Markets end higher as S&P reaches all time high

Europe's benchmark index of top shares trimmed its gains yesterday, as Italian stocks fell and a US markets opened weak, but remained supported by strength in telecoms issues. The FTSEurofirst 300 index of pan-European shares closed up 0.3 percent at 1,358.78 points, after being up 0.5 percent earlier. Italy's FTSE MIB traded flat, with a 3.3 percent fall in UniCredit making it the top faller. It rapidly shed gains made after an expectation-beating report. UniCredit's revenues were hindered by weakness in the Italian economy, which tripped momentum gained from stronger than expected profits. The FTSE Italia All-Share Banks Index is down over 12 percent since early October. Shares in German consumer goods group Henkel rose 4.6 percent after it also posted better than expected quarterly earnings and raised its full-year forecast. Germany provided further earnings support after mid-cap construction group Hochtief, controlled by Spain's ACS, rose 2.6 percent. It reported a 12 percent rise in underlying third-quarter net profit, beating market expectations. However, in Ireland general insurer FBD Holdings Plc issued its second profit warning in six months, saying it could face a full-year loss. Its shares tumbled as much as 25 percent.

U.S. stocks extended all-time highs, with the Standard & Poor’s 500 Index advancing a fifth day, as gains in homebuilder shares helped offset losses among industrial companies. The S&P 500's top percentage gainer was Zoetis, which jumped 8.9 percent to $43.72. Activist hedge fund manager William Ackman's Pershing Square Capital Holdings has taken a new position in the animal health company. In the consumer discretionary space, shares of homebuilders rose after D.R. Horton reported better-than-expected quarterly revenue and said orders jumped 38 percent, suggesting an uptick in housing demand. D.R. Horton shares rose 2.2 percent to $23.95. The S&P 500 has rallied more than 9 percent from a six-month low in October, buoyed by supportive economic data and solid corporate earnings reports. For the year so far, the index is up 10.4 percent. The last time the index closed at a record for five consecutive days was in May 2013. The S&P 500's biggest percentage decliner was Juniper Networks, down 5.7 percent to $20.28, a day after the company's chief executive resigned following a board review of his conduct in a negotiation with a customer. Cable providers mostly remained under pressure for a second straight session after U.S. President Barack Obama said on Monday that Internet service providers should be regulated more like public utilities. Time Warner Cable was down 1.3 percent at $134.78. NYSE advancing issues outnumbered decliners by 1,566 to 1,481, for a 1.06-to-1 ratio on the upside; on the Nasdaq, 1,407 issues fell and 1,239 advanced for a 1.14-to-1 ratio favoring decliners.

Japan's Nikkei share average hit a seven-year high yesterday as speculation swirled that Prime

Minister Shinzo Abe may postpone a planned sales tax increase and call a snap election to bolster his political standing.The Nikkei share average rose 2.1 percent to 17,124.11 points, its highest close since October 2007, with traders citing heavy buying in the Nikkei futures by speculators such as commodity trading advisors (CTAs).

Media reported yesterday that Abe might call an election before the end of the year if he decides to delay a planned hike in the sales tax to 10 percent slated for next October. No election for parliament's lower house need be held until 2016. Abe's junior coalition partner said on Tuesday his party should be prepared for a possible early election. The news surprised financial markets, which have long expected that Abe will go ahead with the second stage of the planned tax increase despite a sharper-than-expected blow to the economy from the first tax hike in April.

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