London open: Footsie drops to 10-week low on US and Eurozone fears
Market Movers
techMARK 2,044.26 -0.22%
FTSE 100 5,703.36 -0.33%
FTSE 250 11,693.84 -0.21%
The FTSE 100 sunk to a 10-week low in intraday trade on Thursday
morning as worries about the US budget and uncertainty in the Eurozone
continues to dampen stocks.
The last time the Footsie closed lower was on September 5th when it finished at 5,658.
Market chatter still abounds on the danger of the 'fiscal cliff'
as the country's politicians prepare for talks scheduled for Friday to
come to an agreement on how to deal with the budget deficit. President
Barack Obama's administration and Republican lawmakers must come to an
agreement in order to avoid $607bn in spending cuts and tax increases
that, if not changed, will take effect on January 1st.
On this
side of the Atlantic, stocks sank yesterday after Olli Rehn, the
European Commissioner for Economic and Monetary Affairs, said that Spain
has taken "effective action" to reduce its deficit in 2012 and 2013,
disappointing some who were expecting the government to request a
bailout soon. However, Rehn did say that Spain could fall short of
making its 2014 deficit.
Meanwhile, Belgium's central bank governor and ECB governing council member Luc Coene has said that Greece will eventually need another haircut on its "towering debt".
Economic data this morning is expected to see the Eurozone region slip back into its second recession since the third quarter of 2009. GDP for the single-currency area is forecast to fall 0.2% in the third quarter.
In addition to the US 'fiscal cliff' and Eurozone concerns that continue to plague the markets, "the ongoing conflict between Israel and Hamas
seems to be in danger of escalating causing additional uncertainty with
investors fleeing out of stocks as a result," according to Markus
Huber, head of German HNW trading at ETX Capital.
In other news, Fitch Ratings last night raised its outlook for the Republic of Ireland
from 'negative' to 'stable' to reflect its "continued progress with its
fiscal consolidation, external adjustment and economic recovery, as
well as the sovereign's improved financing options."
FTSE 100: Resolution slumps on international concerns and IT costs
Life insurer Resolution
tanked after a somewhat mixed update, saying that new business
profitability is continuing to improve, but that its international
business is "below par" and it will incur higher costs from IT updates.
Oil giant BP
fell after announcing that it is close to resolving claims with US
regulators relating to the Gulf of Mexico oil spill in 2010. The
resolutions are expected to represent the largest criminal penalty in
history.
Rexam, the consumer packaging giant, dropped
after revealing weakness in its Healthcare division, despite a broadly
'in line' performance in the third quarter across the group.
British Gas owner Centrica
fell after saying that average UK residential gas consumption for the
first ten months of 2012 was 9% higher than for the same period of 2011,
while average electricity consumption was 1% lower.
Sector peer National Grid
was also lower despite saying that underlying pre-tax profit of £1,154m
for the six months to the end of September was up 21% from £953m the
year before.
Copper miner Antofagasta was also down
after a decline in copper and molybdenum prices partially offset the
benefits of increased volumes in the first nine months of 2012.
| UK Event Calendar |
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Thursday November 15
INTERIMS
3i Group, Atkins (WS), Invensys, Investec, National Grid, Opsec Security Group
INTERIM DIVIDEND PAYMENT DATE
Cenkos Securities, Sagicor Financial Corp., Tullett Prebon
QUARTERLY PAYMENT DATE
Abbott Laboratories, Marsh & Mclennan Cos Inc.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Consumer Price Index (EU) (10:00)
Consumer Price Index (US) (13:30)
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (15:30)
ECB Report (EU) (09:00)
GDP (Flash Estimate) (EU) (10:00)
Gross Domestic Product (GER) (07:00)
Harmonised Index of Consumer Prices (EU) (10:00)
Initial Jobless Claims (US) (13:30)
Philadelphia Fed Index (US) (15:00)
Wholesale Price Index (GER) (07:00)
Q3
Caledonia Mining Corp., MHP SA GDR (Reg S)
GMS
Hellenic Telecom Industries SA ADS, Rugby Estates, Verdes Management
FINALS
Euromoney Institutional Investor
IMSS
Alpha
UK Multi Property Trust, Amlin, BBA Aviation, Centrica, Derwent London,
Hill & Smith Holdings, Keller Group, Premier Oil, Resolution Ltd.,
Rexam, Ted Baker, Unite Group, UTV Media
AGMS
Armor Designs Inc. (DI), El Oro Ltd, Kier Group, Medusa Mining Ltd. (DI), Red Emperor Resources NL (DI), Ricardo, Swallowfield
UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Quayle Munro Holdings
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| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European
stocks are set to open lower on Thursday, extending the previous
session's losses, on concerns that the U.K. may lose its triple-A rating
after Moody's Investors Service said
it would revisit the nation's government debt rating and the current
'negative' outlook next year in the face of gloomier economic prospects
and rising risks from the euro area.
