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Stocks Seeing Modest Strength On Upbeat Chicago Data
Stocks have moved modestly higher in early trading on Thursday, regaining some ground after ending the previous session in the red. The major averages have climbed into positive territory, although buying interest remains relatively subdued. The major averages have recently pulled back off their highs for the young session but are holding on to slim gains. The Dow is up 18.74 points or 0.1 percent at 13,929.16, the Nasdaq is up 8.85 points or 0.3 percent at 3,151.16 and the S&P 500 is up 0.32 points or less than 0.1 percent at 1,502.28. The modest strength that has emerged on Wall Street is partly due to the release of a 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. Economists had expected the index to dip to 50.5 from the 51.6 originally reported for the previous month. However, a separate report from the Labor Department showing that initial jobless claims rebounded by more than expected in the week ended January 26th has helped to limit the upside for the markets. The Labor Department said initial jobless claims rose to 368,000, 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. 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." A separate report from the Commerce Department 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. Networking stocks are seeing considerable strength in early trading, driving the NYSE Arca Networking Index up by 2.1 percent. Ciena (CIEN) has helped to lead the sector higher, surging up by 7.1 percent. Most of the other major sectors are showing only modest moves, although notable weakness is visible among gold stocks. 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. Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has fallen by 0.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 0.2 percent. In the bond market, treasuries are pulling back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.001 percent after hitting a low of 1.971 percent. |
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TSX Down At Open Thursday
Toronto stocks moved down at open Thursday amid selling across a variety of sector, with the S&P/TSX Composite Index shedding 51.68 points or 0.40 percent to 12,742.76. BlackBerry maker Research In Motion dived over 10 percent a day after launching the much awaited new models. Agricultural nutrient maker Potash Corp. was down over 2 percent after reporting lower fourth-quarter net earnings. Fellow fertilizer maker Agrium Inc. lost nearly 2 percent. The Diversified Materials Index was down about 1 percent, with Inmet Mining and First Quantum Minerals losing around 1 percent each. In the oil patch, Trilogy Energy surrendered close to 2 percent, while Suncor Energy and Imperial Oil were slipping around 1 percent each. Among gold stocks, Royal Gold lost 1 percent. Meanwhile, Semiconductor and electronic component manufacturing company JDS Uniphase Corp. jumped 16 percent after it swung to profit in second-quarter. The price of crude oil was trading lower Thursday morning as traders await cues from the US jobs data, due out Friday. Crude for March slipped $0.40 to $97.54 a barrel. The price of gold was moving lower Thursday morning, with the euro halting its recent rally after downbeat retail sales data from Germany. Gold for April was down $6.70 to $1,674.90 an ounce. In corporate news from Canada, agricultural nutrient maker Potash Corp. reported a lower fourth-quarter net earnings of $421 million or $0.48 per share compared to $683 million or $0.78 per share in the same period last year. Analysts expected the company to report earnings of $0.58 per share for the quarter. Bank of Montreal said it obtained necessary approvals to proceed with a normal course issuer bid through the facilities of the TSX to purchase, for cancellation, up to 15 million of its common shares commencing February 1, 2013 and ending January 31, 2014. Semiconductor and electronic component manufacturing company JDS Uniphase Corp. swung to profit in second-quarter, reporting net income of $4.1 million or $0.02 per share compared to a net loss of $10.2 million or $0.04 per share in the year ago quarter. On Non-GAAP basis, net income for the quarter was $42.3 million, or $0.18 per share up from $36.3 million, or $0.16 per share last year. Analysts expected the company to report earnings of $0.14 per share on revenues of $424.19 million for the quarter. In economic news Statistics Canada said that the economy grew by 0.3 percent in November, extending its 0.1 percent rise in October as most major industrial sectors increased production in November. Manufacturing and mining, quarrying and oil and gas extraction were the main contributors to the November increase. In a separate release, the agency revealed that the Industrial Product Price Index came in flat compared with November. An 0.9 percent increase in primary metal products was offset mainly by a 0.5 percent decline in motor vehicles and other transportation equipment. Meanwhile, the Raw Materials Price Index fell 2.0 percent, largely due to lower prices for crude oil. |
