RTTNews - The stock market in Japan ended in positive territory on Thursday. Profit taking in late trading amid reports of bankruptcy filing by CIT Group and stronger local currency trimmed the early gains as traders preferred to adopt a wait-and-watch approach ahead of earnings from JP Morgan, IBM and Google as well as key economic data in the U.S.
In the U.S., stocks ended sharply higher, led by positive results from chipmaker Intel (INTC) and restaurant operator Yum! Brands (YUM) raising hopes of revival in consumer spending. A smaller-than-expected drop in industrial output and the minutes of the June FOMC meeting helped sustain the tempo of the rally throughout the session. The minutes of the June FOMC meeting showed that the GDP estimates were revised to show a smaller than expected decrease in 2009 and a bigger than expected increase in 2010. At the same time, the Fed said it expects the unemployment rate to come in higher than previously estimated based on the incoming employment data.
Earlier, a Labor Department report revealed that consumer prices saw a 0.7% increase in June compared to the previous month. Economists had projected an advance of about 0.6%. Compared to the same period last year, consumer prices were down 1.4 percent, the largest year-over-year decline since 1950. In a report, the New York Fed said that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
A separate report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating. With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
The Dow closed up by 256.72 points or 3.1% at 8,616, the Nasdaq climbed 63.17 points or 3.5% to 1,863, and the S&P 500 rose 26.84 points or 3% to 933.
The Nikkei 225 Average opened sharply higher at 9,394 compared to its previous close of 9,269 and further moved higher to as high as 9,490 on positive cues from Wall Street. However, profit taking at higher levels amid stronger local currency and prospects of bankruptcy filing of CIT Group in the U.S, trimmed early gains. Traders also turned cautious ahead of earnings from JP Morgan, IBM and Google later in the day. The index managed to end in positive territory with a gain of 74.91 points, or 0.81% at 9,344. The broader Topix Index of all first section issues gained 5.88 points, or 0.7%, to 872.25.
Light sweet crude oil for August delivery ended the Asian trading session at $60.34, down 20 cents, after ending Wednesday's session in New York at $61.54, up $2.02 a barrel boosted by a larger-than-expected decline in crude oil inventories in the previous week.
Tiremaker Bridgestone Corp. gained 5.75% after Mizuho Securities Co. raised the company's earnings estimate.
Mitsubishi Corp., which gets more than half its sales from commodities, rose 4.63%. Marubeni Corp. gained 2.63%.
Komatsu gained 2.75% after strong GDP numbers for second quarter from China.
Auto-related stocks advanced following news that Toyota Motor and Mazda Motor are in talks over the supply of components of Toyota's hybrid system to Mazda. Honda Motor gained 1.02%, Mazda Motor surged up 6.19% and Toyota Motor added 0.86%.
Shipping stocks advanced following rise in Baltic Dry Index. Kawasaki Kisen gained 3.45%, Mitsui OSK Lines advanced 1.92% and Nippon Yusen edged up 0.25%
Financial stocks ended mixed amid profit taking. While Mitsubishi UFJ Financial slipped 0.93%, Mizuho Financial edged up 0.53%, Resona Holdings added 1.46% and Sumitomo Mitsui Financial advanced 0.81%.
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