Stocks Move Mostly Lower But Nasdaq Turns Positive
While stocks have
moved mostly lower in early trading on Wednesday amid worries about the
global economy, the major averages have once again turned mixed, as the
Nasdaq has benefited from a rebound by shares of Apple (AAPL).
The Dow and the S&P 500 have recently climbed well off their lows for the young session but remain in the red. The Nasdaq is up 1.93 points or 0.1 percent at 3,112.71, while the Dow is down 40.97 points or 0.3 percent at 13,493.92 and the S&P 500 is down 2.44 points or 0.2 percent at 1,469.90.
The weakness among most stocks is partly due to news that the World Bank cuts its forecast for global economic growth in 2013.
The World Bank
said it now expects the global economy to expand by 2.4 percent in 2013
compared to its June forecast for 3 percent growth. Estimates suggest
the global economy grew 2.3 in 2012.
Lingering concerns about the
debt ceiling debate in Washington have also generated some negative
sentiment, with traders worried about a possible default.
Steel stocks are seeing considerable weakness amid concerns about the global economy, with the NYSE Arca Steel Index
down by 1.4 percent. The loss extends a recent downward move by the
index, which has fallen to its lowest intraday level of the New Year.
Chemical, defense, and health insurance stocks are also seeing some early weakness, although most of the major sectors are showing only modest moves.
Meanwhile, shares of Apple have shown a strong move to the upside, with the iPhone and iPad maker up by 3.4 percent after falling by 3.2 percent to an eleven-month closing low on Tuesday.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 2.6 percent, while China's Shanghai Composite Index fell by 0.7 percent.
Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has edged up by 0.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index remain down by 0.1 percent and 0.4 percent, respectively.
In the bond market, treasuries are
seeing modest strength, adding to their recent gains. Subsequently, the
yield on the benchmark ten-year note, which moves opposite of its
price, is down by 1.8 basis points at 1.813 percent.
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TSX Down At Open Wednesday
Toronto stocks moved down at open Wednesday amid concerns over global economic growth, with the S&P/TSX Composite Index shedding 51.61 points or 0.41 percent to 12,590.36.
The Diversified Materials Index lost about 1 percent, with Inmet Mining, First Quantum Minerals and Teck Resources losing nearly 1 percent each
In the oil patch, Suncor Energy slipped 0.50 percent, while Niko Resources and Nexen Inc. were edging up 0.25 percent each.
Among gold stocks, Barrick Gold, Goldcorp. and Kinross Gold were down around 1 percent each. Allied Nevada Gold lost close to 3 percent.
Meanwhile, Smartphone maker Research In Motion rose over 2 percent ahead of the release of its new products.
Battery systems maker Electrovaya Inc.
surged 40 percent after announcing that it has received an initial
contract to produce prototypes to deliver complete electric vehicle
battery systems for DongFeng Motors's two electric vehicle platforms.
The price of crude oil
was moving higher Wednesday morning after data showed a
smaller-than-expected increase in weekly U.S. inventories, despite mild
gains for the dollar. Meanwhile, the OPEC maintained 2013 global
oil demand growth forecast at 0.80 mbd and said the impact of economic
turbulence on oil demand should be considerably milder than in previous
years.
Crude for February edged up $0.04 to $93.32 a barrel.
The price of gold was moving lower Wednesday morning as the US dollar was trading mixed after the release of inflation data. Gold for February was down $7.50 to $1,676.40 an ounce.
In corporate news from Canada, automotive supplier Magna International, Inc. on Wednesday said it expects total sales for fiscal 2013 between $31.3 billion and $32.7 billion.
Battery systems maker Electrovaya Inc.
announced that it has received an initial contract to produce
prototypes to deliver complete electric vehicle battery systems for
DongFeng Motors's two electric vehicle platforms. Yesterday, the stock
jumped 20 percent.
Elsewhere, euro zone inflation remained
unchanged at 2.2 percent in December as initially estimated, final data
released by Eurostat showed. The latest figure is the lowest since
November 2010. Inflation has been hovering above the central bank's
threshold limit of 2 percent for many months.
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Asian Stocks Drop Led By Japan's Exporters
Asian stocks fell
broadly on Wednesday, with mixed U.S. data, a firmer yen and caution
ahead of a slew of Chinese data due this week weighing on investor
sentiment. Investors also awaited earnings results from major U.S. banks
for directional cues. Meanwhile, the World Bank today projected another
year of slow global growth, as it reduced its estimate of global growth
in 2013 to 2.4 percent from 3 percent earlier in the face of weak
growth, high unemployment and low business confidence in developed
nations.
Japanese shares snapped a four-day winning
streak, with automakers and other export-sensitive companies declining
sharply following a pause in the yen's recent selloff. The yen extended
its gains against major currencies after a cabinet minister warned over
the currency's sharp decline and Eurogroup President Jean-Claude
Juncker said an overvalued euro is likely to threaten the economic
recovery. The Nikkei average dropped 2.6 percent, while the broader Topix index lost 2 percent.
Among the prominent decliners, Sharp, Toyota Motor, Fujifilm Holdings, Honda Motor and Nikon
fell 2-5 percent. Telecom service provider Softbank tumbled 3.3 percent
and heavyweight Fast Retailing slumped 4.6 percent. Gulliver
International soared 6.8 percent on a brokerage upgrade. Builders gained
ground on expectations they would benefit from a rebuilding program in
the Tokyo metropolitan area. P.S. Mitsubishi Construction and Japan
Bridge Corp jumped 4-5 percent.
