(MENAFN - Arab Times) Global stocks rebounded on Friday on data that showed US consumer sentiment rose to its highest level in more than four years in early May, but commodity prices fell after weak data from China reduced demand expectations.
European and US stocks turned higher after the Thomson Reuters/University of Michigan survey showed nearly twice as many Americans reported hearing about new job gains than fresh job losses, despite a recent slowdown in job growth.
The gains in equity markets helped trim losses in crude oil and led the euro to rebound against the US dollar.
Gains were held back after JPMorgan Chase & Co's trading loss of at least 2 billion from a failed hedging strategy knocked financial stocks across the globe.
JPMorgan's shares fell 7.1 percent to 37.85. The KBW index of large US financial service firms fell 0.5 percent. In Europe, the euro zone STOXX banking index fell 1 percent.
European shares erased early losses to end higher, although many investors remained wary over Spain's banks and Greece's political impasse.
The FTSEurofirst index of top European stocks pared losses to close up 0.3 percent at 1022.52 points.
The MSCI world equity index also rebounded, just off break-even at 316.07.
The euro rose for a second day after falling for eight straight sessions. Inconclusive Greek election results on Sunday threw the country into political disarray and raised the risk of it exiting the euro zone.
The gains in global stocks offset dour news from Europe, where uncertainty over Greece and Spain pushed government debt prices higher. German Bund futures hit a record high at one point.
Crude prices fell below 112 a barrel early in the session after a weak reading of industrial growth in China sparked worries demand may slow from the world's No. 2 oil consumer.
US
US stocks edged up on Friday after a strong outlook from chipmaker Nvidia and surprisingly robust consumer confidence offset a slide in bank shares after disclosures of huge trading losses at JPMorgan Chase & Co.
JPMorgan said it lost at least 2 billion from a failed hedging strategy. The Dow component was down 7.3 percent at 37.76 and weighed on the entire sector.
Nvidia Corp rose 8.3 percent to 13.45 after reporting adjusted first-quarter earnings that beat expectations. The stock boosted the Nasdaq and was the S&P 500's top percentage gainer.
Still, the S&P 500 was on track for its second weekly decline, although investors were encouraged after the index has rebounded from 2-month lows hit on Wednesday and looks set to close once again above April lows.
The Dow Jones industrial average was up 5.41 points, or 0.04 percent, at 12,860.45. The Standard & Poor's 500 Index was up 1.30 points, or 0.10 percent, at 1,359.29. The Nasdaq Composite Index was up 15.16 points, or 0.52 percent, at 2,948.80.
JPMorgan estimates the business unit involved in the trading loss will lose 800 million in the current quarter, excluding private equity results and litigation expenses. The bank had previously expected the unit to earn a profit of about 200 million.
JP Morgan's news weighed on bank shares as investors feared both a greater risk of more regulation and the potential for more such losses at other banks. However, the stocks were off their lows of the morning.
Citigroup Inc lost 3.2 percent to 29.67 and the Financial Select Sector SPDR was off 0.4 percent to 14.72. The S&P financial sector fell 0.5 percent, extending its month-to-date losses to 3.4 percent.
Financial stocks have been among the most volatile in recent months as investors question what the growth outlook for the United States and the debt crisis of Europe will mean for the group's profits. JPMorgan has fallen 12.2 percent this month.
The CBOE VIX Volatility Index is up 9 percent this month in a sign of growing caution, although it eased somewhat on Friday.
Of the 453 companies in the S&P 500 that have reported earnings to date for Q1 2012, 66.2 percent have reported earnings above analyst expectations, according to Thomson Reuters data.
That compares with more than 80 percent at the start of earnings season and is below the average for the past 4 quarters of 68 percent.
Shares of Arena Pharmaceuticals Inc rose 64.5 percent to 6.01 after a panel of experts recommended approval of the company's obesity pill, a big step toward making it the first new diet drug on the US market in more than a decade.
The stock was the most actively traded on the Nasdaq composite.
Europe
European stock markets took a hit Friday from political uncertainty in Greece and downbeat eurozone forecasts but then recovered on better-than-expected US inflation and consumer sentiment data.
After spending most of the day in the red, London's benchmark FTSE 100 index of top companies closed up 0.57 percent at 5,575.52 points and Frankfurt's DAX 30 climbed 0.95 percent to 6,579.33 points.
In Paris, the CAC 40 ended down a marginal 0.01 percent at 3,129.77 points.
UK
ritain's top shares reversed early losses to close higher on Friday with traders citing technical reasons as gains in defensive stocks outpaced falls in banks and miners, which remain hamstrung by European debt and global growth worries.