Releasing its annual credit
report on the country, Moody's cautioned that the government's efforts
to achieve fiscal consolidation and reduce debt are being hampered by
weaker economic prospects as well as by the risks posed by the ongoing
euro area sovereign debt crisis.
Asian markets are broadly lower,
weighed down by the ongoing concerns about the U.S. fiscal cliff and
worries about renewed tensions and social angst against unpopular
austerity measures in peripheral Eurozone countries.
Japanese shares are bucking the downward trend, with the Nikkei average gaining
nearly 2 percent, as the yen's weakness lifted export-linked shares.
Japan's Prime Minister announced a general election for next month,
increasing speculation that a change of government would result in more
action to stimulate the economy.
Brent crude prices are
firming up slightly, extending overnight gains on supply concerns after
Israel launched its most intense air offensive against militants in the
Gaza Strip since 2008. Copper and gold are narrowly mixed, as the euro
steadied following successful bond auctions in Greece and Italy.
In
economic releases, the French economy expanded 0.2 percent from the
previous three months in the third quarter, with domestic demand and
foreign trade contributing positively to the gross domestic product, the
latest figures from the statistical office Insee revealed. Economists
expected the economy to stagnate during the period.
Quarterly national accounts from
the euro area and other major Eurozone economies are due later in the
European session. Across the Atlantic, traders will keep an eye on data
concerning weekly jobless claims, consumer price inflation and
manufacturing activity in the New York and Philadelphia areas.
In domestic corporate news, Bouygues SA
raised its 2012 sales outlook slightly after reporting higher sales of
9.09 billion euros for the third quarter. The company's net profit
attributable to the Group, however, declined to 286 million euros from
403 million euros in the prior year quarter.
Ablynx reported that its nine-month period net loss narrowed to 22.3 million euros from 33.1 million euros in the year ago period.
Air Berlin reported third-quarter net income of 66.6 million euros, up from 30.2 million euros in the same quarter last year.
Buyout firm Apollo Global Management LLC, run by Leon Black, is in the lead to buy U.K. insurer Aviva Plc's U.S. life insurance and annuities business, the Bloomberg reported, quoting people with knowledge of the matter.
Koninklijke Ahold NV
posted third-quarter net income attributable to common shareholders of
139 million euros or 0.13 euros per share, lower than 257 million euros
or 0.23 euros per share reported a year ago.
European stocks
drifted lower on Wednesday as violent protests and coordinated walkouts
organized by labor unions in Greece, Spain, Portugal and Italy stoked
concerns that Europe is failing to contain the debt crisis. Some weak
economic data, including separate reports showing a larger than expected
decline in Eurozone industrial output and the unexpected jump in
British jobless claims also eroded investors' appetite for riskier
assets. Key benchmark indexes in Switzerland, France, Germany and the
U.K. fell between 0.7 percent and 1.1 percent.
U.S. stocks fell
sharply overnight, extending a recent downtrend since last week's
elections, as investors fretted about U.S. budget negotiations,
widespread protests against austerity measures in Europe and a flare-up
of violence in the Middle East. Further denting sentiment, data showed
that U.S. retail sales fell in October for the first time in three
months following an upwardly revised 1.3 percent increase in September.
