Stocks Moving Modestly Lower In Early Trading
After
ending the previous session mixed, stocks have moved mostly lower in
early trading on Thursday. The major averages have all moved to the
downside, with the Dow moving lower for the fourth consecutive session.
The major averages have bounced off their lows for the young session in the past few minutes but remain in the red. The Dow is down 50.75 points or 0.4 percent at 13,122.01, the Nasdaq is down 9.98 points or 0.3 percent at 3,063.69 and the S&P 500 is down 4.27 points or 0.3 percent at 1,409.22.
The early weakness on Wall Street
is partly due to the release of a report from the Labor Department
showing an unexpected increase in initial jobless claims in the week
ended August 18th.
The report showed that initial jobless claims
edged up to 372,000 from the previous week's revised figure of 368,000.
The modest increase came as a surprise to economists, who had expected
jobless claims to slip to 365,000 from the 366,000 originally reported
for the previous week.
Disappointing earnings news from Hewlett-Packard (HPQ) is also weighing on the markets, with the PC giant down by 6.3 percent.
While HP reported
fiscal third quarter adjusted earnings that exceeded estimates, the
company reported a steep net loss for the quarter due to a hefty
goodwill impairment charge as well as restructuring and other costs. The
company also forecast full-year earnings at the low end of its
previously provided outlook.
The release of results from HP came on the heels of a negative reaction to quarterly results from rival Dell (DELL), which fell by 5.4 percent on Wednesday and is currently down by another 2.1 percent.
With
HP leading the way lower, computer hardware stocks have come under
pressure, dragging the NYSE Arca Computer Hardware Index down by 1
percent. The index is pulling back further off Monday's nearly three-month closing high.
Notable weakness has also emerged among steel stocks, with the NYSE Arca Steel Index falling by 1.1 percent. The weakness in the sector is partly due to disappointing Chinese manufacturing data.
While
more modest weakness is visible in a variety of other sectors, gold
stocks have shown a strong move to the upside amid a sharp increase by
the price of the precious metal.
In overseas trading, stock
markets across the Asia-Pacific region moved mostly higher on Thursday
amid optimism about further stimulus. Japan's Nikkei 225 Index advanced by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 1.2 percent.
Meanwhile, the major European markets have turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index is up by 0.1 percent, the German DAX Index and the French CAC 40 Index are down by 0.8 percent and 0.9 percent, respectively.
In the bond market, treasuries have
moved notably higher, extending the upward move seen in the previous
session. Subsequently, the yield on the benchmark ten-year note, which
moves opposite of its price, is down by 4.3 basis points at 1.676
percent.
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TSX Edges Down At Open Thursday
Toronto stocks
were little changed at open Thursday amid buying in metals stocks, with
the S&P/TSX Composite Index slipping 11.97 points or 0.10 percent
to 12,107.02.
The Diversified Materials Index added 0.50 percent,
with First Quantum Minerals gaining about 2 percent. Inmet Mining was
up 1 percent, while Teck Resources was slipping nearly 1 percent.
Among gold stocks, Eldorado Gold, Goldcorp. Yamana Gold and Detour Gold moved up round 2 percent each.
Australia focused metals miner Talison Lithium Ltd.
surged over 50 percent to C$6.40 after it said it would be acquired by
Rockwood Holdings Inc. (ROC) in an all-cash transaction for C$6.50 per
share for an equity purchase price of around C$724 million, on a fully
diluted basis.
Meanwhile, energy stocks were moving lower. Suncor Energy, Cenovus Energy and Imperial Oil ere down around 1 percent each.
In the financial space, TD Bank, Scotiabank and CIBC were down about 0.50 percent each.
The price of crude oil was
steady near $98 Thursday morning amid speculation that central banks
will opt for further stimulus measures to support their sagging
economies. Crude for October gained $0.17 to $97.43 a barrel.
The price of gold advanced
to a four-month high Thursday morning as the U.S. dollar was moving
lower after the minutes from the recent Federal Reserve meeting raised
hopes for further stimulus measures. Gold for December surged $23.50 to
$1,664.00 an ounce.
Uranium miner Energy Fuels Inc.(EFR.TO) announced that it would purchase the interests of Aldershot Resources Ltd. in the Sage Plain Project Area for $750,000 in cash, forgiven debt, and 3.52 million shares of Energy Fuels common stock.
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European Markets Rise On Stimulus Hopes
The
European markets are in positive territory in afternoon trading
Thursday, as investors continued to be optimistic about stimulus actions
from the U.S. and China. Banking stocks are witnessing buying interest.
The minutes of the Federal Reserve's latest monetary
policy meeting released Wednesday suggested that the central bank is
losing patience with the pace of the fragile U.S. economic recovery.
Many
members of the Fed said additional monetary policy accommodation is
likely warranted unless the economy improves substantially, potentially
opening the door for another round of quantitative easing measures at
the next meeting in September.
In China, manufacturing sector contracted in August at the fastest pace in nine months, a closely watched survey revealed. The flash HSBC manufacturing Purchasing Managers' Index dropped to 47.8 from 49.3 in July, mainly due to a fall in factory orders, Markit Economics said.
