Stocks Turning In A Lackluster Performance In Mid-Day Trading
Stocks are turning in a lackluster performance in mid-day trading on
Thursday after failing to sustain an initial upward move. The choppy
trading comes as earnings uncertainty has overshadowed some upbeat news
from overseas.
The major averages are currently lingering near the unchanged line, with the Nasdaq posting a slim loss. While the Nasdaq is down 1.19 points or less than a tenth of a percent at 3,104.62, the Dow is up 15.84 points or 0.1 percent at 13,406.35 and the S&P 500 is up 2.97 points or 0.2 percent at 1,463.99.
The initial strength on Wall Street came
on the heels of some upbeat Chinese trade data, with a report from the
Chinese General Administration of Customs showing that the nation's
trade surplus swelled to $31.6 billion in December from $19.6 billion in
November.
The report said Chinese exports rose 14.1 percent
year-over-year, the fastest rate of growth in seven months. Chinese
imports also saw 6 percent annual growth.
The upbeat Chinese trade data generated some optimism about the outlook for the global , as China represents the world's second-largest economy.
Traders
also reacted positively to news out of Europe, where the European
Central Bank announced its decision to leave interest rates unchanged at
a record low.
ECB President Mario Draghi said economic weakness in the euro area is expected to extend into the new year but said economic activity should gradually recover later in 2013.
Buying
interest waned not long after the start of trading, however, as traders
seemed reluctant to continue buying stocks following last week's rally.
A disappointing U.S. jobs report also helped to limit the upside.
The
Labor Department said initial jobless claims rose to 371,000 in the
week ended January 5th from the previous week's revised figure of
367,000. Economists had expected jobless claims to drop to 362,000 from
the 372,000 originally reported for the previous week.
Additionally, many traders have moved to the sidelines, waiting for the earnings season to pick up steam over the coming weeks.
While Alcoa kicked off the earnings season on a relatively upbeat note, it remains to be seen if other companies will follow suit.
Sector News
While most of the major sectors are showing only modest moves in mid-day trading, considerable strength remains visible among gold stocks. The NYSE Arca gold Bugs Index is up by 2.3 percent, bouncing off yesterday's five-month closing low.
The rebound by gold stocks comes amid a notable increase by the price of the precious metal, with gold for February delivery climbing $21 to $1,655.50 an ounce.
Banking,
electronic storage, and semiconductor stocks are also seeing some
strength on the day, while weakness has emerged among bio and railroad stocks.
Other
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday, adding to yesterday's gains. Japan's Nikkei 225 Index rose by 0.7 percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index fell by 0.2 percent and 0.4 percent, respectively.
In
the bond market, treasuries are moving back to the downside after
regaining some ground over the past few sessions. Subsequently, the
yield on the benchmark ten-year note, which moves opposite of its price,
is up by 4.2 basis points at 1.894 percent.
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TSX Up As Commodities Jump On China Data - Canadian Commentary
Canadian stocks were extending gains for a third session Thursday
morning as commodities recovered after data revealed Chinese exports
rebounded strongly in December. China's exports soared 14.1 percent in
the month from a year earlier, the fastest pace in seven months, data
released by the General Administration of Customs showed. The outcome
was much stronger than the 5 percent increase forecast by economists.
European
shares were hovering in the green after the Bank of England and the
European Central Bank left their key rates unchanged, as widely
expected.
The S&P/TSX Composite Index gained 46.00 points or 0.37 percent to 12,568.24, after adding just 25 points in the past two straight sessions.
The price of gold was ticking higher Thursday morning as traders speculate demand pick-up just ahead of Chinese New Year. gold for February jumped $19.50 to $1,675.00 an ounce.
Among gold plays, Allied Nevada gold , Royal gold and Goldcorp. were up around 3 percent each.
Yamana gold Inc.
gained 4 percent after providing preliminary operational results for
the fourth-quarter and the full year 2012, and updated its outlook for
2013. Production during the fourth-quarter 2012 reached a record level
of 322,800 gold equivalent ounces (GEO). For the full year ended
December 31, 2012, total production was also a record of over 1.2
million GEO consisting of 1.02 million ounces of gold and 9 million ounces of silver. Production in 2013 is expected to be in the range of 1.44 - 1.60 million GEO.
