Stocks fall as focus turns to Friday's US jobs report
Equities
were extending losses on Thursday after yesterday’s shock contraction
in the States, as markets braced for another busy day on the economic
calendar tomorrow.
“Traders were unwinding positions earlier
on January's phenomenal rally which sees major share markets at
multi-year highs,” said market strategist Ishaq Siddiqi from ETX
Capital.
Market analyst Craig Erlam from Alpari said this afternoon that markets were nervous ahead of the crucial jobs report in the US
due out tomorrow afternoon. He said: “The jobs report tomorrow is
always one of the most keenly watched items on the economic calendar,
with the potential to cause significant movements in a number of
markets. The figures over the last couple of months have been pretty
uninspiring, as the private sector held off on hiring due to the
uncertainty surrounding the fiscal cliff.
“All of the
political infighting did little to ease these concerns, but now a lot of
this has been dealt with, especially in respect to taxes, I expect to
see the numbers pick up in the first few months of the year. We could
even see the first quarter numbers come in much higher than expected,
with a backlog of new hires over the past few months being carried out
at the start of 2013.”
Stocks fell yesterday after the US Commerce Department revealed that the world's largest economy shrank by 0.1%
in the last three months of last year, a stark contrast to the 3.1%
growth seen in the third quarter. Forecasts were for a 1.1% expansion.
Meanwhile, economic data from the US today came in mixed:
initial jobless claims rose by more than expected last week; personal
incomes surpassed forecasts; while the Chicago NAPM purchasing managers’
index came in well ahead of estimates.
Pharmaceutical titan AstraZeneca
dropped after reporting that full-year revenue fell 15 per cent due to a
loss of exclusivity on several brands. The company also said that it
would not buy back any shares in 2013 "in order to maintain the
flexibility to invest the business".
Oil giant Royal Dutch Shell
was lower after full-year profits slipped slightly as a result of oil
price volatility. An analyst at Investec labelled the company's fourth
quarter as a "substantial miss".
A third-quarter production report from Vedanta
disappointed early on but shares climbed firmly into positive territory
by the afternoon. The company said that oil and gas output rose 21% and
mined metal and silver increased strongly.
Petrofac recovered one day after the stock plunged over fears that industry earnings would be lower than expected.
Consumer goods giant Diageo
was higher after posting profits broadly in line with market
expectations. While North American growth was weaker-than-expected and
Europe saw continued weakness, this was offset by a strong performance
in the Emerging Markets.
Broadcaster and broadband group BSkyB
gained after beating profit forecasts in the first half, helped by a
surge in customer numbers. The firm also hiked its dividend by a fifth.
|
European Markets Declined On Mixed Economic Data & Earnings
The European markets
finished in negative territory on Thursday, after some mixed earnings
results and some mixed European economic reports. However, the markets
pared their losses in the afternoon, following the release of some
positive economic data from the United States. Thursday was the first
opportunity Europe had to react to Wednesday's FOMC announcement.
Investors will now turn their attention to the U.S. jobs report for
January, which will be released on Friday.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.81 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.21 percent.
The DAX of Germany dropped by 0.24 percent and the CAC 40 of France fell by 0.87 percent. The FTSE 100 of the U.K. decreased by 0.55 percent, but the SMI of Switzerland gained 0.38 percent.
In Frankfurt, Bayer fell by 0.75 percent. France's health regulator is considering suspending sales of its Diane 35 acne treatment.
Infineon Technologies increased by 4.18 percent, after the semiconductor maker reported quarterly results on expected lines and backed its full-year revenue outlook.
Deutsche Bank rose by 3.35 percent, despite reporting a fourth quarter loss.
In Paris, Essilor International finished lower by 2.44 percent. Exane BNP Paribas downgraded its rating on the stock to "Neutral" from "Outperform."
In London, Rio Tinto
increased by 0.62 percent. The mining giant announced that it remains
on track to start production at its Oyu Tolgoi copper-gold project in
Mongolia by the middle of the year, contrary to reports that it might
temporarily halt construction because of political issues.
Royal Dutch Shell
declined by 3.19 percent, after the oil giant reported a marginal rise
in fourth-quarter profit, helped by a slight growth in revenues.
