Stocks gain on economic indicators, US earnings

10:46 AM, Jan 24, 2013   |    comments
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Shares creeped higher as investors welcomed surveys showing a smaller-than-forecast contraction in both manufacturing and services in the 17-country eurozone this month. That came after overnight data showing a pickup in China's factory production as well as strong tech earnings that spurred Wall Street to rally to a five-year high.

Britain's FTSE 100 ended the day 1.09 percent higher at 6,264. Germany's DAX gained 0.5 percent to 7,748 and France's CAC-40 rose 0.7 percent to 3,752.

Wall Street trended higher with Dow Jones industrial average up 78 points at 13,857. The Standard & Poor's 500 index inched above 1,500 in early trading but dropped back to at 1,498, up 0.27 on the Wednesday's close.

Markets shrugged off news from Germany's banking sector, where Commerzbank said it planned as many as 6,000 job cuts over the next three years. The country's second-largest bank, which was bailed out by the government in 2009, expects to cut between 4,000 and 6,000 jobs by 2016.

Grim employment data in Spain also failed to dent markets optimism. Spain's unemployment rate shot up to a record 26.02 percent in the fourth quarter of 2012, leaving almost 6 million Spaniards out of work, the country's statistics agency said.

Stock markets in Asia were boosted from HSBC Bank's preliminary survey on China's monthly manufacturing. Its index rose to a two-year high of 51.9 in January from 51.5 in December. A reading above 50 indicates expansion on a scale of 100.

Analysts at Credit Agricole CIB in Hong Kong said before the survey's release that they expected China to beat estimates. "Manufacturing sentiment should have been boosted by previous fiscal measures and optimism towards the new government" following the once in a decade leadership change late last year, the bank said in an email.

Japan's Nikkei 225 index rose 1.3 percent to close at 10,620.87. Australia's S&P/ASX 200 advanced 0.5 percent to 4,810.20, its highest close since May 2011. Benchmarks in Singapore, Thailand, and the Philippines also rose.

Investors were encouraged by developments in Washington, where the U.S. House of Representatives voted to avert the imminent threat of a government default by suspending the debt limit - the amount of money the government is allowed to borrow.

The law requires that Congress approve raising the amount the government can borrow to pay its obligations as the debt exceeds its limit, currently at $16.4 trillion. That's the cumulative amount the country owes as a result of routinely spending more than it collects in taxes.

On Wednesday, IBM single-handedly lifted the Dow Jones industrial average to a five-year high. The tech giant's quarterly earnings beat Wall Street's expectations, thanks to its lucrative Internet-based "cloud" computing business and sales of software services.

Benchmark oil for January was up $1.16 to $96.38 per barrel in electronic trading on the New York Mercantile Exchange. Wednesday the contract dropped $1.45, or 1.5 percent, to finish at $95.23 per barrel, the first decline of more than 1 percent since Dec. 21.

In currencies, the euro rose to $1.337 from $1.3321 late Wednesday in New York. The dollar rose to 90.07 yen from 88.66 yen.

(Copyright 2013 by The Associated Press. All Rights Reserved.)

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