Stocks Move Modestly Lower After Seeing Early Strength
8/29/2012 11:17 AM ET
After failing to sustain an early upward move, stocks have moved
modestly lower over the course of morning trading on Wednesday. The
major averages have pulled back well off their early highs and into
negative territory.
The downturn by stocks comes despite the
release of two relatively upbeat economic reports, including a report
from the Commerce Department showing slightly stronger than previously
estimated U.S. economic growth in the second quarter.
With the
data largely seen as backward looking, many traders continue to look
ahead to Federal Reserve Chairman Ben Bernanke's speech at the Jackson
Hole symposium on Friday.
Steel stocks have shown a notable move to the downside over the course of the trading day, dragging the NYSE Arca Steel Index down
by 1.9 percent. The loss extends a recent downward move by the index,
which has fallen to its lowest intraday level in almost a month.
Airline,
gold, and oil service stocks have also come under pressure on the day,
while most of the major sectors continue to show only modest moves.
The major averages have climbed off their worst levels in recent trading but currently remain in the red. The Dow is down 14.40 points or 0.1 percent at 13,088.59, the Nasdaq is down 6.32 points or 0.2 percent at 3,070.82 and the S&P 500 is down 1.68 points or 0.1 percent at 1,407.62.
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Commodities Drag TSX Below 12k - Canadian Commentary
8/29/2012 11:20 AM ET
Canadian stocks were extending losses for a third session Wednesday
morning as traders cautiously await cues from Chairman Ben Bernanke's
speech on Friday at an annual meeting at Jackson Hole, Wyoming.
Investors
overlooked today's positive economic data from the U.S., Canada's
largest trading partner. While U.S. economic growth in the second
quarter of 2012 was stronger than initially reported, pending home sales
index reached its highest level in over two years.
The S&P/TSX Composite Index lost 41.54 points or 0.35 percent to 11,968.36, after shedding over 70 points or 0.60 percent in the past two sessions.
Latest data from the EIA revealed that U.S. Crude oil inventories
unexpectedly moved up by 3.80 million barrels, while gasoline stocks
shed 1.50 million barrels in the weekended August 24. Analyst expected Crude oil inventories
to decline 2 million barrels and gasoline stocks to shed 2 million
barrels last week. Prices were under pressure after Hurricane Isaac
missed oil installations, hitting Louisiana. Crude for October shed $1.02 to $95.31 a barrel.
In the oil patch, Walter Energy , Tourmaline Oil and Baytex Energy Corp. were down around 2 percent each.
Progress
Energy Resources eased 0.20 percent after it said its shareholders have
approved a takeover bid from Malaysia's state oil company Petronas at
C$22.00 a share, or about $6.09 billion.
The price of gold was moving lower as traders await cues from a key central bankers' meeting at the weekend. gold for December shed $9.70 to $1,660.00 an ounce.
Among gold plays, Barrick gold was down close to 2 percent. Goldcorp. and Agnico-Eagle Mines slipped about 1 percent each.
Meanwhile
financial stocks were trading firm after two of major Canadian banks
posted consensus beating quarterly net-income and hiked their dividend
payout.
In the financial space, National Bank , TD Bank , Bank of Montreal and Scotiabank gathered around 1 percent each.
Audio
entertainment company Canadian Satellite Radio Holdings Inc. (XSR.TO)
surged close to 7 percent after announcing plans to launch expanded
features and programming offerings for subscribers.
In economic
news Statistics Canada said the Industrial Product Price Index (IPPI)
was down 0.5 percent month-over-month in July, largely due to decline in
chemical products, motor vehicles and other transportation equipment.
Meanwhile, the Raw Materials Price Index (RMPI) rose 0.9 percent, mainly
because of higher prices for mineral fuels and vegetable products.
8/29/2012 11:20 AM ET
From south of the border, the U.S. Commerce Department said the
economy's growth in the second quarter of 2012 was stronger than
initially reported, but still fell short of the growth level posted in
the first quarter. The U.S. gross domestic product was revised up to 1.7
percent growth, somewhat stronger than the 1.5 percent initially
reported.
