Oct. 30 (Bloomberg) — Asian stocks advanced, led by mining companies and electronics makers, as Japan’s jobless rate unexpectedly dropped and the U.S. economy grew faster than economists expected.
Sony Corp., which makes the PlayStation game console, gained 3 percent in Tokyo as the yen weakened. Komatsu Ltd., the world’s second-biggest maker of construction equipment, advanced 3.3 percent, even after its first-half net income plunged. Rio Tinto Group, the world’s third-biggest mining company, rose 4 percent in Sydney as commodity prices increased.
The MSCI Asia Pacific Index added 1 percent to 115.79 as of 10:10 a.m. in Tokyo. The gauge has climbed 64 percent from a more than five-year low on March 9, outpacing gains of more than 50 percent by the Standard & Poor’s 500 Index and Europe’s Dow Jones Stoxx 600 Index. Stocks in the MSCI index are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx 600. Ream more »
Oct. 29 (Bloomberg) — The Oracle of Omaha retains his pre-eminence as a market visionary, outshining a new wave of financial strategists and the best-known central bankers.
Billionaire investor Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., is regarded as the best assessor of financial markets by a plurality of almost one-fourth of respondents to the quarterly poll of investors, traders and analysts who subscribe to the Bloomberg terminal.
The closest runner-up, Bill Gross, the founder and co- chief investment officer of Pacific Investment Management Co., is chosen by 16 percent. Billionaire investor George Soros gets 10 percent, followed by Nouriel Roubini, the New York University professor who in 2006 predicted the financial crisis, and Marc Faber, publisher of the Gloom, Boom & Doom Report.
Fewer than 1 in 10 cited Federal Reserve Chairman Ben Bernanke, despite high marks for his performance as a central banker. Only 3 percent pick Alan Greenspan, the former Fed chairman. Ream more »
Oct. 28 (Bloomberg) — Honda Motor Co., Japan’s second- biggest carmaker, rose the most in three months in Tokyo trading after almost tripling its full-year profit forecast on increasing sales in China and Japan.
Honda gained as much as 4.9 percent to 2,985 yen and traded at 2,965 yen as of 9:39 a.m. in Tokyo. Japan’s Topix index fell 0.1 percent. Honda expects net income of 155 billion yen ($1.7 billion) in the year ending March 31, compared with an earlier forecast of 55 billion yen, it said in a statement yesterday.
The carmaker raised its full-year forecast for global vehicle sales 3.2 percent to 3.4 million after governments spurred demand by offering car buyers rebates and tax cuts. Honda increased second-quarter sales in China and Japan, helping offset declines in Europe and the U.S. Ream more »
By David Voreacos, Jeran Wittenstein, and Cordell Eddings
Oct. 25 (Bloomberg) — Jeffry Picower, the philanthropist alleged to have withdrawn more than $7.2 billion from Bernard Madoff’s investment company, was found dead today at his home in Palm Beach, Florida, according to police. He was 67.
Picower’s wife Barbara told dispatchers at 12:09 local time that she had “just found her husband at the bottom of their swimming pool” at their oceanfront estate, police said. He was taken to Good Samaritan Hospital, where he was pronounced dead about 80 minutes later, the police said.
“As standard operating procedure in any drowning, the Palm Beach Police Department is conducting an investigation into Mr. Picower’s death,” police said in a statement. Ream more »
Oct. 23 (Bloomberg) — Asian stocks advanced as earnings reports from Australia to Japan boosted speculation that rising demand will help the global economy exit from recession.
Wesfarmers Ltd., Australia’s second-largest retailer, gained 5.9 percent after first-quarter sales of food and liquor climbed. Kirin Holdings Co., Japan’s largest beverage maker, added 2.9 percent after Morgan Stanley raised the stock to “overweight.” Daiwa House Industry Co., the nation’s top homebuilder, and Nomura Real Estate Holdings Inc. climbed at least 2 percent after reporting higher-than-forecast earnings.
The MSCI Asia Pacific Index rose 0.5 percent to 119.79 as of 9:26 a.m. in Tokyo. The Standard & Poor’s 500 Index jumped 1.1 percent in New York yesterday, while the dollar appreciated against the yen to as much as 91.71, its strongest in a month. Ream more »
Oct. 21 (Bloomberg) — U.S. stocks tumbled in the final hour of trading after analyst Dick Bove downgraded Wells Fargo & Co., erasing an earlier rally spurred by better-than-estimated results at Morgan Stanley and Yahoo! Inc.
Wells Fargo, the largest U.S. home lender this year, slid 5.1 percent after Bove of Rochdale Securities cut the shares to “sell” and said earnings were boosted by mortgage-servicing fees rather than improving business trends. Wal-Mart Stores Inc., the world’s largest retailer, tumbled 2.1 percent after saying it expects a “tough” holiday shopping season. The Standard & Poor’s 500 Index reversed a 0.9 percent advance as nine of 10 industry groups retreated, led by financials.
