U.S. Stocks Extend Gains, Global Markets Cautious

Nichole Harper
14 May, 2013
New York City

U.S. indexes traded higher after bulls took charge of trading and financials and industrials led the gainers. Import price index fell 0.5% on lower oil prices. Euro declined after German investor confidence index was lower than expected and industrial production increased in the euro zone.

[R]11:15 AM New York – Market indexes in New York traded higher after bulls took charge of trading and financials and industrials led the gainers. Import price index fell 0.5% on lower oil prices. Euro declined after German investor confidence index was lower than expected offsetting industrial production increase in the euro zone.[/R]

Stocks in New York traded higher after price indexes for import and exports declined and positive comments from a hedge fund managers empowered momentum traders.

David Tepper, co-founder and owner of Appaloosa Management LP expressed positive comments of the market direction on CNBC.

Investors are rushing into stocks and adding riskier assets after G7 meeting of ministers failed to criticize the latest central bank moves in Japan.

Central banks in Japan, Europe and U.S. are supporting stock markets and lending at banks to revive economic growth that could back fire.

Real estate prices in Japan, Germany and in eight largest metropolitan markets in the U.S. and in emerging markets like China, Hong Kong, India, Russia and Brazil are on the rise.

Import price index declined 0.5% in April from March, meeting expectations set by economists in the U.S.

European Markets

European markets traded higher and German investor confidence rose less than expected in May.

In addition, industrial production in the euro zone increased 1% in March from February, according to the data released by the eurostat.

In London trading, FTSE 100 index increased 0.6%, in Frankfurt the DAX index gained 0.5% and in Paris CAC 40 index advanced 0.2%.

Intesa Sanpaolo SpA gained 2% after the Italy based banking group said net interest income in the first quarter dropped 19.2% to €2.02 billion. Net income for the quarter tumbled 61.9% to €306 million.

Severn Trent Plc surged 14.01 to 2,079.02 pence after the waste water treatment provider received an approach with a proposal from a consortium of Canada''s Borealis, the Kuwait Investment Authority and Universities Superannuation Scheme are at a very early stage. The consortium is reported to have offered £5.3 billion for the company.

Tata Steel Limited, the India based steel producer expects non-cash write down of approx £1 billion or €1.34 billion, the largest write-down in Indian corporate history.

Tata Steel purchased the Anglo-Dutch steelmaker Corus in 2008 for $13.7 billion and is struggling with its European division mainly due to weak European markets. In February, the company’s European operations reported a loss of £50 million.

Asian Markets

In Asian markets, Nikkei edged lower from its 5-year high after investors took profit. In Shanghai, the benchmark index decreased 1.1% on the latest weak economic data including fixed asset investments and retail sales.

In Mumbai, the Sensex index increased 0.2% after the latest read on inflation was below 5% target established by the Reserve Bank of India.

Stocks in Review

Sony Corp ((SNE)) soared 9% in New York trading after a hedge fund manager Daniel Loeb proposed the company to spin-off up to 20% stake in its entertainment division. Third Point, controlled by Loeb has acquired 6.3% stake in the electronics and entertainment group.

Tesla Corp ((TSLA)) jumped 4% after soaring 14% in the previous session after the maker of electric cars reported first quarterly profit last week. The stock has surged 55% in last five trading sessions.