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Stocks Extending Yesterday's Rally In Early Trading
After
turning higher over the course of the previous session, stocks are
seeing some further upside in early trading on Thursday. The major
averages have climbed firmly into positive territory, continuing to
recover from the weakness seen earlier this month.
The major averages have recently pulled back off their highs for the young session but are holding on to gains. The Dow is up 50.50 points or 0.4 percent at 13,035.61, the Nasdaq is up 19.19 points or 0.6 percent at 3,010.97 and the S&P 500 is up 6.38 points or 0.5 percent at 1,416.31.
The early strength on Wall Street
is partly due to a positive reaction to a pair of U.S. economic
reports, including a report from the Labor Department showing a modest
drop in initial jobless claims in the week ended November 24th.
The report said jobless claims
dipped to 393,000, a decrease of 23,000 from the previous week's
revised figure of 416,000. Economists had expected jobless claims to
fall to 390,000 from the 410,000 originally reported for the previous
week.
A separate report from the Commerce Department said U.S. GDP increased by more than previously estimated in the third quarter.
The Commerce Department said
GDP increased at an annual rate of 2.7 percent in the third quarter
compared to the 2.0 percent growth previously reported. Economists had
expected the pace of GDP growth to be upwardly revised to 2.8 percent.
While
the stronger than previously estimated GDP growth reflected upward
revisions to private inventory investment and exports, the report also
showed a downward revision to the pace of consumer spending growth.
Positive sentiment has also been generated by a report from the European
Commission showing that Eurozone economic confidence strengthened in
November, marking the first improvement since February.
Traders
are also keeping an eye on developments in Washington, where lawmakers
continue to negotiate an agreement to avoid the looming fiscal cliff
Steel stocks have shown a strong move to the upside in early trading, driving the NYSE Arca Steel Index up by 1.5 percent. AK Steel (AKS) and Olympic Steel (ZEUS) are posting notable gains.
Electronic storage, networking, and biotechnology stocks are also seeing early strength, moving to the upside along with most of the major sectors.
In
overseas trading, stock markets across the Asia-Pacific region saw
notable strength during trading on Thursday. Japan's Nikkei 225 Index
and Hong Kong's Hang Seng Index both ended the day up by 1 percent,
while Australia's All Ordinaries Index advanced by 0.6 percent.
The major European markets have also shown strong moves to the upside on the day. While the German DAX Index has risen by 0.8 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 1 percent and 1.2 percent, respectively.
In the bond market, treasuries are
giving back some ground after moving higher over the three previous
sessions. Subsequently, the yield on the benchmark ten-year note, which
moves opposite of its price, is up by 1.5 basis points at 1.632 percent.
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TSX Jumps At Open Thursday
Bay Street stocks opened
higher Thursday amid burying in commodities, with the S&P/TSX
Composite Index surging 74.25 points or 0.61 percent to 12,214.58.
The
Diversified Materials Index rose nearly 2 percent, with Inmet Mining
gaining about 5 percent. First Quantum Minerals and Teck Resources moved
up around 1 percent each.
In the oil patch, Bonterra Energy and Trilogy Energy gathered close to 2 percent each. In the financial space, Royal Bank of Canada moved up 1 percent after reporting higher fourth-quarter net income.
Fashion
apparel products company Gildan Activewear Inc. rose over 2 percent
after reporting that its fourth-quarter net income increased to $89.02
million or $0.73 per share from $48.46 million or $0.40 per share last
year.
Meanwhile, The Descartes Systems Group Inc. slipped 0.50 percent even after posting higher third-quarter net income.
The
price of crude oil was moving higher Thursday morning amid US budget
optimism after President Barack Obama said that he was hopeful the White
House and Congress could reach a deal before Christmas. Crude for
January added $1.09 to $87.58 a barrel.
The price of gold was
paring previous session's losses Thursday morning as traders await more
cues on the US budget talks. Gold for February delivery, the most
actively traded contract, edged up $5.70 to $1,724.50 an ounce.
In corporate news from Canada, Royal Bank of Canada
reported that its fourth-quarter net income increased to C$1.91 billion
or C$1.25 per share from C$1.57 billion or C$1.02 per share reported
last year.
Global logistics technology solutions provider The Descartes Systems Group Inc.
posted higher third-quarter net income of $3.1 million or $0.05 per
share versus $2.7 million or $0.04 per share last year. Analysts
expected earnings per share of $0.14 for the quarter.
Fashion apparel products company Gildan Activewear Inc.
reported that its fourth-quarter net income increased to $89.02 million
or $0.73 per share from $48.46 million or $0.40 per share last year.
Adjusted profit per share came in at $0.78. Analysts expected the
company to report fourth-quarter profit per share of $0.80.
Media and entertainment company Corus Entertainment Inc
said it expects to report consolidated segment profit for fiscal 2013
in the range of $293 million to $303 million, and free cash flow for the
year in excess of $140 million.