“Wells Fargo’s downgrade spooked investors,” said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages about $2 billion in San Antonio. “Investors are concerned because that’s one of the biggest in the industry and most of the recent news has been positive so far. So that could be an indication of problems ahead for other big names.”
The S&P 500 lost 0.9 percent to 1,081.4 at 4:07 p.m. in New York after earlier climbing above its highest closing level in a year. The Dow Jones Industrial Average fell 92.12 points, or 0.9 percent, to 9,949.36. About three stocks declined for each that rose on the New York Stock Exchange.
The S&P 500 is trading at its highest valuation in five years after rallying 60 percent from a 12-year low in March as the government lent, spent or guaranteed $11.6 trillion to combat the worst U.S. recession since the 1930s. The rebound left the index trading at more than 20 times the reported operating earnings of its companies, the highest since 2004.
‘Mediocre Results’
Profit has topped estimates at 76 percent of the S&P 500 companies that have posted third-quarter results, including Google Inc., JPMorgan Chase & Co. and DuPont Co. More than 130 S&P 500 companies are reporting this week.
“Companies prepared investors for very mediocre results,” said Robert Lutts, president of Cabot Money Management in Boston, which manages $450 million. “They lowered the bar very low and now are jumping over those bars.”
Wells Fargo slumped 5.1 percent to $28.90, erasing a gain of as much as 2.2 percent. Bove said servicing fees on mortgages lifted profits by 15 cents a share, while a 2.2 percent lower tax rate gave a 2-cent boost. Wells Fargo reported third-quarter earnings of 61 cents a share, excluding some items, beating the average analyst estimate of 39 cents.
‘Most Disturbing’
Bove said the “most disturbing” thing about Wells Fargo’s results is that loan losses seem to be accelerating. Assets no longer collecting interest climbed 28 percent to $23.5 billion from the second quarter, Wells Fargo said, while the reserve to cover future loan losses grew by $1 billion from the second quarter to $24.5 billion.
“It’s definitely had an effect on the market,” said Tim Smalls, head of U.S. trading at Execution LLC in Greenwich, Connecticut. Bove “has a very good following and very long track record of consistency,” he said.
Financial shares in the S&P 500 slumped 1.9 percent after Morgan Stanley’s results helped lift the group as much as 1.3 percent earlier. JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. each lost at least 2.9 percent.
Morgan Stanley rallied as much as 7.6 percent before trimming gains, leaving the stock up 4.8 percent at $34.08. The sixth-largest U.S. bank by assets reported its first profit in a year, surpassing analysts’ estimates on higher investment- banking fees.
Wal-Mart dropped 2.1 percent to $50.63. The world’s largest retailer expects customers to delay holiday purchases, said John Fleming, chief merchandising officer. Walmart plans to reduce prices as the season advances in areas including home, food and gifts, Fleming told analysts today at a conference in Rogers, Arkansas.
Boeing, Merck Slide
Boeing Co., the second-largest maker of commercial aircraft, fell 2.4 percent to $50.63 after booking $3.5 billion in charges for the delayed 787 Dreamliner and 747-8 jumbo jet programs. Its largest-ever net loss of $1.56 billion, or $2.23 a share, exceeded the $2.10-a-share average estimate of 18 analysts in a survey.
Merck & Co. had the steepest decline in the Dow average, falling 3.1 percent to $32.68. The pharmaceutical company’s Gardasil vaccine, used to protect girls from a virus linked to cervical cancer, shouldn’t be given routinely to boys, a U.S. advisory panel said.
Genzyme Corp. declined 6.2 percent to $51.43. The world’s largest maker of drugs for rare genetic disorders reported third-quarter profit excluding some items of 31 cents a share, missing the average analyst estimate by 28 percent. Genzyme also lowered its full-year forecast of earnings to $2.26 a share, down from $2.35 to $2.90 a share on July 22.
Allegheny Technologies
Allegheny Technologies Inc. had the biggest drop in the S&P 500, falling 8.4 percent to $34.81. The specialty-metals producer that supplies titanium to Boeing reported third-quarter profit and sales that fell short of analysts’ estimates as customers kept their metal inventories low during the recession.
Yahoo rose 2.9 percent to $17.66. Third-quarter profit excluding some expenses was 15 cents a share, beating the average prediction of 13 cents by analysts in a Bloomberg survey. Sales, excluding fees passed on to partner sites, were $1.13 billion, exceeding projections.
SanDisk Corp. soared 9.5 percent to $23.53. The biggest maker of flash-memory cards used in digital cameras and mobile phones forecast fourth-quarter sales that beat analysts’ estimates as chip prices rebounded.
Tech Earnings
Apple Inc., maker of the iPhone mobile phone, iPod music players and MacIntosh computers, rose 3.1 percent to a record $204.92. The gains added to a 4.7 percent advance yesterday after Apple posted earnings and sales that topped analysts’ estimates.
Profits have topped estimates at all 15 technology companies in the S&P 500 that have released results since Oct. 7, according to Bloomberg data.
