World markets little changed Tuesday

MAY 05, 2009
World stock markets were little changed Tuesday as investors awaited details of which U.S. banks will need more capital, but Britain's FTSE 100 index surged as it played catch-up after being closed the day before when investors reaped big gains. In Europe, the FTSE was up 115.38 points, or 2.7 percent, at 4,358.60, while Germany's DAX fell 9.90 points, or 0.2 percent, to 4,892.55. France's CAC-40 was down 0.60 point at 3,237.37. While London was closed Monday for a public holiday, markets around the world posted heavy gains, most notably in Asia where some actually jumped over 5 percent and the U.S., where the Standard & Poor's 500 spiked 3.4 percent and moving the index into positive territory for 2009. Wall Street was expected to give up some recent gains at the open as the U.S. government's stress tests into 19 leading banks — results of which could come later — are expected to show that several banks need more capital. Investors are particularly concerned about Citigroup Inc. and Bank of America Corp. A report in the Wall Street Journal Tuesday said about 10 of the 19 banks undergoing the tests will be instructed to boost their capital base one way or another. Dow futures were down 23 points, or 0.3 percent, at 8,386 while the broader S&P futures dropped 4 points, or 0.4 percent, to 898.80. Those losses, if they indeed materialize, would represent a modest dent on the recent uptick, which has been fueled by mounting hopes that the global economy may start to recover later this year. In particular a run of better than expected U.S. economic data have indicated that the worst of the recession in the world's largest economy may have run its course. Stock markets usually rally around six to nine months before real evidence of an economic recovery. However, many analysts think the markets may be overestimating the speed and scale of the economic rebound in the wake of the slight improvements seen in the economic news over recent weeks. "Equity investors are rather like travellers lost in the desert," said Stephen Lewis, an analyst at Monument Securities. "They come across a discarded water-bottle in the sands and are delirious with joy when they find they can squeeze out a few drops of liquid to slake their thirst," he added. Attention later will turn to U.S. Federal Reserve Chairman Ben Bernanke, who will testify before Congress about the Fed's strategy to to get banks lending freely again and stimulate the economy. He is likely to point to the fact that the three-month dollar interbank lending rate fell below 1 percent for the first time ever earlier as a sign that the Fed's aggressive stance is beginning to reap dividends. Earlier in Asia, Hong Kong's benchmark Hang Seng index flitted in and out of positive territory to end the day up 49.03 points, or 0.3 percent, at 16,430.08. Mainland China's benchmark Shanghai Composite Index also edged up 0.3 percent to a nine-month high close of 2,567.34, as property shares fed expectations that the economy may be poised for recovery. Australia's main index climbed 0.2 percent to 3,890.40, while Singapore's Straits Times index rose 2.3 percent. Financial markets in Japan, South Korea and Thailand were closed for national holidays. Oil prices declined modestly, but lingered around $54 a barrel on general optimism about the global economy. Benchmark crude for June delivery was down 48 cents to $53.99 in electronic trading on the New York Mercantile Exchange. In currencies, the dollar rose to 98.91 yen from 98.85 late Monday in New York, while the euro fell to $1.3394 from $1.3419.

Latest News

Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team
Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team

LPL Financial and Raymond James also add independent advisors from Osaic and Edward Jones in Michigan and Arizona.

M1 Advisor bets AI can serve clients wealth managers turn away
M1 Advisor bets AI can serve clients wealth managers turn away

The SEC-registered RIA advises on more than $1 billion in client assets, with no advisory fee through 2027 and no human financial advisors.

SEC charges Caris Investment Partners in alleged cherry-picking scheme
SEC charges Caris Investment Partners in alleged cherry-picking scheme

95.8% of house trades were winners. For clients? The SEC says just 14.9%.

Pension fund accuses Duolingo of burying user-growth crisis
Pension fund accuses Duolingo of burying user-growth crisis

The complaint says Duolingo added friction on purpose, then lied about it.

Wirehouses losing more advisors so far in 2026: Report
Wirehouses losing more advisors so far in 2026: Report

The four wirehouse firms lost 1,449 experienced advisors and recruited 932 in the first six months of the year, according to Diamond Consultants.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor