Stocks Give Back Ground After Seeing Initial Strength
Stocks
moved higher at the start of trading on Monday, extending the upward
move seen over the course of the two previous weeks. The major averages
all moved to the upside at the open but did not see much follow-through
on the initial upward move.
The major averages have pulled back well off their highs for the session but currently remain in positive territory. The Dow is up 28.45 points or 0.2 percent at 13,054.03, the Nasdaq is up 13.05 points or 0.4 percent at 3,023.29 and the S&P 500 is up 4.65 points or 0.3 percent at 1,420.83.
The
initial strength on Wall Street was partly due to positive
manufacturing data out of China, with the data generating optimism about
the outlook for the global economy.
A report from the China Federation of Logistics and Purchasing showed that its purchasing managers' index rose to 50.6 in November from 50.2 in October, with a reading above 50 indicating growth in the Chinese manufacturing sector.
Buying interest waned not long after the open, however, as traders continue to express uncertainty about the looming U.S. fiscal cliff.
Traders
are keeping a close eye on developments in Washington, where lawmakers
continue to negotiate an agreement to avoid the automatic tax increases
in spending cuts currently due to go into effect at the end of the year.
While many of the major sectors are showing only modest moves, early strength is visible among computer hardware stocks. Dell has helped to lead the sector higher after Goldman Sachs upgraded its rating on the PC maker to Buy from Sell.
Electronic storage, commercial real estate, and natural gas stocks are also seeing early strength, while trucking and utilities stocks have moved to the downside.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. While Japan's Nikkei 225 Index edged up by 0.1 percent and Australia's All Ordinaries Index rose by 0.5 percent, Hong Kong's Hang Seng Index tumbled by 1.2 percent.
Meanwhile, the major European markets have all moved to the upside on the day. The U.K.'s FTSE 100 Index has risen by 0.3 percent, while the French CAC 40 Index and the German DAX Index are up by 0.9 percent and 1.1 percent, respectively.
In
the bond markets, treasuries have come under pressure, giving back some
ground after trending higher last week. Subsequently, the yield on the
benchmark ten-year note, which moves opposite of its price, is up by 3.9
basis points at 1.645 percent.
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TSX Poised To Extend Gains At Open - Canadian Commentary
Canadian
stocks are poised for positive open Monday as commodities were trading
firm after data over the weekend revealed that China's manufacturing
activity rose to a seven-month high in November on improved new orders
and production, mirroring signs of stabilization in the second-largest
economy. Also, macroeconomic data from across the Atlantic revealed a
slower contraction in Europe.
The Purchasing Managers' Index
rose to 50.6 from 50.2 in October, official survey jointly issued by
the China Federation of Logistics and Purchasing and the National Bureau
of Statistics showed Saturday. The sector expanded for the second
straight month.
The S&P/TSX Composite Index was
down 23.14 points or 0.19 percent to 12,216.23, after adding over 125
points or 1 percent in the past three straight sessions.
However, gains may be capped during the session as traders fret over the development on US budget talks.
U.S. stock futures were pointing to a higher open.
On Friday, the S&P/TSX Composite Index extended gains for a third session, adding 36.51 points or 0.30 percent to 12,239.36.
The price of Crude oil was moving higher Monday morning on China data, with Crude for January gained $0.63 to $89.54 a barrel.
The price of gold was ticking higher Monday morning amid a generally weak dollar, with traders awaiting cues from this week's economic data. gold for February added $9.10 to $1,721.80 an ounce.
In corporate news from Canada, private equity firm Onex Corp. said it would acquire a 50 percent holding in BBAM, a commercial jet aircraft manager, for $165 million.
Canadian Pacific said
it would take a fourth-quarter pre-tax non-cash charge of about $180
million or $107 million after tax on its option to build into the Powder
River Basin
Oil and gas company TransAtlantic Petroleum Ltd. swung
to profit in third-quarter, reporting net income was $6.99 million,
compared to net loss of $6.41 million in the year ago quarter. Net
income from continuing operations was $0.5 million or $0.00 per share,
compared to a net loss of $4.8 million, or $0.01 per share last year.
