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Stocks Moving Modestly Lower In Early Trading
Stocks
have moved modestly lower in early trading on Friday, extending the
notable downward move seen over the course of the previous session. The
major averages have slipped into negative territory, with the Dow moving
lower for the fifth consecutive session.
The major averages have not seen much follow-through on their initial downward move but remain stuck in the red. The Dow is down 19.86 points or 0.2 percent at 13,037.60, the Nasdaq is down 7.52 points or 0.3 percent at 3,045.88 and the S&P 500 is down 2.91 points or 0.2 percent at 1,399.17.
The
early weakness on Wall Street is partly due to a negative reaction to
the Commerce Department's report on durable goods orders in the month of
July.
While the report showed a much bigger than expected
increase in durable goods orders, the increase was largely due to
strength in the volatile transportation sector.
The Commerce Department
said durable goods orders surged up by 4.2 percent in July following a
1.6 percent increase in June. Economists had been expecting orders to
increase by about 1.9 percent.
Excluding a 14.1 percent jump in
orders for transportation equipment, however, orders fell by 0.4 percent
in July compared to a 2.2 percent drop in the previous month. The
decrease surprised economists, who had expected ex-transportation orders
to increase by 0.4 percent.
Traders also continue to express
concerns about the situation in Europe, where Greek Prime Minister
Antonis Samaras held a meeting with Chancellor Angela Merkel.
In
remarks at a joint press conference, Samaras pledged that Greece will
"stick to its commitments and fulfill its obligations" but noted that
the debt-plagued nation needs "time to breathe" as it undertakes crucial
reforms.
Merkel did not immediately respond to the request for
more time to implement reforms but stressed that Germany wants to help
Greece remain in the eurozone.
Steel stocks have moved sharply lower in early trading, dragging the NYSE Arca Steel
Index down by 1.8 percent. The weakness in the steel sector is partly
due to concerns about the outlook for global steel demand.
Networking, oil service, and brokerage stocks have also moved to the downside, although selling pressure has remained relatively subdued.
In
overseas trading, stock markets across the Asia-Pacific region moved
mostly lower on Friday following the negative lead from Wall Street. Japan's Nikkei 225 Index fell by 1.1 percent, while Hong Kong's Hang Seng Index dropped by 1.3 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.7 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.4 percent and 0.3 percent, respectively.
In the bond market, treasuries have
moved modestly higher, extending the upward move seen over the two
previous sessions. Subsequently, the yield on the benchmark ten-year
note, which moves opposite of its price, is down by 2.1 basis points at
1.645 percent.
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TSX Slips At Open Friday
Toronto stocks
moved down at open Friday amid marginal selling across a variety of
sectors, with the S&P/TSX Composite Index slipping 15.31 points or
0.13 percent to 12,047.20.
In the oil patch, Pacific Rubiales Energy and Cenovus Energy were down around 1 percent each. Meanwhile, MEG Corp. and Crescent Point Energy added around 1 percent each.
Gold stocks retreated as bullion struggled to extend gains. Agnico-Eagle Mines, Barrick Gold and Goldcorp. were down about 1 percent each.
Among base-metals stocks, Teck Resources and Inmet Mining were down over 1 percent each, while First Quantum Minerals was adding about 1 percent.
In the IT space, MacDonald Dettwiler gathered close to 3 percent.
The
price of crude oil was ticking lower Friday morning as traders await
further moves by the central banks in policy easing, with Light Sweet Crude Oil (WTI) futures for October delivery, easing $0.26 to $96.01 a barrel.
Gold
was paring gains Friday morning after advancing to a fresh four-month
high in the previous session as stimulus is expected to raise the
inflation outlook, benefiting the yellow metal, which is seen as a hedge
against rising prices. Gold for December slipped $4.60 to $1,668.20 an
ounce.
In corporate news from Canada, gold miner Acadian Mining
Corp. said it would divest its Dufferin area claims to Ressources
Appalaches, an exploration company that is currently developing the
Dufferin Mine project in Nova Scotia.
Oil and gas firm Africa Oil Corp. announced the appointment of Nick Walker as its Chief Operating Officer effective September 10.