Base-metals miner Inmet Mining Corp.
said it rejected an unsolicited non-binding, highly conditional
proposal from First Quantum Minerals for First Quantum to acquire all of
the shares of Inmet for of C$70.00 share
In economic news, Statistics Canada
said the nation's current account deficit, on a seasonally adjusted
basis, increased $0.5 billion to $18.9 billion in the third quarter,
mainly due to a larger decline in exports than imports. Total exports of
goods were down $3.7 billion to $112.7 billion, while Imports of goods
declined $2.5 billion
Separately, the agency said the
Industrial Product Price Index was down 0.1 percent in October compared
with September, largely the result of lower prices for petroleum and
coal products. Meanwhile, the Raw Materials Price Index was unchanged in
October.
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European Stocks Rise On US Budget Hopes
European stocks rose
on Thursday as signs of progress in talks over the U.S. budget issues
lifted appetite for risk. President Barack Obama and Speaker of the
House John Boehner both said a deal to avoid a budget crisis could be
reached before the end of the year, boosting investor sentiment. Obama
and the US Congress have until Jan. 1 to avert the so-called fiscal
cliff of big tax increases and spending cuts.
The Euro Stoxx 50
index of Eurozone bluechip stocks is gaining 1.1 percent and the Stoxx
Europe 50 index, which includes some major U.K. companies, is moving up
0.8 percent while key benchmark indexes in Switzerland, the U.K.,
Germany and France are up between 0.8 percent and 1.2 percent.
Banking stocks
are among the prominent gainers. Commerzbank AG is climbing 2.4
percent, Deutsche Bank is gaining 1.6 percent, Spain's Banco Popular is
climbing 4.8 percent and French lender Societe Generale is adding 1.8
percent.
Invensys shares are up 11.6 percent in London
after Siemens offered to buy its rail automation business for about 2.2
billion euros or 1.742 billion pounds.
Kingfisher shares
are down 1.7 percent after the firm reported third-quarter retail profit
of 257 million pounds, down 5.9 percent on a reported basis.
Rio Tinto Plc
is climbing 4.1 percent after the global miner said that it targets
cumulative savings of more than $5 billion by the end of 2014 in order
to tide over the challenges from the volatile economic environment.
In economic releases, U.K. house
prices dropped for the ninth month in a row in November, data from
Nationwide Building Society showed. House prices were down 1.2 percent
from a year ago, following a 0.9 percent drop in October.
Separately, Germany's unemployment rate
remained unchanged at 6.9 percent in November, data from the Federal
Labor Agency showed, matching expectations. At the same time, the number
of unemployed rose by 5,000 from a month earlier in the month.
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Asian Stocks Broadly Higher On US Fiscal Deal Hopes
Asian stocks rose
broadly on Thursday on signs of progress on the U.S. fiscal cliff after
President Barack Obama and Speaker of the House John Boehner both said a
deal to avoid a budget crisis could be reached before the end of the
year. The renewed optimism over the fiscal cliff, continued expectations
that the Bank of Japan will pursue powerful easing after a December 16
election and positive data on Australian new-home sales helped lift
appetite for risker assets. Obama and the US Congress have until Jan. 1
to avert the so-called fiscal cliff of big tax increases and spending
cuts.
Tokyo stocks rebounded from the previous session's
losses, supported by the yen's weakness against the dollar and the euro
as well as easing worries over the U.S. fiscal cliff. Both the Nikkei
average and the broader Topix index rose about a percent each despite
relatively thin trading volumes. Exporters like Honda Motor and TDK rose
about 2 percent each after Japan's main opposition Liberal Democratic
Party leader and possible next Prime Minister, Shinzo Abe, said the
government and the Bank of Japan should forge an accord to achieve a 2 percent inflation target.
Sharp jumped over 3 percent on reports that it is in talks with Dell, Intel Corp., and Qualcomm Inc. about a capital injection. JVC Kenwood rallied 3.2 percent on a Nikkei report that it seeks to generate some Y13 billion in group net profit in fiscal 2015. Heavyweight Fast Retailing edged up 0.3 percent, extending gains for the tenth consecutive session on expectations of strong Christmas sales.
China's Shanghai Composite index slid half a percent, dragged down by brokerages on expectations of weak corporate earnings. Hong Kong's Hang Seng index added a percent, shrugging off weakness in Chinese shares.
Australian
shares gained ground following encouraging remarks from U.S. House
speaker John Boehner on the fiscal cliff deal before the end of the
year. The benchmark S&P/ASX 200 rose 0.7 percent, while the broader All Ordinaries index added 0.6 percent. Rio Tinto rose
0.9 percent on saying it targets cumulative savings of more than $5
billion by the end of 2014 in an attempt to tide over the challenges
from the volatile economic environment. Rival BHP Billiton rose 0.6
percent, Fortescue Metals Group rallied 1.6 percent and gold miner
Newcrest added 1.1 percent.
Among the major banks, NAB, Commonwealth, Westpac and ANZ rose
between 0.3 percent and 1.1 percent. Tower rallied 2.7 percent after
the insurer posted a 67 percent rise in full-year profit and said it
would return capital to shareholders after the sale of its medical
insurance business.
