Stocks Seeing Modest Weakness In Early Trading
Stocks have
moved modesty lower in early trading on Thursday, giving back some
ground after moving mostly higher over the three previous sessions. The
major averages have slipped into negative territory, although selling
pressure has remained relatively subdued.
The major averages have climbed off their lows for the young session but currently remain in the red. The Dow is down 15.79 points or 0.1 percent at 13,541.21, the Nasdaq is down 9.36 points or 0.3 percent at 3,094.76 and the S&P 500 is down 3.31 points or 0.2 percent at 1,457.60.
The
early weakness on Wall Street is partly due to a disappointing report
on weekly jobless claims, which inspired some traders to cash in on the
recent strength in the markets.
The report showed that initial jobless claims jumped to 388,000 in the week ended October 13th after falling to a four-year low 342,000 in the previous week.
Economists
had been expecting jobless claims to show a more modest increase to
365,000 from the 339,000 originally reported for the previous week.
The
rebound from the four-year low set in the previous week was partly due
to the normalization of distortions caused by seasonal adjustment
challenges in California.
However, a positive reaction to a batch of largely upbeat Chinese economic data has helped to limit the downside for the markets.
China
reported a 7.4 percent increase in third quarter GDP, which was slower
than the 7.6 percent growth recorded in the second quarter but in line
with estimates. The communist country also reported stronger than
expected industrial production and retail sales growth in September.
Most
of the major sectors have shown only modest moves to the downside,
although gold stocks are seeing notable weakness amid a drop by the
price of the precious metal.
Semiconductor, trucking, and electronic storage stocks are seeing more moderate weakness, while strength is visible among airline, networking, and railroad stocks.
In
overseas trading, stock markets across the Asia-Pacific region saw
considerable strength on the heels of the upbeat Chinese economic data. Japan's Nikkei 225 Index surged up by 2 percent, while Hong Kong's Hang Seng Index advanced by 0.5 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.3 percent, the U.K.'s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is down by 0.3 percent.
In the bond market, treasuries are regaining some ground after ending the previous session firmly in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 1.797 percent.
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TSX Flat At Open Thursday
Toronto stocks
were little changed at open Thursday amid selling in metal stocks, with
the S&P/TSX Composite Index edging up 2.39 points or 0.02 percent
to 12,463.64.
The Diversified Materials Index was down nearly 1
percent, with Teck Resources surrendering over 2 percent. Inmet Mining
and First Quantum Minerals were down around 1 percent each.
Among gold stocks, Goldcorp. and Barrick Gold were down over 1 percent each.
In the oil patch, Niko Resources lost close to 3 percent, while Cenovus Energy and Husky Energy were down around 1 percent each.
On the other hand, Lundin Petroleum and Encana Corp. gathered nearly 3 percent each
Telecommunications company Telus Corp.
edged up 0.50 percent after announcing that its shareholders have voted
strongly in favor of a proposal to exchange the company's non-voting
shares for common shares on a one-for-one basis.
The price of crude oil
was little changed Thursday morning as traders digest economic growth
data out of China, the second largest energy consuming nation and
inventories data from the U.S., the world's largest economy. Growth in
China's overall national output continued to slow in the third quarter
with the GDP recording a 7.4 percent year-on-year growth, data from the
National Bureau of Statistics showed. This was in line with expectations
but slower than the 7.6 percent growth recorded in the second quarter.
Crude for November delivery slipped $0.50 to $91.62 a barrel.
The price of gold was
moving lower Thursday morning as traders were cautious ahead of the
outcome of the two-day summit of the EU leaders at Brussels, beginning
today. Gold for December lost $10.50 to $1,742.50 an ounce.
In
corporate news from Canada, telecommunications company Telus Corp. said
that its shareholders have voted strongly in favor of a proposal to
exchange the company's non-voting shares for common shares on a
one-for-one basis.
Electrical products distributor Wesco International Inc. said that it has agreed to acquire Canada-based rival Eecol Electric Corp. for about C$1.14 billion.
In economic news, Canadian wholesale sales
rose by 0.5 percent to $49.7 billion in August, snapping their two
consecutive monthly declines, Statistics Canada said. Economists
expected whole sales to rise just 0.2 percent in the month. Higher sales
in the food, beverage and tobacco sub-sector, and the machinery,
equipment and supplies sub-sector, were the main contributors to the
increase. Meanwhile, inventories rose for a ninth consecutive month,
gaining 0.8 percent to $61.6 billion in August.
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European Stocks Mixed Ahead Of EU Summit
European stocks
are moving sideways on Thursday, as investors paused for breath
following recent gains awaiting cues from the two-day EU summit
beginning today.
