Stocks Turning In Lackluster Performance In Early Trading
7/31/2012 10:05 AM ET
Stocks are turning in another lackluster performance in early trading
on Tuesday, as traders seem reluctant to make any significant moves. The
major averages have turned mixed after ending the previous session
modestly lower.
The major averages currently remain on opposite sides of the unchanged line, with the Nasdaq posting a modest gain. While the Nasdaq is up 1.91 points or 0.1 percent at 2,947.75, the Dow is down 25.20 points or 0.2 percent at 13,047.81 and the S&P 500 is down 1.86 points or 0.1 percent at 1,383.44.
The choppy trading on Wall Street comes as many traders are staying on the sidelines as the Federal Reserve begins a two-day monetary policy meeting.
The
Fed is due to announce its latest monetary policy decision on
Wednesday, while the European Central Bank is due to hold its monetary
policy meeting on Thursday.
Peter Boockvar, managing director at
Miller Tabak, said, "For the next two days we'll sit and wait for what
the Fed will tell us they'll do next as patience and sitting still are
not virtues of theirs."
"But, Mario Draghi and the ECB last week
stole the thunder and took the microphone away from the Fed, making
Thursday's ECB meeting much more relevant to markets," he added. Traders
have largely shrugged off a batch of U.S. economic data, including a
recent report showing that Chicago-area business activity unexpectedly
expanded at a faster rate in July.
While most of the major
sectors are showing only modest moves, electronic storage stocks have
come under pressure. The NYSE Arca Disk Drive Index is down by 2.3
percent, with Seagate Technology leading the way lower after reporting
disappointing quarterly results.
Brokerage and housing stocks are also seeing early weakness, while strength has emerged among semiconductor and steel stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index surged up by 1.1 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 0.3 percent and 0.4 percent, respectively.
In
the bond market, treasuries have moved moderately higher, continuing to
recovery from the sell-off seen last Friday. Subsequently, the yield on
the benchmark ten-year note, which moves opposite of its price, is down
by 2.6 basis points at 1.478 percent.
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TSX Poised For Higher Open Amid Soft GDP Data - Canadian Commentary
7/31/2012 9:01 AM ET
Canadian stocks are poised for a higher open Tuesday on firm
commodities and on a mixed batch of corporate earnings reports. However,
a soft economic growth data out of Canada may weigh on sentiment even
as traders were cautiously optimistic on further stimulus after French
and German leaders, and the ECB chief pledging to protect the euro zone.
U.S. stock futures were pointing to a marginally higher open.
On Monday, the S&P/TSX Composite Index snapped its three-session winning streak to edged down 8.48 points or 0.07 percent to 11,757.88.
The price of Crude oil was ticking higher Tuesday morning as traders await cues from a 2-day FOMC meeting, starts today Crude for September edged up $0.30 to $90.08 a barrel.
The price of gold continued to hover above the $1,600-mark Tuesday morning as the U.S. dollar was mixed ahead of the FOMC meeting. gold for December delivery added $4.90 to $1,628.90 an ounce.
In corporate news from Canada, electricity transmission systems operator Brookfield Infrastructure (BIP_UN.TO) announced that ti along with its institutional partners would acquire the remaining 45 percent of the Autopista Vespucio Norte or AVN toll road that they do not currently own for approximately $590 million.
Distribution
utility company Fortis Inc. posted improved second quarter net earnings
at C$62 million or C$0.33 per share compared to C$57 million or C$0.32
per share for the second quarter of 2011. Analysts were expecting the
company to report earnings of C$0.33 per share.
Power company
TransAlta Corp. (TA.TO) slipped into the red in second quarter,
reporting net loss of C$797 million or C$3.51 per share versus profit of
C$12 million or C$0.05 per share a year ago. Comparable loss was C$0.10
per share versus comparable earnings C$0.29 per share. Analysts were
expecting the company to report loss of C$0.07 per share.
Oil fields services provider Trican Well Service
(TCW.TO) slipped into the red in second-quarter, reporting a loss of
C$50.9 million or C$0.35 per share compared to a profit of C$30.1
million or C$0.21 per share in the prior-year quarter. Adjusted loss was
C$48.6 million or C$0.33 per share compared to a profit of C$33.3
million or C$0.23 per share last year. Analysts were expecting the
company to report a loss of C$0.37 per share for the quarter.
