GLOBAL STOCKS edged higher in what was described as “choppy trade” , after chairman of the Federal Reserve Ben Bernanke said the US central bank was ready to take further steps to stimulate the economy, but stopped short of signalling near-term action.
Financial markets had looked forward to Bernanke’s testimony to the US Congress for any signs the Fed was moving closer to a third round of bond-buying to support the economy.
But the Fed chief adhered closely to the message of “watchful waiting” that the bank’s policy panel delivered in June, and yielded few new clues.
US stocks fell but recovered in midday trading, however, led by shares of materials producers.
DUBLIN
The Iseq index closed down 7.5 points, or .41 per cent, at 3,217.60, after what traders described as very quiet day.
Volumes were light, in line with recent trading patterns, although one trader held the view that Mr Bernanke’s testimony to congress “gave people a good excuse to do nothing”.
Building materials giant CRH, which represents one-third of the index, closed down 1.2 per cent for the day. The stock had climbed 3 per cent on Monday, moving the overall index higher. However, traders said that there was “nothing untoward” in yesterdays decline in share price, with one noting that CRH had probably “outperformed its sector”.
Paddy Power had a strong finish, closing up 2.08 per cent at €54.40. The stock had traded most of the day at around €53.60. “Sometimes theres a buyer in at the end of the day and when volume is light it can move markets,” said one trader.
Ryanair released full details of its €694 million Aer Lingus takeover offer, as part of the formal bidding process for its rival. However, the offer document had impact on the share price of either company. Aer Lingus closed up 1.33 per cent at €1.07 on trading in 242,000 shares. Ryanair was flat on the day, closing at €4.13.
LONDON
UK stocks fell for a second day as US Federal Reserve chairman refrained from discussing specific steps to support economic growth in his testimony to Congress.
Rio Tinto Group led a gauge of mining shares lower, falling 2.3 per cent.
Building materials company Wolseley closed down 1.9 per cent after the company said it may sell its French operation and write down the value of the unit.
The FTSE 100 Index slid 33.34, or 0.6 percent, to 5,629.09 at the close in London, extending Mondays 0.1 per cent decline. The broader FTSE All-Share Index retreated 0.6 per cent.
EUROPE
European stocks fell for the first time in three days after Ben Bernankes testimony to Congress disappointed investors.
Alcatel-Lucent SA, Frances largest telecommunications equipment supplier, plunged the most in almost 14 years after it posted a second-quarter loss.
CSR Plc surged 34 per cent after Samsung Electronics Co. agreed to buy its wireless technology unit.
The Stoxx Europe 600 Index slipped 0.3 per cent to 256.09 at the close of trading, erasing an earlier advance.
National benchmark indexes fell in eight of the 18 western European markets.
Frances CAC 40 slipped 0.1 percent. Germanys DAX rose 0.2 percent.
NEW YORK
US stocks rose, erasing earlier losses, and commodities climbed as US investors took a brighter view of Mr Bernanke’s testimony to Congress where he said the central bank is prepared to act to boost growth if labour markets don’t improve.
Ten-year Treasury yields rose two basis points to 1.5 percent.
Stocks retreated in the first hour of trading as Bernanke’s prepared testimony to Congress provided no specific plans for boosting growth. Equities recovered as the Fed chairman’s answers to senators’ questions signalled he is concerned about the economic recovery and doesn’t view inflation as a hindrance to providing more stimulus.
Walt Disney Co. rallied 3.2 per cent to a record after Bank of America raised the world’s largest entertainment company to a buy.
Coca-Cola advanced 1.6 percent after posting earnings that topped projections.
Maker of Barbie, Mattel, jumped 9.6 per cent after reporting second-quarter profit that exceeded analyst estimates.
Goldman Sachs increased 0.4 percent, trimming a rally of as much as 2.9 percent. The bank reported second-quarter profit that exceeded analysts estimates and announced it is selling its hedge-fund administration unit to State Street Corp.
Earnings beat estimates at 32 of the 45 companies in the SP 500 that have reported quarterly results so far, data compiled by Bloomberg showed. Profits are down 3 per cent for the group. – Additional reporting: Bloomberg
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