Commodities are little changed and the
euro is trading below one-month high against the dollar after Spain's
funding costs fell at an auction and data showed bad loans at Spanish
banks surged to a new record high in August. The latest figures from the
Bank of Spain showed that the value of loans at risk of not being
repaid rose to EUR 178.6 billion or 10.5 percent of the total lending
from EUR 173.2 billion in the previous month.
The Euro Stoxx 50 index of Eurozone bluechip stocks and the Stoxx Europe 50 index, which includes some major U.K. companies, are edging down marginally. Around Europe, France's CAC 40 is moving down 0.1 percent and Switzerland's SMI is losing 0.3 percent, but the German DAX is gaining 0.4 percent and the U.K.'s FTSE 100 is up 0.1 percent.
Akzo Nobel NV
is tumbling 5 percent in Amsterdam after the paint maker reported a
loss for the third quarter on the back of 2.5 billion euros impairment
in its Decorative Paints business.
Cairn Energy Plc. is
edging up 0.1 percent in London after issuing an interim management
statement. Rolls-Royce Holdings is moving down 0.2 percent despite
winning a contract to supply its Spinline digital safety instrumentation
and control to the China Guangdong Nuclear Power Corp.
Shares of Nestlé S.A.
are losing 2 percent in Zurich after the Swiss food and nutrition
products giant reported 11 percent increase in sales for the nine-month
period, with an organic growth of 6.1 percent, helped by continuous
growth in all of its regions.
British energy giant BP Plc.
is gaining 0.9 percent amid reports the company is nearing a deal to
sell its 50 percent shareholding in troubled Russian oil producer TNK-BP
to Anglo-Russian state oil firm OAO Rosneft.
In economic news, U.K. retail sales
volume, including sales of automotive fuel grew 0.6 percent in
September from a month ago, when it fell 0.1 percent, the Office for
National Statistics said. Economists had forecast a 0.4 percent rise for
September.
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Asian Stocks Rally On China Relief
Asian stocks
rose across the board on Thursday after a string of Chinese economic
data beat estimates, raising hopes for a rebound in the world's second
largest economy. Fresh signs of recovery in the U.S. housing market and e-Bay's
third-quarter results that were largely in line with estimates also
helped lift investor sentiment ahead of the EU summit beginning in
Brussels, Belgium tonight. Ahead of the release of China's economic
growth data, Premier Wen Jiabao had said that the Chinese economy is
stabilizing and should meet fiscal-year economic targets.
Japanese
shares rose for the fourth straight session, boosted by encouraging
Chinese data and speculation that the Bank of Japan may consider further
monetary easing at its next policy meeting. With a weaker yen against
both the euro and dollar lifting exporters, the benchmark Nikkei average jumped 2 percent to 8,983, its highest closing level since September 25. The broader Topix index rallied 1.7 percent.
Automakers such as Toyota Motor and Honda Motor rose 2-4 percent, heavyweight Fast Retailing advanced 2.8 percent and steelmaker JFE Holdings gained 1.9 percent. China-sensitive Fanuc and Komatsu rose
by 1.2 percent and 4.7 percent, respectively on hopes for a year-end
rebound in China. Canon jumped 3 percent, closing up for a sixth
consecutive session, shares of Sony added 2.8 percent, Advantest climbed 6.2 percent and Yaskawa Electric soared 6.7 percent on a brokerage upgrade.
China's Shanghai Composite index rose 1.2 percent and Hong Kong's Hang Seng index gained half a percent after official data showed China's industrial production, retail sales and fixed-asset investment accelerated in September, signaling that the country is not at risk of hard landing.
Growth
in China's overall national output continued to slow in the third
quarter with the gross domestic product recording a 7.4 percent
year-on-year growth during the period, data from the National Bureau of Statistics showed. This was in line with expectations but slower than the 7.6 percent growth recorded in the second quarter.
Industrial production
grew 9.2 percent year-on-year in September compared to forecasts for a 9
percent rise, while retail sales grew 14.2 percent annually during the
month compared to expectations for a 13.2 percent increase, data
released by the statistical office showed. Fixed asset investment during
the January to September period was up 20.5 percent, slightly faster
than 20.2 percent growth forecast by analysts.
Australian shares hit a 15-month high, led by miners after a batch of Chinese economic reports beat estimates. The benchmark S&P/ASX 200 index rose 0.7 percent to 4,559, its highest close since late July 2011. Global miners BHP Billiton and Rio Tinto soared
3-5 percent, tracking firmer copper prices, while smaller rival
Fortescue rose 2.7 percent and gold miner Newcrest added 1.2 percent. Gindalbie Metals jumped 10.5 percent after announcing the first commercial shipment of iron ore from its 50%-owned Karara iron ore project.
