Online Stockmarket Trading Update

*  U.S. stocks rose Friday, snapping a three-day losing streak, however key stock indexes still posted their biggest weekly drops of the year.
*  European markets finished off their weekly lows, but still posted their biggest weekly retreat in 7 months.
*  Asian markets ended mostly higher on Friday as investors went bargain hunting.
*  Commodities were generally lower. Crude oil prices stabilised.

The SPI Futures is trading below the key level of 4950, and closed up 0.4% (or 20 pts) at 4,839.  The key levels for our index this week are 4900 and 4750. M&A activity continues to drive specific stocks. 

The ASX is set to trade higher today.  Local earnings reporting tapers off this week, and we had positive leads from overseas markets.  Expect Financials and Materials stocks to support the market. Investors need to continue to monitor the escalating tensions simmering in the Middle East and North Africa with unrest in Libya and Bahrain, and tensions between Iran and Israel over the Suez Canal.

See below for stocks in the news today.

Economics News Today

*  TD Securities Monthly Inflation Gauge for February
*  Financial Aggregates, incl Private Sector Credit for January
*  Business Indicators Company Profits and Inventories for Q4.

U.S. Markets

U.S. stocks rose on Friday, snapping a three-day losing streak, however key stock indexes still posted their biggest weekly drops of the year.  The concerns over the unrest in the Middle East and North Africa dominated the week, sending crude oil prices to their highest levels in more than two years. However, crude oil futures stabilised on Friday as worries faded about supply shortages related to the unrest in Libya, after Saudi Arabia and a group of major oil consuming nations said there is plenty of oil on hand to replace any disrupted supplies from Libya.

The Dow Jones closed with its biggest weekly point drop since mid-August, the S&P 500 index had its biggest fall since mid-November, while the tech-heavy Nasdaq Composite had its biggest 1-day gain since 1 February.

In corporate news:
* Boeing rose 2.2% after the Air Force awarded a tanker deal valued at more than $US30 billion to the company
* Intel jumped 2.7%, after Citigroup analysts said sales of PCs could pick up in March
* AIG fell -4.7%, after posting 4Q net income of $US11.2 billion, but its core insurance businesses turned in a weaker performance
* J.C. Penney slumped -6.5%, after its fiscal 4Q earnings rose 36%, but its 1Q earnings forecast was well below expectations
* Salesforce.com rose 3.4%, as 4Q profit fell 46% on surging costs and stock-based expenses, but the company’s strong revenue growth continued
* Lloyds Banking Group fell -3.1%, after the group’s 2010 earnings topped forecasts, but margin and integration costs were disappointing.

In economic news, the latest reading on gross domestic product (GDP) showed the economy grew at a slower rate at the end of 2010 than previously reported. The Commerce Department said 4Q GDP rose at an inflation-adjusted annual rate of 2.8% (expectations of 3.3%).

The Dow closed up 0.5% (or 62 points) at 12,130, while in the broader market the S&P 500 index closed up 1.1% (or 14 points) at 1,320 and the tech-heavy Nasdaq ended up 1.6% (or 43 points) at 2,781. The S&P 500 held below key support at 1324, 1275 is the next target.

Sectors that make up the S&P index delivered positive performances, with outperformers including Energy up 1.6%, Materials up 1.5%, Financials up 1.4%, Industrials up 0.9%, and Consumer Staples up 0.5%.

European Markets

European markets finished off their weekly lows, but still posted their biggest weekly retreat in 7 months.  Airlines fell on concerns of increasing costs of fuels, also oil companies with interest in Libya sold-off. 

The Stoxx Europe 600 index slumped 2.4% for the week, the biggest drop since July.  Elections in Ireland weighed heavily on the euro, also the US dollar gained as oil prices stabilised and there was a greater international response to oil supply in the light of the Libyan conflict. 

In London the market finished off its lows, despite reports that the GDP fell 0.6 percent in the December quarter, and retail sales fell to an 8-month low in February.  In Germany the market was higher, but had its biggest weekly drop of 3.3 percent since July, trimming its YTD gains to 3.9 percent.

In London the FTSE 100 index closed up 1.4% (or 61 points) at 6,001, the German DAX was up 1.8% (or 55 points) at 7,185, while in France the CAC was up 1.5% (or 61 points) at 4,070.

Asian Markets

Asian markets ended mostly higher on Friday as investors went bargain hunting, choosing to look past unrest in the Mideast and North Africa, as crude oil prices backed off two-and-a-half-year highs. The rebound came as crude oil prices retreated after the International Energy Agency (IEA) assured it was prepared to release its emergency oil stockpiles to cover any shortfalls resulting from the turmoil, and Saudi Arabia said it was willing to supply more oil to the market.  Saudi Arabia pumps 8.4 million barrels a day and has capacity to ramp up another 4 million. 

Hong Kong’s Hang Seng index and South Korea’s Kospi ended a 4-day losing streak.  Japan’s Nikkei Stock Average recovered from a 3-day losing streak.  In China the Shanghai Composite ended flat.  Financials, Airlines and Auto makers were mostly higher around the region on Friday, after being sold-off heavily ealier in the week.

In China the SSE Composite closed flat at 2,878, while in Hong Kong the Hang Seng Index was up 1.8% (or 411 points) at 23,012 and in Japan the Nikkei 225 Index was up 0.7% (or 74 points) at 10,527.

Commodities

The Dollar Index was higher at 77.25 on a lower Euro, while the Australian Dollar last traded above parity at 100.91. Commodities were generally lower.

For the session the Benchmark crude NYMEX for December delivery was up 0.6% (or $US0.60) to settle at $US98.23.  Copper prices are back at 2-year highs. Copper for December delivery was up 2.5% (or 1.09 cents) at $US4.4535.  April gold was down -0.5% (or -$US6.50) at $US1,408.80.

ASX Market News