The price of Crude oil was
extending its four-month high Thursday morning amid hopes of higher
demand from China after data revealed Chinese exports rebounded strongly
in December. Crude for February rose $0.93 to $94.03 a barrel.
In the oil patch, Lundin Petroleum gained close to 5 percent.
Potash
and magnesium miner Karnalyte Resources (KRN.TO) jumped 10 percent
after India based Gujarat State Fertilizers & Chemicals Limited
announced that it would make a strategic investment of approximately $45
million in Karnalyte at a price of $8.15 per share.
Broadcasting
company Astral Media Inc. (ACM_A.TO, ACM_B.TO) edged up 0.50 percent
after reporting improved first-quarter net earnings of C$59.1 million
compared to C$55.8 million last year, with earnings per share rising to
C$1.04 from C$1.00 a year ago.
Pharmaceuticals company Jean
Coutu Group Inc. (PJC_A.TO) gained over 2 percent after reporting that
its third-quarter net income increased to C$56.2 million or C$0.26 per
share from C$51.7 million or C$0.23 per share prior year. The company
declared a quarterly dividend of C$0.07 per share.
Sports
equipment and related apparel dealer Bauer Performance Sports (BAU.TO)
rose 3 percent after posting second-quarter net income of $6.1 million
or $0.16 per share, down from $8.2 million or $0.26 per share in the
prior year quarter.
Meanwhile, Niko Resources dived 7 percent after providing drilling updates.
DragonWave
Inc. (DWI.TO) plummeted 14 percent after reporting a wider third
quarter loss of $13.8 million or $0.36 per share compared to $8.0
million or $0.23 per share in the comparable quarter last year. Analysts
expected the company to report a loss of $0.27 per share for the third
quarter.
Fitch Ratings has affirmed the ratings of Sun Life
Financial Inc. including all outstanding issues, as well as the Insurer
Financial Strength ratings of the company's primary Canadian insurance
subsidiaries at 'AA-'. The Rating Outlook is Negative. The 'A-' IFS
ratings of SLF's U.S. life insurance subsidiaries remain on Rating Watch
Negative. Sun Life Financial eased 0.25 percent.
In economic
news, Statistics Canada said municipalities issued building permits
worth $6.2 billion in November, down 17.9 percent from October and the
lowest level since January 2012. This follows a 15.9 percent increase in
October.
From the U.S., a report from the Labor Department
revealed that initial jobless claims rose to 371,000, an increase of
4,000 from the previous week's revised figure of 367,000. Economists had
expected jobless claims to drop to 362,000 from the 372,000 originally
reported for the previous week.
From the euro zone, the
Bank of England maintained quantitative easing at GBP 375 billion and
the interest rate at a record low 0.50 percent. Elsewhere, the European
Central Bank held its key interest rate at 0.75 percent for a sixth
consecutive month in January, following the Governing Council meeting in
Frankfurt on Thursday. The decision was in line with economists'
expectations.
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European Markets Finished Mostly Lower After Central Bank Decisions
The majority of the European
ended Thursday's session in negative territory. The strong Chinese
export data had provided a boost in early trade, but the markets
struggled to find direction following the decisions of both the ECB and
the BoE to maintain their respective interest rates. Comments from ECB
President Mario Draghi dashed hopes for rate cuts in the near future.
Investors were also disappointed by the unexpected increase in U.S.
weekly jobless claims.
The European Central Bank left the key
interest rates unchanged at a record low at the first rate-setting
session of the year as the bank shifts its focus to underpinning the
fragile amid some feeble signs of stabilization.
The
central bank of 17 nations maintained the refinancing rate at 0.75
percent for a sixth consecutive month in January, following the
Governing Council meeting in Frankfurt on Thursday. The decision was in
line with economists' expectations.
European Central Bank President Mario Draghi said on Thursday that the euro area
may see a gradual recovery later in the year as there are some modest
signs of stabilization. While speaking at the post-decision press
conference in Frankfurt, Draghi said, "More recently several
conjunctural indicators have broadly stabilized, albeit at low levels,
and financial market confidence has improved significantly."
