Asia Stocks Rise on U.S. Optimism (Source: Bloomberg)
Asian stocks (MXAP) rose, with a regional index heading for its first gain in three weeks, as a drop in U.S. jobless claims and an increase in consumer confidence added to signs the world’s biggest economy is weathering Europe’s debt crisis. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, advanced 1.7 percent in Seoul. James Hardie Industries SE (JHX), a supplier of building materials the counts the U.S. as its largest market, climbed 3.1 percent in Sydney. Gloucester Coal Ltd. surged 25 percent after Yanzhou Coal Mining Co. offered to buy the Sydney-based company for A$700 million ($709 million) and merge it with Yanzhou’s Australian unit. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) gained 0.4 percent to 394.26 as 8:47 a.m. in Hong Kong, heading for a 1.4 percent advance this week. About five shares gained for each that fell in the gauge. Japanese markets are closed today for a holiday.
U.S. Stocks Advance Amid Better-Than-Estimated Economic Reports (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as better- than-estimated jobless claims, consumer confidence and leading indicators bolstered optimism in the world’s largest economy. Financial (S5FINL) shares had the biggest gain in the S&P 500 among 10 industries as Morgan Stanley (MS), Citigroup (C) Inc. and Bank of America Corp. (BAC) jumped more than 4.5 percent. General Electric Co. (GE) and Exxon Mobil Corp. (XOM) added at least 1.4 percent, pacing gains among companies most-tied to economic growth. Akamai Technologies Inc. surged 19 percent after agreeing to buy Cotendo to expand (AKAM) Internet-based and mobile services. The S&P 500 advanced 0.8 percent to 1,254 at 4 p.m. New York time, rallying 4 percent in three days. The Dow Jones Industrial Average gained 61.91 points, or 0.5 percent, to 12,169.65 today. About 6 billion shares changed hands on U.S. exchanges, or 25 percent below the three-month average.
European Stocks Advance as U.S. Jobless Claims Fall; IAG Rallies (Source: Bloomberg)
European stocks advanced, extending this week’s gains, after U.S. jobless claims unexpectedly fell last week to the lowest since April 2008, indicating the recovery in the world’s largest economy is on track. International Consolidated Airlines Group SA and Deutsche Lufthansa AG (LHA) climbed after the parent of British Airways reached a binding agreement to buy Lufthansa’s BMI unit. Deutsche Bank AG (DBK) and BNP Paribas (BNP) SA jumped more than 3 percent, as banks pared some of this year’s slump. Stagecoach Group Plc (SGC) slid 3.4 percent after JPMorgan Chase & Co. advised selling the shares. The Stoxx Europe 600 Index added 1.1 percent to 239.78 at the close in London, bringing this week’s gains to 2.6 percent. The benchmark measure has rallied 12 percent from this year’s low on Sept. 22 amid optimism that U.S. economic growth is holding firm and euro-area leaders are moving to stem the region’s debt crisis.
U.S. Jobless Claims Dip, Consumer Views Gain (Source: Bloomberg)
Fewer Americans than forecast sought jobless benefits and consumer confidence climbed, giving the world’s largest economy a boost heading into 2012. Unemployment claims fell by 4,000 to 364,000 in the week ended Dec. 17, the lowest level since April 2008, Labor Department figures showed today in Washington. The Bloomberg Consumer Comfort Index improved to minus 45 in the period ended Dec. 18 from a reading of minus 49.9 the prior week, marking the biggest seven-day gain since January. A decline in firings and the cheapest gasoline prices since February are helping revive retail sales during the busiest shopping season of the year. A stronger consumer, whose spending accounts for 70 percent of the economy, raises the odds the U.S. can ride out the debt crisis in Europe or failure by Congress to extend tax cuts.
Republicans Agree to End Payroll Tax Deadlock (Source: Bloomberg)
House Speaker John Boehner agreed to extend a U.S. payroll-tax cut past its Dec. 31 expiration, backing down under pressure from Senate Republicans and President Barack Obama. The agreement capped a month of wrangling that led to a revolt by House Republicans over a two-month bipartisan deal passed by the Senate Dec. 17 in an 89-10 vote. Amid polling that showed Republicans losing ground politically during the standoff, Obama and Senate Republicans urged Boehner to bring his caucus to agreement. Boehner said at a news conference in Washington today his members decided to “do the right thing for the American people even if it’s not exactly what we want.”
