Stocks Turning In A Lackluster Performance In Early Trading
After moving modestly higher at the open, stocks have
shown a lack of direction over the course of early trading on Friday.
The major averages continue to linger near the unchanged line after
ending the previous session nearly flat.
The major averages are currently posting slim gains, with the Dow up 32.94 points or 0.3 percent at 13,359.33, while the Nasdaq is up 0.22 points or less than a tenth of a percent at 3,049.63 and the S&P 500 is up 0.61 points or less than a tenth of a percent at 1,433.45.
The choppy trading on Wall Street comes despite the release of better than expected quarterly results from financial giant JP Morgan (JPM).
Before
the start of trading, JP Morgan reported third quarter net income of
$5.7 billion or $1.40 per share compared to $4.3 billion or $1.02 per
share in the same quarter last year. Analysts had expected the company
to earn $1.21 per share.
The company also said revenues for the
quarter rose to $25.2 billion from $23.8 billion a year ago, exceeding
analyst estimates for $24.5 billion.
Mortgage giant Wells Fargo
(WFC) also released its third quarter results before the start of
trading, reporting earnings that came in slightly above analyst
estimates but on weaker than expected revenues.
Lingering
concerns about the outlook for the global economy may be keeping traders
on the sidelines following the weakness seen earlier in the week.
On the economic front, the Labor Department
recently released a report showing that U.S. producer prices rose by
more than expected in the month of September amid another jump in energy
prices.
The report said producer price index rose by 1.1 percent
in September after jumping 1.7 percent in August. Economists had
expected the index to increase by about 0.8 percent.
Excluding the jump in energy prices
and a modest increase in food prices, the core producer price index was
unchanged in September. The core index had been expected to edge up by
0.2 percent.
While many of the major sectors are showing
only modest moves, considerable weakness has emerged among banking
stocks. The KBW Bank Index is down by 2.1 percent, with Wells Fargo
helping to lead the way lower.
Electronic storage and brokerage stocks have also come under pressure, while trucking stocks
have shown a strong move to the upside. J.B. Hunt (JBHT) is posting a
standout gain in the trucking sector after reporting its third quarter
results.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. While Japan's Nikkei 225 Index edged down by 0.2 percent, Hong Kong's Hang Seng Index advanced by 0.7 percent.
Meanwhile, the major European markets have moved modestly lower on the day. The U.K.'s FTSE 100 Index, the French CAC 40 Index and the German DAX Index are all down by 0.3 percent.
In the bond market, treasuries have
moved moderately higher, extending the upward move seen earlier in the
week. Subsequently, the yield on the benchmark ten-year note, which
moves opposite of its price, is down by 2.2 basis points at 1.653
percent.
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Royal Bank Of Canada Intends To Repurchase 30 Mln Of Common Shares - Quick Facts
Royal Bank of Canada Friday
announced that it is mulling to commence a normal course issuer bid
through the facilities of the Toronto Stock Exchange and to repurchase
for cancellation up to 30 million of its common shares, representing
approximately 2.1 per cent of the bank's outstanding common shares as at
September 28, 2012.
The Bank however stated that the proposal is
subject to the approval of the Office of the Superintendent of
Financial Institutions, or the OFSI, and the Toronto Stock Exchange.
The Bank stated
that the proposed share repurchases will enable the bank to balance the
imperatives of maintaining strong capital ratios with the ongoing need
to generate shareholder value.
The Bank further stated that
Purchases may commence on November 1, 2012, provided the Toronto Stock
Exchange has accepted the notice of intention, and may continue until
October 31, 2013.
The S&P/TSX
Composite Index closed Thursday at 12,233.95, up 21.53 points or 0.18
percent. The index touched an intraday high of 12,295.43 and a low of
12,215.01. The Index shed nearly 250 points or about 2 percent in the
past three straight sessions.
The Energy Index gained 0.57
percent, although U.S. crude oil futures for November delivery gained
$0.82 or 0.9 percent to close at $92.07 a barrel Thursday on the NYMEX.
Among energy stocks, Suncor Energy Inc. gained 0.15 percent, Talisman Energy Inc. was up 2.23 percent, and Encana Corp. gathered 2.69 percent. Canadian Natural Resources Limited moved up 0.70 percent, while Niko Resources limited gained 3.15 percent.