"Later
in 2013 a gradual recovery should start," he added. In order to sustain
confidence, it is essential for governments to reduce further both
fiscal and structural imbalances and to proceed with financial sector
restructuring, Draghi said.
The Bank of England kept its
quantitative easing intact at the start of the year, as policymakers see
little compelling case for another stimulus in the face of improving
lending conditions.
Following its two-day meeting, the Monetary
Policy Committee headed by Mervyn King left the size of its bond buying
program unchanged at GBP 375 billion and the interest rates at record
low 0.50 percent on Thursday.
The U.K. statistical authorities
said the current calculation of the Retail Price Index should be
continued without major changes so that it would not affect payments on
inflation-linked bonds.
Jil Matheson, the National Statistician on
Thursday said the RPI has significant value to index-linked bond
holders. So the statistician recommended formulae used for the RPI
should be kept unchanged and to develop a separate monthly inflation
index called RPI-J to meet international standards.
France's central bank said Thursday that the gross domestic product probably declined 0.1 percent in the fourth quarter of 2012, an assessment unchanged from its previous estimate.
At
the same time, data from the statistical office Insee indicated that
there was some signs of recovery in the industrial sector as output
rebounded in November from the previous month.
Spain had a
successful start to its 2013 funding, with the country's first debt sale
of the year on Thursday exceeding the maximum target. The country
raised EUR 5.8 billion from the sale of its three bonds which included a new two-year bond. The treasury had targeted proceeds between EUR 4 billion and EUR 5 billion.
The
2.75 percent March 2015 bond fetched a yield of 2.476 percent, while
the yield for the five-year bond due in January 2018 fell to 3.988
percent from 4.680 percent at a previous sale on November 8. A long-term
bond due July 2026 with a coupon of 5.90 percent fetched a yield of
5.555 percent.
The euro Stoxx 50 index of eurozone bluechip stocks gained 0.01 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.39 percent.
The DAX of Germany fell by 0.20 percent and the CAC 40 of France dropped by 0.39 percent. The FTSE 100 of the U.K. decreased by 0.01 percent and the SMI of Switzerland finished down by 0.12 percent.
In Frankfurt, Deutsche Bank and Commerzbank rose by 2.92 percent and 1.06 percent, respectively.
Volkswagen
finished up by 1.17 percent. The car maker, which already holds 75.03
percent of the voting rights in MAN, is planning to buy the rest of the
shares that it does not known in the truck maker. Man is gaining 4.7
percent.
BMW gained 0.98 percent and Daimler added 0.41 percent.
Barclays downgraded its rating on RWE to "Underweight" from "Equalweight," but lifted E.ON to ''Equalweight'' from ''Underweight.'' E.ON fell by 0.52 percent, while RWE lost 2.11 percent.
Dialog Semiconductor, which lifted its revenue forecast, advanced by 5.89 percent.
Sugar
firm Suedzucker reported higher profit and revenue for the third
quarter and backed its full year profit and revenue forecast. The stock
declined by 5.85 percent.
In Paris, Societe Generale climbed by 1.77 percent and Credit Agricole added 2.09 percent. BNP Paribas, however, decreased by 0.13 percent.
GDF Suez dropped by 2.02 percent, after JPMorgan downgraded the stock to ''Underweight'' from ''Neutral.''
Alstom increased by 3.52 percent, after Citigroup upgraded the stock to "Buy" from "Neutral."
In London, Bunzl rose by 3.35 percent, after announcing new acquisitions.
Tesco, which reported growth in Holiday sales, advanced by 1.79 percent.
Arm Holdings gained 4.23 percent, after Dialog Semiconductor in Germany raised their revenue forecast.
Standard Chartered climbed by 0.63 percent, after Societe Generale upgraded its rating on the stock to "Buy" from "Hold."
Marks
& Spencer fell by 0.81 percent. The retailer reported a 0.6 percent
rise in sales for the 13-week period ended December 29, 2012, adding
that it expects the pressure on consumers' disposable incomes to
continue in 2013, and remains cautious about the outlook for the year
ahead.
SIG surged by 6.61 percent. The building products supplier expects to make further progress in 2013.
China's
exports advanced more than expected in December, boosting hopes of a
rebound in growth for the world's second largest economy.