BP plc
(BP_UN.TO) posted second-quarter 2012 loss of $1.385 billion or 7.29
cents per share versus a $5.72 billion profit or 30.27 cents per share
last year.
Hardware dealer RONA inc. (RON.TO) announced that its
Board of Directors has unanimously determined that an unsolicited,
non-binding $14.50 per share acquisition proposal recently received from
U.S.-based Lowe's Companies, Inc. , is not in the best interests of
RONA and its stakeholders.
7/31/2012 9:01 AM ET
News service provider Thomson Reuters Corp.
reported a much improved second-quarter net earnings of $922 million or
$1.11 per share compared to last year's $563 million or $0.67 per
share. Adjusted earnings from continuing operations were $449 million or
$0.54 per share, compared with $429 million or $0.51 per share .
In
economic news, Statistics Canada said real gross domestic product edged
up 0.1 percent in May, just missing consensus estimates for a 0.2
percent growth and lower than 0.3 percent growth recorded in April. The
output of service industries rose 0.1 percent in May on the strength of
retail trade and the finance and insurance sector.
From the U.S.,
the Commerce Department said that personal income in the U.S. had risen
by $61.8 billion in June, an increase of 0.5 percent. The increase was
higher than the 0.4 percent predicted by most economists and comes atop
revised figures that showed the May increase in personal income of 0.3
percent was higher than the 0.2 percent initially reported. However
consumer spending, known formally as personal consumption expenditures
fell marginally in June, dropping $1.3 billion.
Elsewhere, today's data from the Eurostat revealed that euro zone
inflation remained stable in July as expected by economists. The annual
rate came in at 2.4 percent, above the central bank's target of "below
but close to 2 percent." The final data is due on August 16.
A separate report from the agency said the euro zone
unemployment rate remained unchanged at a record high in June. The
jobless rate for June was 11.2 percent, the same as seen in May. The
rate matched economists' expectations.
Unemployment in
Germany increased in July as widely expected, data from the Federal
Labor Agency showed. The number of unemployed rose by 7,000 in July from
a month earlier. This was in line with economists' forecast and
followed a similar increase in the previous month.
Meanwhile,
Germany's retail sales dropped unexpectedly in June from the prior
month, data from the Federal Statistical Office revealed. Retail
turnover was down 0.1 percent from May, in contrast to a 0.5 percent
rise expected by economists. Nonetheless, the rate of decline was slower
than the 0.3 percent drop seen in May. |
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European Markets Fell Again Tuesday Due To Lingering Economic Concerns
7/24/2012 11:56 AM ET
European markets struggled to find direction on Tuesday, but ultimately
finished the session with modest losses. The increase in the Chinese
manufacturing result was welcomed by investors, however the decision by
Moody's to lower its outlook on Germany raised concerns. Concerns over
the situation in Spain persisted, as well as the possibility of a Greek
exit from the Eurozone. Shares of banks, insurers and telecoms were weak
Tuesday, but technology stocks performed well.
An indicator of
Chinese manufacturing activity rose to its highest level in five months
in July despite suggesting contraction, with the modest improvement
hinged on a rebound in output, which rose to a nine-month high.
Flash
estimates released by Markit Economics revealed that the purchasing
managers' index came in at 49.5 in July, up from 48.2 in June,
suggesting the slowest contraction in manufacturing activity in five
months.
Moody's Investors Service has warned Germany, the
Netherlands and Luxembourg that they may lose their coveted triple-A
credit ratings due to intensified uncertainty regarding the outcome of
the debt crisis.
The agency cut the outlook on the sovereigns'
Aaa rating to 'negative' from 'stable' and said the revision is driven
by its view that the level of uncertainty about the outlook for the euro area and the potential impact of plausible scenarios on member states are no longer consistent with 'stable' outlooks.
Moody's said the risk of a Greek exit from the euro area
has increased relative to its expectations earlier this year. A Greek
exit from the monetary union would pose a material threat to the euro,
it warned.
Moody's said these sovereigns are impacted by the "rising uncertainty regarding the outcome of the euro area
debt crisis and the increased susceptibility to event risk stemming
from the likelihood of Greek exit, including the broader impact that
such an event would have on euro area members, particularly Spain and Italy."
