While you were sleeping: Wall St edges higher on China industrial output

Thursday 12th November 2009

Stocks on Wall Street edged higher after figures showed China’s industrial production surged and Japanese machinery orders climbed, while speculation grew that the Federal Reserve will keep borrowing costs low.

The Dow Jones Industrial Average rose 0.4% to 10289.61 and the Standard & Poor’s 500 climbed 0.5% to 1098.66. The Nasdaq Composite gained 0.7% to 2165.24.

Bank of America rose 2.3% to US$16.39, leading gainers on the Dow. MBIA, the bond insurer that tumbled this week, gained 8.5% to US$3.82, the biggest advance on the S&P 500.

Toll Brothers, the luxury home builder, soared 16% to US$21.37, leading homebuilders higher after reporting a 42% surge in orders. Macy’s Inc. dropped 8% to US$17.87 after reporting a third-quarter loss and forecasting annual profit that lagged behind analyst estimates.

Chinese industrial output jumped 16.1% from a year earlier, the biggest monthly gain since March last year, figures yesterday showed. Japanese machinery orders rose 10.5% from a month earlier, more than twice the expected pace.

Fed officials including Dallas President Richard Fisher, San Franciso’s Janet Yellen and Atlanta’s Dennis Lockhart have all hinted this week that current central bank policy settings, keeping interest rates near zero, may be set to endure.

Lockhart said the U.S. economy faces “a relatively subdued pace of growth.”

In Europe, the Dow Jones Stoxx 600 gained 0.4% to 246.20, helped by strong Chinese industrial output and better-than-expected earnings from cement maker Holcim Ltd. and French bank Credit Agricole.

Holcim gained 3.7% after the company said it fattened margins by cutting costs and closing plants, resulting in a third-quarter profit of 673 million francs.

Credit Agricole rose 5.6% after posting a smaller-than-expected 21% decline in third-quarter profit to 289 million euros.

BHP Billiton, the world’s largest mining company, rose 2.6%, leading gains in resources companies on the prospects of ongoing demand for raw materials in China and Japan.

ING Groep rose 6.6% after the financial services group turned to a third-quarter profit of 499 million euros, as writedowns eased.

Among national benchmarks, the U.K.’s FTSE 100 rose 0.7% to 5266.75 after figures showed unemployment rose at the slowest pace in 18 months, while Bank of England Governor Mervyn King said the British economy will have a “hard path” to recovery.

France’s CAC 40 climbed 0.8% to 3814.39 and Germany’s DAX 30 gained 1% to 5668.35.

The greenback traded at US$1.4973 per euro from US$1.4993, recovering from an earlier dip to as weak as US$1.5048. The U.S. dollar traded at 89.81 yen from 89.81. The euro traded at 134.46 yen from 134.65.

The Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.4% to 75.16.

Copper was little changed in New York, paring an earlier gain as the greenback climbed from its 15-month low.

Copper for December delivery copper was 0.1% higher at US$2.9655 a pound on the New York Mercantile Exchange.

Gold futures for December delivery rose to as much as US$1,119.10 an ounce, a record, on the New York Mercantile Exchange, as the dollar weakened. Gold was recently at US$1,116.30 an ounce.

Crude oil pared an earlier gain in New York when figures showed Chinese net oil imports jumped, as the greenback recovered.

Oil for December delivery slipped 0.4% to US$78.74 a barrel in New York.

Businesswire.co.nz

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