Redline Communications Group Inc. gained nearly 8 percent.
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European Stocks Lower At Mid-day
European stocks are
trading mostly lower on Friday, with concerns about the euro zone debt
crisis keeping investors on edge ahead of German-Greek talks and the
Spanish government's cabinet meeting later in the global day.
Investors
also locked in some recent gains after a Fed official dashed stimulus
hopes, saying current economic conditions weren't weak to justify
another round of stimulus.
The Euro Stoxx 50 index of
Eurozone bluechip stocks is down 0.24 percent, while the Stoxx Europe 50
index, which includes some major U.K. companies, is little changed with
a negative bias.
Around Europe, the U.K.'s FTSE 100, the German DAX and France's CAC 40 are down between 0.1 percent and 0.3 percent, but Switzerland's SMI is rising marginally.
In
stock-specific action, Shares of Anglo American Plc are moving down 3
percent in London after the British miner and Chilean state-owned
Corporación Nacional del Cobre de Chile finally reached a settlement on
the legal tussle between the two since October 2011 related to stakes in
Anglo American Sur SA - the Chilean unit of Anglo American.
HSBC
Holdings Plc is losing a percent after ratings agency Standard &
Poor's downgraded its outlook for the lender to "negative" from 'stable"
citing U.S money-laundering investigations and other regulatory issues.
SeaEnergy
shares are down almost 7 percent after the company acquired
Aberdeen-based Return To Scene LTD or R2S for an initial cash payment of
5 million pounds.
In economic news, the U.K. economy
contracted 0.5 percent in the second quarter, revised upwards by 0.2
percentage points from the fall of 0.7 percent published on July 25,
data from the Office for National Statistics showed. Nonetheless, the
sequential fall was bigger than the 0.3 percent drop registered in the
first quarter.
Elsewhere, Asian markets fell across the
board, taking their cues from the U.S. markets overnight, as
manufacturing data from China and Europe depicted a gloomy economy
outlook.
The euro weakened against the dollar and
commodities eased after St. Louis Fed President James Bullard said he
would oppose any new program by the Fed to buy bonds to reduce borrowing
costs.
As stimulus hopes fade, investors look forward to Fed Chairman Ben Bernanke's
speech on August 31 at the Kansas City Federal Reserve Bank's annual
symposium in Jackson Hole, Wyo for further directional cues.
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Asian Stocks Fall On Growth, Stimulus Worries
Asian stocks
fell across the board on Friday, as manufacturing data from China and
Europe depicted a gloomy economy outlook. Also, U.S. stimulus hopes
faded after a Fed official said further action to boost the U.S. economy
may not be necessary in the wake of some mildly encouraging data
recently.
Commodities were modestly lower and the euro eased
a little bit from its recent seven-week high against the dollar as
caution set in ahead of a summit between Germany and Greece later in the
global day. Both German Chancellor Angela Merkel and French President
Francois Hollande urged the debt-laden nation to stick to crucial
reforms in order to stay in the eurozone.
Tokyo stocks
drifted lower in thin trading, as the yen's continued strength prompted
selling in shares of export-related companies such as automakers and
electronics manufacturers. The benchmark Nikkei average fell 1.2
percent, while the broader Topix index slid a percent.
TDK,
which makes components for hard-disk drives, tumbled 3.3 percent after
personal computer maker Hewlett-Packard reported shrinking sales and
disappointing earnings, hit by a massive writedown of the value of its
services business.
Steel maker JFE Holdings tumbled 3.5 percent and Nippon Steel finished 1.1 percent lower as weak Chinese manufacturing data added to global growth worries. Utilities rose, with Kansai Electric Power and Tohoku Electric Power climbing about 6 percent each, after Goldman Sachs raised its view on the sector to 'attractive' from 'neutral'.
China's Shanghai Composite
index fell about a percent to a more than three-year low, with shares
of coal companies falling sharply on concerns over slowing growth
domestically and abroad. Heavyweight oil companies also retreated on
concerns over corporate earnings growth after PetroChina posted a 6 percent fall in first-half profit. Hong Kong's Hang Seng index fell 1.3 percent.
