Daily Digest

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Today's Highlights

• US dollar reached three-year lows after Federal Reserve Chairman Ben Bernanke said the central bank would continue to reinvest proceeds from maturing securities, and there was no specific time frame to tighten interest rates;

• The Dow Jones Transportation Average, which is often seen as important evidence of an active economy, reached a new all-time high at 5510.06 topping its previous record of 5493 at June 6, 2008;

Sino's Comments

US stocks extended their multiyear highs on Thursday as the market clung to optimism generated by the Federal Reserve's plans to keep interest rates low and the flow of encouraging corporate earnings.

The Dow Jones Industrial Average rose 0.6% to 12763.31, its highest close since May 20, 2008. Leading the blue-chip measure, Boeing climbed 3.2% to 78.55. Procter & Gamble was also strong, rising 0.8%, to 64.50, after its first-quarter earnings beat analysts' estimates, though the global consumer-products firm offered cautious guidance for the year, reflecting higher commodity costs.

The Nasdaq Composite added 0.1% to 2872.53, its highest close since Dec. 12, 2000. The Standard & Poor's 500-stock index rose 0.4% to 1360.48, finishing at its highest level since June 9, 2008.

After reaching a new closing high on Wednesday, the Russell 2000 index of small-capitalization stocks extended its gains, rising 0.4% to 861.55. The Dow Jones Transportation Average, which is often seen as important evidence of an active economy, reached a new all-time closing high at 5510.06, topping its previous record close of 5493 from June 6, 2008.

Among other companies reporting earnings, Sprint Nextel gained 6.7% to 5.11, after the wireless carrier narrowed its first-quarter loss by nearly half, adding customers as it weathered the introduction of the Verizon Wireless iPhone.

Aetna rose 4.1% to 41.45, after boosting its 2011 earnings target and beating first-quarter estimates. Akamai Technologies slid 15% to 34.94, after the Internet-content-delivery company said it was renewing contracts at lower prices for some customers and handling lower volumes on others.

Shares of insurer Allstate jumped 5.7% to 33.76, after its first-quarter earnings more than quadrupled as catastrophe losses plunged and revenue increased.

Coffee giant Starbucks shed 0.8% to 36.88, after fiscal second-quarter earnings met a downbeat projection and the company raised its full-year profit outlook but predicted high commodity costs will take an even bigger bite out of the bottom line.

Microsoft closed up 1.3% to 26.71, ahead of its earnings report after the market's close. The stock was down 2.5% in after-market trading after the software firm's earnings only met analysts' expectations, excluding a 5-cent tax benefit. Revenue topped Street forecasts.

In deal activity, Constellation Energy rose 5.7% to 36.26, after Exelon agreed to buy the electricity generator and utility operator in a stock deal valued at US$8 billion. Shares of Exelon added 1.7% to 42.18.

The market largely looked past a lukewarm round of economic data. US pending home sales climbed more than expected last month, but gross domestic product showed a significant slowing from the previous quarter. A third batch of data showed US jobless claims unexpectedly rose last week.

Demand for Treasurys rose, pushing the yield on the 10-year note down to 3.32%.

European markets advanced, boosted by strong results from Deutsche Bank, Bayer AG and Suez Environnement SA.

The Stoxx Europe 600 index closed up 0.3% at 283.04, supported by the insurance and utility sectors. A string of positive earnings updates has kept the strong momentum going.

A slew of European companies reported, contributing to the broad gains.

One of the top performers was Deutsche Bank, which surged 4.8%. The bank reported a 17% increase in net profit as a string of recent acquisitions helped drive growth.

Also in Germany, Bayer AG rose 2% after the drug maker lifted its annual sales and profit forecast, citing an improvement in its crop-chemicals business. Bayer also reported an 8% increase in profit to EURO684 million.

Meanwhile rival Merck KGaA gained 3.6% after reporting a 78% jump in profit and confirming its 2011 outlook.

The gains helped the DAX 30 index to shrug off weakness in the technology sector after a disappointing update from business software specialist SAP AG. The DAX rose 1% to 7,475.22.

SAP sagged 5.7% after a 4% increase in first-quarter net profit to EUR403 million missed analysts' expectations.

In France, stocks in focus included Suez Environnement, up 4%. The waste and water utility beat expectations with a 29% increase in EBITDA.

On the downside, shares of Technip SA dipped 2.5% after the oil-services company's sales missed analysts' expectations.

The French CAC 40 index added 0.9% to 4,104.90.

Elsewhere in Europe, Spain's Ibex 35 index advanced 1.1% to 10,858.1, led by a 1.5% gain for Banco Santander SA.

The bank reported a 4.8% drop in first-quarter profit but its Latin American business performed strongly and provisions to cover bad loans fell 10%.

In the UK, the FTSE 100 index finished virtually unchanged at 6,069.90. UK markets are closed Friday for the Royal wedding and Monday for a holiday.

Among top gainers in the benchmark was Standard Life PLC, up 3.2%. The insurer had a solid start to the year, with a 25% increase in long-term savings new business sales in the three months to the end of March.

In the media and advertising sector WPP PLC climbed 2.9% after raising its revenue outlook for the year.

Shares of Royal Dutch Shell rose 0.6% after the oil giant reported a 60% jump in first-quarter net profit on higher oil prices and expanding margins.

On the downside, hotel, restaurant and coffee-shop operator Whitbread PLC fell 3.3% following a trading update in which it said it's accelerating expansion plans for some of its chains but warned of slowing sales and challenging economic conditions.

Consumer-products giant Unilever PLC also came under pressure, down 2.4%, after it posted a 7% rise in sales but warned that mature economies remain sluggish.

Finally in the pharmaceutical sector shares of AstraZeneca PLC fell 3.5% after the company posted a 4.7% increase in first-quarter net profit to US$2.91 billion but said sales dipped 3.4%, missing analysts' expectations.

Base metals on the LME finished mixed. Aluminium raised 0.51% to US$2,763 while copper firmed 0.58% to US$9,375 and nickel added 0.83% to US$26,850. Zinc strengthened 0.67% to US$2,255 and lead fell 0.28% to US$2,491. Comex copper was last quoted at 424.50 US cents per pound.

Spot gold was last quoted at US$1,535.10. Comex gold futures increased 0.93% to US$1,530.80. Spot silver was last quoted at US$48.34. West Texas Intermediate was last quoted at US$112.86 per barrel.

Investors wasted no time in sending the US dollar to new three-year lows after the Federal Reserve gave them little reason to support it. Weak US growth and unemployment data released during the session quickened the dollar's fall.

At 07:44 AM (AEST) the US dollar was quoted at AUD 0.9152.

Should you have any further inquires, please contact William Vandermeer or Yang SHI

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