Stocks Turning In A Lackluster Performance In Early Trading
With traders sitting on the sidelines amid uncertainty about the near-term outlook for the markets, stocks are
showing a lack of direction in early trading on Friday. The major
averages are lingering near the unchanged line after closing higher in
the two previous sessions.
The major averages are currently turning in a mixed performance, with the Nasdaq posting a slim gain. While the Nasdaq is up 1.61 points or 0.1 percent at 3,123.37, the Dow is down 13.65 points or 0.1 percent at 13,457.57 and the S&P 500 is down 2.20 points or 0.2 percent at 1,469.92.
The
choppy trading on Wall Street comes as traders seem reluctant to make
any significant moves after the upward move seen on Thursday lifted the
S&P 500 to a new five-year closing high.
Since earnings
season is only just starting to pick up steam, traders are taking a
wait-and-see approach as more big-name companies release their quarterly
results in the coming weeks.
Traders are also digesting
some mixed news from overseas. While news of a $116 billion stimulus
package in Japan generated some positive sentiment, a report from China
showing a bigger than expected acceleration in the pace of inflation
suggested that the Chinese may not provide further stimulus.
While most of the major sectors are showing only modest moves, steel stocks have come under pressure on the news out of China. The NYSE Arca Steel Index is down by 1.6 percent, with Cliffs Natural Resources (CLF) helping to lead the way lower.
Banking and gold stocks are also seeing some early weakness, while notable strength has emerged among biotechnology stocks.
Among individual stocks, shares of Wells Fargo
(WFC) have moved to the downside in early trading even though financial
services giant reported fourth quarter earnings and revenues that
exceeded analyst estimates.
Wells Fargo, the nation's
largest mortgage lender, reported fourth quarter earnings of $0.91 per
share on revenues of $21.9 billion. Analysts had expected the company to
earn $0.89 per share on revenues of $21.3 billion.
On the other hand, shares of Infosys (INFY)
have surged up by 18.3 percent after the software services provider
reported better than expected third quarter results and raised its
full-year revenue guidance.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index surged up by 1.4 percent, while China's Shanghai Composite Index tumbled by 1.8 percent.
The major European markets have also turned mixed on the day. While the French CAC 40 Index has edged down by 0.1 percent, the U.K.'s FTSE 100 Index is up by 0.2 percent and the German DAX Index is just above the unchanged line.
In the bond market, treasuries have moved to the downside, pulling back toward their recent lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 1.921 percent.
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TSX Dips At Open Friday
Toronto stocks were moving lower Friday morning amid marginal selling in commodities, with the S&P/TSX Composite Index shedding 48.59 points or 0.39 percent to 12,551.16.
The Diversified Materials Index was down about 1 percent, with Teck Resources losing close to 2 percent.
Leucadia National Corp.
announced that it would intend to tender the common shares of Inmet
Mining Corp. to the take-over bid that has been made by First Quantum
Minerals. Leucadia said it own 11.04 million or approximately 15.92
percent of the outstanding common shares of Inmet
First Quantum Minerals and Inmet Mining eased about 0.50 percent each.
Among gold plays, Barrick Gold, Goldcorp. Agnico-Eagle Mines and Allied Nevada Gold were down around 1 percent each.
In the oil patch, Petrobakken Energy lost 3 percent, while Bonterra Energy was slipping 1 percent.
Meanwhile, Absolute Software Corporation jumped 10 percent after announcing that it bagged a multi-million dollar deal in the healthcare industry.
The price of crude oil
was moving lower Friday morning after inflation data from China raised
demand concerns from the commodity hungry nation. The consumer price
index in China rose 2.5 percent year-on-year in December, the fastest
pace since May. Economists expected the rate of inflation to increase to
a more modest 2.3 percent. The freezing weather and the approaching
'Spring Festival' stoked prices of fresh food.
Crude for February shed $0.47 to $93.35 a barrel
The price of gold was
paring recent gains Friday morning as traders preferred to book profits
amid a generally steady US dollar. Gold for February was down $4.10 to
$1,673.90 an ounce.
In corporate news from Canada, Leucadia
National Corp. announced that it would intend to tender the common
shares of Inmet Mining Corp.(IMN.TO) to the take-over bid that has been
made by First Quantum Minerals Leucadia said it own 11.04 million or
approximately 15.92 percent of the outstanding common shares of Inmet
In economic news, Statistics Canada
said merchandise imports rose 2.7 percent in November, while exports
decreased 0.9 percent. As a result, Canada's trade deficit with the
world widened from $552 million in October to $2.0 billion in November.
Economists were expecting $0.60 billion deficit.
