U.S. STOCK MARKETS, BONDS
Stocks Monday started the fourth quarter mostly higher after a report showed an unexpected expansion in September U.S. factory activity. The Dow Jones Industrial Average climbed 77.98 points, or 0.6%, to 13515.11, following its biggest weekly loss since the week ended June 1.
Gold futures slumped to a six-week low Friday, as concerns about Europe pushed investors to the U.S. dollar at the expense of precious metals. The most-actively traded contract, for December delivery, fell $20.70, or 1.2%, to settle at $1,724 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest price since Sept. 6.
The blue-chip benchmark trimmed gains heading into Monday's close, after climbing as much as 161 points earlier in the day. The Standard & Poor's 500-stock index added 3.82 points, or 0.3%, to 1444.49.
Consumer staples and health-care shares rose while the utilities and telecommunications sectors pulled back. The Nasdaq Composite Index dropped 2.70 points, or 0.1%, to 3113.53.
Traders said the benchmark, significantly weighted to midsize companies, suffered as investors sold off exchange-traded funds that track mid-cap stocks. One of the ETFs, the iShares S&P Mid Cap 400 Index Fund, dropped 0.4% on nearly 13-times its 30-day average volume, according to FactSet.
The Institute for Supply Management's manufacturing purchasing managers' index for September rose to 51.5 from 49.6 a month earlier. The result bucked economists' expectation for a fourth straight monthly reading lower than 50, which indicates a contraction in activity.
Spending on construction projects fell for the second straight month in August, the Commerce Department said. The drop was bigger than economists had expected.
In corporate news, Tenet Healthcare rose 3.3% after the hospital operator announced a $500 million stock-buyback program and said it would make $400 million in acquisitions in the near term. Goldman Sachs Group rose 2.8% after an article in Barron's suggested the firm's stock could rise at least 25% within a year.
Ceradyne soared 43% after the ceramic-materials maker agreed to be acquired by 3M for $860 million, or a 43% premium to Friday's closing price. Transocean climbed 3% after the oil-services company said a Brazilian court partially lifted a ban that allows the company to continue operations in Brazil except at the site of an oil spill last November.
A surprise improvement in U.S. manufacturing activity boosted European stocks in late trade Monday, with markets shaking off weaker Asian growth data in the wake of steep losses last week when Spain's continuing woes hammered sentiment.
EUROPEAN STOCKS, BONDS
The Stoxx Europe 600 index rallied 1.4% to close at 272.33, the best daily performance since European Central Bank President Mario Draghi detailed plans for an unlimited bond-buying program on Sept. 6.
Banks and drug makers were among the biggest gainers in the pan-European index, with Sanofi SA up 3.4%, Roche Holding AG rising 2.3% and HSBC Holdings PLC 2.5% higher. Spain stole the spotlight again, as markets continued to wait for the results of Moody's Investors Service's review of Spain's debt.
The IBEX 35 index rose 1% to 7,784.10, with Banco de Sabadell SA up 1.2% and Banco Santander SA up 1.4%. Banco Popular Espanol SA fell 6.2% after the bank confirmed plans to raise up to EUR2.5 billion to cover a significant capital shortfall.
A Spanish banks' stress test found last week that Banco Popular needed EUR3.2 billion in additional capital to withstand losses in an adverse economic scenario.
Data from the euro zone showed unemployment for the region came in at a record 11.4% in August, with the unemployment rate highest in Spain, at 25.1%.
Shares of Xstrata PLC advanced 2.4% in London after independent board members agreed to a revised offer from Glencore International PLC. Other miners were also on the rise, tracking metals prices higher. BHP Billiton PLC added 2.6% and Anglo American PLC gained 4.1%. The U.K.'s FTSE 100 index rose 1.4% to 5,820.45.
In France, Credit Agricole SA jumped 7.4%, as the firm said it has started talks to sell its Greek unit Emporiki for EUR1 ($1.28) to Greece-based Alpha Bank by the end of this year. The CAC 40 index added 2.4% to 3,434.98. Among German stocks, Deutsche Bank AG rose 2.7%, and Commerzbank AG gained 3%. Infineon Technologies AG added 4.5% after Standard & Poor's Equity Research lifted the stock to hold from sell. The DAX 30 index closed 1.5% higher at 7,326.73.
ASIA-PACIFIC STOCK MARKETS
Asian stock markets were mostly lower Monday, with Japanese shares hitting a multi-week low, as weak manufacturing data from China and an unimpressive quarterly Tankan survey drained investor confidence at the beginning of a new quarter.
The Nikkei Stock Average dropped 0.8% to 8,796.51 in Tokyo, while the broader Topix Index shed 0.7% to 732.35. Stock markets in Hong Kong, mainland China and South Korea were closed for a holiday.
Trading volumes were modest in those markets that were open. The drop in Tokyo came after the Bank of Japan's quarterly Tankan survey showed an index of business confidence of large manufacturers fell to minus 3 from a minus 1 reading in the June survey.
Data released by National Bureau of Statistics Monday showed China's manufacturing Purchasing Managers' Index improved to 49.8 in September from 49.2 in August but remained below the 50-point level, indicating a deterioration in activity.
Metals and real estate stocks were among the hardest hit in Tokyo. Shares of JFE Holdings Inc. dropped 2.5% and Tokyo Steel Manufacturing Co. gave up 2.3%, while Mitsubishi Estate Co. and Mitsui Fudosan Co. shed 2.7% and 2.1%, respectively.
The automobile sector suffered further losses on concern about the fallout from recent anti-Japan protests in China. Toyota Motor Corp. lost 1.7% and Nissan Motor Co. gave up 1.5%. Shares of NGK Insulators Ltd. plunged 10.4% after the company Friday cut its fiscal-year net profit view.
Copper closed higher on the London Metal Exchange Monday, boosted by a weaker dollar and upbeat manufacturing data from the U.S. At the close of open outcry trading, LME three-month copper was up 1.1% at $8,299 a metric ton. Nickel was up 1.4% at $18,730/ton.
The U.S. data helped soften the blow of a disappointing reading on the Chinese manufacturing sector. While China's official manufacturing Purchasing Managers Index rose to 49.8 in September from 49.2 in August, it undershot the median forecast of 50.2 in an earlier poll of 11 economists by Dow Jones Newswires.
Investors remain concerned about recent sluggish physical demand from the country, the world's top consumer of industrial metals. Chinese markets were closed Monday for the start of a week-long holiday.
The absence of Chinese market participants--the world's top buyers of base metals--is likely to add to price volatility in coming sessions, said analysts.
Crude-oil futures posted slight gains Monday as monthly data suggested an improvement in U.S. factory activity that could help boost fuel demand.
Light, sweet crude for November delivery settled 29 cents, or 0.3%, higher at $92.48 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange was 13 cents lower at $112.26 a barrel.
Gold futures settled at the highest price in seven months Monday, after a U.S. central banker made the case for bond buying through next year and money managers boosted their stakes in the precious metals on the first day of the new quarter.
The most actively traded contract, for December delivery, rose $9.40, or 0.5%, to settle at $1,783.30 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest ending price since Feb. 28. Compiled from MORRISON SECURITIES PTY. LTD.
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