European markets are called to open positive this morning.
Asian stocks advanced, paring the benchmark index’s fourth weekly loss, and commodities climbed after leaders of the Group of Eight said the global economy is gaining strength and South Korea’s current-account surplus widened. The dollar weakened, while Japanese bonds rallied.
The MSCI Asia Pacific Index rose 0.6 percent at 3:10 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index added 0.2 percent and those on the Euro Stoxx 50 Index jumped 1.1 percent. Oil increased 0.5 percent in New York, copper rose 0.9 percent, while wheat rallied for a third day. The Dollar Index sank 0.7 percent, set for its biggest drop since April 20. The won gained 0.6 percent and the euro added 0.8 percent versus the greenback. Japan’s 10-year government bond yield fell three basis points.
The strengthening global economy will pave the way to cuts in debt built up in the recession, G-8 leaders holding a two-day summit that ends today said in a draft statement. South Korea’s current-account surplus widened to a four-month high in April, boosted by record exports. Optimism may be dented by data today forecast to show U.S. personal spending and home sales weakened, following a report yesterday that showed slower growth in the world’s largest economy.
“Following the recent market decline, stock valuations are offering investors some scope for upside,” said Ng Soo Nam, the Singapore-based chief investment officer at Nikko Asset Management Co., which oversees about $126 billion. “While the U.S. economy is showing a painfully slow pace of recovery, I’m comfortable as long as the momentum doesn’t reverse.”
Stocks edged higher Thursday as momentum in the technology sector offset disappointing reports on economic growth and the labor market.
The Dow Jones industrial average (INDU) rose 8 points, or 0.1%, to end at 12,403; the S&P 500 (SPX) added 5 points, or 0.4%, to 1,326; and the tech-heavy Nasdaq Composite (COMP) gained 22 points, or 0.8%, to close at 2,783. The Dow had been down more than 70 points earlier in the session.
Technology shares helped offset broader market losses, with technology blue chip Microsoft (MSFT, Fortune 500) rising 2% and Hewlett-Packard (HPQ, Fortune 500) gaining 1.5%. Microsoft shares were higher after large shareholder David Einhorn called for CEO Steve Ballmer to step down.
“All these tech giants like Microsoft, Dell, HP have gotten so big, they’re very hard to manuveur,” said Daniel Morgan, portfolio manager with Synovus Trust Co., who also owns Microsoft shares.
Events this week
Friday: Before the start of trading, investors will get data on personal income and spending for April. Economists expect income edged up 0.4% last month, while spending increased 0.5%.
Shortly after the opening bell, the University of Michigan will put out its final reading on consumer sentiment in May. Economists
expect the figure to remain unchanged at 72.4.
National Association of Realtors is expected to show a 1.8% decline in pending home sales for the month of March.