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European Markets In Negative Territory, Banks Rise
The European markets
are lower in afternoon trading Friday, as debt and growth worries
continued to weigh on investor sentiment, amid news that the European
Union won the Nobel Peace Prize for 2012. Banks are higher, following a
positive sector recommendation from Deutsche Bank.
The 2012 Nobel
Peace Prize was awarded to the European Union "for over six decades
contributed to the advancement of peace and reconciliation, democracy
and human rights in Europe." Announcing the coveted award at the
Norwegian Nobel Institute in Oslo, Thorbjørn Jagland, chairman of the
Norwegian Nobel Committee, said the decision was unanimous.
The
finance ministers from across the globe meeting in Tokyo have recognized
that the Eurozone has made "significant progress" in addressing the
debt crisis, German Finance Minister Wolfgang Schauble reportedly said.
"This
time there is a much more positive" sentiment regarding the economic
developments in Eurozone, Schaeuble said at a press briefing in Tokyo.
Eurozone
industrial production grew unexpectedly by 0.6 percent month-on-month
in August, the same rate of expansion as seen in July, estimates
released by Eurostat showed. Production was forecast to fall by 0.4
percent.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.04 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.04 percent.
The German DAX is losing 0.16 percent and the French CAC 40 is falling 0.26 percent. The UK's FTSE 100 is sliding 0.18 percent. Switzerland's SMI is flat.
In Frankfurt, Lanxess is declining 3.4 percent after Barclays and Credit Suisse downgraded the stock. Deutsche Telekom is losing 2 percent and Infineon Technologies is falling 1.4 percent. Commerzbank and Deutsche Bank are climbing 2.8 percent and 1.5 percent, respectively.
In Paris, Safran is losing 2.2 percent, Legrand is down 2 percent and Publicis Groupe is falling 1.9 percent. Carrefour and EADS are losing around 1.5 percent each.
STMicroelectronics
is climbing 12.8 percent on reports that the company is planning to
separate businesses. Telecom equipment maker Alcatel Lucent is climbing
3.9 percent after Deutsche Bank raised European telecoms to
"Overweight."
Beiersdorf is up 1 percent after UBS upgraded the stock. Credit Agricole and Societe Generale are advancing 1.9 percent and 1.3 percent, respectively. BNP Paribas is advancing 0.6 percent.
In
London, miners Kazakhmys and Antofagasta are declining 2.4 percent and
2.1 percent, respectively. HSBC cut Anglo American to "Neutral" from
"Overweight." The stock is down 0.2 percent.
Morgan Crucible
is plunging nearly 11 percent after the advanced materials company said
its revenue in the third quarter weakened and that full-year
performance would be materially below the Board's previous expectations.
Hargreaves Lansdown is gaining 3.6 percent after an interim management statement.
Lloyds Banking Group is rising 2.8 percent, Standard Chartered is advancing 2.7 percent and Barclays is adding 2.6 percent.
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Asian Stocks Broadly Higher On US Data
Asian stocks
ended mostly higher on Friday, with upbeat data on the U.S. labor
market underpinning sentiment. Amid a lack of positive catalysts,
investors welcomed the news that China and Japan have agreed to hold
talks soon in a bid to reduce tensions over a territorial dispute. All
eyes are on J.P. Morgan and Wells Fargo's earnings results due later in
the global day following downbeat reports from Alcoa and Chevron at the
start of the U.S. quarterly earnings season.
Tokyo stocks
ended slightly lower, dragged down by heavyweights Softbank and Fast
Retailing in an otherwise mildly bullish broader market. The Nikkei
average slipped around 0.2 percent, extending losses for a fourth
consecutive session, while the broader Topix index shed 0.6 percent.
A weaker yen lifted export-related stocks like Honda Motor, Canon and Tokyo Electron
up 1-3 percent, while Softbank shares plunged 17 percent on heavy
volume amid news that the firm is in talks to buy about 70 percent stake
in U.S. operator Sprint Nextel Corp. Fast Retailing tumbled 10 percent
after it announced a consolidated operating profit that missed guidance
for the fiscal year ending August.
China's Shanghai
Composite index edged up 0.1 percent, even as caution prevailed ahead of
trade and inflation numbers due to be released on Saturday and Monday,
respectively. Hong Kong's Hang Seng index rose 0.7 percent.
Australian shares rose marginally, led by miners. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended up about 0.1 percent each. Global miners BHP Billiton and Rio Tinto rose 1-2 percent, tracking stronger iron ore prices, while gold miner Newcrest edged down 0.9 percent. Fortescue Metals Group
rallied 2.7 percent after the iron-ore extractor said it would increase
its debt loan facility to help refinance existing loans.