Australian
shares ended firmly in the red, weighed down by weak global
manufacturing data, more uncertainty in Europe and fading hopes for a
U.S. stimulus. Snapping a five-week losing streak, both the benchmark
S&P/ASX 200 and the broader All Ordinaries index ended down about
0.8 percent each. Miners led the losses, hit by plunging iron ore prices
and the uncertainty over the timing of additional central bank
stimulus.
Rio Tinto shares tumbled 4.4 percent, BHP Billiton lost a percent and smaller rival Fortescue slumped over 6 percent. Reserve Bank of Australia Governor Glenn Stevens said
today in an opening statement to House of Representatives Standing
Committee on Economics that the ongoing mining boom will likely see its
peak within the next year or two and the central bank is prepared to
respond to significant deviations from this central forecast.
Newspaper publisher Fairfax plummeted
10.8 percent to a record low after mining magnate Gina Rinehart
unsuccessfully tried to divest at least one third of her stake in the
company at 50 cents last night. Whitehaven Coal shares closed down 11.2
percent after Australian mining magnate Nathan Tinkler scrapped his
takeover proposal to privatize the company.
Seoul shares lost ground on renewed global growth worries and dashed hopes of further economic stimulus from major central banks. The benchmark Kospi
average fell 1.2 percent to hit a two-week closing low, with financials
and economy-sensitive shipbuilders bearing the brunt of the selling.
Hyundai Heavy Industries and Daewoo Shipbuilding fell 2-3 percent, while Woori Finance and Hana Financial fell about 4 percent each. Samsung Electronics
fell 0.9 percent after a Korean court ruled that both Apple Inc. and
Samsung infringed on each other's patents for mobile devices.
New Zealand shares fell sharply, mirroring weak regional cues. The benchmark NZX-50 index lost 1.1 percent, with heavyweight Telecom
leading the decliners with an 8.5 percent loss after the country's top
telecommunications company firm reported disappointing earnings and
forecast flat earnings growth during its next fiscal year.
Shares of Sky Network Television
tumbled 4.8 percent after the Auckland-based pay television company
posted a 3 percent drop in full-year profit amid a slight growth in
revenue. Warehouse Group, the biggest listed retailer, soared 4.7
percent on fresh buying and Kathmandu Holdings, the outdoor equipment
retailer, added 2.3 percent, while construction firm Fletcher Building
rose 1.6 percent. Utility Contact Energy slid 2.2 percent on going ex-dividend.
Elsewhere, India's benchmark Sensex was last trading 0.4 percent, Indonesia's Jakarta Composite index fell 0.4 percent, Malaysia's KLSE Composite edged down 0.2 percent, Singapore's Straits Times fell 0.2 percent and the Taiwan Weighted average slid 0.4 percent.
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Crude Slips Near $95
The price of crude oil was
ticking lower Friday morning as traders await further cues over the
likelihood of more economic stimulus for the U.S. economy.
Meanwhile,
the leaders of Germany and France also suggested that they would be
reluctant to extend deadlines for Greece to make reforms.
Light Sweet Crude Oil
(WTI) futures for October delivery, slipped $0.44 to $95.83 a barrel.
Yesterday, oil retreated from near its four-month high on profit taking
and as well on some weak manufacturing data out of China.
This
morning, the U.S. dollar was recovering from a two-month low versus the
euro and the Swiss franc, while leveling off from a three-month low
against sterling. The buck was lingering near a two-week low versus the
yen.
In economic news from the euro zone, the U.K. economy
contracted 0.5 percent in the second quarter, revised upwards by 0.2
percentage points from the fall of 0.7 percent published on July 25,
data from the Office for National Statistics showed. Nonetheless, the
sequential fall was bigger than the 0.3 percent drop registered in the
first quarter. The revision largely reflects upward revisions to
construction and production output. Output of production industries
slipped 0.9 percent, revised from the 1.3 percent drop estimated
initially.
Traders will look to the data on durable goods orders
from the U.S. Commerce Department, due out at 8.30 a.m ET. Economists
expect a 1.9 percent increase in durable goods orders for July.
Excluding transportation, orders may have risen 0.4 percent.
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