February 20, 2013
Given encouraging acquisition deals and better than expected confidence data in Germany, U.S. stocks reached to multi-year highs, sending the Dow 54 points higher, while the S&P 500 and the NASDAQ advanced 0.74 percent and 0.69 percent, respectively.
Actually, investors flocked towards equities despite downbeat housing data as mergers and acquisitions stoked risk appetite across the board. Office Depot and OfficeMax have discussed a stock swap that would create a single office-supply retailer to compete with Staples Inc, revealing additional value on the companies. Meanwhile, German investor confidence, ZEW, jumped more than economists estimates in February to the highest in almost three years, restoring market mood largest economy in the euro zone. Furthermore, President Obama said the door is open to avoid from automatic spending cuts, which will be effective as of March, 1., calling Republicans to get the job done.
On the corporate side, Google Inc. advanced 1.8 percent, surpassing $800 for the first time. Bank of America added 1.3 percent to $12.19. Citigroup edged up 1.5 percent to $44.50, its highest level since May 2011, while JPMorgan Chase & Co. climbed a more than four-year high after gaining 1.2 percent to $49.45.
European stocks increased to the highest level in three weeks as German economic sentiment improved more than estimate and Danone SA jumped after reporting earnings, spurring investors to stay long on the equities. The Stoxx Europe 600 Index rose 1.1 percent to 290.01 at the close.
The common currency posted notable gains against the buck as German confidence data showed that European economic horizon is gaining ground, prompting investors to liquidate long positions on the dollar in the wake of resurging risk appetite. Euro climbed to 1.3390 vs. the buck, signaling more upward momentum for near future.
Crude oil for March delivery settled at $96.66 a barrel, up 80 cents, or 0.8%, from
Friday’s settlement on the New York Mercantile Exchange as weaker dollar and upbeat German data raised hopes over sustainable demand.
Despite weaker dollar, April gold shed
$5.30, or 0.3%, to settle at $1,604.20 an ounce on the Comex division of the New
York Mercantile Exchange, the lowest close for a most-active contract since Aug.
14. Rising equities and better than expected German ZEW index triggered another round of selling on precious metal as investors purchased risky assets.
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