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European Stocks Fall On U.S. Data, Mixed Earnings
European stocks fell on Thursday, as investors reacted to mixed earnings reports and downbeat GDP data out of the United States. Closer home, Germany's retail sales decreased more than expected in December, while the nation's unemployment declined unexpectedly by a seasonally adjusted 16,000 in January, separate reports showed. Elsewhere, French household spending remained flat in December, while house prices in the U.K. increased 0.5 percent month-over-month in January after recording no change in the past two months. Asian stocks ended mostly lower as downbeat U.S. GDP figures coupled with weaker-than-expected growth in Japan's industrial output overshadowed optimism over the outcome of the Federal Reserve's monetary policy meeting. The U.S. index futures are declining, indicating a soft open as investors await data on weekly jobless claims, personal income and spending, and Chicago-area business activity. The Euro Stoxx 50 index of Eurozone bluechip stocks is moving down 0.6 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is declining 0.2 percent. Around Europe, benchmark indexes in Germany, France, the U.K. and Switzerland are down between 0.3 percent and 0.6 percent. Bayer is moving down 0.8 percent in Frankfurt on news that France's health regulator is considering suspending sales of its Diane 35 acne treatment. Infineon Technologies is rallying 3.2 percent after the German semiconductor maker reported quarterly results on expected lines and backed its full-year revenue outlook. Shares of TNT Express N.V. are down 1.8 percent in Amsterdam after United Parcel Service Inc. withdrew its $6.77 billion offer for the company. Mining giant Rio Tinto Plc. is edging down marginally in London after saying 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 Plc is down 1.1 percent as the European oil giant reported a marginal rise in fourth-quarter profit, helped by a slight growth in revenues. TeliaSonera is losing 1.6 percent after the Swedish telecommunications firm reported about 35 percent increase in fourth-quarter profit, reflecting mainly non-recurring gains, and said it will trim 2000 jobs as part of its strategy to reduce costs and maintain profitability. Santander shares are down 2 percent after the company reported a sharp decline in profit for the fiscal year 2012. |
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Asian Stocks Fall On Economic Concerns
Asian stocks ended mostly lower on Thursday as downbeat U.S. GDP figures coupled with weaker-than-expected growth in Japan's industrial output overshadowed optimism over the outcome of the Federal Reserve's monetary policy meeting. The Fed reiterated its commitment to aggressive policy easing, saying it would continue the stimulus until unemployment reaches 6.5 percent or inflation increases substantially. The Fed's statement following a two-day meeting meant that fund inflows will continue to increase in emerging markets in the short-to-medium term. Japanese stocks reversed early losses to end at a fresh 33-month high. The Nikkei average rose 0.2 percent while the broader Topix index advanced 0.6 percent. Shipping firm Mitsui O.S.K. Lines soared 5.6 percent despite the company revising down its operating profit outlook for FY12 ending March 31, 2013. The company's shares briefly tumbled 7.7 percent in early trading before rebounding on bargain hunting. Sumitomo Mitsui Financial Group jumped 5.2 percent after posting a 34 percent rise in profit for the nine months through December, beating estimates. Mitsubishi UFJ Financial Group advanced 3.6 percent and Mizuho Financial Group added 2.8 percent, while brokerages Nomura and Daiwa Securities Group rose 2-5 percent. Nomura reported a 13 percent rise in third-quarter net profit, while revenue and income before income taxes fell slightly. Honda Motor shares ended 0.9 percent higher before its earnings announcement. The automaker posted a sharp increase in quarterly earnings, but trimmed its full-year forecast. Advantest fell 1.8 percent after posting a quarterly loss. Canon eased 0.6 percent after reporting profit well below forecasts. On the macroeconomic front, Japan's seasonally adjusted industrial production rose 2.5 percent in December from the previous month, the Ministry of economy, Trade and Industry said, falling well shy of forecasts for an increase of 4.1 percent following the 1.4 percent contraction in November. Separately, the Bank of Japan may consider additional monetary easing if required, to bring an end to deflation and boost growth, Deputy Gov. Hirohide Yamaguchi said at a meeting with business leaders in Nagasaki, southern Japan. Australian shares snapped a 10-day winning streak, with weak U.S. GDP as well as domestic data on export prices