Analysts expected the company to report earnings of $0.01 per share.
Pharmaceutical retailer Jean Coutu Group Inc. announced that it is acquiring a 50 percent stake in Le Groupe Médicus Inc., a corporation specialized in orthotic and prosthetic devices.
Software services provider Constellation Software Inc. said it completed the acquisition of the software technology and clients of the Canadian healthcare business of Ormed Information Systems Ltd.
Metalworking machinery manufacturing company Exco Technologies reported
improved fourth quarter net income at C$7.1 million or C$0.17 per share
compared to C$2.7 million or C$0.06 per share in the year ago quarter.
Analysts expected the company to report earnings of C$0.14 per share for
the quarter. The company announced the quarterly dividend of C$0.0375
per common share
In economic news from the euro zone, the downturn in the euro zone manufacturing sector eased as estimated in November, final data from Markit Economics showed. The final manufacturing Purchasing Managers' Index rose to an eight-month month high of 46.2, in line with flash estimate. The reading was 45.4 in October.
Separately,
the agency said that the German manufacturing sector shrank as
estimated earlier in November, but the rate of contraction eased from
the previous month. The seasonally adjusted PMI for the manufacturing
sector increased to 46.8 in November from 46 in October, as recorded in
the preliminary reports.
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European Markets Rise After China Data
The
European markets are in positive territory on Monday, buoyed by
encouraging economic data from China. The Asian markets ended mixed, as
concerns about the U.S. fiscal cliff overshadowed optimism about the
improving outlook for China's economy.
Sentiment was also
influenced by the meeting of Eurozone finance ministers in Brussels
later today to discuss details of the buyback of Greek bonds held by
investors at a discounted rate. The buyback will be financed with 10
billion euros from the rescue package. It has to be concluded by
December 13 for Greece to secure 30 billion euros of agreed bailout money.
China's
manufacturing activity rose to a seven-month high in November on
improved new orders and production, mirroring signs of stabilization in
the second-largest economy.
The Purchasing Managers' Index
rose to 50.6 from 50.2 in October, official survey jointly issued by
the China Federation of Logistics and Purchasing and the National Bureau
of Statistics showed Saturday. The sector expanded for the second
straight month.
The downturn in the Eurozone manufacturing sector
eased as estimated in November, final data from Markit Economics
showed. The final manufacturing Purchasing Managers' Index rose to an eight-month high of 46.2, in line with flash estimate.
The
German manufacturing sector shrank as estimated earlier in November,
but the rate of contraction eased from the previous month, final data
from Markit Economics and BME showed revealed.
Meanwhile, the
French manufacturing sector operating conditions continued to
deteriorate in November, final data from Markit Economics showed.
The euro Stoxx 50 index of eurozone bluechip stocks is adding 0.62 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.45 percent.
The German DAX is gaining 0.4 percent and the French CAC 40 is rising 0.7 percent. The UK's FTSE 100 is advancing 0.3 percent and Switzerland's SMI is up 0.6 percent.
In Frankfurt, ThyssenKrupp is gaining 2 percent. Deutsche Boerse is advancing 1.5 percent and Fresenius is rising 1.3 percent.
Deutsche Bank is moderately up while Commerzbank is modestly down.
Duerr is gaining 2 percent. HSBC initiated the stock with a ''Neutral'' rating.
E.ON is losing around 1 percent. Carmakers BMW and Volkswagen are moderately lower.
Deutsche Bank initiated Euromicron with a ''Hold'' rating. The stock is up 0.2 percent.
In Paris, Alcatel Lucent is rising 3.9 percent. Deutsche Bank raised its price target on the stock.
Bouygues is gaining 3.7 percent and Vinci is rising 1 percent.