Among the major banks, ANZ and Commonwealth rose about 0.2 percent each, but NAB slipped 0.2 percent and Westpac eased 0.4 percent. Billabong International
shares plunged 17 percent after U.S. private equity fund TPG withdrew
its A$694 million bid for the surfwear retailer after conducting due
diligence scrutiny of its accounts.
South Korean stocks
closed almost unchanged on Friday despite relentless foreign fund
selling amid the looming U.S. fiscal cliff of tax hikes and spending
cuts that take effect early next year. The benchmark Kospi average inched up 0.17 points or 0.01 percent to 1,933, snapping a four-session losing streak.
Market heavyweight Samsung Electronics
edged down 0.6 percent, reversing early gains after a U.S. appeals
court overturned a preliminary injunction on the sale of its newest Galaxy Nexus smartphone in the U.S. Automakers Hyundai Motors and Kia Motors ended down about 2 percent each.
New
Zealand shares rose, snapping three days of declines, buoyed by firm
regional cues. The benchmark NZX-50 index rose 0.3 percent, with gold
miner OceanaGold rising 2.4 percent even as gold prices traded little
changed on Friday after gaining in the previous session on the back of a
weaker U.S. dollar.
Freightways, NZ Refining and NZX rose
about 2 percent each, while rural services firm PGG Wrightson lost 2.8
percent after two top executives of its majority shareholder, Agrium,
resigned unexpectedly this week to pursue other opportunities. Heavyweights Telecom and Fletcher Building
were little changed. India's benchmark Sensex was moving down 0.6
percent, dragged down by IT stocks after Infosys lowered its rupee
revenue guidance and issued a weak outlook for its outsourcing business,
citing global economic uncertainties. In economic news, official data
released today showed that India's industrial output grew by a
higher-than-expected 2.7 percent in August from a year earlier on the
back of a positive base effect.
Singapore's Straits Times
index was up 0.4 percent after the nation's central bank unexpectedly
kept its monetary policy unchanged, citing inflation concerns and a
slowing economy. Elsewhere, Indonesia's Jakarta Composite was moving up 0.6 percent, while Malaysia's KLSE Composite slipped 0.3 percent and the Taiwan Weighted average edged down 0.2 percent.
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US Dollar Extends Weakness Against European Majors After PPI Data
During early New York trading on Friday, the US dollar extended its European session's weakness against major oponents after the release of producer price index data.
According to a report released by the Labor Department today, producer price
index rose by 1.1 percent in September after jumping 1.7 percent in
August. Economists had expected the index to increase by about 0.8
percent.
Excluding the jump in energy prices and a modest increase in food prices, the core producer price index was unchanged in September.
The core producer price index had been expected to edge up by 0.2 percent, which would have matched the increase seen in the previous month.
The greenback was
trading near fresh multi-day lows of 0.9308 against the Swiss franc,
1.2990 versus the euro and 1.6099 against the British pound in New York
morning, compared to yesterday's closing values of 0.9352, 1.2928 and
1.6047, respectively.
In early European session today, the IMF Managing Director Christine Lagarde called for less austerity and greater global economic cooperation as key drive for a strong path to recovery.
While
speaking at the plenary session of the IMF-World Bank 2012 Annual
Meetings in Tokyo, Lagarde said top priority was for the world to get
beyond the current crisis and to restore sufficient growth to generate
jobs for the millions of unemployed.
In economic front, the latest report released by the Eurostat, Eurozone industrial production
grew unexpectedly by 0.6 percent month-on-month in August, the same
rate of expansion as seen in July. Production was forecast to fall by
0.4 percent.
Meanwhile, industrial production dropped 2.9
percent on a yearly basis, following a 2.8 percent fall in July.
Economists had forecast a 4.1 percent decrease for August.
The
final data released by statistical office Istat today showed that
Italy's EU harmonized index of consumer prices (HICP) increased 3.4
percent on an annual basis in September, in line with the preliminary
estimates. In August, the rate of growth was 3.3 percent.
Against its Japanese counterpart,
the greenback also showed weakness in North American morning session
and presently trading near 78.35 from early Asian session's high of
78.54.
The preliminary report of Reuters/University of Michigan's
consumer sentiment index for October is set to release by about 9:55 am
ET.
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