World Market Update 04/11/2011

U.S. Markets

US stocks are mixed on global worries ahead of the unofficial start of first quarter earnings season.

The Dow Jones Industrial Average is up 3.22 points, or 0.03 percent, to trade at 12,383.27 at 2:57 p.m. EST. The S&P 500 Index is down 3.39 points, or 0.26 percent, to trade at 1,324.78. The Nasdaq Composite is down 0.36 percent.

The earnings season is set to kick off with U.S. aluminum producer Alcoa slated to report quarterly earnings after the market closes on Monday. Analysts are expecting a first quarter profit of $0.27 per share from $0.10 per share a year ago. Shares of Alcoa Inc. (NYSE:AA) declined 1.12 percent to $17.72.

The broader market is mixed due to ongoing worries about oil prices, which, at WTI $110 per barrel, is approaching levels that will negatively affect global growth. Oil prices remain elevated due to the ongoing conflict in Libya and uncertainties in other parts of the Middle East and North Africa.

The IMF also 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, Global Crossing Ltd. (NASDAQ:GLBC) climbed 58.58 percent and Level 3 Communications, Inc. (NASDAQ:LVLT) advanced 11.11 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.

Tasty Baking Co. (NASDAQ:TSTY) stock jumped 145.97 percent to $3.96 as Flowers Foods agreed to begin a tender offer to buy all of the outstanding shares of Tasty common stock for $4.00 a share in cash or a total purchase price of around $165 million, including Tasty's existing indebtedness.

Tyco International Ltd. (NYSE:TYC) shares gained 3.05 percent to $48.59 on news that Schneider Electric SA is weighing a takeover offer for Tyco International.

European Markets

European stock markets ended lower on Monday, led by declines from automakers after a brokerage downgrade.

The Stoxx Europe 600 Index declined 0.24 percent to 280.99. DAX30 declined 12.16 points or 0.17 percent to 7,204.86 and CAC 40 fell 23.21 points or 0.57 percent 4,038.70, while FTSE 100 declined 2.31 points or 0.04 percent to 6,053.44.

Daimler AG led declines in auto sector after the company stock was downgraded to “neutral” rating from “outperform” rating at Credit Suisse. Credit Suisse also lowered its stance on European automakers to “benchmark” from “outperform,” citing an environment of declining earnings.

Among automakers, Daimler declined 2.98 percent to 50.65 euros and Volkswagen declined 2.3 percent to 104.01 euros, while Renault declined 2.38 percent to 38.88 euros.

Hochtief AG plunged 9.46 percent to 62.11 euros after the company said its profit may fall about 50 percent this year.

Barclays Plc gained 2.76 percent and Royal Bank of Scotland Group Plc advanced 2.3 percent on relief following the release of Britain's Independent Commission on Banking (ICB) report which seems to spare the two lenders.

Asian Markets

Asian stock markets ended mixed on Monday as surging oil prices and weaker-than-expected Japanese machinery orders weighed on the sentiment.

Tokyo shares fell, led by declines from automakers after Citigroup downgraded ratings on Japan’s major automakers to “sell citing production cuts in the wake of last month’s magnitude-9 earthquake. Benchmark Nikkei declined 0.50 percent or 48.38 points to 9,719.70.

Among the automakers, Honda Motor declined 2.22 percent to 2,903 yen and Nissan Motor fell 2.38 percent to 697 yen, while Toyota Motor declined 2.39 percent to 3,260 yen.

Shares of Tokyo Electric Power, Japan's biggest utility and operator of the Fukushima nuclear-power plant, surged 19.04 percent to 500 yen as Mizuho Securities on Friday reiterated its outperform rating on Tokyo Electric Power.

Japan's core private-sector machinery orders fell a faster-than-expected 2.3 percent in February from the previous month as a downward trend continued for non-manufacturers. Orders declined to 748.8 billion yen in February compared to 766.1 billion yen logged in January.

South Korean shares ended lower, led by declines from airline shares on concerns that rising oil prices would increase jet fuel costs. Seoul composite declined 5.58 points or 0.26 percent to 2,122.397.97. Korean Air Lines declined 2.62 percent and Asiana Airlines declined 2.54 percent.

Hong Kong’s Hang Seng index fell 93.00 points or 0.38 percent to 24,303.07 and Chinese Shanghai composite declined 0.25 percent or 7.48 points to 3,022.54.