EADS
is climbing 2.2 percent. The Airbus maker confirmed that key
shareholders are discussing potential changes in the company
shareholding structure and corporate governance.
Berenberg reduced its rating on Sanofi. The stock is up 0.2 percent.
Credit Agricole and Societe Generale are making gains while BNP Paribas is modestly down.
On the losing side is Renault, which is falling 1.9 percent. Carrefour is losing 1.3 percent.
In London, Schroders is rising 3.5 percent, leading the gainers. Reed Elsevier is adding 2.9 percent and Melrose is gaining 2.4 percent.
Cable & Wireless Communications has agreed with Batelco Group to sell majority of the businesses within its Monaco & Islands division for an enterprise value of $680 million. The stock is gaining 5.4 percent.
Hargreaves Lansdown is falling 2.4 percent and Tate & Lyle is losing 1.2 percent.
Swiss Life is falling 2.3 percent in Zurich after Merrill Lynch cut the stock to ''Underperform'' from ''Neutral.''
Aryzta
is down 0.9 percent in Zurich. The Swiss bakery business reported a 9
percent growth in revenue for the first quarter, benefiting from
positive currency translation effect.
Across Asia/Pacific, China's Shanghai Composite index fell 1 percent and Hong Kong's Hang Seng dropped 1.2 percent. Australia's All Ordinaries, however, added 0.5 percent. Japan's Nikkei 225 also managed to end in positive territory by advancing 0.1 percent.
In
the U.S., futures point to a higher open on Wall Street. In the
previous session, stocks showed a lack of direction throughout much of
the trading day on continued uncertainty about the looming fiscal cliff.
While the Nasdaq slipped 0.1 percent, the Dow and the S&P 500 crept up less than a tenth of a percent each.
In the commodity space, Crude for January delivery is losing $0.05 to $88.86 per barrel and February gold is advancing $5.4 to $1718.1 a troy ounce. |
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Indian Shares End Modestly Lower On Profit Taking
Indian
shares ended a lackluster session modestly lower on Monday, as
investors took some profits off the table following a four-day rally,
awaiting the outcome of a voting in Parliament this week on the FDI in
multi-brand retail issue. Data showing improvement in manufacturing
growth and a decision by Morgan Stanley to raise India's growth forecast
for the current financial year to 5.4 percent from 5.1 percent
projected earlier, helped to limit the downside.
The seasonally adjusted HSBC Purchasing Managers' Index,
which gauges the business activity of India's factories, rose to 53.7
in the month from 52.9 in October, driven by a strong pick up in new
orders and improving purchasing activity.
The benchmark BSE Sensex ended the session down 35 points or 0.18 percent at 19,305, with 17 of its components retreating. The broader Nifty index
fell by 9 points or 0.15 percent to 5,871, while the BSE mid-cap and
small-cap indexes ended up 1.2 percent and 0.9 percent, respectively.
Banking and FMCG stocks were subdued, while realty, metal, power and
consumer durable stocks saw significant buying.
Among the prominent decliners in the Nifty pack, ONGC, Gail, Bharti Airtel, IDFC, and HDFC Bank fell 1-2 percent. Bajaj Auto
edged down 0.4 percent after the country's second-largest two-wheeler
maker reported a marginal decline in motorcycle sales in November. Kingfisher Airlines eased 0.8 percent on reports that it was served an eviction notice by the Mumbai International Airport.
Network 18 Media & Investments
fell 2.3 percent after the media conglomerate said it would sell its
entire stake in Newswire18 to private equity firm Samara Capital for
Rs.90 crore. Pharma stocks like Ranbaxy, Cipla and Sun Pharmaceutical Industries ended modestly lower ahead of a Cabinet meeting late Monday to formalize the pharmaceutical FDI policy guidelines.
Among those that gained ground, airline SpiceJet soared 5.3 percent on the buzz that promoter Kalanithi Maran may hike his stake in the company. Jet Airways also rose over 5 percent on stake sale reports.
