Intel gives world markets modest lift

[February 04, 2010]  LONDON (AP) -- Strong earnings from chipmaker Intel Corp. helped most world markets push higher Friday, though the optimism was tempered somewhat by patchy U.S. economic data and ongoing worries about Greece's budgetary problems.

European stocks mostly tracked their Asian counterparts higher, with the FTSE 100 index of leading British shares up 18.44 points, or 0.3 percent, at 5,516.64 and France's CAC-40 index 20.40 points, or 0.5 percent, higher at 4,036.17. However, Germany's DAX was 14.03 points, or 0.2 percent, lower at 5,974.85.

Sentiment has been supported by the news Thursday that Intel saw sales swell 29 percent in the fourth quarter and net income surged nearly tenfold to $2.3 billion from the year before.

Attention will continue to focus on earnings statements later in the day to see if the increasing optimism on Wall Street, which has driven a ten-month bull run in stock markets, is justified by the fundamentals.

The key earnings statement Friday will be from JP Morgan Chase & Co. The banks will be taking center stage over the coming week.

"In line with the overall expectations of Q4 earnings season, financials are expected to show some strong results," said Geoffrey Yu, an analyst at UBS.

The impact of earnings on markets was clearly visible earlier this week, when aluminum company Alcoa Inc. saw its share price tumble 11 percent after it reported lower than expected earnings for the fourth quarter.

An unexpected decline in U.S. retail sales in December and continued unease about Greece's attempts to bring its budget deficit down substantially over the coming few years has also kept the market optimism in check and Wall Street was set to open down modestly -- Dow futures were 10 points, or 0.1 percent, lower at 10,653 while the broader Standard & Poor's 500 futures fell 1.8 point, or 0.2 percent, to 1,143.40.

David Buik, markets analyst at BGC Partners, said the debt problems facing Greece, concerns over the global economic recovery and moderately disappointing U.S. retail sales figures for December have left equity markets in "a ponderous rather than negative frame of mind."

Earlier in Asia, Japan's Nikkei 225 stock average advanced 74.42 points, or 0.7 percent, to 10,982.10 while Hong Kong's Hang Seng slipped 62.79, or 0.3 percent, to 21,654.16 amid news that Beijing has dropped a plan to let mainland Chinese buy shares listed in the territory.

South Korea's Kospi advanced 1 percent to 1,701.80 and Taiwan's benchmark added 0.8 percent. Elsewhere, Australia's market was marginally higher and Indonesia's benchmark was up 0.3 percent.

Oil prices slid below $79 a barrel amid weak crude demand from developed countries.

Benchmark crude for February delivery was down 48 cents at $78.91 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, the contract fell 26 cents to settle at $79.39.

The euro fell 0.7 percent to $1.4397 while the dollar was down 0.5 percent at 90.72 yen.

The euro was undermined by news that the seasonally adjusted trade surplus in the 16-country eurozone narrowed in November to euro3.9 billion ($5.65 billion) from October's euro4.7 billion, largely because exports fell 0.4 percent on a month-on-month basis.

The main reason behind the eurozone's recovery from recession in the third quarter was a bounceback in exports as global trade recovered. However, the fall in November has stoked concerns that growth may stall, especially if consumer demand does not take up the slack.

Confirmation that inflation in the 16-country eurozone rose to a ten-month high of 0.9 percent in the year to December had little impact in the currency markets.

On Thursday, European Central Bank president Jean-Claude Trichet indicated that the benchmark interest rate will not be rising any time soon from the historic low of 1 percent, partly because inflationary pressures remain subdued.

[Associated Press; By PAN PYLAS]

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