Stocks: Wednesday's review

Japan’s Nikkei 225 Stock Average dropped 0.2 percent, erasing gains of as much as 0.2 percent, after the government said it is becoming more pessimistic about exports and business sentiment. The country’s export growth accelerated for the first time in nine months in November, data released today showed.
Canon Inc., the world’s largest maker of cameras that gets about 28 percent of sales from the U.S., increased 1.9 percent in Tokyo. Mitsui & Co., which counts commodities as its biggest source of profit, gained 0.7 percent. Sanyo Electric Co., a maker of rechargeable batteries, slumped 5.1 percent after its parent Panasonic Corp. announced plans to delist the company.

European stocks advanced for a third day, extending a 27-month high, as U.S. economic growth was revised higher and merger activity boosted companies from Hermes International SCA to Aker Solutions ASA.
ARM Holdings Plc soared 9.1 percent after Microsoft Corp. was said to be preparing to unveil a full version of its Windows operating system that runs on the U.K. company’s technology. Hermes gained 2.3 percent as LVMH Moet Hennessy Louis Vuitton SA raised its stake in the luxury-goods company. Aker Solutions, Norway’s largest engineering company, climbed 4.3 percent as Jacobs Engineering Group Inc. agreed to buy some of its units.
The benchmark Stoxx Europe 600 Index rose 0.1 percent to 281.45 at the 4:30 p.m. close in London. The gauge has rallied 11 percent in 2010, recovering all its losses from the plunge that followed Lehman Brothers Holdings Inc.’s collapse in 2008, as companies reported higher earnings, the European Union bailed out Greece and Ireland and the Federal Reserve unveiled $600 billion of additional bond purchases to support the recovery.

U.S. stocks gained, sending the Standard & Poor’s 500 Index higher for a fifth day, as government data showed the economy grew last quarter at a faster pace than previously estimated.
Bank of America Corp. and JPMorgan Chase & Co. rose at least 2 percent after lawmakers denied budget increases that regulators said were needed to meet responsibilities imposed by the Dodd-Frank Act. Walgreen Co. jumped 7 percent after the largest U.S. drugstore chain reported profit that beat analyst estimates. Carnival Corp. jumped 4.3 percent as S&P equity analysts advised buying the stock.
The S&P 500 rose 0.2 percent to 1,257.25 at 2:04 p.m. in New York, reaching the highest since Sept. 8, 2008, on a closing basis. The Dow Jones Industrial Average added 19.71 points, or 0.2 percent, to 11,552.87.
The S&P 500 yesterday completed its recovery from the six- month plunge that followed Lehman Brothers Holdings Inc.’s collapse in September 2008, extending its rally from a bear- market low in March 2009 to 85 percent. The index will end 2011 at 1,374, according to the average forecast of 11 strategists at Wall Street’s biggest banks.
The U.S. economy expanded at a 2.6 percent annual rate in the third quarter, marking a pickup in growth that may extend into 2011 as companies and consumers gain confidence to spend. The revised increase in gross domestic product compares with a 2.5 percent estimate issued last month and was less than the median forecast of a 2.8 percent in a Bloomberg News survey.
The Federal Reserve’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, rose at a 0.5 percent annual pace, the slowest since record-keeping began in 1959, today’s report showed. Inventories rose more than initially reported, while the rise in household purchases was revised down.