Stocks Moving Mostly Higher In Early Trading
With
traders reacting positively to the latest news out of Europe, stocks
moved to the upside at the start of trading on Friday. The major
averages all climbed into positive territory after ending the previous
session on opposite sides of the unchanged line.
The major averages have pulled back off their highs for the young session but currently remain in positive territory. The Dow is up 26.40 points or 0.2 percent at 13,623.33, the Nasdaq is up 16.49 points or 0.5 percent at 3,192.45 and the S&P 500 is up 5.10 points or 0.4 percent at 1,465.36.
The
initial strength on Wall Street was partly due to a report from the
Financial Times indicating that European Union officials are working
behind the scenes to pave the way for a new Spanish rescue program and
unlimited bond buying by the European Central Bank. Citing officials
involved in the discussions, FT said the talks are focused on ensuring
that the measures that will be required by international lenders as part
of a new rescue program are in place before a bailout is formally
requested.
Peter Boockvar, managing director at Miller
Tabak, said, "While discussions are ongoing, it doesn't mean Spain will
be so quick to ask for the help as right now seems to be a fact finding
mission for Spanish officials on what the conditions they will be
subject to if need be."
Oil service stocks have shown a
strong upward move in early trading, benefiting from a rebound by the
price of crude oil. With crude for November delivery climbing $0.86 to
$93.28 a barrel, the Philadelphia Oil Service Index is up by 1.6 percent.
Considerable strength has also emerged among gold stocks, which are moving higher along with the price of the precious metal. Housing, telecom, and electronic storage stocks are also seeing early strength, although buying interest is somewhat subdued.
Among individual stocks, Apple (AAPL)
is moving moderately higher as the company's highly anticipated iPhone 5
hits stores around the globe. Shares of Apple are up by 0.6 percent.
Business software giant Oracle (ORCL) is also moving higher after releasing its fiscal first quarter results after the close of trading on Thursday.
Oracle
reported first quarter adjusted earnings of $0.53 per share, in line
with analyst estimates. However, the company said its revenues dipped 2
percent to $8.18 billion, coming in below expectations.
Shares of KB Home
(KBH) have surged up by 6.6 percent after the homebuilder unexpectedly
reported a third quarter profit compared to a year-ago loss.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 ended the day up by 0.3 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.
The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index is just above the unchanged line, the French CAC 40 Index is up by 0.6 percent and the German DAX Index is up by 1.1 percent.
In the bond market, treasuries have
moved modestly lower after trending higher over the past week. As a
result, the yield on the benchmark ten-year note, which moves opposite
of its price, is up by 1.6 basis points at 1.793 percent.
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TSX Up At Open Friday
Toronto stocks
moved up at open Friday amid buying in commodities, with the
S&P/TSX Composite Index adding 59.00 points or 0.46 percent to
12,468.25.
Among base-metals stocks, First Quantum Minerals rose close to 3 percent. Inmet Mining and Teck Resources were up over 1 percent each.
Among gold plays, Centerra Gold gained over 5 percent and Allied Nevada Gold was up nearly 3 percent. Detour Gold, Barrick Gold and Goldcorp. gathered around 1 percent each
In the oil patch, Cenovus Energy, Baytex Energy Corp. and Trilogy Energy moved
up around 1 percent each. Wealth management company Gluskin Sheff +
Associates Inc. added 1 percent despite reporting lower fourth quarter
net income
Meanwhile, YM BioSciences Inc. lost nearly 4 percent even after reporting a narrower fourth quarter net loss.
Research In Motion was down 3 percent after suffering service outage across Europe, the Middle East and Africa.
The
outage coincides with the launch of Apple Inc.'s (AAPL) iPhone 5. While
RIM has apologized and is investigating the issue, the cause of the
outage is still not known.
The Canadian smartphone maker
is already in an unenviable position, with dwindling sales and declining
market share, thanks to competition from rivals such as Apple and
Samsung.
While the issue was raised first by customers of
Vodafone Plc. around 8 AM, the operator apparently said the fault lay
with the handset maker.
While some Vodafone customers are able to
access their services, some others are having problem in getting these
services over Wi-Fi or the mobile network. The service had suffered a
four-day downtime last year.
Last week, Apple's iCloud experienced an outage for two days for certain customers. Early this year, Google's Gmail also faced a similar trouble.
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European Markets Mostly Higher Amid Spain Bailout Talks
The European markets
are mostly higher in afternoon trading Friday, after a report said
Spain is discussing measures that may be tied to a bailout. The Asian
markets rose and the U.S. index futures are higher.
