Alexa
  • Directory of Taiwan

World markets up modestly as Alcoa beats forecasts

World markets up modestly as Alcoa beats forecasts

World stock markets modestly rose modestly Thursday after aluminum company Alcoa Inc. kicked off the second quarter earnings reporting season with a smaller than anticipated loss, stoking hopes that businesses may have seen off the worst of the recession.
In Europe, the FTSE 100 index of leading British shares was up 27.53 points, or 0.7 percent, at 4,167.76 while Germany's DAX rose 61.50 points, or 1.3 percent, at 4,634.15. The CAC-40 in France was 24.25 points, or 0.8 percent, to 3,033.96.
Earlier, Asian stocks turned in a shaky performance, with Japan's market notching its seventh straight loss after a spike in the value of the yen against the dollar. At one stage on Wednesday, the dollar had slumped around 3 yen to a near five-month low of 91.81 yen.
The Japanese currency has been a big winner amid the economic uncertainty as it is widely considered a barometer of risk appetite in the markets in general _ when investors are pessimistic, the yen gains a lot of support as it is considered a safe haven currency.
Key over the coming days and even weeks could be the second-quarter earnings reporting season as it will provide clues about whether companies have already seen the worst of the recession or whether they are still struggling in the first synchronized global economic downturn since the Second World War.
Alcoa was the first Dow constituent to report in an after-hours statement Wednesday.
Its loss of $454 million was narrower than analysts expected, and company executives attributed that outcome to efforts to slash costs and raise cash. They said some aluminum markets showed signs of improvement, but reiterated a forecast that worldwide aluminum consumption will shrink 7 percent this year amid the global recession.
The markets greeted the statement with cautious optimism and on Wall Street the prospects for the coming session were encouraging. Dow futures rose 56 points, or 0.7 percent, to 8,172 while the broader Standard & Poor's 500 futures were up 7.3 points, or 0.8 percent, to 881.
"Alcoa results beat expectations and assisted a rise in equity futures," said David Keeble, an analyst at Calyon Credit Agricole.
Equities rose from the middle of March until the start of June on hopes that the U.S. economy in particular will recover from recession sooner than anticipated.
But disappointing economic news over the last few weeks, culminating in last Thursday's worse than expected U.S. jobs report for June, has altered the mood prevailing among investors that a significant rebound in the U.S. was a possibility. Since peaking in early June, the S&P and the Dow Jones industrial average have dropped around 7 percent.
The focus of attention in Europe later will be on whether the Bank of England asks the British government for the authority to pump another 25 billion pounds ($40 billion) into the financial system. The central bank's monetary policy committee is also expected to keep interest rates unchanged at a record low 0.5 percent.
Earlier in Asia, Japan'sNikkei 225 stock average lost 129.69 points, or 1.4 percent, to 9,291.06 after the yen strengthened to its highest level in almost five months. That weighed on the broader market, with major exporters like Toyota and Sony losing between 2 percent and 3 percent.
Hong Kong's Hang Seng rose 69.52, or 0.4 percent, to 17,790.59 in choppy trade, while South Korea's Kospi benchmark was virtually flat with a loss of just 0.13 point.
In Australia, the main stock measure edged down 0.1 percent as the country's unemployment rate rose to a six-year high of 5.8 percent in June, showing that companies continued to shed workers despite the government's massive stimulus spending. Shanghai's index gained 1.4 percent.
Benchmark crude for August delivery was up 99 cents to $61.13 after slumping more than 4 percent Wednesday amid waning optimism about the speed of any global economic recovery.
The dollar rebounded 0.6 percent 93.22 yen while the euro was up 0.6 higher at $1.3961.
____
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.