Oil
& gas firm Woodside Petroleum advanced 2.4 percent after the
company lifted its full year production target, mainly due to a better
than expected performance at its Pluto gas project. Oil Search and
Santos edged down modestly. Media firm Ten Network Holdings fell 1.6
percent, extending the previous session's loss after posting a full-year
loss of A$12.9 million and launching another cost-cutting program.
Banks ended mostly higher, with ANZ and Commonwealth ending flat, while
NAB rose 0.6 percent and Westpac added 0.2 percent.
In economic news, Australia's international merchandise
imports fell 3 percent on a seasonally-adjusted basis to A$20.6 billion
($21.3 billion) in September compared to A$21.22 billion in August,
figures released by the Australian Bureau of Statistics revealed.
Seoul shares rose modestly on the back of stronger-than-expected U.S. housing data. The benchmark Kospi average
edged up 0.2 percent, led by shipbuilders and oil stocks.
Economy-sensitive shipbuilders extended gains for a second consecutive
session on easing Eurozone concerns ahead of the two-day EU summit,
where leaders are expected to discuss ways to strengthen economic and
monetary union. Hyundai Heavy Industries and Daewoo Shipbuilding jumped 3-5 percent.
New
Zealand shares rose to a fresh four-and-a-half-year high after Chinese
GDP data came in line with expectations. Breaking through the
psychological 4,000 level, the benchmark NZX-50 ended the session up nearly a percent at 4,002, its highest level since January 2008.
Among the prominent gainers, Fletcher Building, the nation's largest construction company, climbed 3.3 percent, utility Contact Energy rallied 1.9 percent and Telecom, New Zealand's largest telecommunications company, rose 0.8 percent. Fisher & Paykel Appliances added 2.4 percent after Chinese appliance maker Haier raised its takeover offer for the whiteware manufacturer. Goodman Fielder led the decliners on the exchange, falling 2.9 percent.
Elsewhere, India's benchmark Sensex was moving up 0.8 percent, Indonesia's Jakarta Composite index was up 0.4 percent, Malaysia's KLSE Composite rose 0.2 percent, Singapore's Straits Times index was gaining 0.4 percent and the Taiwan Weighted average edged up marginally.
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Crude Steady Amid China GDP, US Inventories Data
The
price of crude oil was little changed Thursday morning as traders
digest economic growth data out of China, the second largest energy
consuming nation and inventories data from the U.S., the world's largest
economy.
Growth in China's overall national output continued to
slow in the third quarter with the GDP recording a 7.4 percent
year-on-year growth, data from the National Bureau of Statistics showed.
This was in line with expectations but slower than the 7.6 percent
growth recorded in the second quarter.
Light Sweet Crude Oil
(WTI) futures for November delivery, slipped $0.17 to $91.95 a barrel.
Yesterday, ended almost flat on a weak dollar and some upbeat housing
data from the U.S. that brightened the demand growth scenario. Investors
were also upbeat on a resolution to the euro zone debt crisis with the
upcoming European heads of state summit this week. Gains were capped as
an Energy Information Administration weekly oil report that showed U.S. crude stockpile to have increased last week.
Wednesday
during trading hours, the EIA revealed that U.S. crude oil inventories
moved up by 2.90 million barrels and gasoline stocks added 1.70 million
barrels in the weekended October 12. Analysts expect crude oil
inventories to gain 1.5 million barrels and gasoline stocks to shed 0.40
million barrels last week.
The price of gold was ticking
lower Thursday morning as traders were cautious ahead of the outcome of
the two-day summit of the EU leaders at Brussels, beginning today.
Gold for
December delivery, the most actively traded contract, eased $6.30 to
$1,746.70 an ounce. Yesterday, gold ended higher with the dollar
continuing to weaken against some major currencies and hopes of
resolution to the euro zone debt crisis coupled with reports that Spain
is inching closer to an official request for bailout. Nonetheless, some
upbeat housing data from the U.S. capped gains made by the precious
metal.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,333.89 tons.
This morning, the U.S. dollar slipped
back toward a one-month low versus the euro and a two-week low against
sterling. The buck was advancing to a 2-month high versus the yen and
trading higher against the Swiss franc.
In economic news from the
euro zone, U.K. retail sales volume that include sales of automotive
fuel grew 0.6 percent in September from a month ago, when it fell 0.1
percent, the Office for National Statistics said . Economists had
forecast a 0.4 percent rise for September. Sales excluding automotive
fuel also expanded 0.6 percent month-on-month, larger than the 0.3
percent rise forecast by economists.
Traders will look to
the weekly jobless claims data from the U.S. Labor Department due out at
8.30 a.m ET. Economists expect the new claims to move up to 365,000
from the last week's 339,000.
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