RTTNews - The stock market in Japan ended in positive territory with marginal gains on Wednesday. Technology related stocks advanced following better-than-expected results from Chipmaker Intel. However, financial stocks declined after the Bank of Japan lowered the forecast for the year 2010. Profit taking following yesterday's rally also trimmed gains as traders preferred to adopt a wait-and-watch approach ahead of earnings in the U.S.
In the U.S., stocks ended in positive territory, led by some late buying activity, meandering back and forth across the unchanged line for most of the session. While the economic numbers were better than expected, the quality of growth raised apprehensions, more than offsetting the positive sentiment generated by better-than-expected results from Goldman Sachs (GS) and Johnson & Johnson (JNJ).
A report released by the Commerce Department revealed that retail sales increased by a little more than expected in June, although the sales growth was due in large part to higher gasoline prices. The report showed that retail sales rose 0.6% in June following an unrevised 0.5% increase in May. Economists had been expecting retail sales to increase by a modest 0.4%. Excluding increases in gas station and motor vehicle and parts sales, retail sales actually fell 0.2 percent for the month.
The U.S. Labor Department revealed that producer prices, a key measure of wholesale inflation, rose 1.8% in June, following a 0.2% increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5%.
Rail-road stocks, gold, oil service, natural gas, semiconductor and airline stocks posted gains, while the healthcare sector continued to be the laggard.
The Dow closed up by 27.81 points or 0.3% at 8,359, the Nasdaq advanced by 6.52 points or 0.4% to 1,800 and the S&P 500 rose by 4.79 points or 0.5% to 906.
The Nikkei 225 Average opened higher at 9,307 compared to its previous close of 9,262 following positive closing on Wall Street and better-than-expected results from Intel Corp. Following a brief upside led up technology stocks, the index drifted lower led by financial and real estate stocks. Traders also turned cautious ahead of earnings from major companies such as IBM later in the week to get cues about recovery prospects. The index managed to end in positive territory with a marginal gain of 7.44 points, or 0.08% at 9,269. The broader Topix Index of all first section issues, on the other hand, ended lower with a loss of 2.20 points, or 0.3%, at 866.
On the economic front, the Bank of Japan retained its key interest rate, and at the same time extended its special funding measures for three months to facilitate corporate financing. The Bank also lowered its growth forecast for the year 2010 to 1% from its earlier expectation of a 1.2% growth.
Light sweet crude oil for August delivery ended the Asian trading session at $60.29, up 77 cents, after ending Tuesday's session in New York at $59.52, down 17 cents amid volatile trading.
Technology related stocks posted gains following Intel's second quarter results. Tokyo Electron gained 0.9%, Nikon Corp. advanced 1.73%, and Advantest rose 1.52%.
Shipping stocks advanced following rise in Baltic Dry Index. Kawasaki Kisen gained 1.75%, Mitsui OSK Lines advanced 2.14% and Nippon Yusen rose 3.38%
Metal stocks ended mixed. Mitsui Mining rose 3.62%, and Sumitomo Metal Mining advanced 1.88%. However, Nippon Light Metal Co slipped 1.08% on profit taking.
Financial stocks ended weaker following downward revision in growth forecast for 2010 from BOJ, which also retained the overnight interest rates unchanged at 0.1%. Mitsubishi UFJ Financial lost 2.36%, Mizuho Financial shed 4.55%, and Resona Holdings declined 2.76%. However, Sumitomo Mitsui managed to end unchanged from previous close.
Real-estate stocks declined after a research report revealed that the number of new condomiums put up in Tokyo market declined 26% in the first half of 2009. Mitsui Fudosan declined 2.27% and Mitsubishi Estate declined 2.16%.
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