From the euro zone, U.K. industrial production
recovered in November, underpinned by robust mining output, the Office
for National Statistics showed. Industrial output rose 0.3 percent
month-on-month, reversing last month's 0.9 percent fall. Nonetheless,
the rate of growth was smaller than the 0.8 percent rise forecast by
economists.
Meanwhile, Switzerland's consumer prices
slipped 0.4 percent year-on-year in December, the same rate of fall as
seen in November, the Federal Statistical Office showed. Prices were
forecast to ease 0.3 percent.
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European Markets Trade Mixed
The European markets
are trading mixed on Friday, after inflation in China accelerated to
the highest level in seven months in December and Japanese Prime
Minister Shinzo Abe announced a massive spending package to revive the economy.
The consumer price
index in China rose 2.5 percent year-on-year in December, the fastest
pace since May. Economists expected the rate of inflation to increase to
a more modest 2.3 percent. The freezing weather and the approaching
'Spring Festival' stoked prices of fresh food.
Japan approved a
fresh round of stimulus spending worth 10.3 trillion yen to jump-start
the flagging economy. Prime Minister Shinzo Abe said the measures would
include spending on public works, disaster prevention and financial aid
for small firms. He said the new measures would add 2 percentage points
to the gross domestic product and create about 600,000 jobs.
The Euro Stoxx 50 index
of eurozone bluechip stocks is adding 0.04 percent, while the Stoxx
Europe 50 index, which includes some major U.K. companies, is falling
0.03 percent.
The German DAX and the UK's FTSE 100
turned positive in the early afternoon session. Switzerland's SMI is
moderately higher while the French CAC 40 is down 0.3 percent.
In Frankfurt, Commerzbank is declining 4.7 percent and Deutsche Bank
is falling 1.5 percent. Fresenius and ThyssenKrupp are falling around
2.6 percent each. Salzgitter is falling 3.4 percent, following a broker
downgrade.
BMW and Volkswagen are in negative territory while Daimler is marginally higher. Goldman Sachs added Daimler to ''Conviction Buy'' from ''Buy.''
Praktiker is
climbing 5.7 percent after Berenberg raised the stock to ''Buy'' from
''Sell.'' Sky Deutschland is declining 4.1 percent. Merrill Lynch
downgraded the stock.
In Paris, Tire firm Michelin is falling 3.1 percent and utility EDF is receding 2.5 percent. Both stocks received negative broker recommendations.
BNP Paribas and Societe Generale are losing around 1 percent while Credit Agricole is unchanged. Cap Gemini is gaining 3.3 percent after peer Infosys in India lifted its annual revenue guidance.
In London, Barclays is gaining 1.7 percent and Royal Bank of Scotland is rising 1 percent. Both stocks were upgraded at HSBC.
International Consolidated Airlines is gaining 3.5 percent after UBS upgraded the stock. Insurer Aviva is up around 3 percent.
Tullow Oil is declining about 5 percent. The oil and gas firm expects to take $670 million in write off for the year.
BHP Billiton and Rio Tinto are declining 2.6 percent and 2 percent, respectively. Pirelli is falling 3.9 percent in Milan after Goldman Sachs cut the stock to ''Sell'' from ''Neutral.''
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Asian Stocks Drift Lower On Chinese Inflation Data
Asian stocks
ended mostly lower on Friday, with Japanese shares rallying following
the announcement of a massive stimulus package, while other major
markets fell after the release of China's December inflation figures.
China's annual consumer price inflation quickened to a seven-month high
of 2.5 percent in December, the National Bureau of Statistics said
today, limiting the room for further policy easing to support an ongoing
economic recovery.
Japanese shares rose for the third
straight session, hitting a 23-month high after the government said it
would spend 10.3 trillion yen ($116 billion) to end deflation and lift
the economy out of recession. Prime Minister Shinzo Abe announced that
the new stimulus package will add 2 percent to the nation's real
economic growth. The Nikkei average rose 1.4 percent to close above the
10,800 mark for the first time since February 21, 2011, while the
broader Topix index added 1.1 percent.
The yen tumbled to
multi-year lows early in the session after official data showed Japan
posted a current account deficit for the first time in 10 months in
November, hurt by a dip in exports amid weak global demand and higher
energy imports. At 222.4 billion yen, the headline figure was well shy
of forecasts for a shortfall of 17.1 billion yen following the 376.9
billion yen surplus in October.
Automakers Toyota Motor
and Honda Motor rose more than a percent each, with the yen's renewed
weakness buoying sentiment. Heavyweight Fast Retailing soared 4.8
percent after the company revised up its fiscal 2013 earnings forecast.
Pharma stocks gained ground after research studies showed induced
pluripotent stem (iPS) cells can be grown into different body cells. Takeda Pharmaceutical advanced 3.1 percent, while Astellas Pharma jumped 7.4 percent.