GMR Infrastructure
jumped 6 percent after it won a stay order from a Singapore court on
the Maldives government's termination of a $511 million airport contract
that the company was executing.
Mahindra & Mahindra and Maruti Suzuki India gained about a percent each after they reported growth in auto sales for November. TVS Motor rallied 2.8 percent despite reporting a marginal 2 percent decline in its totalvehicle sales in November.
Likewise, Tata Motors
ended up half a percent despite posting a 13 percent decline in its
November sales. Dabur India rose half a percent after the healthcare
products manufacturing company incorporated a new step down subsidiary
company in Brazil.
MphasiS rose over 4 percent as it announced the acquisition of U.S.-based Digital Risk for about Rs.1,100 crore in an all cash deal. Adani Enterprises jumped 9.5 percent on fund raising reports.
Rating agencies ICRA and Crisil soared 18 percent and 10 percent, respectively, on heavy volumes ahead of the initial public offering of Credit Analysis and Research
later this week. PVR rallied 7.6 percent, extending its two-day rally,
after the multiplex chain operator entered into a definitive agreement
to buy Cinemax India's promoters' entire 69.27 percent stake for Rs 395
crore.
Elsewhere, other Asian markets ended mostly lower, as
lingering concerns about the U.S. fiscal cliff tempered optimism over
the visibly improving outlook for China's economy.
Investors also
looked ahead to a gathering of Euro zone finance ministers in Brussels
later in the day to discuss details of the buyback of Greek bonds held
by investors at a discounted rate. The buyback, which will be financed
with 10 billion euros from the rescue package, has to be concluded by
December 13 for Greece to secure 30 billion euros of agreed bailout
money. |
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Crude Edges Up On China Data
The price of Crude oil was
moving higher Monday morning after data over the weekend revealed that
China's manufacturing activity rose to a seven-month high in November on
improved new orders and production, mirroring signs of stabilization in
the second-largest economy.
The Purchasing Managers' Index
rose to 50.6 from 50.2 in October, official survey jointly issued by
the China Federation of Logistics and Purchasing and the National Bureau
of Statistics showed Saturday. The sector expanded for the second
straight month.
Light Sweet Crude oil futures for January delivery, edged up $0.11 to $89.02 a barrel. Last week oil
edged up marginally on some upbeat macroeconomic economic data and
optimism of a deal in the U.S. budget talks. President Barack Obama
expressed confidence over a deal, indicating that he was hopeful the
White House and Congress could reach an agreement before Christmas.
This morning, the U.S. dollar was extending its one month low versus the euro and sterling. The buck was leveling off firm around its 7-month high versus the yen and ticking lower against the Swiss franc.
In economic news, the downturn in the euro zone manufacturing sector eased as estimated in November, final data from Markit Economics showed. The final manufacturing Purchasing Managers' Index rose to an eight-month month high of 46.2, in line with flash estimate. The reading was 45.4 in October.
Separately,
the agency said that the German manufacturing sector shrank as
estimated earlier in November, but the rate of contraction eased from
the previous month. The seasonally adjusted PMI for the manufacturing
sector increased to 46.8 in November from 46 in October, as recorded in
the preliminary reports.
Traders will look to the results of the
manufacturing survey of the Institute for Supply Management, due out at
10 am ET. Economists expect the index to show a reading of 51.7 for
November, flat with last month.
Simultaneously, the Commerce
Department will release its construction spending report, which is
expected to show a 0.4 percent increase in October, slower than the 0.6
percent increase in the previous month.
During this week, focus
will be on the non-farm payrolls data, the ADP's private sector payroll
numbers, the weekly jobless claims data and the results of the Institute
for Supply Management's manufacturing and non-manufacturing surveys for
November.
Also, focus will be on the Crude oil inventories data from the API, due out Tuesday after the market hours, and the EIA due out the subsequent day. |
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