On the macroeconomic front, core
machinery orders in Japan jumped a seasonally adjusted 3.9 percent in
November from the previous month, the Cabinet Office said, toping
forecasts. On a yearly basis, orders added 0.3 percent - also beating
estimates for a contraction of 7.3 percent.
China's Shanghai
Composite index fell 0.7 percent after data showed China's foreign
direct investment inflows fell 3.7 per cent in 2012 from a year ago, the
first annual drop since 2009. Hong Kong's Hang Seng index eased 0.1 percent ahead of more Chinese data due at the end of the week.
Australian shares
bucked the regional downward trend to end higher, as gains in banks and
defensive stocks outweighed losses in resource stocks. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about half a percent each.
Westpac, ANZ, NAB and Commonwealth rose between 0.3 percent and 0.9 percent, while blood products group CSL jumped 3.5 percent and the nation's top telecommunications provider Telstra added 1.1 percent. Global miner BHP Billiton fell 0.8 percent and rival Rio Tinto lost half a percent ahead of Chinese fourth-quarter gross domestic product data on Friday.
Qantas Airways
advanced 0.7 percent after the airline said its order of 15 Dreamliner
aircraft for its low-cost carrier Jetstar remained on track, following a
series of problems with the aircraft in recent days. Construction materials
company Boral soared 10 percent to an 18-month high after announcing
700 redundancies nationwide to combat slowdown in the construction
industry.
In economic news, consumer confidence in Australia
barely rose in January despite the central bank cutting interest rates
to the lowest level since the aftermath of the global financial crisis,
the latest survey results from Westpac and the Melbourne
Institute showed. The group's confidence index increased 0.6 percent
from December, with the reading of 100.6 indicating there were slightly
more optimists than pessimists.
Seoul stocks fell to a one-month low owing to lack of positive triggers. The benchmark Kospi average shed 0.3 percent to 1,977, dragged down by tech shares on growing concerns about demand for smartphones. Heavyweight Samsung Electronics declined 1.3 percent, extending Tuesday's loss. Automakers rose, helping to limit any major downside. Hyundai Motor gained 0.7 percent, while shares of its affiliate Kia Motors rallied 2.3 percent.
New Zealand shares eased marginally, weighed down by weak global cues. The benchmark NZX-50 index edged down 2 points or 0.04 percent to 4,169, dragged down by high-tech electronic components maker Rakon and retailer Kathmandu Holdings, which fell 2-3 percent. Gold miner Oceana Gold led the gainers on the exchange, climbing 5.2 percent, while Trade me rose 1.5 percent ahead of changes in the benchmark index taking place next Monday.
Elsewhere, India's Sensex was down half a percent, Malaysia's KLSE Composite edged down 0.2 percent and the Taiwan Weighted average fell 0.8 percent, while Singapore's Straits Times index rose 0.3 percent and Indonesia's Jakarta Composite index added 0.2 percent.
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Crude Edges Up Ahead Of Inventories Data
The price of crude oil was
moving higher Wednesday morning after data showed a
smaller-than-expected increase in weekly U.S. inventories, despite mild
gains for the dollar.
Meanwhile, the OPEC maintained 2013
global oil demand growth forecast at 0.80 mbd and said the impact of
economic turbulence on oil demand should be considerably milder than in
previous years.
Light Sweet Crude Oil (WTI) futures for February delivery, added $0.12 to $93.40 a barrel.
Tuesday
after the market hours, the API said US crude oil inventories rose by a
meager 46,000 barrels and gasoline stocks added 4.10 million barrels in
the weekended January 11.
The price of gold was moving lower Wednesday morning as the US dollar was trading mixed ahead of the inflation data, due out later today.
Gold
for February delivery, the most actively traded contract, shed $5.10 to
$1,678.80 an ounce. Yesterday, gold settled up near a three-week high,
with traders overlooking positive retails data out of the US amid
reports that the Bank of Japan may agree for a firm 2 percent
inflation target as demanded by the new government over there.
Holdings
of SPDR Gold Trust, the world's largest gold-backed exchange-traded
fund, moved down to 1,336.83 tons from 1,337 73 tons.
This morning, the U.S. dollar
was lingering around a 11-month low versus the euro and leveling off
from its 2-week low against sterling. The buck continued to retreat from
its 30-month high versus the yen and ticking lower against the Swiss
franc.
In economic news, euro zone inflation remained
unchanged at 2.2 percent in December as initially estimated, final data
released by Eurostat showed. The latest figure is the lowest since
November 2010. Inflation has been hovering above the central bank's
threshold limit of 2 percent for many months.
Traders will
look to inflation data from the U.S. Labor Department due out at 8.30
a.m ET. Economists expect headline inflation rate of 0 percent for
December, while the core consumer price index may have edged up 0.1
percent. In November, consumer prices declined 0.3 percent, while core
prices rose 0.2 percent.
Today during trading hours, the EIA will
release its US crude oil inventories report for the weekended January
11. Analysts expect crude oil inventories to gain by 2.10 million
barrels and gasoline stocks to add 2.3 million barrels last week.
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