While you were sleeping: Stocks recover as FedEx delivers

While you were sleeping: Stocks recover as FedEx delivers

(BusinessDesk) March 18 - Stocks on Wall Street and in Europe advanced on an upbeat outlook from FedEx Corp and a gain in oil prices.

FedEx, the world's second-largest package delivery company, bolstered investors’ optimism as it forecast improved revenues and margins in the fourth quarter and fiscal 2012. FedEx, along with United Parcel Service, are considered economic bellwethers.

In afternoon trading, the Dow Jones Industrial Average rose 1.20%, the Standard & Poor's 500 Index gained 1.38% and the Nasdaq Composite Index climbed 1.34%.

Wall Street’s fear gauge, the Chicago Board Options Exchange volatility index, dropped more than 11%, declining for the first session in four.

Even so, analysts said equities might not be out of the woods yet.

From a chart standpoint, "I don't see anything right now that suggests that the near-term decline is over," Chris Burba, short-term market technician at Standard & Poor's in New York, told Reuters.

"Momentum is still weakening ... I don't think the fear is going to be expelled, alleviated all at once, It's going to take some time for optimism to build back up again."

On the economic front, the news was positive as U.S. consumer prices advanced at their fastest pace since June 2009 in February, though underlying inflation remained generally under wraps.

Other reports today showed that claims for new unemployment benefits fell last week and factory activity in the country's Mid-Atlantic region increased at its fastest rate in 27 years.

Meanwhile, Groupon Inc has held talks with banks about an initial public offering that would value the online-coupon company at as much as US$25 billion, Bloomberg News reported, citing two people with knowledge of the discussions.

In Europe, the Stoxx 600 Index rose 1.8%, after dropping 7% in the previous six days.

Before a conference call of G7 finance ministers, Japan said it didn’t need help to contain a soaring yen.

As Tokyo struggles with one of the world’s largest nuclear crises, the yen soared overnight to a record high against the U.S. dollar amid speculation Japanese firms would repatriate billions of dollars in overseas funds to pay for a massive reconstruction bill.

A strong yen could make it more difficult for the heavily export-dependent Japanese economy, the world’s third-largest, to recover from last week's earthquake, tsunami and the resulting nuclear crisis it is still trying to control.

Japanese Economics Minister Kaoru Yosano told Reuters that neither currency nor stock markets were in a state of turmoil that would warrant G7 action and said Tokyo was more interested in "psychological support" from its partners.

Oil prices jumped almost 3% on intensifying unrest in the Middle East and North Africa.

Bahrain's ongoing crackdown on Shi'ite protesters after Saudi Arabia sent in troops on Monday has provoked a complaint from Iran lodged before the United Nations, fuelling concern about wider regional turmoil that could curb oil production.

Brent crude for May delivery rose US$3.04 to US$113.64 a barrel at 1535 GMT. U.S. crude for April delivery advanced US$2.45 to US$100.43.

Gold climbed. Spot gold was bid at US$1,401.45 a troy ounce at 1516 GMT from US$1,398.70 late in New York on Wednesday.

Platinum and palladium dropped on concern about a loss of demand due to car plant closures in Japan. Platinum and palladium weakened to 3-1/2 month lows of US$1,654 and US$684.50 an ounce respectively, before paring losses.

(BusinessDesk)

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