Separately, the National Association of Realtors said
its pending home sales index rose by 2.4 percent to 101.7 in July after
falling by 1.4 percent to 99.3 in June. Economists had been expecting
the index to increase by about 1.0 percent. |
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European Markets Trimmed Their Early Losses After U.S. GDP Report
8/29/2012 11:58 AM ET
The European markets turned in a weak performance in early trade
Wednesday, but managed to pare their losses in the afternoon. The early
weakness was due largely to some disappointing earnings reports across
Europe. The upward revision to the U.S. second quarter gross domestic
product report was well received in the afternoon. Shares of miners and
banks were among the weakest performers.
Investors continue to
await Federal Reserve Chairman Ben Bernanke's speech at the Kansas City
Federal Reserve Bank's annual symposium in Jackson Hole, Wyoming on
Friday. European Central Bank President Mario Draghi announced yesterday
that he will be unable to attend the symposium, due to heavy workload
foreseen for the next few days.
The European Central Bank may have
to adopt exceptional measures sometimes to fulfill its mandate of
maintaining price stability, the bank's chief Mario Draghi said
Wednesday, in what was seen as a response to German criticism of the
central bank's bond purchases.
In an opinion piece published in
the German weekly Die Zeit, Draghi said, "The ECB will do what is
necessary to ensure price stability." "It will remain independent. And
it will always act within the limits of its mandate," he added.
The message on the irreversibility of the euro is very important and policymakers should be careful not to create uncertainty while speaking out on the euro crisis, European Central Bank Governing Council member Erkki Liikanen was quoted as saying.
In
an interview with Finnish daily Aamulehti, published Wednesday,
Liikanen, who heads the Finnish central bank, suggested that ECB should
be more transparent in decision making and should make more information
public than was the case earlier.
Italy's borrowing costs
for six months declined sharply to its lowest level since March at an
auction on Wednesday as investor sentiment was boosted by hopes that the
European Central Bank will resume the purchases of peripheral bonds
that could bring down the country's bond yields.
The Italian Treasury raised the targeted EUR 9 billion by selling 6-month bills in today's auction. The strong demand for the country's debt was reflected in bids totaling EUR 15.244 billion. The yield on the 6-month paper tumbled to 1.585 percent from 2.454 percent paid in the previous sale on July 27.
The
Spanish region of Catalonia sought a financial rescue from the
government on Tuesday even as Prime Minister Mariano Rajoy repeated his
earlier remarks that the country will not request for a full-blown
international bailout.
Catalonia, the most indebted of Spain's 17 autonomous regions, requested for a EUR 5 billion bailout from the EUR 18-billion
rescue fund, set up by Madrid to support its debt-ridden regions.
Valencia was the first Spanish region to ask for a bailout, followed by
Murcia.
8/29/2012 11:58 AM ET
The euro Stoxx 50 index of eurozone bluechip stocks declined by 0.44 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.23 percent.
The FTSE 100 of the U.K. dropped by 0.49 percent and the CAC 40 of France decreased by 0.51 percent. The DAX of Germany climbed by 0.11 percent and the SMI of Switzerland gained 0.01 percent.
In
Frankfurt, Deutsche Lufthansa fell by 1.42 percent. CEO Peter Gerber
reportedly said unlimited strikes over a wage dispute would cost the
airline millions of euros in damages per day.
Raiffeisen Bank
International sank by 3.18 percent, after the lender forecast a slight
increase in the volume of non-performing loans in the second half of
2012.
In Paris, L'Oreal dropped by 4.56 percent, after the
cosmetics giant reported a 10.8 percent rise in fiscal 2012 first-half
profit, missing estimates.
Hotel group Accor decreased by 3.08
percent, after the company posted a net loss for the first half of the
year of 532 million euros, compared to the profit of 41 million euros a
year ago.
Bouygues plunged by 8.97 percent. The company reported
first half 2012 net profit attributable to the Group of 278 million
euros, down 29 percent from 391 million euros last year.
In London, mining stocks and banks were under pressure. Vedanta Resources declined by 1.66 percent and Rio Tinto fell by 3.09 percent. Anglo American dropped by 2.47 percent and BHP Billiton lost 1.47 percent.
Royal Bank of Scotland decreased by 0.80 percent and Lloyds Banking Group fell by 1.64 percent. Barclays finished down by 1.38 percent and Standard Chartered lost 0.81 percent.
