Wall Street exchanges were flat for the week as a poor outlook from tech heavyweight Intel offset a better than expected quarterly profit at Morgan Stanley. Still, the S&P 500 was on track for a third week in a row of gains and remained near a five year high. Shares of giant technology company, Intel slumped 6.7% to USD21.17 a day after it forecast quarterly revenue below analysts’ estimates.
The US Department of Labor reported last week that the number of US workers filing new applications for unemployment benefits dropped to its lowest level in five years last week, the latest signal of an improving Labor market. Initial jobless claims declined by 37,000 to a seasonally adjusted 335,000 in the week ending Jan. 12. Meanwhile, the US Home starts data surged in December as housing continues to boost the economic recovery. Housing starts rose 12.1% last month. That was the highest level since July 2008. The DJIA gained 1.2% for the week, while the NASDAQ gained 0.3% for the week. US markets are shuttered today, for Martin Luther King Day, this year it is combined with the Presidential Inauguration. There is very little on the global eco calendar to change markets today, so it is expected that traders will see a quiet bay.
Across the Atlantic in the EU, stocks were little changed as China’s economy accelerated for the first time in two years combined with retail sales and industrial production climbing higher than expected and a gauge of US consumer confidence, known as the Michigan Confidence Survey, unexpectedly declined. Most agree this is due to Washington news over the fiscal cliff and disappointment that lawmakers have not resolved the issues.
The Stoxx Europe 600 Index retreated 0.1% to 287 at the close of trading. The gauge lost less than 0.1% this week. The equity benchmark climbed to its highest level since February 2011 last week amid speculation that US companies’ earnings would exceed. The CAC 40 rose by 0.9%, followed by FTSE however, the DAX lost by 0.1% for the week. A lot appears to be going right in Europe’s financial markets. Greece is no longer a threat, banks are looking stronger, and government borrowing costs are down. Yet Europe’s economy remains in a slump.
In Asia, Chinese consumer stocks rose in New York and the nation’s largest ETF in the US climbed to a two week high after growth in the Asian country’s economy accelerated for first time in two years. Japan stocks rose, with the Topix Index capping its longest weekly winning streak since 1986, after the yen fell below 90 to the USD for the first time in 2 1/2 years. The Shanghai Composite gained 3.3% for the week, followed by Hang Seng (1.0%), Nikkei (1.0%). However, Kospi fell by 0.44%. All eyes are on the Bank of Japan meeting that begins today, and later in the week Chinese HSBC PMI data will keep traders on edge.