World markets gain, but Spain downgrade looms
In this Sept. 20, 2012, file photo, trader Andrew Silverman, left, works on the floor of the New York Stock Exchange. European stocks edged higher on Monday, Oct. 1, 2012, as investors cautiously welcomed the result of stress tests of Spain’s banks. But the threat that Moody’s might downgrade the country’s debt rating to junk status limited gains. AP FILE PHOTO
BANGKOK — Asian stock markets were boosted Tuesday by an upbeat report showing U.S. manufacturing grew in September month for the first time in four months.
Hopes that the U.S. economy might be picking up helped push Japan’s Nikkei 225 index 0.3 percent higher to 8,825.40.
South Korea’s Kospi rose nearly 0.3 percent to 2,001.41 and Australia’s S&P/ASX 200 gained 0.6 percent to 4,413.80.
Benchmarks in Singapore, Taiwan and Malaysia also rose. Markets in Hong Kong and mainland China were closed for public holidays.
Investors were emboldened to weigh into stocks after the Institute for Supply Management said Monday its index of U.S. factory activity rose to 51.5 in September from 49.6 in August. A reading above 50 indicates growth.
The better news on manufacturing helped investors set aside concerns of a possible downgrade by credit rating agency Moody’s of Spain’s debt rating to junk status. The agency has the debt on review and is due to release its findings this week. Any cut in the rating would make Spain’s debt non-investment grade.
That would hurt Spanish markets because many pension funds and banks would have to sell them from their portfolios and desist from buying them at auction. That, in turn, would force Spain to pay higher rates to borrow money, further hurting its finance.
Wall Street stocks closed mostly higher Monday. The Dow Jones industrial average rose 0.6 percent to close at 13,515.11. The Standard & Poor’s 500 index rose 0.3 percent to 1,444.49. The Nasdaq composite fell 0.1 percent to 3,113.53.
Benchmark oil for November delivery rose 8 cents to $92.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed up 29 cents at $92.48 in New York on Monday.
In currencies, the euro rose to $1.2897 from $1.2886 in New York late Monday. The dollar rose slightly to 78.04 yen from 78.02 yen.
