Global Market Overview 04/12/2011

U.S. Markets

U.S. stocks ended mixed on Monday as energy shares declined on lower oil prices and investors cautious ahead of the unofficial start of first quarter earnings season.

The S&P 500 Index was down 3.71 points, or 0.28 percent, at 1,324.46. The Dow Jones Industrial Average was up 1.06 points, or 0.01 percent, at 12,381.11. The Nasdaq Composite Index fell 0.32 percent.

Occidental Petroleum Corp. (NYSE:OXY) shares plunged 3.18 percent and Anadarko Petroleum Corp. (NYSE:APC) slumped at least 4.25 percent as crude oil fell 2.5 percent after the International Monetary Fund released a report that forecast the global economic growth rate to slow to 4.4 percent in 2011 from 5.0 percent in 2010.

For the US, 2011 growth is expected to be 2.8 percent. The IMF cited rising commodities prices as a risk to global economic growth and the budget deficit as a risk to US growth.

On the corporate front, Tyco International Ltd. (NYSE:TYC) shares gained 3.33 percent to $48.70 on news that Schneider Electric SA is weighing a takeover offer for Tyco International.

Global Crossing Ltd. (NASDAQ:GLBC) climbed 68.72 percent and Level 3 Communications, Inc. (NASDAQ:LVLT) advanced 18.06 percent after Level 3 Communications agreed to buy Global Crossing for $23.04 per Global Crossing common or preferred share, or about $3.0 billion, including the assumption of about $1.1 billion of net debt as of Dec. 31, 2010.

After the bell, Alcoa Inc. (NYSE: AA) reported its first quarter sales that missed Street view as the dollar weakened. The New York-based aluminum producer said its first quarter sales grew 22 percent to $5.96 billion, but fell short of analysts' forecast of $6.07 billion. Earnings from continuing operations were $309 million or 27 cents a share, compared to a loss of $194 million or 19 cents a share last year.

U.S. Futures

Futures on the S&P 500 are down 0.48 percent, futures on the Dow Jones Industrial Average are down 0.41 percent and Nasdaq100 futures are down 0.47 percent.

The euro advanced 0.28 percent to 1.4476 against the dollar and the yen gained 0.29 percent. Crude oil futures gained 0.18 percent to $110.12 a barrel and gold futures declined 0.23 percent.

European Markets

European stock markets fell in early trade on Tuesday as concerns over Japan nuclear crisis weighed on the sentiment, while commodity related shares declined due to lower energy and metals prices.

The Stoxx Europe 600 Index declined 1.08 percent to 277.96. DAX30 declined 70.29 points or 0.98 percent to 7,134.57 and CAC 40 fell 41.20 points or 1.02 percent 3,997.50, while FTSE 100 declined 48.26 points or 0.80 percent to 6,005.18.

Japan nuclear agency has raised severity level of the crisis at a stricken nuclear plant Tuesday to rank it on par with the 1986 Chernobyl disaster. According to Japan's Nuclear and Industrial Safety Agency, the amount of radiation emission released at the Fukushima plant was equivalent to 10 percent of Chernobyl.

Oil producers declined as crude oil for May delivery fell to $109.88 a barrel. British Petroleum declined 1.32 percent and Royal Dutch Shell fell 1.03 percent.

Among mining shares, BHP Billiton declined 2.39 percent and Rio Tinto fell 2.58 percent, while Xstrata Plc declined 2.45 percent.

Among automakers, Daimler declined 0.61 percent to 50.34 euros and Volkswagen declined 2.41 percent to 101.45 euros, while Renault declined 2.48 percent to 37.91 euros.

Game Group Plc. slumped 9.25 percent after the company stock was downgraded to “sell” rating from “neutral” rating at UBS.

Asian Markets

Asian stock markets ended lower on Tuesday, led by declines from commodities after International Monetary Fund (IMF) cut its outlook for the US economy.

The IMF's World Economic Outlook has put world economic growth at 4.4 per cent this year, down from five per cent last year. It has forecast the world's biggest economy, the US, to expand by just 2.8 per cent in 2011, compared to its previous forecast of three per cent, saying lackluster jobs growth and high oil prices will hold the recovery back.

Tokyo shares declined after Japan nuclear agency has raised severity level of the crisis at a stricken nuclear plant Tuesday to rank it on par with the 1986 Chernobyl disaster. Benchmark Nikkei declined 1.69 percent or 164.44 points to 9,555.26.

Exporters’ shares declined as yen gained against dollar and euro. Sony Corp. declined 2.87 percent and Nikon Corp. declined 3.3 percent, while Canon Inc. fell 1.11 percent.

Commodity shares fell as energy and metals prices declined. Inpex Corp. declined 5.19 percent to 620,000 yen.

Hong Kong shares ended lower as energy stocks plunged after a sharp pullback in crude-oil prices. Hang Seng index fell 326.70 points or 1.34 percent to 23,976.37 and Chinese Shanghai composite gained 0.02 percent or 0.58 points to 3,022.33.

Cnooc Ltd. declined 2.88 percent to HK$19.86 and PetroChina Co. plunged 4.86 percent to HK$11.74 as crude oil prices fell below $109 on profit taking.

South Korean Seoul composite declined 32.99 points or 1.55 percent to 2,089.40. Samsung Electronics declined 1.34 percent and Hyundai Motor fell 2.91 percent, while LG Chem Ltd. declined 3.2 percent.