In
economic news, the German economy expanded for the second straight time
during the quarter ended June as robust growth in exports and domestic
spending offset contraction in investment, data from Destatis showed.
Gross domestic product rose
0.3 percent sequentially in the second quarter, in line with initial
estimates, but slower than the 0.5 percent growth seen in the previous
quarter.
Meanwhile, the Eurozone private sector contracted for
the seventh successive month in August, flash estimate from Markit
Economics showed. The composite output index rose marginally to 46.6
from 46.5 in July. The reading was forecast to remain unchanged at 46.5.
In France, manufacturing sector contracted
at a slower pace in August. The seasonally adjusted purchasing
managers' index for the manufacturing sector increased to a four-month
high of 46.2 in August from 43.4 in July. Economists were looking for a
reading of 43.7.
The Euro Stoxx 50 index of eurozone bluechip stocks is rising 0.04 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.03 percent.
The German DAX is gaining 0.19 percent and the French CAC 40 is rising 0.15 percent. The UK's FTSE 100 is advancing 0.33 percent and Switzerland's SMI is up 0.12 percent.
In Frankfurt, Deutsche Bank is advancing 1.9 percent and Commerzbank is rising 1.4 percent. Adidas is gaining 1.7 percent. HeidelbergCement, Infineon Technologies and ThyssenKrupp are notably higher.
Fresenius is declining 1.5 percent and RWE is falling 1.1 percent. Metro and Beiersdorf are dropping notably. GSW is losing 1.2 percent. Morgan Stanley reduced its rating on the stock.
In Paris, ArcelorMittal is advancing 1.7 percent. STMicroelectronics is gaining 1.5 percent.
Peugeot and Renault are advancing 1.5 percent and 1 percent, respectively. Societe Generale is gaining 1.7 percent and Credit Agricole is rising 1.3 percent. BNP Paribas is adding 0.9 percent.
EADS
is declining 1.8 percent. Australia's Qantas Airways said it would
restructure its Boeing 787 delivery schedule, with potential commitments
for the Boeing 787-9 being reduced to 50 from 85.
Carrefour is losing 1.7 percent and Safran is falling 1.1 percent.
In London, Kazakhmys reported a plunge in profit for the first half of the year. The stock is gaining 0.5 percent.
Anglo American and Antofagasta are declining 2 percent and 3 percent, respectively. Randgold Resources is climbing 4.1 percent and Fresnillo is gaining 3.2 percent.
Diageo is
up around 1 percent. The beverages firm posted a higher profit for the
fiscal year ended June 30, as net sales grew 8 percent driven mainly by
emerging markets growth and higher spirits demand.
HSBC, Barclays, Lloyds Banking and Standard Chartered are in the green while Royal Bank of Scotland is losing moderately.
Petropavlovskis plunging 16.7 percent after first-half profit plummeted. Deutsche Bank
raised Credit Suisse to "Buy" from "Hold." The stock is gaining 1.9
percent in Zurich. Travel firm Kuoni is losing 7.6 percent. The company
reported a wider loss for the first half of the year.
Ahold
is falling nearly 3 percent in Amsterdam after the retailer said it
expects market conditions to remain difficult and is cautious about the
potential impact of rising food commodity costs.
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Asian Stocks Broadly Higher After Fed Stimulus Hints
Asian stocks rose
broadly on Thursday after the U.S. Federal Reserve hinted at taking
more action to prop up the world's largest economy. Weak Chinese
manufacturing data disappointed investors, but the gloomy data added
pressure on Beijing to step up its policy stimulus.
Commodities rose
and the euro hit a seven-week high after purchasing managers' surveys
on French manufacturing and services sector activity came in above
forecasts. Eurozone manufacturing activity improved in August, but
remained in contraction mode for the 12th consecutive month, preliminary
data released by Market showed.
Investors now eagerly await the outcome of a meeting between Greek President Antonis Samaras and German Chancellor Angela Merkel
slated for Friday that could go a long way in shaping the future course
of Europe's still-unresolved debt crisis. Debt-laden Greece is seeking
more time to implement the reforms and spending cuts agreed to in
exchange for its massive bailout package.
Speaking to reporters
in Athens after talks with Greek Prime Minister Antonis Samaras,
Eurozone finance chief Jean-Claude Juncker said the final decision on a
Greek request would depend on the troika's report on Greece due next
month.
Tokyo stocks recouped earlier losses to end higher, but gains were capped by the yen's strength. The Nikkei average rose half a percent in thin trading, while the broader Topix index edged up 0.2 percent.
Heavyweights Fast Retailing and Tokyo Electron
gained 0.9 percent and 3 percent, respectively, computer-component
suppliers TDK and Mitsumi Electric rose about half a percent each and MS&AD Insurance Group rallied 2.9 percent on a Goldman Sachs upgrade, while shipping company Mitsui OSK Lines
fell 1.8 percent to a fresh 10-year low as Japanese trade data released
yesterday spurred growth worries. Automaker Toyota Motor slid half a
percent, Mazda Motor lost over a percent and electrical goods
manufacturer Pioneer tumbled 4.5 percent, hurt by a firmer yen following
the release of dovish Federal Reserve minutes. Sharp rose 1.1 percent
amid reports its main creditor banks are considering extending about 200
billion yen in new loans to the struggling electronics maker.