London's blue chip index closed up 31.57 points, or 0.6 percent at 5,575.52, in weak volumes, finding support around the 5,500, a level at which the index has bounced off in each of the last three sessions and closing above its 200-day moving average.
The FTSE 100 is down 4.0 percent in the last 7 trading days as political and debt concerns surrounding Europe have weighed on investor sentiment.
The index is in bearish territory below the 61.8 percent Fibonacci retracement of the rally that the European Central Bank launched in mid-December with its flood of cheap loans, but equities remain attractive for investors with the will to withstand the low volume, erratic intraday trading.
Gains in defensives - companies whose services and products remain in demand no matter what the economic backdrop is like - such as tobaccos, pharmaceuticals and water utilities outperformed riskier banking and mining stocks as the weight of global growth and Europe's debt crisis weighed on the latter two sectors.
Asia
Asian markets slipped further on fears over the eurozone debt crisis Friday as politicians in Greece struggled to form a coalition after pro-austerity parties were lashed in weekend elections.
Regional sentiment was also hit following another batch of data from China added to concerns of a slowdown in the world's number two economy.
Tokyo fell 0.63 percent, or 56.34 points, to 8,953.31, Seoul skidded 1.43 percent, or 27.80 points, to 1,917.13 and Sydney finished 0.24 percent lower, or 10.5 points, at 4,285.1.
Hong Kong fell 1.30 percent, or 262.65 points, to 19,964.63 and Shanghai lost 0.63 percent, or 15.25 points, to 2,394.98.
In other markets:
n Singapore closed down 0.70 percent, or 20.20 points, at 2,883.40.
Palm oil producer Wilmar International shed 3.04 percent to Sg4.14 while Singapore Airlines was down 0.10 percent at Sg10.28.
n Taipei fell 1.10 percent, or 82.64 points, to 7,401.37.
Hon Hai Precision shed 1.48 percent to Tw86.4 while TSMC was 0.23 percent higher at Tw85.5.
n Manila closed 0.65 percent, or 33.96 points, lower at 5,158.14.
Bloomberry Resorts fell 1.10 percent to nine pesos, Alliance Global Group slid 0.31 percent to 12.90 pesos and Philippine Long Distance Telephone was off 0.80 percent at 2,506 pesos.
n Wellington fell 0.59 percent, or 20.99 points, to 3,548.06.
Sky City fell 4.6 percent to NZ3.72, Telecom shed 3.0 percent to NZ2.59 and The Warehouse rose 2.3 percent to NZ2.67.
n Kuala Lumpur fell 0.24 percent, or 3.74 points, to 1,584.32.
Plantations stalwart PPB Group lost 1.9 percent to 16.16 ringgit while resorts firm Genting slid 1.7 percent to 10.50 ringgit. Hong Leong Financial Group rose 0.8 percent to end at 12.04 ringgit.
n Jakarta closed 0.47 percent, or 19.49 points, lower at 4,114.14.
n Bangkok was flat, edging 0.36 points up to 1,191.01.
n Mumbai was down 127.07 points or 0.77 percent to 16,292.98 - its fourth straight day of losses and a near four-month-low.
Oil
Oil remained lower near midday on Friday but had pared losses as news that US consumer confidence hit a four-year high countered pressure from weak industrial growth in China.
Even with the recovery from lows, Brent crude remained on track to post a small weekly loss, with US crude headed for a weekly drop of nearly 2 percent.
Brent June crude dipped 11 cents to 112.62 a barrel by 12:32 pm EDT (1632 GMT), after falling to 111.40. Brent must rally above 113.18 to avoid a weekly loss.
US June crude was down 42 cents at 96.66, having fallen to 95.61 before recovering back above the 200-day moving average of 96.27.
The Brent/US crude spread widened slightly, hovering near 15.90 a barrel, after Brent's premium to its US counterpart ended at 15.65 based on settlements.
Friday's seesaw price trajectory came as total crude trading volumes remained tepid. Brent volume outpaced US turnover. But both contracts had less than 400,000 lots traded, well below 30-day averages, at midday in New York.
Gold
Gold prices fell to four-month lows on Friday as worries over the financial health of Greece and Spain and huge trading losses for JPMorgan hurt stock markets and the euro, prompting investors to seek refuge in the dollar.
Investors liquidated gold holdings to cover losses on other markets, analysts said, as a rise in risk aversion sparked selling across assets seen as higher risk, while lifting the US currency and safe-haven German Bunds.
Spot gold slid to 1,573.29 an ounce, its weakest since Jan. 3, after support gave way at 1,579, and was down 0.8 percent at 1,581.40 an ounce at 1346 GMT.
