Stocks Turning In Yet Another Lackluster Performance
Stocks are
turning in another lackluster performance in early trading on Wednesday
after moving roughly sideways over the past week. The major averages
are lingering near the unchanged line after closing mixed in four out of
the five previous sessions.
The major averages have moved to the upside in the past few minutes and are currently posting modest gains. The Dow is up 9.52 points or 0.1 percent at 13,181.66, the Nasdaq is up 8.83 points or 0.3 percent at 3,025.81 and the S&P 500 is up 2.12 points or 0.2 percent at 1,406.05.
The
choppy trading on Wall Street comes as traders digest a mixed batch of
U.S. economic data. While the New York Federal Reserve released a
disappointing regional manufacturing report, the Federal Reserve
released a separate report showing a bigger than expected increase in
industrial production.
The New York Fed said its general
business conditions index dropped to a negative 5.9 in August from a
positive 7.4 in July, with a negative reading indicating a contraction
in regional manufacturing activity. Economists had expected the index to
show a much more modest decrease to 7.0.
Meanwhile, the Federal Reserve
said industrial production increased by 0.6 percent in July compared to
economist estimates for an increase of about 0.5 percent. The growth
reflected increased output in each of the manufacturing, mining, and
utilities sectors. The Labor Department also released a report showing that consumer prices unexpectedly came in unchanged for the second consecutive month in July.
Uncertainty
about the near-term outlook for the markets has also contributed to the
lackluster trading seen over the past several sessions.
While most of the major sectors are showing only modest moves, considerable strength has emerged among networking stocks. The NYSE Arca Networking Index has advanced by 1.1 percent, rebounding from the 2.3 percent loss it posted on Tuesday.
Health insurance, biotechnology, and banking stocks are also seeing early strength, while steel stocks have come under significant selling pressure.
In overseas trading, stock markets
across the Asia-Pacific region moved mostly lower during trading on
Wednesday. Japan's Nikkei 225 Index edged down by 0.1 percent, while
Hong Kong's Hang Seng tumbled by 1.2 percent.
Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has crept up by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index both remain down by 0.4 percent.
In the bond market, treasuries have
moved to the downside, extending a recent downward trend. As a result,
the yield on the benchmark ten-year note, which moves opposite of its
price, has risen by 3.8 basis points to 1.764 percent.
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TSX Edges Up At Open Wednesday
Toronto stocks
edged up at open Wednesday amid marginal buying across a variety of
sectors, with the S&P/TSX Composite Index adding 26.71 points or
0.23 percent to 11,880.32.
Among gold plays, Allied Nevada Gold added over 1 percent, while Goldcorp. and Agnico-Eagle Mines (AE were slipping nearly 0.50 percent each.
Fertilizer maker Potash Corp. and Agrium Inc. were up around 1 percent each.
Base-metals miner Capstone Mining Corp. moved up 1 percent even after reporting a lower second-quarter net earnings.
Meanwhile, energy stocks
were trading lower, with Niko Resources diving 3 percent. Metal
products company Martinrea International Inc. lost over 6 percent after
announcing a marginally lower second-quarter net earnings.
Retailer Sears Canada Inc.
slipped over 1 percent after reporting a wider second-quarter net loss
of C$9.8 million or C$0.10 per share compared to a net loss of C$0.2
million or break even per share in the year ago quarter.
The price of crude oil was little changed Wednesday morning as traders await cues from the official inventories data from the EIA. Crude for September eased 0.27 to $93.16 a barrel.
The price of gold was
flat Wednesday morning as the U.S. dollar was steady amid inflation
data. Gold for December edged up 0.80 to $1,603.20 an ounce.
In corporate news from Canada, Metal products
company Martinrea International Inc. reported second-quarter net
earnings of C$14.4 million or C$0.17 per share, compared to C$15.5
million or C$0.19 per share last year. However, adjusted earnings rose
to C$24.1 million or C$0.29 per share from C$16.6 million or C$0.20 per
share last year. Analysts were expecting the company the report earnings
of C$0.31 per share for the quarter.
Metal mining company HudBay Minerals,
Inc. said its second-quarter loss narrowed to C$30.4 million or C$0.17
per share from C$171.9 million or C$0.97 per share in the same period
last year. Loss from continuing operations was C$30.4 million, compared
to a profit of C$41.1 million last year. Analysts were expecting the
company the report earnings of C$0.08 per share for the quarter.
Precious metals miner High River Gold Mines Ltd.
reported a lower second-quarter profit of C$31.6 million or C$0.04 per
share compared to C$41.4 million or C$0.05 per share in the same period
last year.
Petroleum and natural gas firm Canadian Energy Services & Technology Corp. said
its second quarter profit declined to C$3.4 million or C$0.06 per share
from C$5.5 million or C$0.10 per share in the same period last year.
Analysts expected the company to earn C$0.12 per share for the quarter.
