World Markets Advance on Housing Data and Bank of Japan Move

Bikram Pandey
19 Sep, 2012
New York City

Markets in New York and around the world were on the upswing after Bank of Japan decided to ease monetary stance and existing home sales increased to a rate last seen 2-years ago. Oil declined for the third day in a row on the global growth worries.

[R]4:05 PM New York – Markets in New York and around the world were on the upswing after Bank of Japan decided to ease monetary stance and existing home sales increased to a rate last seen 2-years ago. Oil declined for the third day in a row on the global growth worries.[/R]

U.S. indexes gained after housing markets offered another signal that indicated that the sector is stabilizing and healing. Existing home sales increased in August to a 2-year high and housing starts rose as well, though less than expected.

However, markets around the world were supported by a surprise stimulus from the Bank of Japan and extended the deadline of the program for six months to the end of 2013.

In corporate news, Blackstone agreed to buy residential security provider Vivint for $2 billion and B2Gold agreed to acquire CGA Mining for C$1.1 billion.

Among earnings, General Mills quarterly earnings soared 35%. AutoZone fourth quarter net climbed 7% on sales increase of 5% and Ascena Retail Group’s profit in second quarter tumbled. Cracker Barrel net surged doubled and revised higher earnings outlook and General Mills first quarter net jumped 35% to $548.9 million.

The European indexes pared early morning gains and Germany raised €4.084 billion from the sale of its two-year note at positive yields. Spain faces more pressure from policymakers to request for a larger bailout which the government is resisting.

Euro zone construction output fell and French leading economic index rebounded in July. Economic expectations in Switzerland declined slightly in September.

In European corporate news, Inditex first-half earnings surged 32% to €944 million. Michelin confirmed its fiscal year guidance. Syngenta agreed to acquire U.S.-based Pasteuria Bioscience for $86 million. Mining company, Lonmin reached a settlement with management on wages.

The UK indexes advanced after Japan announced stimulus measures to boost economic growth. The Bank of England policymakers were unanimous in their decisions on quantitative easing and interest rate at the last meeting according to the minutes released today.

Stocks in Tokyo surged after the Bank of Japan expanded its asset purchase program to provide additional liquidity and inflate asset prices. Several large Japanese companies resumed production and reopened stores after anti-Japanese protests subside.

Australian markets closed higher following a rally in Asian markets after Bank of Japan expanded asset purchase program. Resource and financial stocks traded higher. The Australian dollar gained against yen.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.78% and on 30-year bond fell to 2.98%.

The U.S. dollar inched higher to $1.305 to a euro and decreased against the Japanese yen to 78.33 yen.

Immediate delivery futures of Texas crude oil decreased $3.60 to $91.71 a barrel and Brent crude fell $4.08 to $107.95, futures of natural gas decreased 0.02 cents to $2.75 per mbtu and gasoline price edged down 7.7 cents to 282.14 cents a gallon.

In metals trading, copper decreased 1.90 cents to $3.80 per pound, gold added $1.20 to $1,776.30 per ounce and silver decreased 11 cents to $34.62.