SSE climbed by 1.11 percent, after Bank of America upgraded its rating on the stock to "Buy" from "Neutral."
Centrica gained 0.58 percent, despite a downgrade to "Underperform" from "Neutral" by Bank of America.
Germany's
inflation based on the EU measure of consumer prices increased at a
faster-than-expected rate in August, preliminary data released by
Destatis showed Wednesday. The harmonized index of consumer prices
rose 2.2 percent year-on-year, following 1.9 percent gain in July.
Economists were looking for an inflation figure of 2 percent.
France's
business confidence increased slightly in August, after declining in
the previous month, survey data released by the statistical office INSEE
showed Wednesday. The manufacturing business confidence index edged up
to 90 from 89 in July, revised from 90. The score matched economists'
expectations.
U.S. economic growth in the second quarter of 2012
was stronger than initially reported but still fell short of the growth
seen in the first quarter. According to figures released Wednesday by
the Commerce Department, U.S. gross domestic product was upwardly
revised to show a 1.7 percent increase in the second quarter, somewhat
stronger than the 1.5 percent growth initially reported.
8/29/2012 11:58 AM ET
The upward revision, which was partly due to faster than previously
estimated consumer spending growth, was in line with the expectations of
most economists.
Pending home sales in the U.S. rose by more than
expected in the month of July, according to a report released by the
National Association of Realtors on Wednesday, with the pending home
sales index reaching its highest level in over two years.
NAR
said its pending home sales index rose by 2.4 percent to 101.7 in July
after falling by 1.4 percent to 99.3 in June. Economists had been
expecting the index to increase by about 1.0 percent. |
| Asia Market Reports |
Asian Markets Mostly Up In Positive Territory
8/28/2012 11:34 PM ET
Asian markets are mostly trading in positive territory on Wednesday,
despite a weak lead from the U.S. and European markets. However, gains
are just modest in most of the markets in the region as the mood remains
cautious due to a lack of positive triggers.
In the Australian
market, mining stocks are trading weak. Energy stocks opened lower, but
regained some lost ground subsequently. Consumer staples and property
trusts stocks are edging higher, while financial, industrial and
healthcare stocks are mostly trading flat.
The benchmark S&P/ASX 200 index,
which declined to 4,346.4, is currently trading at 4,352, down 7.4
points or 0.2 percent from its previous close. The broader All Ordinaries index is down 9.8 points or 0.2 percent at 4,377.2.
Among bank stocks, ANZ Bank , Commonwealth Bank of Australia and National Australia Bank are down with modest losses, while Westpac is trading flat.
Among top miners, BHP Billiton (BHP, BBL) is down 1.3 percent and Rio Tinto (RIO, RIO.L) is trading lower by 2.3 percent.
In the energy sector, Woodside Petroleum and Santos are trading weak. Oil Search and Origin Energy are up marginally, while Caltex Australia is gaining about 1 percent.
Atlas Iron is trading lower by 7.5 percent. Fortescue Metals is down with a loss of 4.6 percent, while Arrium and Harvey Norman Holdings are down 3.7 percent and 3.2 percent, respectively.
Perseus Mining, Bluescope Steel, Qantas Airways, JB Hi-Fi, Paladin Energy, Downer EDI and Whitehaven Coal are also trading notably lower. Lynas Corp. shares are up 5.3 percent. Goodman Group, Beach Energy, Primary Healthcare, AMP and Westfield Group are trading firm.
Worley
Parsons tumbled more than 4 percent before staging a smart recovery.
However, the stock is still down in negative territory with a modest
loss. The company has announced that it posted a net profit of A$353
million for the year to June 30, down three percent from the previous
year's A$364 million.
After a smart upmove and a subsequent
retreat, the Japanese market edged higher with investors indulging in
some selective buying.
The benchmark Nikkei 225 index,
which gave up some gains after rising to around 9,070, recovered well
subsequently and was up 25.7 points or 0.3 percent at 9,059 at the end
of the morning session.
Mining, insurance, railway, foods and real
estate stocks found some support, while shares from electric power,
chemicals, non-ferrous metals, financial and automobile sectors traded
mixed.