China's Shanghai
Composite index rose 0.3 percent on hopes of imminent monetary easing
after PMI data showed manufacturing activity fell to a nine-month low in
August. The preliminary reading of HSBC China Manufacturing Purchasing Managers Index fell to 47.8 from 49.3 in July, weighed down by falling export orders and a rise in inventories.
Hong Kong's Hang Seng index rallied 1.2 percent, rebounding from a three-week closing low hit yesterday.
Australian
shares finished a roller coaster session modestly higher, with the
prospects of more U.S. and Chinese stimulus underpinning sentiment. Both
the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 0.2 percent each.
Among miners, Fortescue Metals rose 2.2 percent after the iron ore producer reported a 53 percent jump in full-year net profit to a record $1.56 billion. BHP Billiton gained 0.8 percent and rival Rio Tinto edged up 0.2 percent. Gold miner Newcrest Mining jumped 4.3 percent as gold prices touched a three-month high.
In the financial sector, ANZ and NAB edged up about 0.2 percent each, but Westpac lost half a percent and Commonwealth ended 0.4 percent lower. Fairfax Media shares tumbled almost 10 percent as the company reported a wider annual loss after writing down the value of its media business. Origin Energy plunged 5.5 percent after the energy retailer forecast flat fiscal 2013 earnings.
South Korea's Kospi average
rose 0.4 percent as bargain hunting on hopes of another round of
stimulus from the Federal Reserve offset worries over further signs of
contraction in China's manufacturing sector. Automobile stocks
underperformed, with Hyundai Mobis tumbling 3.3 percent after recent
sharp gains, while LG Chem retreated 2.8 percent following the news of
an explosion at its organic light-emitting display material plant in the
central city of Cheongju.
New Zealand stocks rose, led by
Skellerup Holdings after the rubber goods and milking equipment
manufacturer reported a record annual profit and increased its dividend
payout. Shares of the company soared 6 percent, lifting the benchmark NZX-50 index up about 0.1 percent. NZ Refining climbed 3.9 percent on comments its refinery margins have strengthened since the end of June.
Fletcher Building
rose 0.8 percent following the previous session's loss, Fisher &
Paykel Appliances rallied 3.8 percent after forecasting a profit rise
and jeweler Michael Hill International rose about 2 percent, while AMP, Telstra and Goodman Fielder fell 2-3 percent. Heavyweight Telecom lost 0.7 percent ahead of its earnings results tomorrow. Utility Vector ended unchanged after it reported a 1.3 percent fall in annual profit.
Elsewhere, Indonesia's Jakarta Composite index edged up marginally, Singapore's Straits Times rose 0.2 percent and the Taiwan Weighted average gained 0.1 percent, but Malaysia's KLSE Composite slipped marginally and India's benchmark Sensex was down 0.1 percent.
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Crude Advances Near $98
The price of crude oil was
steady near $98 Thursday morning amid speculation that central banks
will opt for further stimulus measures to support their sagging
economies.
Minutes from the recent Federal Reserve meeting
released overnight showed that the central bank is losing patience with
the pace of the fragile U.S. economic recovery. Many members of the
Federal Reserve said additional monetary policy accommodation is likely
warranted unless the economy improves substantially, potentially opening
the door for another round of quantitative easing measures at the next
meeting in September.
Chinese PMI data released overnight
showed manufacturing activity fell to a nine-month low in August,
calling Beijing to speed up economic stimulus efforts. The preliminary
reading of HSBC China Manufacturing Purchasing Managers Index fell to
47.8 from 49.3 in July, as new export orders slumped and inventories
rose.
Light Sweet Crude Oil (WTI) futures for October
delivery, gained $0.58 to $97.84 a barrel. Yesterday, oil extended its
three-month high on optimism over the euro zone and a weekly oil report
from the Energy Information Administration which showed crude stockpiles
in the U.S. to have declined more-than-expected last week.
Wednesday during trading hours, the EIA said that U.S. crude oil inventories dipped 5.4 million barrels and gasoline stocks were down 1 million barrels in the weekended August 17. Analysts expected crude oil inventories to dip by 2 million barrels and gasoline stocks to shed 1.25 million barrels last week.
This morning, the U.S. dollar was
lingering near a two-month low versus the euro and the Swiss franc,
while slipping back to a three-month low against sterling. The buck was
surrendering recent gains versus the yen.
In economic news, the
euro zone private sector contracted for the seventh successive month in
August, flash estimate from Markit Economics showed. The composite
output index rose marginally to 46.6 from 46.5 in July. The reading was
forecast to remain unchanged at 46.5. The Purchasing Managers' Index for manufacturing rose to 45.3, a four-month high, from 44 in July. The expected reading was 44.2.
Meanwhile,
data from Destatis showed that the German economy expanded for the
second straight time during the quarter ended June as initially
estimated. Gross domestic product rose 0.3 percent sequentially in the second quarter, but down from the 0.5 percent growth seen in the previous quarter.
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