Data and earnings push sentiment south(ISFM) (27-01-2012)

Markets were cautious after date from various parts of the world as disappointing Japanese earnings, higher unemployment in Spain and weak U.S. home sales weighed. The lower than expected GDP growth in the US before the market opened did not help much either.

Earlier today, Asian markets were mostly flat, with movements that were very close to neutral. The Japanese market was in negative territory largely due to a strong yen that hurt exporters, while most other markets in the region ended just inside positive territory. Among major losers in Japan, were Nintendo Corp., which plunged one day after announcing its annual earnings forecast to a 65 billion yen ($844 million) loss blaming the strong yen for much of the loss, and NEC Corp., which dropped sharply after announcing yesterday that it was slashing 10,000 jobs worldwide and would slide into the red for the full year.

Benchmark oil for March delivery was up 39 cents at $100.09 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 30 cents to finish at $99.70 per barrel on the Nymex on Thursday.

European markets were muted after the latest unemployment data from Spain. The National Statistics Institute said the jobless rate shot up from 21.5 percent to 22.8 percent in the fourth quarter. Markets extended losses after U.S. growth data fell short of expectations. Although the U.S. economy appears to have gained strength, the recovery still seems tenuous. Following the announcement, stocks fell further, on profit taking after yesterday’s gains. In Greece negotiations are still continuing on the PSI, although sources state that there may be progress during the weekend.

On Wall Street, the open brought losses, with US stocks opening mostly lower after the announcement of data showing that the U.S. economy expanded less than expected and results from Ford Motor Co. fell short of Wall Street’s estimates.

Source: ISFM