Asian Stocks Rise, Gold Falls

Asian shares climbed on Tuesday, and the dollar held its gains, after JPMorgan raised its bid for Bear Stearns and U.S. home sales rose unexpectedly, lifting expectations for a recovery in the U.S. housing and credit markets.

Japanese government bond futures retreated, pulling away from last week's five-year highs, after U.S. Treasuries slid on tentative hopes the world's top economy would weather the credit crisis. Financial stocks, from Seoul's Kookmin Bank, to Australia's Babcock & Brown, rang up big gains after JP Morgan Chase & Co's sweetened offer for Bear Stearns signaled there was more value in financial assets than previously thought.

MSCI's index of shares outside Asia rose 1.9 percent by 0150 GMT, the third day of gains, although the benchmark is still down around 16 percent this year. Japan's Nikkei index ended the morning 1.3 percent better as Canon Inc and other exporters climbed as the yen traded well below a near 13-year high posted last week against the dollar, easing some concern about earnings outlooks. Seoul's KOSPI added 1.1 percent, Australia's S&P/ASX 200 rose 3 percent, and Singapore's Straits Times climbed 1.9 percent.

In the currency markets, the dollar crept up to 100.76 yen, holding near the previous session's highs hit after data showed that sales of existing U.S. home sales rose in February for the first time since July. The dollar had plunged to as low as 95.77 yen last week, its lowest since 1995, amid the Federal Reserve's aggressive efforts to ease the credit crisis.

Oil fell more than $1 to below $100 a barrel, extending a 10 percent fall from last week's record, sent down by a buildup in U.S. crude stocks, concerns over slower energy demand and a recovering dollar. Gold dropped and held near its lowest in a month, with its appeal as a hedge against inflation weakened by a firming U.S. dollar and sliding crude oil prices. Gold fell to $920.40/921.20 an ounce, and was within sight of last week's one-month low of $904.65 an ounce.

Source: Reuters

American Markets Bounce Back

U.S. stocks jumped on Monday after a raised buyout offer for Bear Stearns Cos Inc suggested that financial stocks may have reached bottom, especially in light of fresh data that fueled hopes for a turnaround in housing.

Stocks rang up big gains for a second straight session after JPMorgan Chase & Co lifted its offer for Bear Stearns to $10 a share from $2, helping alleviate concerns that other investment banking shares could tumble. JPMorgan's move also relieved worry that a prolonged fight with disgruntled shareholders could have derailed the deal.

Financial stocks also got a boost from an article in the Barron's newspaper suggesting that downtrodden bank stocks could rebound by 10 percent to 20 percent by year end. Bear Stearns shares, which at their session high were more than doubled their Thursday's closing price, ended up 76.1 percent. Citigroup, the largest U.S. bank by assets, was among financial sector standouts in the S&P 500, with its shares up 3.5 percent, while shares of American Express Co, a credit card and travel services company, led the Dow's financials with a 3.1 percent gain.

A surprising increase in sales of pre-owned homes last month fueled optimism that the worst of the housing slump may have passed. That ignited a rally in home building shares.

The Dow Jones industrial average climbed 187.32 points, or 1.52 percent, to finish at 12,548.64. The Standard & Poor's 500 Index ended up 20.37 points, or 1.53 percent, at 1,349.88. The Nasdaq Composite Index shot up 68.64 points, or 3.04 percent, to close at 2,326.75. Monday's gains, coming after a three-day Easter weekend, helped Wall Street notch its first back-to-back advance for March and its biggest 2-day jump in almost 4 months. The S&P 500 achieved its highest close for the month, and with this advance, the benchmark index trimmed its drop from its October record closing high to a decline of 13.1 percent.

Source: Reuters