Article – BusinessDesk
Jan 11 (BusinessDesk) Wall Street advanced as better-than-expected exports data from China underpinned hope the world’s second largest economy will help propel growth elsewhere.
While you were sleeping: Chinese engine kicks into gear
Jan 11 (BusinessDesk) – Wall Street advanced as better-than-expected exports data from China underpinned hope the world’s second largest economy will help propel growth elsewhere.
China’s overseas shipments jumped 14.1 percent from a year earlier last month. That compared with the 5 percent median forecast in a Bloomberg News survey of 40 economists. And the US replaced the EU last year as China’s largest export market.
The latest data on the US economy were promising. Though claims for unemployment benefits unexpectedly rose last week, up 4,000 to a seasonally adjusted 371,000, the trend of cautious recovery remains in place. The prior week’s figures were revised to 367,000 from an initially reported 372,000.
The four-week moving average for new claims, a less volatile measure than the weekly figures, rose to 365,750 last week from 359,000.
“Jobless claims data continue to suggest steady but modest US employment gains,” Robert Kavcic, a senior economist at BMO Capital Markets in Toronto, told Reuters.
Separately, US wholesale inventories climbed more than predicted in November, up 0.6 percent, while sales increased by 2.3 percent, the most since March 2011.
In afternoon trading in New York, the Dow Jones Industrial Average advanced 0.24 percent, while the Standard & Poor’s 500 Index rose 0.30 percent to 1,465.34. The Nasdaq Composite Index edged 0.03 percent lower.
The S&P 500 is technically at the level of resistance, near 1,465 to 1,467, Randy Frederick, managing director of active trading and derivatives at Charles Schwab, told Reuters.
“A solid breakthrough above the level would be the start of a next leg higher, but it looks like it is going to be difficult to break above that level for now,” Frederick said.
Shares of Ford gained, last up 2.5 percent, after record profit margins prompted the car maker to double its dividend to 10 cents per share.
Shares of Tiffany, however, sank, last down 4.5 percent, after the company predicted that earnings for the year through January 31 will be at the lower end of its forecast because of weak sales.
In Europe, the Stoxx 600 Index ended the day with a 0.3 percent decline from the previous close. France’s CAC 40 dropped 0.4 percent and Germany’s DAX slid 0.2 percent, while the UK’s FTSE 100 was steady.
As anticipated by most economists, policymakers at the European Central Bank decided to keep the key interest rate at a record low 0.75 percent, as did those at the Bank of England, holding its benchmark rate at a record low 0.5 percent.
There is light at the end of the tunnel, though, for the euro zone’s economic hardships.
“The economic weakness in the euro area is expected to extend into 2013,” according to ECB President Mario Draghi at a news conference in Frankfurt today.
“Later, in 2013, economic activity should gradually recover,” Draghi said. “In particular, our accommodative monetary policy stance, together with significantly proved financial market confidence and reduced fragmentation, should work its way through the economy, and global demand should strengthen.”
Meanwhile, Spain managed to draw solid demand for its debt auction today. It sold a combined 5.8 billion euros of securities, surpassing its target of 5 billion euros.
“The auction went very well and the size was also higher than the market was expecting,” Mohit Kumar, the head of European interest-rate strategy at Deutsche Bank in London, told Bloomberg. “German bonds are falling as Draghi is being on the constructive side. That is paring down market expectations of an ECB rate cut in the near future.”