The Spanish
government and the European Commission are in talks over measures that
would be demanded by creditors if the country places an official bailout
request, Financial Times reported, citing unnamed officials involved in
discussions.
According to the newspaper, the plan will be
unveiled next Thursday and will focus on structural reforms rather than
new taxes and spending cuts.
The government led by Prime Minister Mariano Rajoy
is hesitating to place a bailout request to the EU, apparently worried
over the tough austerity conditions such a rescue would entail.
Meanwhile,
discussions between the Greece government and international creditors
to fix a deal on 11.5 billion euros spending reduction reached no clear
conclusion late Thursday. But some progress has been made on lifting the
retirement age and pension cuts, which would together contribute a
saving of 9.5 billion euros. A final deal is crucial for Greece to
receive a 31.5 billion euros in aid.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.27 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.09 percent.
The German DAX is adding 0.72 percent, France's CAC 40 is advancing 0.09 percent and Switzerland's SMI is gaining 0.26 percent. However, the U.K.'s FTSE 100 is falling 0.07 percent.
In Frankfurt, MAN is gaining 1.5 percent. JPMorgan raised its price target on the stock. Volkswagen is up 1.1 percent and Daimler is moderately higher. BMW is losing 0.5 percent.
Deutsche Bank
is gaining 1.3 percent. Commerzbank is modestly higher. Adidas is
falling 1.5 percent after the firm slashed its 2015 sales target for the
Reebok brand. Duerr is declining 3.7 percent. Berenberg cut the stock
to "Hold" from "Buy."
In Paris, Technip is gaining 1.7
percent. The company was awarded by Statoil a contract for the
fabrication, installation and tie-ins of flowlines for the Gullfaks
South field development Renault is gaining 1.6 percent. Peugeot is
rising moderately. BNP Paribas and Credit Agricole are advancing moderately. Societe Generale is up 0.2 percent.
In London, Reckitt Benckiser is declining 1.6 percent. Imperial Tobacco is falling 1.3 percent. Among miners, Rio Tinto is dropping 1.4 percent. BHP is modestly lower. Bucking the trend, Vedanta is climbing 2.2 percent.
BP
is falling 0.5 percent. Ireland-headquartered DCC has signed a
conditional agreement with BP to buy its liquefied petroleum gas
distribution business in the Netherlands and Belgium. DCC is up around 2 percent.
Hansard Global is plunging over 11 percent after the specialist long-term savings provider reported a decline in fiscal 2012 profit.
Retailer Sainsbury and publishing firm Pearson are gaining 1.5 percent each.
Essenden
is surging 52 percent as the firm posted a significantly higher pre-tax
profit for its first half, helped by lower costs.
Kuoni is
advancing 2.5 percent in Zurich. The leisure travel company plans to
explore exit options for its small loss-making tour operating businesses
that are not of strategic relevance to the company.
Swiss
agribusiness company Syngenta intends to launch a public voluntary offer
of 16 euros per share in cash for Belgian agro-biotechnology company
Devgen NV. Syngenta is up 0.2 percent while Devgen shares are surging 66
percent in Brussels.
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Asian Stocks Mostly Higher On Spain Bailout Reports
Asian shares
rose broadly on Friday, with gains in commodities and the recent
strength in the euro following easing measures announced by central
banks around the world underpinning sentiment. Gains, however, were
limited after a batch of surveys showed aggressive monetary easing from
the European Central Bank has so far failed to boost Eurozone business
activity.
There were hopes that Spain may be edging closer to a
rescue plan as early as next week after the Financial Times newspaper
reported that EU officials and Spanish government are working over a
plan on "structural reforms" that could meet the demands of its
international lenders. It is worth mentioning here that Spain's debt
auction attracted strong demand yesterday with a substantial drop in
borrowing costs despite lingering questions over whether and when Madrid
will ask for a bailout.
Tokyo stocks ended slightly
higher in thin trading, led by defensive shares as the yen looked set
for a weekly gain against most of its major counterparts amid concerns
about the global economy and the ongoing tensions between Japan and
China over disputed islands. Both the Nikkei average as well as the broader Topix index ended up about 0.3 percent each. Japan Tobacco rose 2.9 percent, pharmaceutical firm Eisai added 0.8 percent and Apple's iPhone 5 carrier KDDI gained half a percent.
