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Wall Street follows overseas markets higher

Wall Street follows overseas markets higher
News
Monday, February 25, 2013 - 10:48am

U.S. stocks rose in early trading Monday, following gains in overseas markets, as investors focused on politics and central bank developments.

The Dow Jones industrial average and the S&P 500 both gained about 0.5%, while the Nasdaq advanced 0.6%.

Multiple Japanese media reports say that Prime Minister Shinzo Abe is poised to nominate an advocate of aggressive monetary easing to head the Bank of Japan. The yen fell to the lowest point versus the dollar since May 2010.

Japan's benchmark Nikkei index added 2.4%. But gains in Chinese shares were modest after a report on Chinese manufacturing fell unexpectedly. The Hang Seng increased 0.2% and the Shanghai Composite closed up 0.5%.

European markets were higher, with the DAX in Germany gaining 2.3% and France's CAC 40 up 1.6%.

The FTSE in London lagged, as traders responded to Moody's decision late Friday to strip the United Kingdom of its AAA credit rating, citing the country's rising debt burden and tepid growth outlook. The British pound fell versus the dollar and the euro in trading Monday.

"Officially we are now 'Good' Britain. No longer 'Great' I'm afraid," wrote Gary Jenkins, a credit analyst at U.K.-based Swordfish Research, in a note to clients.

In Italy, results of Sunday's elections are not yet known. But late polls showed center-left candidate Pier Luigi Bersani on track to defeat controversial three-time prime minister Silvio Berlusconi and ex-comedian Beppe Grillo, who is leading an anti-establishment movement. Markets could react badly if Berlusconi, who has promised to undo some austerity measures, or Grillo were to win, as it would raise new doubts about the future of the euro.

U.S. stocks rose Friday, capping the worst of 2013 for the S&P and the Nasdaq, though the Dow managed a slight gain.

In corporate news, shares of Barnes & Noble shot higher after Chairman Leonard Riggio said he plans to buy the company's retail operations, leaving the Nook electronic book segment a separate company. No price was disclosed in his filing with the Securities and Exchange Commission.

Lowe's reported lower sales and earnings, but both results were slightly better than forecasts and the company announced a $5 billion share repurchase.

Results are due later in the week from companies including Home Depot, Macy's and Groupon.

Shares of 3D systems plunged 17% after the maker of 3D printers reported quarterly results that were slightly better than expected. A three-for-two stock split, which 3D Systems announced earlier this month, went into effect Monday.

FarmVille maker Zynga shares surged on reports New Jersey will revise online gambling laws.

U.S. investors looking for domestic news can focus on Capitol Hill for signs of progress in talks to avoid deep cuts in federal spending due to take place at the end of the week. But there were few signs of compromise in comments Sunday.

Oil and gold prices rose, while the U.S. dollar fell versus the euro. The yield on the 10-year Treasury note edged up to 1.99%, from 1.97% previously.

 

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