AstraZeneca
dropped by 3.19 percent. The company warned that revenues and earnings
will continue to decline through 2013, due to the expiration of drug
patents.
Diageo climbed by 1.48 percent, after reporting a sharp profit increase for the half year.
Antofagasta fell by 2.05 percent, after Credit Suisse downgraded it to "Underperform" from "Neutral."
Euro
area house prices decreased at a faster pace in the third quarter,
European Union statistical office Eurostat said Thursday.
The House Price
Index dropped 0.7 percent from the second quarter, when prices fell 0.1
percent, Eurostat said in its first ever publication on the evolution
of house prices in the 17-nation currency bloc. In the first quarter of
2012, prices fell 0.7 percent.
Germany's unemployment fell unexpectedly in January as the labor market turned healthier in the face of rising prospects of moderate economic growth.
Unemployment declined
sharply by a seasonally adjusted 16,000 in January, following
December's revised decrease of 2,000, figures from the Federal Labor
Agency revealed Thursday. The latest decline contrasted with an expected
increase of 8,000.
Germany's retail sales decreased more
than expected in December reflecting weak domestic demand. Sales
declined 1.7 percent in December from a month ago, when it was up 0.6
percent, Destatis reported Thursday. Sales were forecast to fall just
0.1 percent.
Germany's inflation unexpectedly slowed in January, preliminary data from the Federal Statistical Office showed on Thursday.
The
harmonized index of consumer prices (HICP), which is meant for EU
comparison purposes, rose 1.9 percent annually, which was a tad slower
than the 2 percent increase in December. Economists had forecast the
figure to hold steady at 2 percent.
France's producer
price inflation slowed unexpectedly in December, data released by the
statistical office INSEE showed Thursday. Producer prices on the French
market rose 1.6 percent year-on-year, following a 1.9 percent gain in
November. Economists had forecast the figure to climb to 2 percent.
French household
spending remained flat in December, following a 0.2 percent increase in
November, the statistical office Insee showed Thursday. Economists had
forecast spending to grow 0.2 percent.
Confidence among British
consumers improved more than expected in January as they turned
optimistic about the economy's prospects, a survey by GfK NOP revealed
Thursday. Also, consumers were upbeat on making major purchases at
present.
The headline consumer confidence index rose to -26 in January from -29 in December. Economists expected only a modest increase to -28.
House
prices in the UK increased in January after recording no change in the
past two months, as recent employment gains and easier access to bank
loans, thanks to central bank's credit program, lifted housing market
activity.
House prices increased 0.5 percent month-on-month in
January, a report from the Nationwide Building Society showed Thursday.
The rate of increase was faster than the 0.2 percent increase expected
by economists.
|
Mixed Batch Of Data Leads To Choppy Trading On Wall Stree
With
traders digesting a mixed batch of economic data, stocks are turning in
a lackluster performance during trading on Thursday. Uncertainty ahead
of tomorrow's monthly jobs report is also contributing to the lack of
conviction among traders.
The major averages are currently posting modest losses, although the Nasdaq is down only 0.83 points or less than a tenth of a percent at 3,141.48. The Dow is down 31.59 points or 0.2 percent at 13,878.83 and the S&P 500 is down 3.63 points or 0.2 percent at 1,498.33.
The
choppy trading on Wall Street comes as traders express uncertainty
about whether the recent batch of economic data supports any further
upside for the markets.
Following yesterday's disappointing
fourth quarter GDP report, the Labor Department released a report before
the start of trading showing a bigger than expected rebound by weekly
jobless claims.
The Labor Department said initial jobless
claims rose to 368,000 in the week ended January 26th, an increase of
38,000 from the previous week's unrevised figure of 330,000. Economists
had been expecting jobless claims to climb to 350,000 after hitting a
five-year low in the previous week.
While bigger than expected, Jennifer Lee,
senior economist at BMO Capital, said the rebound was not too shocking,
adding, "And it was encouraging that the bounceback did not completely
erase the two weekly improvements."
Helping to offset the
negative sentiment generated by the report was a separate report from
the Institute for Supply Management - Chicago showing a notable
improvement in business activity in the Chicago-area in the month of
January.
