NEW YORK: A blockbuster General Motors Co stock offering dovetailed with upbeat U.S. economic data and easing Irish debt tensions to lift global stocks on Thursday, Nov 18, while the dollar gained on the yen and cut losses versus the euro.
GM's return to the market less than 18 months after it emerged from government-funded bankruptcy raised $20.1 billion, the largest initial public offering in U.S. history, and provided positive support for investor sentiment.
"This is bigger than just an IPO. It's an American icon coming back onstream and it is feeding optimism to the stock market," said Bernie McGinn, president of McGinn Investment Management in Alexandria, Virginia.
The momentum appeared set to carry over into Friday trade in Tokyo. The December futures contract for the Nikkei 225 stock index trading in Chicago rose 15 points to 10,135.
Commodity prices rose while U.S. government debt prices fell as credit tensions eased.
Manufacturing activity in the U.S. Mid-Atlantic region grew much more than expected, according to a survey from the Philadelphia Federal Reserve Bank. An improvement in the latest weekly initial claims for U.S. jobless benefits also helped strengthen the dollar..
The U.S. data helped erode the euro's gains as uncertainty about the Irish crisis ebbed after Dublin agreed to work with a European Union-International Monetary Fund mission on steps to shore up its battered banking sector.
But analysts remained skeptical that any rebound in risk appetite would be sustained, with fiscal problems still severe in Ireland and other peripheral euro-zone countries such as Portugal, and many investors inclined to cut risk exposure before year-end.
"It's absolutely vital for the authorities to take pro-active steps in order to try to resolve this crisis as soon as possible. The market should see some relief in relation to that," said Henk Potts, equity strategist at Barclays Wealth.
At the close, the Dow Jones industrial average rose 173.35 points, or 1.57 percent, to 11,181.23. The Standard & Poor's 500 Index gained 18.10 points, or 1.54 percent, to 1,196.69. The Nasdaq Composite Index added 38.39 points, or 1.55 percent, at 2,514.40.
GM's common stock, priced at $33 in the initial public offering on Wednesday night, closed up 3.6 percent at $34.19l, losing momentum after an early pop up to $35.99. GM accounted for over 5 percent of regular trading session volume on the New York Stock Exchange.
Dell Inc's quarterly margins and profit beat Wall Street expectations. The world's No. 2 PC maker raised its yearly income forecast, sending its shares up 6.2 percent to $14.51 in after-hours trade from a $13.67 close on Nasdaq.
The pan-European FTSEurofirst 300 index of top shares climbed 1.43 percent to close at 1,108.12 after being as low as 1,091.06.
"Ireland had been the cause of the sell-off this week and with the country keen to talk to the IMF/EU, this has calmed everyone's jitters," said Mark Priest, senior equities trader at ETX Capital
"If everything is going to be stable and they are going to throw money at the problem, then there is no reason why these markets can't rally."
The MSCI All-Country World equity index rose 1.61 percent after hitting a one-month low on Wednesday.
The gains came after Japan's Nikkei jumped 2.1 percent on Thursday to close above 10,000 for the first time since late June. Shares in Shanghai rose, as did broader emerging stocks, which rose 1.57 percent.
EURO'S GAINS TRIMMED
Enthusiasm for stocks led to some paring back of the euro's gains after Ireland's central bank chief said he expected Dublin to receive tens of billions of euros in loans from European partners and the IMF.
The euro gained 0.89 percent to $1.3638, but that represented a pullback from its earlier 1.1 percent gain to a session high of about $1.3668 on the EBS trading platform.
Analysts cautioned, however, that lingering worries about other debt-stricken European economies, including Portugal and Spain, will likely continue to weigh on the euro, which has lost about 3 percent this month as funds liquidated long positions.
The dollar fell 0.61 percent versus a basket of currencies. But it rose 0.32 percent to 83.51 yen.
The 10-year Irish/German government bond yield spread was last at 567 basis points, around 15 basis points tighter for the day but off the session's tightest levels.
The benchmark 10-year U.S. Treasury note fell 5/32 of a point in price, lifting the yield to 2.90 percent.