The Dow and the tech-heavy Nasdaq fell 1.5 percent and 1.3 percent, respectively, to end at their lowest closing levels in over four months, while the S&P 500 lost 1.4 percent to hit a three-month low. |
| US Market Report |
US close: Israeli air strike adds to investors' worries
Market movers
Dow Jones: -185 at 12,571
S&P 500: -19 at 1,355
NASDAQ Composite: -37 at 2,847
Disappointing economic data, worries about the impending 'fiscal cliff'
and the prospect of heightened tensions in the Middle East after
Israeli air stikes on the Gaza Strip killed the head of the military
wing of the Palestinian Islamist group Hamas all combined to send equity
prices tumbling.
Retail sales fell by 0.3% in October (+3.8%
year-on-year) to $411.6bn. The market consensus was expecting a 0.2%
decline. Retail sales for September were revised higher to 1.3% (5.4%
year-on-year) from the previously reported 1.1%.
Market chatter still abounds on the danger of the 'fiscal cliff'
as the country's politicians prepare for talks scheduled for Friday to
come to an agreement on how to deal with the budget deficit.
President Barack Obama's administration and Republican lawmakers must come to an agreement in order to avoid $607bn in spending cuts and tax increases that, if not changed, will take effect on January 1st.
Investors were also fretting about US dividend taxes: these have been at 15% for nearly a decade but could automatically increase when the 2003 deal expires in 2013.
The mood was upbeat to start the session with doveish comments from Federal Reserve Vice Chair Janet Yellen
providing a lift. Yellen, who is widely expected to be Chairman Ben
Bernanke's successor if he leaves, said that the Fed should change its
stance and tie the interest rate outlook to unemployment and inflation.
"The Committee might eliminate the calendar date entirely and replace
it with guidance on the economic conditions that would need to prevail
before lift-off of the federal funds rate might be judged appropriate,"
she said. Company movers
Networking equipment firm Cisco gave a boost to the whole sector with better-than-expected fiscal first-quarter figures. Juniper Networks and F5 Networks were both being pulled along on Cisco's coat-tails.
Elsewhere in the tech sector, computer chip maker Advanced Micro Devices
gave up all of yesterday's gains as it poured cold water on reports
that it has hired JPMorgan to explore the possibility of selling some or
all of the company.
Trendy retail group Abercrombie & Fitch soared after raising profit guidance for the year on back of better than expected third quarter figures.
Banking groups Bank of America and JPMorgan Chase & Co were heavy fallers.
Other markets
US Treasuries closed the day little changed, with the yield on the benchmark 10-year Treasuries unchanged at 1.59%.
On the futures market, West Texas sweet light crude for December rose
94 cents to $86.32 a barrel on the New York Mercantile Exchange.
S&P 500 - Risers
Abercrombie & Fitch Co. (ANF) $41.92 +34.45%
Cisco Systems Inc. (CSCO) $17.66 +4.81%
NetApp Inc. (NTAP) $27.12 +3.01%
Staples Inc. (SPLS) $11.55 +2.62%
Dell Inc. (DELL) $9.58 +1.91%
JDS Uniphase Corp. (JDSU) $11.13 +1.64%
Xilinx Inc. (XLNX) $33.68 +1.50%
General Mills Inc. (GIS) $39.86 +1.30%
Lexmark International Inc. (LXK) $22.12 +1.28%
Jabil Circuit Inc. (JBL) $17.17 +1.18%
S&P 500 - Fallers
Advanced Micro Devices Inc. (AMD) $1.93 -7.66%
Pitney Bowes Inc. (PBI) $10.85 -7.03%
PulteGroup Inc. (PHM) $15.23 -5.78%
Federated Investors Inc. (FII) $18.43 -4.71%
D. R. Horton Inc. (DHI) $18.39 -4.47%
United States Steel Corp. (X) $20.37 -4.41%
NYSE Euronext Inc. (NYX) $22.28 -4.30%
Cablevision Systems Corp. (CVC) $13.65 -4.14%
Seagate Technology Plc (STX) $26.78 -4.12%
Alpha Natural Res (ANR) $7.27 -4.09%
Dow Jones I.A - Risers
Cisco Systems Inc. (CSCO) $17.66 +4.81%
Dow Jones I.A - Fallers
Bank of America Corp. (BAC) $8.99 -3.64%
