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Market Update

Global Markets Extend Rally in January, S&P 500 Jumps 5%, Nikkei Soars 7%

Author: Bikram Pandey
Last Update: 4:59 PM ET January 31 2013

4:55 PM Frankfurt U.S. stocks trimmed the gains but extended 2012 advances in January. The S&P 500 index gained 5% and has now doubled from its low in 2009. The euro closed at a 14-month high and markets in Japan surged 7% on the stimulus hopes.

Market indexes staged another spectacular rally in January and extended gains of 2012.

The S&P 500 index gained 5% in January after jumping 14% in 2012 and has doubled from its low in 2009.

The narrow Dow Jones Industrial Average added 5.8% in the month and is only 2% from its record high. The S&P 500 index is only 4% below its record 1,565.15 in October 2007.

Stocks in New York traded sideways after Chicago area manufacturing indicated expansion. U.S. jobless claims increased 38,000 at the end of last week and personal income rose 2.6% in December, the largest increase in nine years.

On the earnings front, Aetna fourth quarter net plunged 49% and Colgate-Palmolive net rose 1%. Facebook revenue climbed but net tumbled 69%. MasterCard net surged to $605 million. Time Warner net declined 9% and sales jumped. Dow Chemical quarterly loss widened.

Markets in the euro zone declined after weaker than expected earnings and German retail sales fell in December. AstraZeneca estimated sales decline on higher competition from generics. Banco Santander set aside more capital cover losses in Spanish loans. Deutsche Bank reported a loss but met Tier 1 capital target.

In January, the FTSE 100 index gained 6.4%, the DAX 30 index added 2.1% and the CAC 40 index advanced 2.5%.

Stocks in Tokyo closed higher as the earnings season accelerated. Softbank, Nintendo, Sumitomo Mitsui and Alps Electric were among the leading companies to report earnings. December industrial production increased less than expected 2.5%.

The Nikkei index in January surged 7.2% on the earnings season and continued optimism that the newly elected government will follow through the stimulus program and the central bank will offer more liquidity.

In Mumbai trading, Bharti Infratel third quarter net jumped 31% and Colgate-Palmolive net declined 4%. ICICI net profit jumped 30% but non-performing asset increased. Lupin net soared 42.6%. The central government plans to sell 10% stake of Oil India. Power Finance net surged 48%.

The Sensex in Mumbai added 2.4% in January.

Reliance Industries sold $800 million of perpetual bonds to lower its cost of capital and pay for capital expansion of $8 billion.

Australian stocks halted a ten-day rally ahead of earnings season next week. For the month, ASX 200 index increased 4.9%, the fastest monthly advance in a year.

Pharmaxis plunged after it failed to win a recommendation for a drug approval from the U.S. drug regulator. Woolworths first half sales increased 4.8%.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond closed up to 1.98% and on 30-year bond edged up to 3.18%.

The U.S. dollar inched lower to $1.358 to a euro and increased against the Japanese yen to 91.51 yen.

Immediate delivery futures of Texas crude oil decreased 51 cents to $97.42 a barrel and Brent crude gained 67 cents to $115.57, futures of natural gas decreased 0.01 cents to $3.33 per mbtu and gasoline traded down 0.35 to 302.56 cents a gallon.

In metals trading, gold decreased $17.20 to $1,664.40 per ounce and silver fell 72 cents to $31.46 and copper closed down 1.40 cents to $3.73 a pound.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc