Stocks upbeat around globe
U.S. stock markets were closed Tuesday, but stocks around the world rallied the first trading day of 2007 on speculation that profit growth and takeovers will boost global equities for a fifth year.
Share indexes in all 16 Western European markets that were open gained, while benchmarks in Australia, Hong Kong and Indonesia climbed to records. The Morgan Stanley Capital International emerging markets index reached a new high, spurred by rallies in Brazil, Argentina and Mexico.
The global advance came as the U.S. market closed for the funeral of former President Ford. Stock-index futures trading electronically on the Chicago Mercantile Exchange rose. In other markets, Treasury yields fell, the dollar sank to its lowest level in three weeks against the euro and crude oil futures retreated in electronic trading in New York.
“We are still looking at a picture of a fairly prosperous year in 2007, which will lead to more earnings growth,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London. “Mergers and acquisitions will remain a feature, and there is still a considerable amount of confidence in the outlook for economic growth.”
In Europe, BNP Paribas led financial stocks higher and BHP Billiton advanced with mining companies after gold traded at a three-week high.
Europe’s Dow Jones Stoxx 600 index rose 1.3% to 369.86, the highest since December 2000. The Morgan Stanley Capital International Asia-Pacific excluding Japan index added 1.3% to a record 402.58, the biggest gain in almost two weeks.
Markets were closed in Japan, China, Malaysia, New Zealand, Pakistan, Singapore and Thailand for the holidays.
In Europe, Britain’s FTSE 100 added 1.5%. Germany’s DAX climbed 1.3%, and France’s CAC-40 advanced 1.4%.
Brazilian stocks rose, led by Petroleo Brasileiro, on prospects that demand for Brazilian exports will stay strong as the global economy grows. The Bovespa index of the most-traded stocks on the Sao Paulo exchange rose 2% to 45,382.61.
Mexico’s Bolsa index climbed 0.8% to 26,664.45, while Argentina’s Merval index advanced 2.3% to 2,139.14.
Gold for immediate delivery rose $3.80, or 0.6%, to $640.60 an ounce in London after trading at $641.20, the highest level since Dec. 6.
The dollar fell to its lowest value in three weeks against the euro on speculation that the Federal Reserve will reduce interest rates this year while European Central Bank policymakers increase their benchmark. The dollar traded at $1.328 against the euro from $1.320 on Friday.
Yields on U.S. Treasury notes rose on expectations that government and private reports this week will show job creation slowed and manufacturing growth stalled last month. Trading hours were shortened because of the Ford funeral.
The yield on the benchmark 10-year Treasury note fell to 4.68% in New York, Cantor Fitzgerald said, from 4.70% on Friday.
Crude futures sank 28 cents to $60.77 a barrel in electronic trading on the New York Mercantile Exchange. Floor trading was closed in honor of Ford.