Overseas
shipments surged 14.1 percent year-on-year in December, the fastest
pace in seven months, data released by the General Administration of
Customs showed Thursday. The outcome was much stronger than the 5
percent increase forecast by economists.
The trade surplus jumped
to $31.6 billion in December from $19.6 billion in November. Economists
expected only a modest improvement to $20 billion.
France's EU
harmonized inflation weakened to the lowest level in thirty-four months
in December, data released by statistical office Insee showed Thursday.
Inflation as per the harmonized index of consumer prices
eased to 1.5 percent in December from 1.6 percent in November, in line
with market expectations. The latest figure was the lowest since
February 2010, when prices moved up 1.4 percent.
On a monthly
basis, the HICP increased 0.4 percent in December, which was in line
with economists' expectations. In November, prices had decreased 0.2
percent month-on-month.
Construction activity in the U.K. will
likely improve in 2013, and the sector is set to recover from last
year's slump which was marked by tough conditions, the latest
construction market survey by the Royal Institution of Chartered
Surveyors (RICS) showed Thursday.
With the data for the previous
week downwardly revised, the Labor Department released a report on
Thursday showing that first-time claims for U.S. unemployment benefits
saw a modest increase in the week ended January 5th.
The report
showed that initial jobless claims rose to 371,000, an increase of 4,000
from the previous week's revised figure of 367,000. Economists had
expected jobless claims to drop to 362,000 from the 372,000 originally
reported for the previous week.
Wholesale inventories in the U.S.
increased by more than anticipated in the month of November, according
to a report released by the Commerce Department on Thursday, with the
report also showing a substantial rebound by wholesale sales.
The
report showed that wholesale inventories increased by 0.6 percent in
November compared to economist estimates for a 0.3 percent increase.
However, the Commerce Department also said that the increase in
inventories in October was downwardly revised to 0.3 percent from 0.6
percent. |
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Asian Markets Trade Higher
Asian stock are mostly trading higher on Thursday, with investors tracking a positive lead from Wall Street where stocks posted gains overnight amid expectations of fairly strong earnings reports.
The
Australian market faltered after a positive start, but rebounded post
noon thanks to some strong buying at lower levels. A somewhat
disappointing report on building approvals weighed down sentiment to an
extent early on in the session.
The benchmark S&P/ASX 200 index, which declined to 4,700.7 after a positive start, is currently up 15.7 points or 0.3 percent at 4,723.8. The broader All Ordinaries index is up 16.4 points or 0.3 percent at 4,746.5, off the day's low of 4,723.1.
Bluescope Steel, Arrium, Commonwealth Property Office Fund and Alumina
are up 2 to 3.3 percent. Tatts Group, Insurance Australia Group, Myer
Holdings and Tabcorp Holdings are trading higher by 1.2 to 1.6 percent.
Beach Energy, Perseus Mining, Atlas Iron, Lynas Corp. and Newcrest Mining are
down 2 to 2.8 percent. Iluka Resources, Leighton Holdings, Oil Search,
David Jones, Oz Minerals and Treasury Wine Estates are down 1.2 to 1.8
percent.
On the economic front, Australian residential building
approvals rose 2.9 percent to 13,307 units in November, according to the
data released by the Australian Bureau of Statistics. That was shy of
forecasts for an increase of 3.0 percent following the revised 5.2
percent contraction in October (originally 7.6 percent).
On a
yearly basis, building permits climbed 13.2 percent, beating forecasts
for an 11.6 percent gain after rising 14.5 percent in the previous
month.
The seasonally adjusted estimate for private sector
dwellings excluding houses jumped 10.1 percent in November following a
fall of 15.0 percent in the previous month. The seasonally adjusted
estimate of the value of total building approved fell 4.1 percent in
November and has fallen in two straight months.
The value of
residential building rose 2.7 percent following a fall of 11.4 percent
in the previous month. The value of non-residential building fell 14.4
percent following a rise of 21.0 percent in October.
The Japanese stock market opened higher, with the yen's decline against the U.S. dollar and the overnight positive close on Wall Street prompting investors to indulge in some fairly strong buying at several counters.