In economic news, the Australian Bureau of Statistics
reported that new private capital spending rose a seasonally adjusted
2.8 percent in the third quarter of 2012 to A$42.5 billion, beating
forecasts. Another report from the Housing Industry Association showed
that sales of new homes in Australia rose 3.4 percent in October from
the previous month, led by a large rise in apartment sales.
Seoul
shares rose to a three-week high as signs of progress in talks over the
U.S. budget issues lifted appetite for risk. The benchmark Kospi
average rallied 1.2 percent to 1,935. Automakers and economy-sensitive
shipbuilders led the gainers. Hyundai Motor and its affiliate Kia Motors
rose 3-5 percent, while Hyundai Heavy, Samsung Heavy Industries, Daewoo Shipbuilding and STX Offshore & Shipbuilding climbed 4-11 percent.
On the macroeconomic front, a survey published by Bank of Korea
showed that business expectations among South Korean firms declined to
its lowest level in nearly four years in December. The index reflecting
manufacturers' business expectations one-month ahead fell to 67 in
December from 70 in November, with a reading below 100 meaning
pessimists outnumber optimists. The index of manufacturers' assessment
of the current business conditions fell to 67 in November from 68
recorded for October.
New Zealand shares rose to a fresh five-year high, boosted by positive global cues. The benchmark NZX-50 index edged up 0.1 percent to 4,017, its highest level since January 2008. Shares of Sky Network Television jumped
3 percent after the nation's largest pay-tv operator announced it would
pay $124.5 million in a special dividend to shareholders as a means to
distribute $44 million in tax credits.
Shower and tapware manufacturer Methven soared
5.2 percent despite reporting a 27.4 percent drop in net profit for the
six months to September. Pyne Gould Corp plunged 15 percent to a record
low in the wake of news that the firm will probably quit New Zealand.
Exporter Fisher & Paykel Healthcare tumbled 3.1 percent on going ex-dividend.
Elsewhere, India's benchmark Sensex was up 1.4 percent, Indonesia's Jakarta Composite index was gaining 0.3 percent, Malaysia's KLSE Composite index edged up marginally, Singapore's Straits Times index was up 1.1 percent and the Taiwan Weighted index advanced 0.9 percent.
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Crude Rebounds On US Budget Hopes
The price of crude oil was
moving higher Thursday morning amid US budget optimism after President
Barack Obama said that he was hopeful the White House and Congress could
reach a deal before Christmas.
Light Sweet Crude Oil
(WTI) futures for January delivery, added $1.08 to $87.57 a barrel.
Yesterday, oil settled lower to extend losses for a third session on
demand concerns as investors worried over the looming fiscal cliff with
reports of "little progress" in debt talks. The fiscal cliff involves
billions of dollar in spending cuts and tax increases indicated to begin
in January, unless an agreement is reached. Nonetheless, oil pared some
of the losses on supply concerns after an Energy Information
Wednesday during trading hours, the EIA said
that US crude oil inventories eased 0.30 million barrels, while
gasoline stocks jumped by 3.90 million barrels in the weekended November
23. Analysts expected crude supplies to increase 500,000 barrels and
gasoline stocks to add 1 million barrels last week.
The price of gold was paring previous session's losses Thursday morning as traders await more cues on the US budget talks.
Gold for
February delivery, the most actively traded contract, recovered $7.20
to $1,726.00 an ounce. Yesterday, gold settled sharply lower for a third
straight day, with deflation fears impacting the precious metal, as
investors focused on the U.S. debt talks which is reported to have made
"little progress" thus far. Gold thrives on inflation while deflation
pushes the precious metal down.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to a record high of 1,347.02 tons from 1,345.81 tons.
This morning, the U.S. dollar was
lingering near its 3-week low versus the euro and sterling. The buck
was hovering around a 7-month high versus the yen, while ticking lower
against the Swiss franc.
In economic news, euro zone economic
confidence improved more than expected in November, survey results from
European Commission showed. The corresponding index rose to 85.7 from
84.3 in the prior month and stayed above the consensus forecast of 84.5.
Confidence strengthened in industry and retail trade, which were partly
offset by decreases among consumers and construction.
Meanwhile,
Germany's unemployment rate remained unchanged at 6.9 percent in
November, data from the Federal Labor Agency showed. The outcome was in
line with expectations. At the same time, the number of unemployed rose
by 5,000 from a month earlier in November.
Traders will
look to the release of second read of the third quarter GDP growth from
the U.S. Commerce Department, due out at 8:30 am ET. Economists expect
growth to be upwardly revised to 2.8 percent.
Simultaneously, the
Labor Department is due to release its customary jobless claims report
for the week ended November 24. Economists expect claims to decline to
390,000 from 410,000 in the previous week.
Later during the
session, the National Association of Realtors is scheduled to release
its pending home sales index for October. The consensus expectations
call for a 1 percent increase in the index compared to the 0.3 percent
increase in September.
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