THE S&P 500 rose yesterday as investors snapped up shares of bailed- out financial companies on hopes the sector may be poised for a recovery as the US economy improves, while a drop in oil producer Chevron’s stock pushed the Dow slightly lower.
In a second day of big gains for a handful of financials, Citigroup shot up 3,1% to 3,94, while shares of insurer American International Group jumped 8% to 35,38.
“It’s a combination of both underlying fundamentals improving and capital markets opening up even further,” said Owen Fitzpatrick, head of the US equity group at Deutsche Bank Private Wealth Management, in New York. “The fact that we are seeing the market improve in general is helping out financials.”
Shares of Chevron, the second- largest US oil company, dropped nearly 1% to 73,60 and contributed the most to the Dow’s decline.
In deal news, Abbott Laboratories agreed to buy Facet Biotech for 27 a share late on Tuesday, topping a failed bid from Biogen Idec . Abbott Laboratories’ stock rose 0,8% to 55,24. Reuters
Editorial and indices as at 8.30pm.
EUROPEAN shares closed at a seven- week high yesterday as equities shook off two successive sessions of losses, with banks rallying and oil majors supported by firmer crude prices.
The FTSEurofirst 300 index closed up 0,6% at 1058,81 points, its highest closing level since January 19.
Banks were higher, with HSBC , Société Générale , BNP Paribas , UBS and Deutsche Bank up 0,4 to 2,7%. Greek banks were up almost 4%.
Barclays gained 0,6%. The bank was said to be looking to buy a retail bank in the US to extend its presence after acquiring Lehman Brothers’ North American operations in 2008, the Wall Street Journal reported.
Analysts said investors’ confidence in equities was partly driven by positive economic data from the US, notably the better than expected nonfarm payrolls numbers in February. stocks fluctuated yesterday as shipping lines and oil companies declined, while Australia’s largest telephone company rose on speculation it will avoid a breakup. STX Pan Ocean , South Korea’s largest bulk-shipping line, dropped 1,5% after a measure of cargo-transport rates retreated for the first time in almost two weeks. Kawasaki Kisen Kaisha , Japan’s third-largest line, fell 2,3% . , Australia’s largest oil producer, lost 0,4%. Telstra Corporation climbed 2,8% after a newspaper said the Australian government may fail to force the phone company to split. “People cannot make up their minds about what to do,” Tim Leung of IG Investment said. “I would expect the market to be quiet and drifting. On the whole, the growth outlook is pretty positive.”
Japan’s Nikkei 225 index was little changed at 10563,92. Australia’s S&P/ASX 200 index and Hong Kong’s Hang Seng index barely budged.
China’s Shanghai index slumped 0,7%, as the trade surplus shrank to the lowest level in a year.