Friday, 19 November 2010

Markets rise on positive reports

Markets bounced back on Thursday. Bloomberg reports:

Stocks surged and commodities snapped a two-day retreat as Ireland moved closer to a European Union-led financial bailout and data on jobless claims and manufacturing bolstered optimism in the U.S. economy. General Motors Co. rallied as it returned to the stock market.

The MSCI World Index gained 1.7 percent at 4:28 p.m. in New York and the Standard & Poor’s 500 Index jumped 1.5 percent, the biggest advances for both in two weeks. The euro climbed 0.8 percent against the dollar. Costs to insure Ireland’s bonds from default sank. A drop in Treasuries sent the 10-year note yield up two basis points to 2.90 percent. Silver rose 5.2 percent, gold climbed 1.2 percent and oil added 1.8 percent.

Economic data on Thursday were quite positive. Bloomberg reports that the US economic recovery is accelerating.

The index of U.S. leading indicators rose for a fourth consecutive month, manufacturing surged in the Philadelphia area and jobless claims climbed less than forecast, signaling the world’s largest economy is accelerating...

The Conference Board’s gauge of the outlook for the next three to six months climbed 0.5 percent for a second consecutive time, capping the biggest back-to-back gains since February- March, the New York-based research group said today...

The Philadelphia Fed’s general economic index rose to 22.5, the highest level since December, from 1 a month earlier...

Applications for unemployment insurance payments rose by 2,000 to 439,000 in the week ended Nov. 13, Labor Department figures showed. The four-week moving average, a less volatile measure than the weekly figures, dropped to 443,000, the lowest level since September 2008.

There were also positive reports from the UK, with retail sales recovering in October and the Confederation of British Industry survey's total order book balance improving in November.

Still, the OECD has cut the global growth outlook for next year. Bloomberg reports:

The Organization for Economic Cooperation and Development cut its global growth forecast for next year, predicting a “soft spot” as stimulus spending fades before investment spurs a revival in 2012.

The global economy will expand 4.2 percent next year instead of the 4.5 percent predicted in May, the Paris-based organization said today in its semi-annual Economic Outlook. Growth will recover to 4.6 percent in 2012, it said.

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