European Markets opened positive this morning.
Asian stocks rose, erasing earlier declines, after China released reports showing industrial output grew more than economists forecast and that inflation accelerated at the fastest pace in almost three years.
China Coal Energy Co., a Beijing-based coal producer, gained 3 percent in Hong Kong, erasing a decline of as much as 1.2 percent. Aluminum Corp. of China Ltd. advanced 2.1 percent. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, lost 0.3 percent, paring a decline of as much as 1.8 percent ahead of the Chinese data. Tokyo Electric Power Co., the owner of the stricken Fukushima Dai-Ichi nuclear power plant, jumped 23 percent in Tokyo, leading Japanese power companies higher after Japan’s Cabinet approved a bill to help the utility compensate victims of the worst nuclear disaster in 25 years.
The MSCI Asia Pacific Index gained 1.2 percent to 133.02 as of 2:14 p.m. in Tokyo, with all 10 industry groups rising.
U.S. stocks closed little changed on Monday after a downgrade of Greece’ credit rating tempered earlier investor enthusiasm for a series of corporate deals.
At the close, the Dow Jones industrial average (INDU) rose 1 point, or less than 0.1%, to end at 11,953; the S&P 500 added less than a point to close at 1,272; and the Nasdaq Composite fell 4 points, or 0.2%, to 2,640.
Stocks opened higher following a series of deals. But the gains were short lived after credit agency Standard & Poor’ downgraded its rating on Greece to “CCC.” S&P also kept its negative outlook on Greece.
The downgrade pressured the currency and commodity markets. Oil fell 2% to $97.30 a barrel. Silver prices slid more than 4%. And and gold dropped 1% to $1,515.60 an ounce.
Energy and material stocks were hit hard, with Cabot Oil tumbling 3.5% and Halliburton (HAL, Fortune 500) shares down more than 2%.
S&P downgrades Greece
“A couple months ago, the market would have overlooked a Greece downgrade,” said David Levy, portfolio manager with Kenjol Capital Management. “But with this negative market sentiment, it’ another reason to sell.”
Stocks have taken a drubbing as of late, with concerns about the economy leaving investors battered and bruised.
With no economic data on tap for Monday’ session, U.S. investors focused on a series of corporate deals announced before the opening bell.
Apparel company VF Corp., the maker of Wrangler and The North Face brands, agreed to buy Timberland for $43 per share — creating a $10 billion apparel and footwear company. Shares of Timberland (TBL) rose 44% and VF Corp.’ stock jumped 10%.
Wendy’/Arby’ Group rose 1%, after the restaurant operator agreed to sell Arby’ to a private equity group led by Roark Capital Group. Wendy’ will retain an 18.5% ownership interest in the roast beef chain’ business.
These deals were some of the first M&A activity Wall Street had seen in weeks.
“It’ an emotional confirmation that businesses continue to deal despite the economy,” said Bruce McCain, chief investment strategist at Key Private Bank.
U.S. stocks tumbled Friday, with each of the three key indexes falling more than 1%, and the Dow ending below 12,000 for the first time in months.
Events this week
Tuesday: Investors will get the Commerce Department’ retail sales report and the Labor Department’ producer price index, also known as manufacturer inflation.
Economists forecast retail sales fell by 0.7% in May compared with a 0.5% rise reported in April, according to Briefing.com. The May producer price index is expected to have climbed 0.1% versus a 0.8% rise in April.
Consumer electronic retailer Best Buy is slated to report its fiscal first-quarter results before the market open. Analysts surveyed by Thomson Reuters expect Best Buy to have earned 33 cents a share.
Cantor Fitzgerald’ Murphy said with the sluggish economic data and low consumer spending numbers, expectations are low for the electronics retailer. Best Buy shares are down 17% this year.
Wednesday: The Labor Department will release its consumer price index for May at 8:30 a.m. ET. Economists expect consumer inflation ticked up by 0.1% in May, down from the 0.4% rise reported the month prior.
Also out Wednesday are the Empire State manufacturing index, and the Federal Reserve’ industrial production and capacity utilization reports.
Thursday: Investors will get initial unemployment claims at 8:30 a.m. ET from the Labor Department, along with May housing starts and building permits data from the Commerce Department. Economists expect weekly claims will fall to 421,000 from last week’ reading of 427,000 claims.
The Federal Reserve Bank of Philadelphia will release its June manufacturing survey at 10 a.m. ET.
Supermarket chain owner Kroger will report results before the opening bell, with analysts expecting earnings of 64 cents per share.
Reporting results after the close will be BlackBerry maker Research in Motion, which is expected to have earned $1.32 a share.
Friday: The University of Michigan will release its initial June consumer sentiment index at 9:55 a.m. ET. Economists are looking for the index to fall to a reading of 73.5 from May’ reading of 74.3.