Spain
paid a hefty premium to sell its short-term debt on Tuesday as
investors remained worried that the country is on the brink of seeking a
full-blown bailout. Italy also saw its benchmark yield climb.
The Spanish Treasury raised EUR 3.05 billion from the sale of its 3- and 6-month treasury bills, which was slightly more than the EUR 2 billion - EUR 3 billion target. The agency sold EUR 1.63
billion of the 3-month bill to yield 2.434 percent, which is higher
than the 2.362 percent paid in the previous auction on June 26.
The euro Stoxx 50 index of eurozone bluechip stocks declined by 0.95 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, dipped by 0.38 percent.
7/24/2012 11:56 AM ET
The DAX of Germany fell by 0.45 percent and the CAC 40 of France decreased by 0.87 percent. The FTSE 100 of the U.K. dropped by 0.41 percent and the SMI of Switzerland lost 0.06 percent.
In Frankfurt, SAP AG
increased by 3.86 percent. The company reported a higher profit in its
second quarter, boosted by strong software revenue growth in all
regions.
Kontron AG sank by 14.87 percent, after it posted
second-quarter net income of 2.3 million euros, a decline from 7.7
million euros reported a year ago.
In Paris, Publicis Groupe rose by 0.56 percent, after Barclays upgraded its rating on the stock to "Overweight."
In London, BP plc fell
by 0.35 percent. The company confirmed it would begin negotiations with
Rosneft for the potential purchase of BP's shareholding in TNK-BP.
Man
Group increased by 3.98 percent, after the company announced that it
would make $100 million in annual savings over the next 18 months.
Aberdeen Asset Management gained 1.14 percent. Societe Generale upgraded its rating on the stock to "Buy" from "Hold."
Croda International added 7.22 percent, after its strong than expected second quarter report.
Consumer
confidence in Eurozone deteriorated in July amid further escalation of
the debt crisis, the latest figures from the European Commission showed
Monday. The flash estimate of the consumer confidence indicator
decreased sharply to -21.6 in July from -19.8 in June in euro area.
The
Eurozone private sector economy contracted for the tenth time in the
last eleven months, with the rate of decline unchanged on June, Markit
Economics said Tuesday. The flash composite Purchasing Managers' Index
remained unchanged at 46.4 and matched the consensus forecast. A reading
below 50 suggests contraction in the sector.
While the
manufacturing PMI fell to 44.1 from 45.1 in June, the services PMI rose
to 47.6 from 47.1. Economists were forecasting the manufacturing index
to rise to 45.2 and the services PMI to remain stable at 47.1.
French
business confidence declined in July, the latest data from the
statistical office Insee showed Tuesday. The headline synthetic index
for the manufacturing sector fell to 90 in July from a revised reading
of 91 in June. Economists expected the reading to remain at June's
original score of 92.
Germany's private sector continued to
shrink in July, marking the weakest performance since June 2009, Markit
Economics said Tuesday. The flash composite output index fell for the
sixth month running in July, to 47.3 from 48.1 in June. The index has
posted reading below 50 in each month since May.
7/24/2012 11:56 AM ET
The flash manufacturing Purchasing Managers' Index dropped unexpectedly
to 43.3 from 45 a month ago. The reading was below the consensus 45.1.
Likewise, the services PMI fell to 49.7 from 49.9 in June. The reading
was forecast to rise to 50.
Germany's leading economic indicator
decreased for the second consecutive month in May, hurt mainly by
negative contributions from stock prices and new residential
construction orders, data released by the Conference Board showed
Tuesday. The leading economic index dropped 0.1 percent to 104.3 in May,
after decreasing 0.5 percent in the previous month.
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Asian Markets Mostly Trade In Positive Territory
7/31/2012 12:05 AM ET
Asian stock markets are mostly trading in positive territory on Tuesday
with investors picking up stocks, betting on hopes that the U.S.
Federal Reserve and central banks in Europe will come out with further
stimulus to boost their sagging economies. Some regional economic data
too is contributing to the rise in stock prices.
After a somewhat
shaky start, the Australian market rallied smartly as investors
shrugged off economic concerns and picked up stocks, betting on fresh
stimulus from global central banks.
Energy, mining, financial,
consumer staples and information technology stocks are moving higher,
while healthcare and consumer discretionary stocks are trading mixed.
