent following better-than-expected earnings. Its net loss for 2010 narrowed to 282 million pounds from 340 million pounds a year ago.

Antofagasta Plc. advanced 0.6 percent after the company said its full year profit rose to $1.05 billion compared to $667.7 million a year ago. Revenue rose to $4.58 billion from $2.96 billion. Despite the rise in earnings net cash at the end of the year fell 15.7 per cent to $1.3 billion.

Share of Lundin Petroleum AB surged 4.59 percent after the company stock was upgraded to “buy” rating from “sell” rating at BofA Merrill Lynch Global Research.

Asian Markets

Asian stock markets advanced on Tuesday, as crude prices slightly eased but still above $104 per barrel amid ongoing political tensions in Libya.

Merger and acquisition activity boosted Tokyo shares but the gains were limited by declines from tech stocks after Wells Fargo Co. reduced the financial credit rating of the semiconductor industry in Japan. Benchmark index Nikkei advanced 0.19 percent or 20.17 points to 10,525.19.

Hitachi gained 1.78 percent to 514 yen after Western Digital Corp. (NYSE:WDC) said it agreed to acquire Hitachi Global Storage Technologies, a wholly owned subsidiary of Hitachi, for $4.3 billion in cash and stock.

Terumo Corp. advanced 3.22 percent to 4,640 yen after it agreed to buy Gambro AB's CaridianBCT unit for $2.63 billion.

Among the exporters, Sharp Corp. declined 1.3 percent to 821 yen and Sony Corp. fell 0.61 percent to 2,908 yen, while Toshiba Corp. declined 0.77 percent.

Hong Kong’s Hang Seng index advanced 398.51 points or 1.71 percent to 23,711.70 and Chinese Shanghai composite gained 0.15 percent or 4.36 points to 3,000.57. PetroChina Co. Ltd. gained 1.83 percent to HK$11.10 and China Petroleum & Chemical Corp., the nation's largest
oil refiner, advanced 3.63 percent to HK$7.99.

South Korean shares ended higher after volatile trade on Tuesday as gains from shipbuilders and financials offset declines in technology plays. Benchmark Seoul composite gained 16.05 points or 0.81 percent to 1,996.32.

Shinhan Financial Group advanced 1.82 percent and Samsung Life Insurance gained 2.33 percent. Hynix Semiconductor Inc. declined 0.86 percent and Samsung Electronics fell 0.77 percent.

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