China's Shanghai Composite index retreated 1.8 percent as higher than expected inflation numbers triggered profit taking following recent sharp gains. Property developers and brokerage stocks bore the brunt of the selling. Hong Kong's Hang Seng index ended 0.4 percent lower.
Australian
shares lost ground, dragged down by miners as tropical cyclone Narelle
strengthened to category four, affecting their operations. The benchmark
S&P/ASX 200 shed 0.3 percent, while the broader All Ordinaries
index slipped 0.2 percent. BHP Billiton and Rio Tinto lost about 2
percent each, while smaller rival Fortescue Metals Group declined 2.5
percent.
Banks ended on a mixed note amid fading hopes of an RBA rate cut in February. Westpac eased marginally and Commonwealth declined
0.4 percent, but ANZ and NAB rose 0.4 percent and 0.6 percent,
respectively. Investors lapped up defensive stocks, lifting Wesfarmers and Woolworths up 0.3 percent and 0.6 percent, respectively.
South Korea's Kospi average fell half a percent on institutional selling after the Bank of Korea
held borrowing costs unchanged for a third month, as widely expected by
economists. The central bank cut its economic growth forecast for this
year to 2.8 percent, citing slower corporate investment and the global
economic uncertainties. Automakers led the declines after the won
climbed to a 17-month high versus the dollar. Hyundai Motor, the
nation's biggest automaker, fell 1.7 percent, while shares of its
affiliate Kia Motors retreated 2.2 percent.
New Zealand
shares rose for a fifth consecutive session despite mixed regional
cues. The benchmark NZX-50 index rose 0.3 percent to a fresh five-year
high. Fletcher Building, the nation's largest construction company, rose 0.6 percent to hit a 19-month high on analyst upgrades, while another heavyweight Telecom, which has an attractive dividend yield of 13 percent, added 0.4 percent.
Carpet maker Cavalier and Skellerup Holdings,
which manufactures milking equipment and rubber goods, both rose about
1.8 percent each. Among the prominent decliners, jeweler Michael Hill International tumbled 3.2 percent after saying its sales growth stalled in the second quarter.
India's Sensex was
little changed, reversing early gains, with gains in technology stocks
limiting the downside. Bellwether Infosys reported higher than expected
Q3 profit and raised its revenue growth forecast for the year ending
March 2013, sending its shares 16 percent higher on the National Stock
Exchange. Meanwhile, India's index of industrial production contracted to a four-month low of 0.1 percent in November from a year earlier, government data showed, boosting hopes that the RBI may cut rates later this month.
Elsewhere, benchmark indexes in Indonesia, Malaysia and Singapore were down between 0.3 percent and 0.4 percent, while Taiwan's Weighted average edged up marginally.
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Crude Eases Near $93 On Demand Concerns
The price of crude oil was
moving lower Friday morning after faster than expected inflation data
from China raised demand concerns from the commodity hungry nation.
Meanwhile, Japan approved a fresh round of stimulus spending worth 10.3
trillion yen to jump-start the flagging economy
Light Sweet Crude Oil (WTI)
futures for February delivery, shed $0.59 to $93.23 a barrel.
Yesterday, oil extended its four-month high amid hopes of higher demand
from China after data Chinese exports rebounded strongly in December.
The price of gold was paring recent gains Friday morning as traders preferred to book profits amid a generally steady US dollar.
Gold for
February delivery, the most actively traded contract, shed $8.90 to
$1,669.10 an ounce. Yesterday, gold rose over 1 percent to settle near a
2-week high after the European Central Bank gave no hints on near-term
rate cuts.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, eased to 1,337 73 tons from 1,339.84 tons.
This morning, the U.S. dollar was
lingering around its one-week low versus the euro and sterling. The
buck moved up to a fresh 30-month high versus the yen and ticking higher
against the Swiss franc.
In economic news from the euro zone, U.K. industrial production
recovered in November, underpinned by robust mining output, the Office
for National Statistics showed. Industrial output rose 0.3 percent
month-on-month, reversing last month's 0.9 percent fall. Nonetheless,
the rate of growth was smaller than the 0.8 percent rise forecast by
economists.
Meanwhile, Switzerland's consumer prices slipped 0.4 percent year-on-year in December, the same rate of fall as seen in November, the Federal Statistical Office showed. Prices were forecast to ease 0.3 percent.
Elsewhere, the consumer price index in China rose
2.5 percent year-on-year in December, the fastest pace since May.
Economists expected the rate of inflation to increase to a more modest
2.3 percent. The freezing weather and the approaching 'Spring Festival'
stoked prices of fresh food.
Traders will look to the
trade balance report for November from the U.S. Commerce Department, due
out at 8:30 a.m. ET. Economists expect the trade deficit to narrow to
$41.1 billion from $42.2 billion in the previous
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