Asian Stocks Rise while MSCI Rebalances

In the last 15 minutes of the trading session, United States stocks managed to erase many of the day’s losses. This advance sent the Standard & Poor’s 500 index into its second consecutive week of gains. Over the week, the Standard & Poor’s 500 index rose by 0.5 percent. For the month, it advanced by 0.4 percent. The past few weeks have been marred by dramatic swings in the stock market. Every time an official comments on the progress of a budget agreement, the market changes course.

Earlier in the day, President Barack Obama warned the nation of the damages caused by prolonged negotiations. The United States government is currently focusing on striking an agreement to change taxes and spending measures in the nation. If the agreement is not reached, the US will enact automatic tax increases and spending measures on January 1. These measures, totaling $600 billion, are expected to push the United States off of a fiscal cliff and back into a recession. Since Obama won re-election on November 6, the benchmark S&P 500 has retreated by 0.9 percent.
MetroPCS Rallies
Guggenheim Securities LLC states this week that the wireless carrier MetroPCS could receive a bid from Sprint. After the announcement, stock in MetroPCS rose by 5 percent. Zynga Incorporated saw their shares fall by 6.1 percent after a deal to loosen their terms with Facebook. VeriSign Incorporated reported the highest share price drop on the Standard & Poor’s 500 index. VeriSign recently signed a new contract that limits them from raising prices on websites that end in .com. At the saw time, Yum! Brands Incorporated saw its share prices fall after it announced a decline in Chinese sales.
During the session, the Dow Jones Industrial Average added just 0.1 percent, or 3.76 points, to reach a level of 13,025.58. On US-based stock markets, over 7.1 billion shares were exchanged. This number is 15 percent higher than the three month average. Most of the increase in volatility was caused by an MSCI rebalance. MSCI global indexes implemented new changes by the end of the trading session on Friday. This caused the Standard & Poor’s 500 index to rise by 0.2 percent to a high for the day of 1,418.86. Seven stocks were removed from the S&P, including Apollo Group and Walter Energy. Among the eight new stocks to hit the marketplace, investors will find the sportswear maker Under Armor as well as the home construction company, Lennar Corporation.
MSCI encompasses indexes and gauges in 24 different developed nations. After conducting a semi-annual review, MSCI decided to rebalance the indexes. Since share prices often mimic the benchmark indexes, this change could affect nearly $3 trillion of funds that are benchmarked against the MSCI index.
Sandy’s Impact Still Felt
Despite the month that has passed, Superstorm Sandy is still impacting construction and utility companies in the United States. Personal spending and income were both below market expectations.
In the last five days, utility companies gave managed to gain. This marks the longest advance since July 2. Utility companies are still a part of the only sector that is down for the year. Since the start of 2012, utility companies have fallen by 2.7 percent. During the trading session on Friday, they gained by one percent.
Individual US Stocks
Facebook shares advanced by 2.6 percent during the day to a level of $28. Groupon Incorporated saw its share prices fall by 8.7 percent to a level of $4.15. As the largest source of online coupons, Groupon is a popular spot for savers. Some of the directors of Groupon met yesterday to voice their annoyance and frustration with Chief Executive Officer Andrew Mason. Although he is not expected to leave immediately, the board of Groupon will be meeting to discuss the possibility of changing their senior management team.
Advanced Micro Devices managed to rally for its fourth consecutive day. It gained by 7.8 percent to reach a level of $2.20. This company is known for its high tech products and is the second-biggest maker of personal computers. Since November 27, share prices in Advanced Micro Devices have risen by 18 percent. Based in Sunnyvale, California, the company is planning to sell its campus in Austin, Texas to raise funds. Since the start of the year, Advanced Micro Devices has watched its share prices fall by 59 percent.
Asian Stock Markets
Overall, Asian stocks managed to achieve their second consecutive weekly gain. The regional benchmark advanced to its highest level since May of 2012. The MSCI Asia Pacific Index rose by 1.4 percent to 124.65 during the week. For the month of November, the gauge advanced by 2.2 percent. Since its low on June 4, the benchmark has advanced by 14 percent.
Leading the gains in Hong Kong, Li & Fung Limited shares advanced by 2.9 percent. This company is known as a supplier of clothing and toys for Wal-Mart Stores. Hitachi Limited also advanced by 5.1 percent in Japan. Hitachi recently agreed to merge its thermal power business activities with Mitsubishi Heavy Industries.
The South Korean Kospi advanced by 1.1 percent while the Hang Seng in Hong Kong gained by 0.5 percent. In Japan, the Nikkei 225 Stock Average increased by 0.9 percent for its third consecutive week of advances. Since November 14, the Nikkei has risen by 9 percent.
Yesterday, Japan’s cabinet decided to approve of a stimulus package. Intended to boost the economy, the stimulus package will encompass 880 billion yen ($10.7 billion). As the yen dropped to a seven month trough versus the euro, exporters enjoyed heightened sales. Nissan Motor Company receives 16 percent of its sales in Europe. Due to the desirability of Japanese exports right now, Nissan saw its share prices rise by 1.4 percent to 799 yen. Nippon Sheet Glass shares also rose by 7 percent to end at a level of 92 yen.
Canadian Stocks
For the first time since May, Canadian stocks posted a monthly decline. The nation’s main stock index saw Talisman Energy drop by 3.5 percent. First Quantum Minerals also offered C$4.86 billion to purchase Inmet Mining Corporation. After the offer was rejected, shares in First Quantum Minerals fell by 1.1 percent. 
About the Author
Marcus Holland is editor of the websites and He holds an Honors degree in Business and Finance and regularly contributes to various financial websites.

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