Stocks recover after tsunami hits Japan

By Shanthi Bharatwaj, TheStreet

Updated at 1:13 p.m. ET

U.S. stocks were moving higher Friday after a massive earthquake and tsunami struck Japan, triggering a sell-off in Asian and European stocks and putting nations across the Pacific and the U.S. West Coast on high alert.

At 1:13 p.m., the Dow Jones Industrial Average ($INDU) was up 22 points, or 0.2%, at 12,006. The S&P 500 ($INX) was up 5.3 points, or 0.4%, at 1,300 and the Nasdaq ($COMPX) was rising 8.9 points, or 0.3%, at 2,709.

3M (MMM), Walt Disney (DIS) and Chevron (CVX) were gaining on the Dow. Coca Cola (KO), AT&T (T) and Verizon (VZ) were laggards.

An 8.9 magnitude earthquake rocked Japan on Friday afternoon, causing a 13-foot tsunami. At least 200 people have been reported dead and aftershocks continue to be felt in Tokyo, The Associated Press reported. Tsunami alerts have been issued across the Pacific, with Russia, Indonesia and Hawaii among the regions on high alert.

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Investors are questioning whether the earthquake, one of the biggest in Japan’s history, could derail the country’s economic recovery.

Asian stocks plunged, with the Nikkei diving 1.7% and Hong Kong’s Hang Seng Index shedding 1.5%.

Phil Orlando of Federated Investors said that while the earthquake had a devastating impact on lives and property, Japan’s economy itself might prove more resilient, as the government invests in rebuilding the economy. “There is an economic multiplier associated with infrastructure investment,” said Orlando.

The Bank of Japan said Friday that it had set up a disaster management team and was willing to supply adequate liquidity to the money markets. "The Bank will continue to do its utmost, including the provision of liquidity, to ensure the stability in financial markets and to secure the smooth settlement of funds, in the coming week," it said in an emergency statement.

Most Japanese American Depositary Receipts, or ADRs, were trading lower on U.S. exchanges Friday in the earthquake’s aftermath. Japanese automakers Toyota (TM) and Honda Motor (HMC) were each down more than 2%. Sony (SNE) was lower by 2.4%, Panasonic (PC) fell 1.7%, Nippon Telegraph & Telephone (NTT) was off 0.7%, and Canon (CAJ) slipped 0.4%.

Germany’s DAX was losing 0.9%, while the U.K’s FTSE was off by 0.3%.

The April crude oil was losing $2.06 to $100.64. Crude oil prices dropped below $100 earlier in the morning for the first time in over a week, as Japan's refiners shut down processing. Japan consumes 4.42 million barrels of oil per day, according to data from the International Energy Agency.

The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report Friday that February output rose 110,000 barrels per day to 30.02 million, the highest since December 2008. The organization said it could add as much as 6 million barrels per day if necessary.

Investors will continue to keep an eye on the developments in Saudi Arabia, where pro-democracy protesters have called for a “day of rage” rally on Friday.

There will be plenty of data for investors to digest as well. China said Friday that inflation stayed at 4.9% in February, far above the government’s target of 4%.

The Census Bureau said February retail sales jumped 1%, the strongest in four months. Retail sales rose 0.3% in January, according to consensus estimates from Briefing.com.

The University of Michigan’s initial reading of consumer sentiment came in at 68.2, much lower than 76.5 economists were expecting.

The Commerce Department said business inventories climbed 0.9% in January, a tenth higher than expectations. The report said inventories rose 1.1%  in December, higher than the 0.8%  estimated earlier.

“The Michigan Sentiment Index was probably the least important of the data we had today,” said Orlando. “I would argue that it reflects the psychological impact of a spike in oil.”

”Retail sales for February showed a nice healthy snap back from what was thought as a weather-related impact on January. Meanwhile January’s number was revised up. So consumers are continuing to spend. Business inventory was stronger than expected, showing manufacturers are cranking up as well,” said Orlando

In company news, Chevron (CVX) agreed to sell assets in the U.K. and Ireland to Valero Energy (VLO). Shares of Chevron were up 1%. Valero stock was rising 6% to $27.90.

Aeropostale (ARO) stock was plunging 6.3% to $23.07 after it fourth-quarter net income fell to $83.8 million, or 95 cents a share, from $96.6 million, or 99 cents, a year ago.

AnnTaylor Stores (ANN) shares were up 12.3% to $27.20 after it reported better than expected fourth-quarter results. The company's earnings stood at $8 million, or 14 cents a share, compared with $41,000, or breakeven per share, a year ago. On an adjusted basis, it earned 19 cents a share. Analysts, on average, were expecting it to earn 17 cents a share.

Shares of 99 Cents Only (NDN) jumped 17.7% to $19.64 after it received a buyout offer for $19.09 per share from private equity firm Leonard Green and the Schiffer-Gold family.

Reinsurers and insurers were experiencing pressure after the massive earthquake hit Japan. Aflac (AFL) was falling 0.5% to $55.42 and Berkshire Hathaway was falling 1.1% to $84.02. Reinsurers such as Swiss Re (SWCEY) and Hannover (HVRRY) were experiencing pressure overseas as the devastating impact of the event unfolded.

The April gold contract was gaining $3.40 at $1,415.90 an ounce.

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The benchmark 10-year Treasury was up by 2/32, with the yield dropping to 3.354%. The dollar strengthened against a basket of currencies with the dollar index up by 0.2%.

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