Sharp Corp gained over 8 percent. Advantest Corp moved up by about 4.5 percent. NEC Corp, Sumco Corp, Nippon Soda, Sony Corp , Sumitomo Mitsui Trust Holdings, Tokyo Electric Power and Ricoh gained 3 to 4 percent.
8/28/2012 11:34 PM ET
Pioneer Corp, Nippon Electric Glass, Sumitomo Osaka Cement, JFE
Holdings, Nippon Light Metal, Chubu Electric Power, Konami Corp, Nikon
Corp and Heiwa Real Estate were all trading higher by over 2 percent.
JX Holdings, Nippon Sheet Glass, Alps Electric, Hino Motors, Mizuho Financial, Credit Saison, Konica Minolta Holdings, SMFC, Casio Computer and Pacific Metals were among the other notable gainers.
Renesas
Electronics Corp. shares vaulted more than 30 percent on the back of
reports that Kohlberg Kravis Roberts & Co. will invest around 100
billion yen in the company for controlling stake.
Daikin Industries plunged more than 5 percent on reports the company will buy Texas-based Goodman Global Inc.
Nippon Paper Group, TDK Corp, Sojitz, Kansai Electric Power, Mitsubishi Paper Mills, Mitsubishi Motors, Nippon Yusen KK and NTN Corp also traded weak.
In the currency market, the U.S. dollar traded in the mid-78 yen range in early deals in Tokyo. The yen is currently trading at 78.60 to the dollar.
Among
other markets in the Asia-Pacific region, Malaysia, New Zealand,
Singapore, South Korea and Taiwan are trading modestly higher, while
Shanghai, Hong Kong and Indonesia are trading weak. Markets across the
region ended on a mixed note on Tuesday.
On Wall Street,
stocks mostly ended flat after a lackluster session on Tuesday as
traders remained reluctant to make any significant moves ahead of
remarks by Federal Reserve Chairman Ben Bernanke.
After bouncing back and forth across the unchanged line, the major averages ended the day mixed. While the Nasdaq inched up by about 4 points or 0.1 percent to 3,077.1, the Dow ended down 21.7 points or 0.2 percent at 13,103 and the S&P 500 edged down 1.1 points or 0.1 percent at 1,409.3.
Major European markets ended lower on Tuesday. The U.K.'s FTSE 100 index closed just below the unchanged line, while the German DAX index and the French CAC 40 Index lost 0.6 percent and 0.9 percent, respectively.
US Crude oil futures edged higher on Tuesday with a weak dollar and disruption in production in the Gulf of Mexico due to hurricane Isaac aiding its surge. Light sweet Crude for October delivery ended up 86 cents at $96.33 a barrel on the New York Mercantile Exchange. |
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South Korea Current Account Surplus $4.38 Billion
8/28/2012 9:45 PM ET
South Korea had a seasonally adjusted current account surplus of 4.38 billion in July, the Bank of Korea said on Wednesday - up from 3.68 billion in June.
On an unadjusted basis, South Korea saw a record surplus of $6.10 billion, up from $5.84 billion in the previous month.
The
financial account saw a net outflow of $7.94 billion, up from $5.27
billion a month earlier, while the capital account saw a net inflow of
$0.04 billion.
The goods account surplus widened to $5.32 billion from $5.05 billion a month earlier.
The
services account surplus widened from June's $0.17 billion to $0.58
billion due to the improvement of the other services account, for items
such as charges for the use of intellectual property rights and business
services, the bank said.
The primary income account surplus
narrowed from $0.90 billion in June to $0.40 billion, owing chiefly to
the decrease in income on equity, the bank noted.
The secondary income account deficit narrowed to $0.19 billion from June's $0.25 billion.
Direct
investment recorded a net outflow of $1.44 billion, larger than $0.69
billion in the previous month as foreign direct investment shifted to a
net outflow.
Portfolio investment shifted to a net inflow
of $2.53 billion from a net outflow of $2.33 billion one month prior,
mostly on increased net offshore issuance by residents of foreign
currency bonds, the bank said.
Financial derivatives posted a net inflow of $0.27 billion.
Other
investment showed a net outflow of $7.68 billion, up from $1.65 billion
in June due mostly to increased lending by domestic financial
institutions and the shift to a net repayment of their borrowings.
Reserve assets increased by $1.60 billion. |
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