Shares of Sharp soared
5 percent on heavy volume following a report that the embattled
electronics maker was in talks with U.S. chip maker Intel over a capital
tie-up, although Sharp denied the report. Japan Airlines slumped 4.3
percent on saying it would cut flights to China due to the ongoing
territorial row between Tokyo and Beijing.
China's Shanghai
Composite index edged up just about 0.1 percent, with concerns over the
outlook for domestic growth limiting further upside. Hong Kong's Hang Seng index rose 0.7 percent, led by resource stocks as oil prices stabilized following recent steep losses.
Australian stocks
edged higher, supported by modest gains in banks and commodity-related
stocks after a Federal Reserve policymaker known for his hawkish stance
suggested on Thursday the central bank can keep interest rates low as
long as inflation remains in check to help bring down unemployment below
5.5 percent. Paring the previous session's losses, both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended the session up about 0.3 percent each.
Global miner BHP Billiton ended on a flat note and Rio Tinto edged down 0.4 percent, but smaller rival Fortescue rose 0.3 percent. In the oil & gas sector, Woodside gained 0.6 percent and Santos added half a percent. Among major banks, ANZ, Commonwealth and Westpac rose between 0.3 percent and 1.4 percent, but NAB lost half a percent.
South Korea's Kospi
average rose 0.6 percent, led by steelmakers and market heavyweight
Samsung on hopes that the recent stimulus measures from major economies
will help to spur economic growth. Samsung Electronics, Apple's
arch-rival in the booming smartphone market, rose 1.2 percent on bargain
hunting following recent losses, while steelmakers POSCO and Hyundai Steel added 1-2 percent. LG Display retreated 2.7 percent on reports its Japanese rival Sharp may get cash injection of more than $380 million from Intel.
New Zealand shares lost ground, as a negative lead from the U.S. amid growth concerns kept investors on the sidelines. The benchmark NZX-50
index slid 0.3 percent, dragged down by Kathmandu Holdings after it
posted an 11 percent decline in annual profit. Shares of the outdoor
clothing and equipment retailer plummeted 6.3 percent and children's
clothing retailer Pumpkin Patch dropped 1.7 percent ahead of its annual results next week, while would-be bank Heartland New Zealand climbed 3.2 percent and carpet maker Cavalier rose 2 percent.
Elsewhere, India's benchmark Sensex
was last rallying 2.3 percent after the government notified all FDI
decisions taken last week and Samajwadi Party supremo Mulayam Singh
Yadav pledged his support to the United Progressive Alliance, saying his
party doesn't want to let communal forces to come to power.
Indonesia's Jakarta Composite index was moving up 0.6 percent, Singapore's Straits Times index was gaining 0.6 percent and the Taiwan Weighted average added 0.4 percent, but Malaysia's KLSE Composite index slipped 0.1 percent.
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Crude Rebounds After Recent Losses
The price of crude oil was
recovering from recent losses Friday morning amid a weak U.S. dollar on
expectations that recent measures to stimulate growth would fuel
inflation and keep interest rates at rock bottom.
Light Sweet Crude Oil (WTI)
futures for November delivery moved up $0.65 to $93.07 a barrel.
Yesterday, oil ended flat on demand growth concerns with some soft
macroeconomic data out of Europe and China, the huge U.S. crude
stockpile last week, and Saudi Arabia's decision to maintain production
at a high level. Oil prices were also impacted with the dollar
strengthening against a basket of major currencies and a sluggish U.S.
equity market.
This morning, the U.S. dollar slipped back around its four-month low versus the euro and sterling, while moving lower against the yen and the Swiss franc.
In economic news from the euro zone
the U.K. budget deficit remained unchanged in August from the previous
year level, data from the Office for National Statistics showed.
Excluding intervention, public sector net borrowing was GBP 14.4 billion
in August, this was equal to the net borrowing in August 2011.
Economists had forecast a level of GBP 15 billion.
Gold Steady Near 7-month High Amid Weak Dollar
The price of gold was
moving higher Friday morning as the U.S. dollar was ticking lower
versus a basket of currencies as the recent measures to stimulate growth
would fuel inflation and keep interest rates at rock bottom.
Gold for December delivery, the most actively traded contract, added $5.60 to $1,775.80 an ounce. Yesterday, gold
settled marginally lower with the dollar strengthening against a basket
of major currencies and a declining U.S. equity market. Gold prices
were also impacted by some soft economic data globally and on profit
taking following recent gains made by the precious metal.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 1,308.41 tons from 1,305.40 tons.
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