World markets digest earnings from Apple, IBM

[January 19, 2011]  LONDON (AP) -- European markets were steady Wednesday despite a rise in Asia as investors digested a raft of earnings reports, including strong results from Apple Inc., and prepared for figures from investment bank Goldman Sachs.

A day after rallying on hopes that EU officials were preparing a more comprehensive strategy to fight the debt crisis, European stocks ran out of momentum as traders turned their eyes to the U.S. corporate earnings schedule.

Apple had weighed on markets after the company announced that its charismatic CEO Steve Jobs was taking another medical leave. Its shares fell 2.2 percent but that was offset when the company announced its earnings after the market closed.

The company produced stellar holiday-quarter results by boosting production of iPads faster than analysts predicted, and shoppers bought iPhones as fast as Apple could make them, helping drive the company's fiscal first-quarter net income up 78 percent from the prior year.

Apple sold 7.3 million iPad tablet computers -- a million more than analysts expected.

IBM also surprised, with net income of $5.26 billion, or $4.24 per share, topping analysts' projections for $4.08 per share.

Later Wednesday, eBay Inc. and Wells Fargo & Co. were due to release quarterly results, while the U.S. Commerce Department's was scheduled to publish housing starts for December.

In Europe, where the earnings season does not take off for another week, Pearson -- the publisher of Penguin books and the Financial Times -- raised its earnings guidance, sending the stock up 5 percent in London.

The German government lifted its growth forecast for this year to 2.3 percent from 1.8 percent earlier thanks to strong exports and recovering domestic demand.

Still, the shadow of the debt crisis loomed over the region. Fitch Ratings agency said Wednesday that gross government borrowing in Europe will fall sharply in 2011 due to big budget cuts. Governments are using austerity measures to heal public finances and regain bond market trust.

Britain's FTSE 100 was down about 0.1 percent to 6,048.06. Germany's DAX was up 0.1 percent to 7,152.39 and France's CAC-40 lost less than 0.1 percent to 4,009.23.

Wall Street was set for a mixed opening, with Dow futures up 0.1 percent 11,819 and S&P 500 futures lower by 0.2 percent to 1,292.60.

In Asia, the electronics sector bolstered indexes, mainly in Japan and Korea.

South Korea's Kospi rose 0.9 percent to a record high close of 2,115.69. Market bellwether Samsung Electronics Co gained 2.9 percent to an all-time high finish of 997,000 won.

Asian "markets are taking their queue from the U.S. We are in results seasons, and some have beaten forecasts," said Lee Kok Joo, head of research at Phillip Securities in Singapore. "The most prominent one is Apple. Indications are that the retail market was very strong in the last quarter of last year. Consumers are spending."

Japan's Nikkei 225 stock average added 0.4 percent to 10,557.10, with Hitachi Ltd. up 3.8 percent in Tokyo.

Hong Kong's Hang Seng index climbed 1.1 percent on robust gains by property shares. Australia's S&P/ASX 200 climbed 0.7 percent.

Chinese shares rebounded, with the benchmark Shanghai Composite Index jumping 1.8 percent to 2,758.10. The Shenzhen Composite Index for China's smaller, second exchange rocketed 2.4 percent.

High speed rail shares surged, boosted by China's progress on a bid for a U.S. high-speed rail project. China South Locomotive & Rolling Stock Co., or CSR, hit the daily limit of 10 percent while North Locomotive & Rolling Stock Co., or CNR, also surged 10 percent.

In currencies, the dollar fell to 82.26 yen from 82.59 yen late Tuesday. The euro rose to $1.3453 from $1.3387.

Benchmark crude for February delivery was up 50 cents at $91.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires this week, fell 16 cents to settle at $91.38 on Tuesday.

[Associated Press; By CARLO PIOVANO]

Pamela Sampson in Bangkok and Ji Chen in Shanghai contributed to this report.

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