Foreclosures May Delay Housing Rebound to 2013 (Source: Bloomberg)
The two-bedroom Denver row house that Kyle and Jennifer Zinth bought in 2005 is a tight fit now that they have an 18-month-old son, Max, and a coonhound named Beauregard. They plan to put it up for sale next month, hoping to at least break even so they can buy a larger home. “My understanding is it’s a better time to buy than sell,” Kyle Zinth, 34, a paralegal, said in a telephone interview. “If we can get out of this one without financial harm and get a good deal on the next place, then that’s ideal under present market realities.” The Zinths are wading back into a U.S. housing market where prices may fall further under the weight of foreclosures and not rebound until 2013, even as the economy builds momentum and mortgage rates fall to record lows, according to a survey of 109 economists released this week by Zillow Inc. When values do rise, the gains probably won’t match those seen in the years prior to the bursting of the bubble in 2006.
Decline in U.S. Home Values to Be Smallest in Four Years, Zillow Reports (Source: Bloomberg)
U.S. home values probably will have their smallest decrease in four years in 2011 after the decline in property prices slowed, Zillow Inc. said today. The total value of the country’s housing probably fell by more than $681 billion, about 35 percent less than the $1.1 trillion lost in 2010, the Seattle-based company said in a statement today. A projected decline of $227 billion from July to the end of this month compares with $454 billion lost in the first half of the year, according to Zillow. An increase in buyer demand is needed before property values can begin to recover, Zillow said. Low borrowing costs may be helping, with sales of existing homes rising in November to a 10-month high, according to a National Association of Realtors report yesterday.
IMF May Delay Boosting China’s Role as Members Fail to Back Quota Changes (Source: Bloomberg)
The International Monetary Fund said today it lacks the necessary votes to implement a 2010 decision to double its permanent resources and boost the voting power of emerging markets. As of Dec. 12, members agreeing to the increase in so- called quotas, which determine nations’ voting rights and access to funding, accounted for 36 percent of total quotas, compared with the 70 percent required for the measure to pass, according to an IMF staff report released today. A related measure on executive-board seats obtained 30 percent of member votes, compared with the 85 percent required. The delay deprives the Washington-based IMF of new resources as it seeks more funds to meet potential loan demand linked to the European debt crisis. It also pushes back changes that will make China the third-largest member at the 187-country IMF and weaken European influence.
Monti’s Budget Plan Gets Final Approval in Italy Parliament (Source: Bloomberg)
Prime Minister Mario Monti’s emergency budget plan won final approval in Parliament today as Italy struggles to tame surging borrowing costs before facing 53 billion euros ($69 billion) in debt repayments early next year. The Senate voted 257 to 41 to approve the 30 billion-euro package in a confidence vote in Rome. The legislation, dubbed by Monti the “Save Italy Decree” and the nation’s third austerity plan since June, was passed by the Chamber of Deputies in a 402- to-75 vote last week. The plan includes a pension overhaul, a levy on primary residences and a crackdown on tax cheats, all measures aimed at convincing investors Monti is serious about cutting the euro region’s second-largest debt and meet the commitment of balancing the budget in 2013. It may also push Italy, which must sell 440 billion euros in debt next year, deeper into a recession that is forecast to begin in the current quarter.
U.K. Grew 0.6% in Third Quarter, Faster Than Originally Estimated: Economy (Source: Bloomberg)
U.K. economic growth accelerated more than previously estimated in the third quarter in a surge that the Bank of England says is unlikely to be repeated as Europe’s debt crisis curbs bank lending and dents confidence. Gross domestic product rose 0.6 percent from the previous quarter, faster than the 0.5 percent reported last month, the Office for National Statistics said today in London. Separate data showed the current account deficit widened to a record, partly due falling profits at U.K. banks’ foreign units. The Bank of England, which has restarted bond purchases to aid the recovery, has said that the U.K. economy may fail to grow in the current quarter and the first part of 2012. In addition to turmoil in Europe, expansion in Britain may be restrained by unemployment at a 17-year high and the government’s ongoing fiscal squeeze.
King Says Crisis Threatens Europe’s Economy as Stability Outlook Worsens (Source: Bloomberg)
Mervyn King, vice chairman of the European Systemic Risk Board, said Europe’s sovereign debt crisis is threatening to hurt the real economy and the outlook for financial stability has worsened. Growth prospects “have deteriorated” since September, King, who is also governor of the Bank of England, said at a briefing hosted by the European Central Bank in Frankfurt yesterday. “Investors lack confidence to continue to provide normal levels of funding. Dependence on central banks has risen.” The ECB loaned banks a record 489 billion euros ($636 billion) for three years on Dec. 21 to avert a credit crunch from the sovereign debt crisis. The central bank said earlier this week that the turmoil has taken on systemic proportions not seen since the 2008 collapse of Lehman Brothers Holdings Inc.
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