SLM Corp. soared 21 percent to $10.74 for the biggest advance in the S&P 500. The largest U.S. student loan company reported its first profit in more than a year.
Treasury Secretary Timothy Geithner said the bank capital- purchase program in the $700 billion bailout will be allowed to expire later this year because parts of the economy and markets are stabilizing, Reuters reported, citing an interview.
“We are now at the point where we can begin to wind down the programs that really defined TARP in its initial stages,” Reuters quoted Geithner as saying in the interview today, referring to the Troubled Asset Relief Program.
‘Further Erosion’
The Federal Reserve said its 12 district banks saw “stabilization or modest improvements” in many areas of the economy, led by housing and manufacturing, while all regions reported a weak or declining commercial real estate market.
Fed banks observed “little or no” price pressures, the Fed said in its Beige Book business survey, published two weeks before officials meet to set monetary policy. Demand for bank loans was “weak or declining,” and many districts reported a “further erosion of credit quality.”
The rally in equities since March has left five unfilled gaps between intraday highs and the next day’s lows for the S&P 500, a sign that stocks may fall, according to the chief market technician at Oppenheimer & Co. On six occasions during its surge from a 12-year on March 9, the S&P 500’s intraday low exceeded the previous day’s intraday high, leaving so-called gaps on the benchmark’s graph. The index has since filled only one of those gap.
Almost all index gaps are eventually filled, Oppenheimer’s Carter Worth, ranked third among analysts who study price charts in Institutional Investor magazine’s 2009 survey, wrote in a note to clients yesterday.
“The ‘bearish interpretation’ is that the rally since March has ‘unanswered’ data points,’” Worth said. “‘Holes in the wall’ if you will.”
Oct. 21 (Bloomberg) — Credit Suisse Group AG and Deutsche Bank AG, which sidestepped the worst of the financial crisis and shunned state aid, will probably report a third straight quarter of profits after bond and stock markets rebounded.
Net income at Credit Suisse, the second-largest Swiss bank, probably totaled 1.74 billion francs ($1.72 billion) in the third quarter after a loss a year earlier, based on the median estimate of 14 analysts surveyed by Bloomberg. Frankfurt-based Deutsche Bank may have earned 811 million euros ($1.21 billion), up from 435 million euros, analysts estimated.
Both profited from the record-low interest rates that drove revenue from trading debt, currencies and commodities to a record at JPMorgan Chase & Co. and to the third-highest level ever at Goldman Sachs Group Inc. UBS AG probably missed out on the credit-market rebound after closing debt units and shedding employees, analysts said. Ream more »
Oct. 15 (Bloomberg) — U.S. stocks rose as energy shares gained after oil climbed to a one-year high, helping the market reverse an early drop triggered by earnings at Citigroup Inc. and Goldman Sachs Group Inc. that disappointed some investors.
Benchmark indexes climbed to one-year highs for a second day and the Dow Jones Industrial Average extended its advance past 10,000. Exxon Mobil Corp. and Chevron Corp. gained at least 1.5 percent as crude jumped above $77 a barrel, while Sunoco Inc. gained the most in 10 months as Morgan Stanley recommended shares of the largest refiner in the U.S. northeast. Citigroup tumbled 5 percent and Goldman Sachs fell 1.9 percent.
The Standard & Poor’s 500 Index gained 0.4 percent to 1,096.56 at 4:07 p.m. in New York after earlier losing as much as 0.5 percent. The Dow average added 47.08 points, or 0.5 percent, to 10,062.94 after climbing above 10,000 for the first time in a year yesterday. Ream more »
Oct. 15 (Bloomberg) — The yen fell for a sixth day against the euro as improving corporate earnings helped Asian stocks extended a global equity rally, encouraging investors to seek higher-yielding assets.
Japan’s currency fell versus all of its 16 major counterparts as JPMorgan Chase & Co.’s earnings beat estimates and before a report forecast to show U.S. industrial production rose for a third month. Australia’s dollar surged to a 14-month high as Reserve Bank of Australia Governor Glenn Stevens said the central bank can’t be too timid in raising interest rates now that the threat of an economic crisis has passed.
“Good earnings and rising stocks underpin risk appetite,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “That will weigh on the yen as a funding currency along with the U.S. dollar.” Ream more »
Oct. 13 (Bloomberg) — Asian stocks climbed on speculation Japanese banks will avoid costs for bad loans and rising commodities prices pushed raw-material producers higher.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by value, gained 2.4 percent after the Wall Street Journal said a government plan to allow small businesses to suspend loan payments will be voluntary for banks. Woodside Petroleum Ltd., Australia’s second-largest oil producer, added 1.6 percent, as crude traded near a seven-week high.
The MSCI Asia Pacific Index rose 0.4 percent to 118.99 at 9:30 a.m. in Tokyo. The measure has climbed 69 percent from a five-year low on March 9 as Japan exited recession and growth accelerated in countries from China to Indonesia. Shares on the gauge trade at 1.57 times book value, up from 1.03 times at the market’s low in March, according to data compiled by Bloomberg. Ream more »