Open

Coming up

Don't miss

Replay


LATEST SHOWS

BUSINESS DAILY

Rising into the ranks of Haute Couture

Read more

DEBATE

Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive

Read more

DEBATE

Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive (part 2)

Read more

MEDIAWATCH

A thin line between fact-checking and propaganda in Gaza social media coverage

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more

FOCUS

Ireland's missing babies cast light on dark history

Read more

WEB NEWS

World Cup 2014: Germany-Brazil inspires the Web

Read more

THE INTERVIEW

Boutros-Ghali: 'I wanted to reform the UN'

Read more

IN THE PAPERS

57 000 little problems

Read more

  • Video: Palestinians fear full Israeli military offensive in Gaza

    Read more

  • Video: Living in Tel Aviv, under threat of rocket attack

    Read more

  • Manhunt as FIFA partner flees Rio hotel to avoid arrest

    Read more

  • US prepared to negotiate Gaza ceasefire, Obama says

    Read more

  • French companies will have to accept anonymous CVs

    Read more

  • Ukrainian forces close in on Donetsk

    Read more

  • Germany asks US intelligence station chief to leave country

    Read more

  • UN chief Ban Ki-moon appoints new Syria mediator

    Read more

  • Video: Muslims in China confront obstacles to Ramadan fasting

    Read more

  • Tour de France passes WWI Chemin des Dames battlefield

    Read more

  • Senegalese man awarded French visa in gay marriage debate

    Read more

  • Argentina beat Netherlands on penalties to reach World Cup final

    Read more

  • Foiled French jihadist ‘targeted Louvre and Eiffel Tower’

    Read more

  • Obama in Texas to urge congressional action on child migrant crisis

    Read more

  • Iraq’s heritage 'in danger' from ISIS militants

    Read more

Business

Mixed signals from global markets

©

Text by REUTERS

Latest update : 2008-11-18

After Asian shares stumbled earlier on Tuesday, European and US markets reacted positively to lower oil prices and good corporate news. Yet volatility remained high and several bank shares fell sharply.

NEW YORK - U.S. and European shares rebounded on Tuesday, as Hewlett-Packard's reassuring results and outlook boosted sentiment, but strength in the dollar and government debt prices suggested fear of a global slowdown has not ebbed.

Oil rose after touching a 22-month low of $54.13 a barrel as it hitched onto a wider market rally, and the dollar climbed versus the yen, defying expectations of future slower growth.

Crude was buoyed as the Organization of Petroleum Exporting Countries mulled cutting output again to stem a slide of more than 60 percent since prices peaked above $147 in July.

"Any better-than-expected news out of the equity world, such as HP, could be a data point that we are not cascading into a deep recession," said Chris Jarvis, senior analyst at Caprock Risk Management in Hampton Falls, New Hampshire.

 

Upbeat profit forecast for Hewelett-Packard

The upbeat profit forecast from HP, a Dow component, tempered worries about the global slump and uncertainty about how Congress will address the ailing U.S. automakers. The Dow jumped 1.7 percent, while Britain's top share index rose 1.9 percent and the leading index of European shares gained almost 1 percent.

HP shares surged more than 12 percent to $32.39 on the New York Stock Exchange, an advance that also underpinned shares of other technology bellwethers, including Apple Inc, up more than 2 percent and IBM, up more than 4 percent.

Before 1 p.m., the Dow Jones industrial average was up 81.32 points, or 0.98 percent, at 8,354.90. The Standard & Poor's 500 Index was up 2.36 points, or 0.28 percent, at 853.11. The Nasdaq Composite Index was down 6.58 points, or 0.44 percent, at 1,475.47.

While the HP news boosted larger components of the Nasdaq, the index edged lower as Google weighed after Yahoo CEO Jerry Yang announced he would leave his position.

The pan-European FTSEurofirst 300 index ended 0.95 percent higher at 845.37 points, but for every company whose shares rose one declined.

Oil shares added the most points to the index as crude rose. Total rose 4.6 percent, Shell added 3.9 percent and BP gained 4 percent.

Banks were broadly weaker.

British mortgage lender HBOS fell 15.4 percent as investors bet against alternatives to its takeover by Lloyds TSB, and BNP ended 5.1 percent lower on fresh talk of a capital increase. The bank declined to comment.

Analysts said volatility continued to be so high that a one-day gain meant little in the overall context.

"We could be at the early stages of a bottoming process but worldwide we are still moving in a very wide range," said John Haynes, strategist at Rensburg Sheppard Investment Management.

 

Expectations of interest rates cuts

Bonds rose as investors bet on lower inflation after U.S. producer prices posted a record decline in October and a surprisingly large drop in UK inflation pushed the yield on two-year gilts below 2 percent for the first time on record.

The yield on short-dated euro zone government bonds marked three-year lows on growing expectations of new rate cuts.

The benchmark 10-year U.S. Treasury note rose 18/32 in price to yield 3.58 percent. The 2-year U.S. Treasury note added 1/32 in price to yield 1.18 percent.

Weak growth sent energy prices tumbling and chain store sales slipped, leading the U.S. producer price index to fall 2.8 percent. In Britain, inflation fell to 4.5 percent from September's peak of 5.2 percent, largely driven by lower gasoline prices.

Credit spreads widened as the record drops in U.S. producer prices and UK consumer prices added to worries about recession.

"The havoc played on global risk appetite is again playing through to investors moving more towards perceived safe-haven assets and currencies where the yen and the dollar remain the major recipients of those flows," said Dustin Reid, a currency strategist at RBS Greenwich Capital in Chicago.

"Stocks (may soften) with a 'sell-into-strength' mentality gripping the market," Reid said.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index down 0.07 percent at 86.969. Against the yen, the dollar was up 0.68 percent at 97.02.

The euro rose 0.13 percent at $1.2662.

U.S. light sweet crude oil rose 65 cents to $55.60 a barrel.

Spot gold prices rose $3.95 to $739.85 an ounce.

Asian stocks fell as prospects of a deep global recession expectations for a financial sector recovery in 2009.

Asia-Pacific stocks outside of Japan fell 4.9 percent, bringing year-to-date losses to near 60 percent, according to an MSCI index.

Japan's Nikkei share average finished down 2.3 percent.

Date created : 2008-11-18

Comments

COMMENT(S)