The ISM Chicago said its Chicago business
barometer climbed to 55.6 in January from a revised 50.0 in December,
with a reading above 50 indicating growth.
The Commerce Department
also released a report showed a substantial increase in personal income
in December, although the jump was due in large part to accelerated
dividend and bonus payments ahead of the year-end tax increases.
Among individual stocks, shares of Facebook (FB)
have come under pressure after the social media giant reported sharply
lower fourth quarter earnings. Facebook is currently down by 1.9
percent.
Dow Chemical (DOW) is also posting a notable loss after reporting adjusted fourth quarter earnings that fell short of analyst estimates.
On the other hand, shares of Qualcomm (QCOM)
have surged up by 4.7 percent after the chip maker reported better than
expected first quarter results and provided upbeat guidance.
Sector News
While most of the major sectors are showing only modest moves, considerable strength is visible among networking stocks. The NYSE Arca Networking Index has surged up by 1.8 percent, regaining some ground after ending the two previous sessions sharply lower.
Alcatel-Lucent (ALU), Ciena (CIEN), and Infinera (INFN) are turning in some of the networking sector's best performances.
On the other hand, gold stocks
have come under pressure, with a notable decrease by the price of gold
weighing on the sector. With gold for April delivery sliding $21.40 to
$1,660.20 an ounce, the NYSE Arca Gold Bugs Index is down by 1.3
percent.
Housing stocks have also shown a notable move to
the downside, dragging the Philadelphia Housing Sector Index down by 1
percent. M/I Homes (MHO) is leading the housing sector lower after
reporting its fourth quarter results.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.
In the bond market, treasuries are
seeing modest strength after coming under pressure in recent sessions.
Subsequently, the yield on the benchmark ten-year note, which moves
opposite of its price, is down by 1.8 basis points at 1.988 percent.
|
Spotlight on BT Group and Tate & Lyle
All eyes will be on BT Group and Tate & Lyle on Friday as the FTSE 100 companies post financial results. British telecommunications company BT Group is expected to report a steady set of numbers when it unveils its third-quarter statement.
Analysts at Liberum Capital predict revenues excluding transit to be
down by 5.5% to £4,512m, (consensus £4,485m), which compares to a
decrease of 8.6% in the second quarter (-5.5% ex transit).
"In
terms of surprises we would not rule out acceleration in cost control
leading to an [earnings before interest, taxes, depreciation, and
amortisation] beat but we also suspect that there may be some negative
news around line provisioning that seems primarily down to the very wet
weather, which could weigh on revenues," Lawrence Sugarman at Liberum
Capital told The Economy News.
Sweeteners and food ingredients specialist Tate & Lyle also releases its third-quarter results after analysts at Investec this week cut its rating from 'buy' to 'hold'.
Investec reduced its forecasts on Monday ahead of the results, saying
it's time to "pause for a breather" after shares have jumped 29% since
mid-September.
Earlier this week, the company launched a
website to enable partners to submit ideas to its research and
development team for new ingredients and solutions for the food and
beverage industries.
Q3
BT Group
IMS
Electrocomponents
Tate & Lyle
GM
Coms
ORA Capital Partners Ltd
FINAL DIVIDEND PAYMENT DATE
Baring Emerging Europe
Character Group
Standard Life European Private Equity Trust
Tracsis
INTERIM DIVIDEND PAYMENT DATE
Aveva Group
Bisichi Mining
Central Asia Metals
Dart Group
Doric Nimrod Air Two Ltd C Shs
KCOM Group
United Utilities Group
SPECIAL EX-DIVIDEND PAYMENT DATE
Central Asia Metals
QUARTELY PAYMENT DATE
Investors Capital Trust 'A' Shares
Investors Capital Trust 'B' Shares
Mercantile Investment Trust (The)
Torchmark Corp.
Verizon Communications
UK ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (09:30)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (GER) (08:55)
PMI Manufacturing (EU) (09:00)
Unemployment Rate (EU) (10:00)
Non-Farm Payrolls (US) (13:30)
Unemployment Rate (US) (13:30)
Auto Sales (US) (15:00)
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
U. of Michigan Confidence (US) (15:00)
|
No comments:
Post a Comment