Base-metals miner Capstone Mining Corp.
reported that its second-quarter net earnings was $12.5 million or
$0.03 per share, compared to $15.5 million or $0.07 per share in the
same quarter last year. Adjusted net earnings were $15.1 million or
$0.04 per share, down from $17.7 million or $0.08 per share in the
previous year quarter. Analysts expected the company to report earnings
of $0.03 per share in the quarter.
Retailer Sears Canada Inc.
reported a wider second-quarter net loss of C$9.8 million or C$0.10 per
share compared to a net loss of C$0.2 million or break even per share
in the year ago quarter.
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European Markets Fall; Resource Stocks Under Pressure
The European markets
are mostly lower in afternoon trading Wednesday, as investors continued
to exercise caution with diminishing hopes of stimulus measures. Mining
stocks were particularly hit amid concerns of growth in China.
Minutes
of the Bank of England's meeting held on August 1 and 2 showed that
policymakers unanimously decided to retain quantitative easing at 375
billion pounds and the interest rate unchanged at 0.50 percent.
The
number of Britons claiming jobless benefits unexpectedly declined in
July, latest data from the Office for National Statistics revealed. The
claimant count declined by 5,900 persons monthly to 1.59 million in
July. Economists had expected the figure to climb by 6,000.
The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.28 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.21 percent.
The German DAX is losing 0.36 percent and the French CAC 40 is falling 0.24 percent. The UK's FTSE 100 is sliding 0.35 percent while Switzerland's SMI is gaining 0.26 percent.
In Frankfurt, ThyssenKrupp is falling 2.3 percent, leading the decliners. HeidelbergCement is falling 1.1 percent. Insurers Allianz and MunichRe are dropping around 1.1 percent each.
Air Berlin, which reported a wider loss for the second quarter, is losing 1.1 percent. Carl Zeiss Meditec was cut to "Add" from "Buy." The stock is moderately lower.
Deutsche Telekom is falling 0.5 percent. UBS removed the stock from 'Most Preferred List.' K+S is gaining 1.2 percent and EON is rising 1.1 percent.
In Paris, Lafarge is losing 1.5 percent and Vallourec is falling 1.4 percent. ArcelorMittal is declining 2.2 percent. Renault is losing 0.9 percent while Peugeot is flat.
Veolia Environnement is gaining 1.4 percent. GDF Suez is moderately higher. Credit Agricole is advancing 0.8 percent. Societe Generale is flat while BNP Paribas is falling 0.2 percent.
Anglo American and Antofagasta are falling around 1 percent each. BHP Billiton is losing 2 percent and Rio Tinto is retreating 3 percent.
Eurasian Natural Resources is declining 7.2 percent after first-half profit plunged on weak prices. Steel maker Evraz is dropping 4.7 percent. CRH is losing 3.1 percent. UBS added the stock to 'Least Preferred List' in European building materials.
Imperial Tobacco is falling 1.9 percent following a new branding rule in Australia. Standard Chartered
is gaining 4.9 percent after the lender agreed to settle the
money-laundering probe with the New York regulator by paying $340
million
Balfour Beatty is up 1.8 percent after announcing first-half results. Insurer Resolution is gaining 4.7 percent.
Holcim is flat in Zurich after reporting higher quarterly profit. Carlsberg is
gaining 2.6 percent in Copenhagen. The firm reported a significant
increase in second-quarter profit, benefited by a special gain and
higher beer volumes with the successful EURO 2012.
Nokia is surging over 7 percent in Helsinki on news about the new Windows phone.
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Asian Markets Mostly Trade Lower
Asian stock markets
are mostly trading lower on Wednesday with investors treading
cautiously in the absence of strong global cues. Though some of the
markets posted gains early on in the session on the back of
better-than-expected U.S. retail sales data and German GDP growth, they
retreated subsequently due to profit taking at higher levels.
The Australian market
opened higher on Wednesday, as stocks received a boost from strong
earnings reported in the banking sector. Investors were also encouraged
by better-than-expected U.S. retail sales data and German GDP growth.
In early-morning trades, the benchmark S&P/ASX 200 Index is adding 16.50 points or 0.38 percent to 4,308.70, while the broader All Ordinaries Index is gaining 15.80 points or 0.37 percent to 4,333.20.
Among banks, National Australia Bank is gaining 0.04 percent, Commonwealth Bank is advancing 1.10 percent and Westpac Banking is up 0.6 percent.
Commonwealth Bank
recorded an 11 percent increase in profit for the year to June 30, to a
record A$7.09 billion. The results reflect lower costs and a decline in
provision for bad debts. Revenue for the year rose 2 percent to A$47.2
billion. The bank said that in the near term, it expects current revenue trends to continue.
In the mining space, BHP Billiton is trading lower by 0.46 percent, Rio Tinto is down 1.43 percent and Newcrest Mining is declining 1.55 percent.
Among energy stocks, Oil Search is adding 0.07 percent, Santos is trading higher by 0.97 percent and Origin Energy is advancing 0.40 percent.
