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Market Update

Global Markets Rally on Earnings and Rising Confidence

Author: Bikram Pandey
Last Update: 1:00 PM ET February 19 2013

1:00 PM New York U.S. market indexes extended gains in global markets after German confidence surged and earnings on both sides of Atlantic rose. Crude oil held at elevated levels and gold eased for the second day in a row in New York.

U.S. stocks extended gains after the latest earnings release and widespread gains in the European markets. German investor confidence rose more than estimated. Merger talks among office supply retailers also contributed to the positive sentiment. Homebuilder confidence unexpectedly fell in February.

The S&P 500 index extended gains of the last week and is now only 2.4% from its all-time high in 2007 and the narrow Dow index is below 1% from its record high in that year.

Google (GOOG) gained 1.2% and crossed $800 for the first time and extended gains to 13% in the year so far. General Mills increased 1.2% after the food products company said it plans to return more cash to shareholders in fiscal 2014.

Humana (HUM) plunged 8% after the government agency proposed higher discount to reimburse Medicare Advantage program for elderly and disabled.

The government agency said that premium for Medicare Advantage managed by private insurance companies is expected to fall 2%.

On the earnings front, Bruker Corp fourth quarter net plunged 67% and Cimarex net declined 15%. Medtronic third quarter net climbed 6% and reiterated fiscal outlook. Omnicare fourth quarter surged 90% and Sealed Air net swung to a profit and Wolverine net to a loss.

Markets in the European Union soared after German investor confidence in February was ahead of expectations by a wide margin.

European markets rallied and jumped to new highs in the year after the release of confidence data in a widespread rally across the euro zone. Italian bonds were stable ahead of the Parliamentary election this weekend.

Spain successfully raised 4 billion euros meeting its debt sale target. Italy is set to complete parliamentary election this weekend.

On the earnings front, Danone revenue advanced 5% to 20.87 billion and net slipped 4%. Drax net profit for the year plummeted 65% to 163.8 million and Nobel Biocare net jumped 15.3%. Vodafone enters in a five-year partnership with BAE Systems.

Stocks in Tokyo edged lower and the yen gained against the dollar. Prime minister will delay the appointment of Bank of Japan governor after his return from a trade summit talks with President Obama later this week. Bridgestone soared on earnings surprise.

In Mumbai trading stocks gained and the benchmark index increased 0.7% and the nation gears for a two-day strike called by several trade unions and transportation services providers.

Eicher Motors fourth quarter net plunged 24% and GSK Pharma net climbed 1.3%. Kingfisher said UB Holdings revised loan limits to $125 million. Tech Mahindra acquired majority stake in Brazil based Complex IT.

Australian market indexes closed at a 4-year high on the strength in resource and bank sector stocks. Earnings drove the market sentiment. Arrium reported higher operating earnings but took a massive asset write down. Coca-Cola Amatil annual net declined 22%. Asciano net soared 74%.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond decreased to 2% and on 30-year bond closed down at 3.17%.

The U.S. dollar inched lower to $1.338 to a euro and increased against the Japanese yen to 93.56 yen.

Immediate delivery futures of Texas crude oil decreased 12 cents to $95.72 a barrel and Brent crude fell 50 cents to $116.88, futures of natural gas increased 11 cents to $3.27 per mbtu and gasoline traded down 1.85 cents to 311.59 cents a gallon.

In metals trading, gold decreased $8 to $1,601.50 per ounce and silver fell 57 cents to $29.28 and copper decreased 9 cents to $3.66 a pound.

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