General Electric Co. (GE) $20.01 -3.24%
United Technologies Corp. (UTX) $74.65 -3.05%
Home Depot Inc. (HD) $61.47 -3.01%
Boeing Co. (BA) $71.29 -2.82%
Chevron Corp. (CVX) $102.50 -2.64%
Caterpillar Inc. (CAT) $81.10 -2.59%
Mondelez International Inc. (MDLZ) $25.15 -2.31%
Alcoa Inc. (AA) $8.13 -2.17%
American Express Co. (AXP) $53.65 -1.99%
Nasdaq 100 - Risers
Cisco Systems Inc. (CSCO) $17.66 +4.81%
NetApp Inc. (NTAP) $27.12 +3.01%
Staples Inc. (SPLS) $11.55 +2.62%
Dell Inc. (DELL) $9.58 +1.91%
Xilinx Inc. (XLNX) $33.68 +1.50%
F5 Networks Inc. (FFIV) $87.50 +1.11%
Research in Motion Ltd. (RIMM) $8.49 +1.07%
Apollo Group Inc. (APOL) $19.17 +0.84%
Broadcom Corp. (BRCM) $30.67 +0.76%
Altera Corp. (ALTR) $30.77 +0.49%
Nasdaq 100 - Fallers
Randgold Resources Ltd. Ads (GOLD) $100.94 -6.69%
Baidu Inc. (BIDU) $93.57 -5.10%
Vertex Pharmaceuticals Inc. (VRTX) $42.16 -4.40%
Seagate Technology Plc (STX) $26.78 -4.12%
Monster Beverage Corp (MNST) $44.74 -3.56%
Flextronics International Ltd. (FLEX) $5.60 -3.28%
Sirius Satellite Radio Inc. (SIRI) $2.70 -3.23%
Micron Technology Inc. (MU) $5.55 -3.22%
Expedia Inc. (EXPE) $55.47 -3.01%
Starbucks Corp. (SBUX) $48.84 -2.92% |
| FX and Commodities round-up |
FX round-up: Euro snaps five day losing streak
The
euro ended its weak run against the dollar on Wednesday as worries
about Eurozone debt were eclipsed by a speech from President Barack
Obama about the looming 'fiscal cliff'.
Obama's administration
and Republican lawmakers must strike an agreement to avoid $607bn in
spending cuts and tax increases that take effect on January 1st.
Focus also turned to US officials who are preparing for talks this
Friday for an agreement on how to deal with the budget deficit.
In economic news, US retail sales fell in October, as producer prices
unexpectedly fell last month. The dollar came under further pressure
after the latest minutes from the Federal Reserve's policy meeting last
month indicated that officials had discussed the need for more bond
buying.
The euro changed hands at $1.2739 from $1.2706 on
Tuesday following positive comments from European Union Economic and
Monetary Affairs Commissioner Olli Rehn. He said Spain has taken
effective steps to remedy its budget deficits for this year and 2013.
The ICE dollar index, which measures the greenback against a basket of
six major currencies, traded at 81.112 from 81.096 on Tuesday.
The yen remained under pressure after Prime Minister Yoshihiko Noda
pledged to hold an election next month. It is widely expected that he
will lose.
The pound fell 0.2% at $1.5841 after the Bank of
England's latest quarterly forecasts indicated inflation is expected to
remain above the central bank's 2% target until mid 2014.
Commodities: Middle East tensions fuel modest crude gains
Crude
oil futures rose on Wednesday, in lighter than usual trading, as
tensions in the Middle East flared up in an otherwise quiet day for
major headlines.
Crude for December delivery gained 94 cents to settle at $86.32 a barrel on the New York Mercantile Exchange.
Reports of an Israeli air strike in Gazza sent jitters through the
market and sent oil prices to an intra-day high of $86.65. Israel's
Prime Minister Benjamin Netanyahu says the operation against Palestine's
Hamas could be extended.
However oil prices traded at a low of $84.93 a barrel on persistent concern about weak global demand.
On the ICE futures exchange Brent oil futures settled $1.35 higher at $109.61.
Among precious metals gold prices settled higher on Wednesday as
escalating tensions in the Mid East spurred mild safe haven flows.
Gold for December delivery advanced $5.30 to settle at $1,730.10 an
ounce on the Comex division of the New York Mercantile Exchange.
Elsewhere January platinum climbed $5.20 to $1.591.60 an ounce
following reports that said recent strikes in South Africa have crimped
supplies of the metal.
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