Paintmaker DuluxGroup
said its takeover talks with Alesco Corporation have stalled, but its
A$210 million offer still remains on the table. However, Alesco
reiterated its advice to shareholders to reject Dulux's bid, and urged
investors who had accepted to withdraw.
The two companies had on
Monday placed their shares in a trading halt so they could discuss the
takeover bid. DuluxGroup shares are gaining 1.80 percent, while shares
of Alesco are up 1.31 percent.
Westfield Group reported a 31
percent increase in profit for the first half to A$800.1 million. The
mall operator said it will pay a dividend of 24.75 cents a share for the
first half, and expects funds from operations in the year ending
December 31 to be 65 cents a share.
On the economic front, Australia
will announce second-quarter figures for its wage cost index, with
forecasts suggesting an increase of 0.9 percent on quarter and 3.5
percent on year. The quarterly figure would be unchanged from the
previous three months, while the yearly rate would ease from 3.6
percent.
Australia will also announce the August results of the
consumer confidence index from Westpac. July saw an increase of 3.7
percent to a score of 99.1.
In the currency market, the
Australian dollar was trading weaker against the US dollar. In early
trades, the local unit was trading at US$1.0488, down from US$1.0519
late Tuesday.
The Japanese market slipped into negative
territory on profit-taking, after initially opening higher. However,
exporter-stocks rose on the back of a weaker yen.
In late-morning trades, the benchmark Nikkei 225 Index is down 25.70 points or 0.29 percent to 8,904.18. The Nikkei had earlier opened 0.34 percent higher at 8,960.28.
Among exporters, Komatsu Ltd. is gaining more than 2 percent, Canon Inc. is adding 0.8 percent, Toyota Motor Corp. is up 0.5 percent and Fanuc is advancing more than 1 percent.
Meanwhile, Sharp Corp shares are down almost 6 percent after brokerage Deutsche Securities Inc. lowered the stock's rating by one notch from "neutral" to "sell".
Shares of automaker Suzuki Motor Corp. are up 0.7 percent after its Indian unit Maruti Suzuki India
Ltd. said on Tuesday that it has decided to reopen a factory in
northern India in the first half of next week. The factory has been
closed since mid-July due to riots.
In the banking sector, Mitsubishi UFJ Financial Group is declining more than 1 percent, Mizuho Financial Group is trading lower by more than 1.5 percent and Sumitomo Mitsui Financial Group is down almost 2 percent.
In the currency market, the U.S. dollar
was trading in the upper 78 yen-range on Wednesday. In late-morning
trades, the dollar was trading in a range of 78.83-78.86 yen, up 0.27
yen from Tuesday's close of 78.56-78.57 yen in Tokyo.
Among the
other Asian markets that are open for trading, Singapore, Taiwan, Hong
Kong, Shanghai Indonesia and Malaysia are trading lower. Bucking the
trend, the New Zealand market is trading in positive territory.
The stock markets in India and South Korea are closed on Wednesday for public holidays.
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Crude Flat Ahead Of Inventories Data
The price of crude oil was little changed Wednesday morning as traders await cues from the official inventories data from the EIA.
Light Sweet Crude Oil
(WTI) futures for September delivery, eased $0.21 to $93.22 a barrel.
Yesterday, oil settled higher as investor sentiment improved on some
encouraging economic data out of Europe and the U.S., notwithstanding a
strong dollar. Economic data out of U.S. showed retail sales to have
improved more than expected, while Germany reported better than expected
GDP growth.
Tuesday after the market hours, the API said
U.S. crude oil inventories gained 2.80 million barrels, while gasoline
stocks eased 2.3 million barrels in the weekended August 10.
This morning, the U.S. dollar was
bouncing back towards a two-week high versus the euro and trading flat
against sterling. The buck was steady versus the Swiss franc and the
yen.
In economic news, Bank of England policymakers
unanimously decided to retain quantitative easing at GBP 375 billion and
the interest rate unchanged at 0.50 percent, the minutes of the meeting
held on August 1 and 2 showed today.
Meanwhile, latest data from the Office for National Statistics
revealed that the number of Britons claiming jobless benefits
unexpectedly declined in July. The claimant count declined by 5,900
persons monthly to 1.59 million in July. Economists had expected the
figure to climb by 6,000. The measure was higher by 35,600 person from a
year ago.
Traders will look to the inflation data from the U.S. Labor Department
due out at 8.30 a.m ET. Economists expect the headline index as well as
the core consumer price index to have risen by 0.2 percent each. In
June, the headline index was unchanged, while the core reading rose 0.2
percent.
Simultaneously, the results of the New York Federal
Reserve's empire state manufacturing survey is slated to be released at
8:30 am ET. The headline general business conditions index for August is expected to come in at 7 compared to 7.4 in July.
During the session, the National Association of Homebuilders
is scheduled to release the results of its August survey on
homebuilders' confidence. The consensus estimates call for the index to
remain unchanged at 35.
Today during trading hours, the EIA will release its U.S crude oil inventories report for the weekended August 10.
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