weighing on sentiment. The benchmark S&P/ASX 200 slid 0.4 percent. The export price index in Australia fell 2.4 percent in the December quarter compared to the previous three months, the Australian Bureau of Statistics said - falling for the second straight quarter. The headline figure missed forecasts for a 1.5 percent decline. A separate report showed that housing credit advanced by banks and non-banks increased by just 0.3 percent in December from the previous month. In stock-specific action, global miner BHP Billiton edged down 0.4 percent, Rio Tinto fell 1.1 percent and smaller rival Fortescue Metals Group lost 1.1 percent. Shares of Whitehaven Coal slumped 5.5 percent after the company warned its first-half earnings could fall below $10 million due to operational issues, weak prices for thermal coal and the high Australian dollar. Among the major banks, ANZ ended flat, Commonwealth slipped 0.4 percent, Westpac slid half a percent and NAB lost a percent. Woolworths retreated 1.3 percent after the retail giant reported a 3.2 percent rise in first-half sales. Origin Energy rose 1.1 percent after releasing its quarterly production report. Seoul shares slipped marginally as losses in banks and insurers offset a rebound in automakers after the government warned of stronger capital flow controls to curb speculation in the currency market. The benchmark Kospi average slipped 0.1 percent. Meanwhile, South Korea today warned its communist neighbor of "grave consequences" if it conducted a nuclear test as threatened last week. "If North Korea misjudges the situation and pushes ahead with a provocation again, it will cause very grave consequences," official spokesman Park Jeong-ha said after a meeting President Lee Myung-bak had with Ministers and top security officials in Seoul. New Zealand shares rose marginally, with a sharp decline in Fisher & Paykel healthcare shares limiting the upside. The benchmark NZX-50 index rose 0.1 percent to its highest level since October 2007. Fletcher Building, the nation's largest construction company, rose 1.4 percent to a fresh five-year high, fast food franchise operator Restaurant Brands added 1.8 percent and New Zealand Oil & Gas, which said its cash flows are steady enough to pay interim dividends, advanced 1.7 percent, while Fonterra Shareholders Fund units dropped 0.7 percent below $7 in the wake of the discovery of a fertilizer chemical in milk powder recently. Shares of exporter Fisher & Paykel Healthcare tumbled 4 percent following news that the U.S. Department of Health and Human Services is expanding the scope of competitive bidding process for reducing state-funded Medicare contracts. Elsewhere, benchmark indexes in Singapore, Indonesia and Malaysia are little changed, while India's benchmark Sensex was moving down half a percent. The Taiwan Weighted average closed up 0.2 percent. |
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Crude Steady Near $98
The price of crude oil was little changed Thursday morning as traders await cues from the US jobs data, due out Friday Light Sweet Crude Oil (WTI) futures for March delivery, slipped $0.22 to $97.72 barrel. Yesterday, oil settled at a fresh four-month high as the dollar continued to weaken against some major currencies with continued fears of supply disruptions from the Middle East due to the geopolitical tensions in Algeria and Egypt. Investors largely ignored an Energy Information Administration report that showed crude stockpile in the U.S. to have increased more than expected, even as the U.S. Federal Reserve indicated the asset purchase program to continue. Wednesday during trading hours, the EIA said that US crude oil inventories jumped 5.90 million barrels, while gasoline stocks shed 1.00 million barrels in the weekended January 25. Analysts expected 2.5 million climb in crude oil inventories and little change in gasoline stocks last week. This morning, the U.S. dollar was was lingering around its 11-month low versus the euro and steady around its 5-month high against sterling. The buck was trading around its its 30-month high versus the yen and flat against the Swiss franc. Gold Retreats From Weekly High The price of gold was moving lower Thursday morning, with the euro halting its recent rally after downbeat retail sales data from Germany. Gold for April delivery, the most actively traded contract, were down $5.10 to $1,676.50 an ounce. Yesterday, gold rose over 1 percent to settle near a 2-week high as investors sought safe haven in the precious metal after a report showed economic activity in the U.S. to have unexpectedly contracted in the fourth quarter. Investors were also focused on the outcome of the Federal Reserve policy meeting with a statement due later. Gold also found support after a government official in India indicated no further action to curb gold imports at the current time. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,328.09 tons. | ||||||||||||
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