Bullish on strong earnings
GLOBAL MARKETS/ STOCK REPORT
| BHP Billiton led gains by mining companies on speculation that profits will climb along with metals prices. Disappointing earnings from Kyocera and Kookmin Bank limited today's advance. |
| "The market is completely focused on earnings,'' said Yoshihisa Okamoto, a Tokyo-based fund manager at Mizuho Asset Management with $26 billion in assets. "Investors are getting away from companies with disappointing earnings and switching into ones that exceeded expectations.'' |
| The Morgan Stanley Capital International Asia Pacific Index added 0.5 per cent to 155.95 in Tokyo. It has climbed 2 per cent this month, its 10th straight monthly advance. That's the longest series of gains according to historical data on the index stretching back to January 1988. |
| US stocks yesterday rebounded from the worst two-day skid since 2003 after Wall Street's biggest securities firms said the sell-off made homebuilders, banks and retailers cheap. Shares tumbled last week, wiping $2.1 trillion off global benchmarks, on concerns that higher borrowing costs will slow takeovers, spur defaults and curb earnings. |
| Europe European stocks rebounded from a five-day plunge and shares in Asia advanced for a second day on waning concerns that losses from US subprime mortgages will damp global economic growth. |
| Aviva, HSBC Holdings and UBS led gains by financial stocks in Europe. GlaxoSmithKline, the region's second-largest drugmaker, jumped the most in two years after a panel of medical specialists said its Avandia drug should remain on the US market. Olympus and Hang Seng Bank paced an advance in Asia after the companies reported higher earnings. |
| The Morgan Stanley Capital International World Index climbed 0.6 per cent to 1574.13 in London, gaining for a second day. The measure tumbled 5.3 per cent last week on concerns that rising corporate bond risk will limit takeovers and defaults among US subprime borrowers will spill over into the economy. |
| US US stock-index futures advanced as concerns eased that the subprime-credit crisis will hurt economic and profit growth. |
| Sun Microsystems, the world's fourth-largest maker of server computers, gained in Europe after reporting profit that beat analysts' estimates. |
| General Motors climbed before the biggest US automaker releases second-quarter earnings. Amgen and Johnson & Johnson rallied after Medicare loosened repayment rules for the drugmakers' anemia medicines. |
| US stocks yesterday rebounded from the worst two-day sell- off since 2003, paced by banks, homebuilders and retailers after brokerages including Citigroup said the shares were relatively cheap. Stocks recovered today in Europe after a five- day rout, while markets gained in Asia for a second day. |
| "Earnings are still sound,'' said Harry Talbot Rice, fund manager of global equities at Sarasin Investment Management in London. "The backdrop for equities is still fine, valuations are reasonable and economic growth is ok'' |
| Second-quarter earnings at companies in the Standard & Poor's 500 Index are poised to top 10 per cent for the 20th straight quarter. |
| Marathon Oil Corporation, the fourth-largest US oil company, and Valero Energy Corp, the largest US refinery, are also among the companies scheduled to report earnings today. |