The benchmark S&P/ASX 200 index is up 32.8 points or 0.8 percent at 4,278.5. The broader All Ordinaries index is trading at 4,297.5, up 30.6 points or 0.7 percent from its previous close.
Duet Group shares are up nearly 5 percent. Lynas Corporation is trading 4.8 percent up. Bluescope Steel, Paladin Energy, Origin Energy and Qantas Airways are up 3 to 4 percent.
Incitec Pivot, Atlas Iron, Beach Energy, JB Hi-Fi, Westfield Group, Woodside Petroleum, Dexus Property Group, Rio Tinto (, RIO.L) and Monadelphous Group are also trading sharply higher.
Campbell Brothers is plunging by over 12 percent. Fairfax Media and Boart Longyear are trading lower by over 4 percent.
Panaust is down with a loss of 2.8 percent. Arrium, Whitehaven Coal and ResMed Inc () are also trading notably lower. In addition, Regis Resources, Iluka Resources, Challenger, Macquarie Group and Bank of Queensland are trading lower.
Caltex Australia
said it plans to raise A$300 million through capital markets to help
fund changes to its operations. The oil refiner will issue subordinated
notes, priced at A$100 each, to retail and institutional investors to
raise the funds. The company's shares are currently trading flat.
Metcash Ltd.
said it has paid A$46.5 million to take complete ownership of hardware
chain Mitre 10. The stock is currently trading lower by about 0.3
percent.
In economic news, the number of dwelling units approved
in Australia dropped in June, but the rate of decline was weaker than
expected by economists, according to data from the Australian Bureau of
Statistics.
As many as 13,336 dwelling units were approved in
June, which was 2.5 percent less than a month earlier on a seasonally
adjusted basis. Economists expected a decline of 15 percent after a
strong 27 percent gain in the previous month.
The seasonally
adjusted estimate for private sector houses fell 1.1 percent in June
following a rise of 7.3 percent in the previous month. Year-on-year,
total dwelling permits increased 10.2 percent. Approvals for private
houses declined 7.7 percent annually. |
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Dollar Recovering From Recent Losses Versus European Rivals
7/30/2012 1:20 PM ET
The dollar is bouncing back from some recent weakness against its major European rivals on Monday. The euro rallied
late last week, after European Central Bank President Mario Draghi
stated that the ECB is ready to do whatever it takes to preserve the
euro. Investors are looking for some crucial action from the European
Central Bank, which holds its rate-setting session later this week.
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti have vowed to defend the euro amid
escalating tensions in Eurozone, close on the heels of a similar
agreement between Merkel and French President Francois Hollande.
During
a telephone conversation on Sunday, Merkel and Monti agreed that both
the countries "will do everything possible to protect the euro area," reports said.
The dollar has rebounded from Friday's 3-week low of $1.2389 versus the Euro, to around $1.2250 Monday.
Eurozone
economic sentiment deteriorated more-than-expected in July due to lower
confidence in all sectors and marked the fourth consecutive month of
downturn. The economic sentiment index fell to 87.9 from 89.9 a month
ago, survey data from the European Commission showed Monday. The reading
was also below expectations for a score of 88.9.
German
wholesale trade turnover rebounded in June after declining for the past
three months, the latest figures from the Federal Statistical Office
showed Monday. Wholesale sales increased 4 percent year-on-year in June
following a 2.8 percent fall in May. In March and April, sales fell 1.1
percent and 0.9 percent respectively.
Spanish economic output sank further in the second quarter, deepening the recession in the euro area's fourth largest economy, which is already hit by a banking sector crisis and the government's tough austerity measures.
The
gross domestic product fell 0.4 percent in the second quarter of 2012
after a 0.3 percent decline in the first quarter of 2012 and in the
fourth quarter of 2011. The outcome was in line with the Bank of Spain's
estimates released early last week.
The greenback has also bounced back from Friday's low of $1.5767 versus the pound sterling, to around $1.5675.
UK's
high street sales increased for the third consecutive month in July,
but the rate of growth slowed from the previous month, data from a
survey by the Confederation of British Industry showed Monday.
The
balance of the survey came in at 11 percent in July, with 44 percent of
surveyed retailers reporting an increase in sales volumes and 33
percent reporting a decline. Economists were looking for a balance of 20
percent. The latest figure was also far below the 32 percent balance
retailers had expected. |
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