The benchmark Nikkei 225 index, which opened notably higher, was up 99.2 points or nearly a percent at 10,677.7 at the end of the morning session.
Mazda
Motor Corp. gained nearly 10 percent. Isuzu Motors moved up by over 5
percent on media reports that the company would partner with General
Motors Co. (GM) to manufacture pickup trucks. Hino Motors, Nissan Motor, Honda Motor and Mitsubishi Motors also rose sharply.
Tokyo
Electric Power vaulted nearly 13 percent. Toyobo Co., Unitika, T&D
Holdings, Tokio Marine Holdings, Kawasaki Kisen Kaisha, JFE Holdings,
MS&AD Insurance Group Holdings, Toho Zinc and Nippon Yusen KK moved
up by 4 to 6 percent.
Kobe Steel, Mitsui OSK Lines, SMFG, Showa Denko KK, Dai-ichi Life Insurance, Taiyo Yuden, Daikin Industries, Japan Steel Works, Mitsubishi Chemicals, Mizuho Financial Group (MFG) and Panasonic Corp. gained 3 to 4 percent.
Chiba Bank, Bank of Yokohama, Fujifilm Holdings, Oki Electric Industry, Nippon Soda and Konica Minolta also posted strong gains.
Meanwhile,
Asahi Group Holdings, Tokyo Dome, Konami Corp., Tokyo Tatemono, Chubu
Electric Power, Sapporo Holdings, Seven & I Holdings and J Front
Retailing traded weak, losing 1.2 to 2.2 percent.
In the currency market, the U.S. dollar traded in the lower 88 yen-range in early deals in Tokyo. The yen is currently trading at 88.11 to the dollar. The euro was changing hands at around 115 yen earlier in the day.
Among
other markets in the Asia-Pacific region, Shanghai, Hong Kong, South
Korea, Singapore and Taiwan are trading notably higher. New Zealand is
trading modestly higher, while Indonesia and Malaysia are down
marginally.
On Wall Street, stocks ended higher on Wednesday, as investors indulged in some buying amid optimism about corporate earnings.
The major averages closed firmly in positive territory, but well off their best levels of the day. The Dow rose 61.7 points or 0.5 percent to 13,390.5, the Nasdaq advanced 14 points or 0.5 percent to 3,105.8 and the S&P 500 climbed 3.9 points or 0.3 percent to 1.461.
Major European markets too closed on a firm note Wednesday. While the U.K.'s FTSE 100 index gained 0.7 percent, the French CAC 40 Index and the German DAX index both closed up 0.3 percent.
U.S. Crude oil settled lower on Wednesday following a U.S. oil inventory report showing an increase in petroleum products stockpile. Crude for February delivery ended down five cents at $93.10 a barrel on the New York Mercantile Exchange. |
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Crude Up Near 4-month High
The price of Crude oil was
extending its four-month high Thursday morning amid hopes of higher
demand from China after data Chinese exports rebounded strongly in
December
China's exports soared 14.1 percent in the month from a
year earlier, the fastest pace in seven months, data released by the
General Administration of Customs showed. The outcome was much stronger
than the 5 percent increase forecast by economists.
Light Sweet Crude oil
futures for February delivery, gained $1.27 to $94.37 a barrel.
Yesterday, oil settled steady above the $93-mark after a report from the
Energy Information Administration revealed marginal build up in US Crude oil inventories last week.
Wednesday during trading hours, the EIA said that US Crude oil inventories
moved up by 1.3 million barrels and gasoline stocks jumped 7.40 million
barrels in the weekended January 04. Analysts expected a rise of 1.5
million barrels for Crude oil and an increase of 2.6 million barrels in gasoline stocks.
This morning, the U.S. dollar was hovering around its three-week high versus the euro and sterling. The buck continued to trade around its 2-year high versus the yen and ticking lower against the Swiss franc.
In economic news from the euro zone, the Bank of England maintained quantitative easing at GBP 375 billion and the interest rate at a record low 0.50 percent.
The
European Central Bank is set to announce its interest rate decision at
7.45 a.m ET. The central bank is seen holding its key interest rate at
0.75 percent. ECB President Mario Draghi will hold a regular press
conference at 8.30 am ET.
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 claims to have declined to 362,000 from 372,000 in the
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