U.S. crude oil futures rose $1.41 to settle at $81.85 per barrel, retracing part of a four-session drop, while spot gold gained $16.55 to $1,353.40 an ounce. - Reuters
GM's return to the market less than 18 months after it emerged from government-funded bankruptcy raised $20.1 billion, the largest initial public offering in U.S. history, and provided positive support for investor sentiment.
"This is bigger than just an IPO. It's an American icon coming back onstream and it is feeding optimism to the stock market," said Bernie McGinn, president of McGinn Investment Management in Alexandria, Virginia.
The momentum appeared set to carry over into Friday trade in Tokyo. The December futures contract for the Nikkei 225 stock index trading in Chicago rose 15 points to 10,135.
Commodity prices rose while U.S. government debt prices fell as credit tensions eased.
Manufacturing activity in the U.S. Mid-Atlantic region grew much more than expected, according to a survey from the Philadelphia Federal Reserve Bank. An improvement in the latest weekly initial claims for U.S. jobless benefits also helped strengthen the dollar..
The U.S. data helped erode the euro's gains as uncertainty about the Irish crisis ebbed after Dublin agreed to work with a European Union-International Monetary Fund mission on steps to shore up its battered banking sector.
But analysts remained skeptical that any rebound in risk appetite would be sustained, with fiscal problems still severe in Ireland and other peripheral euro-zone countries such as Portugal, and many investors inclined to cut risk exposure before year-end.
"It's absolutely vital for the authorities to take pro-active steps in order to try to resolve this crisis as soon as possible. The market should see some relief in relation to that," said Henk Potts, equity strategist at Barclays Wealth.
At the close, the Dow Jones industrial average rose 173.35 points, or 1.57 percent, to 11,181.23. The Standard & Poor's 500 Index gained 18.10 points, or 1.54 percent, to 1,196.69. The Nasdaq Composite Index added 38.39 points, or 1.55 percent, at 2,514.40.
GM's common stock, priced at $33 in the initial public offering on Wednesday night, closed up 3.6 percent at $34.19l, losing momentum after an early pop up to $35.99. GM accounted for over 5 percent of regular trading session volume on the New York Stock Exchange.
Dell Inc's quarterly margins and profit beat Wall Street expectations. The world's No. 2 PC maker raised its yearly income forecast, sending its shares up 6.2 percent to $14.51 in after-hours trade from a $13.67 close on Nasdaq.
The pan-European FTSEurofirst 300 index of top shares climbed 1.43 percent to close at 1,108.12 after being as low as 1,091.06.
"Ireland had been the cause of the sell-off this week and with the country keen to talk to the IMF/EU, this has calmed everyone's jitters," said Mark Priest, senior equities trader at ETX Capital
"If everything is going to be stable and they are going to throw money at the problem, then there is no reason why these markets can't rally."
The MSCI All-Country World equity index rose 1.61 percent after hitting a one-month low on Wednesday.
The gains came after Japan's Nikkei jumped 2.1 percent on Thursday to close above 10,000 for the first time since late June. Shares in Shanghai rose, as did broader emerging stocks, which rose 1.57 percent.
EURO'S GAINS TRIMMED
Enthusiasm for stocks led to some paring back of the euro's gains after Ireland's central bank chief said he expected Dublin to receive tens of billions of euros in loans from European partners and the IMF.
The euro gained 0.89 percent to $1.3638, but that represented a pullback from its earlier 1.1 percent gain to a session high of about $1.3668 on the EBS trading platform.
Analysts cautioned, however, that lingering worries about other debt-stricken European economies, including Portugal and Spain, will likely continue to weigh on the euro, which has lost about 3 percent this month as funds liquidated long positions.
The dollar fell 0.61 percent versus a basket of currencies. But it rose 0.32 percent to 83.51 yen.
The 10-year Irish/German government bond yield spread was last at 567 basis points, around 15 basis points tighter for the day but off the session's tightest levels.
The benchmark 10-year U.S. Treasury note fell 5/32 of a point in price, lifting the yield to 2.90 percent.
U.S. crude oil futures rose $1.41 to settle at $81.85 per barrel, retracing part of a four-session drop, while spot gold gained $16.55 to $1,353.40 an ounce. - Reuters
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