Stocks Pulling Back Further Off Their Recent Highs
Stocks
have moved mostly lower over the course of morning trading on Tuesday,
pulling back further off their recent highs. The major averages have
slid firmly into negative territory after initially showing a lack of
direction.
The weakness on Wall Street comes as traders continue to cash in on the recent strength in the , which lifted the S&P 500 to a five-year closing high last Friday.
Uncertainty about the upcoming earnings season has also generated some negative sentiment, with aluminum giant Alcoa due to release its quarterly results after the close of trading.
The release of results from Alcoa is seen as the unofficial start of the quarterly earnings season, as it is typically the first Dow component to release its results.
Networking stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 2.9 percent. With the loss, the index has pulled back well off the eight-month closing high it set on Monday.
Significant weakness has also emerged among computer hardware stocks, as reflected by the 2.1 percent loss being posted by the NYSE Arca Computer Hardware Index. NetApp and Logitech are posting notable losses.
Telecom, steel, energy, and defense stocks have also come under considerable selling pressure, moving lower along with most of the major sectors.
The major averages have seen some further downside in recent trading, hitting new lows for the session. The Dow is down 73.91 points or 0.6 percent at 13,310.38, the Nasdaq is down 19.01 points or 0.6 percent at 3,079.80 and the S&P 500 is down 9.37 points or 0.6 percent at 1,452.52.
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TSX Slips Ahead Of Earnings - Canadian Commentary
Canadian
stocks were extending losses for a second session Tuesday morning as
investors remain guarded ahead of the U.S. earnings season, with
aluminum producer Alcoa set to report its quarterly
results after the close of trading today. Lingering concerns about the
U.S. debt ceiling issue also kept investors on the sidelines after
Republicans said they intend to use the debt ceiling as "leverage" to
end the administration's "massive spending addiction
The S&P/TSX Composite Index shed 33.69 points or 0.27 percent to 12,465.86, after losing just over 40 points in the previous session.
The Diversified Materials Index was the major loser, shedding about 1 percent. Teck Resources and First Quantum Minerals were down around 1 percent each.
The price of Crude oil was moving lower Tuesday morning as traders were anxious over future action from the U.S. Federal Reserve. Crude for February delivery eased $0.39 to $92.80 a barrel.
In the oil patch, Trilogy Energy and Niko Resources were around 3 percent each. Suncor Energy was down about 1 percent, while Nexen Inc. was edging up 0.25 percent.
The price of gold was moving higher Tuesday morning amid a generally weak US dollar, with the euro steady amid expectations that the ECB would keep rates unchanged at its Thursday policy meeting. gold for February gained $7.20 to $1,653.50 an ounce.
Among gold plays, Alamos gold Inc. and Detour Gold were down around 2 percent each.
Barrick gold shed 1.50 percent after it said it has ended talks with China National gold Group Corp. to sell its African unit.
Meanwhile, Goldcorp.
added 0.50 percent after declaring its first monthly dividend payment
for 2013 of $0.05 per share, reflecting an increase of 11 percent to the
annual dividend.
Defense equipment maker CGI Group Inc. gained over 2 percent after announcing that its subsidiary, CGI Federal Inc. has got US$7 billion orders from the US Army.
In economic news from the euro zone,
Germany's exports fell 3.4 percent in November from October, Destatis
reported. Economists had forecast shipments to drop just 0.5 percent
after rising 0.2 percent a month ago.
Meanwhile, data from Eurostat showed retail sales in the euro zone
rose 0.1 percent month-on-month in November, recovering from three
successive months of contractions. At the same time, unemployment rate
in the single-currency region climbed to a new record high. The
seasonally-adjusted unemployment rate for euro area rose to 11.8 percent in November from 11.7 percent in October. There were 18.82 million unemployed in euro area in November, according to Eurostat. |
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European Markets Gain Ahead Of Alcoa Results
The
European are in positive territory on Tuesday, ahead of the
fourth-quarter reporting season that unofficially kicks off in the U.S.,
with aluminum producer Alcoa Inc. reporting quarterly results. Some positive data influenced sentiment, even as Germany's exports fell more than forecast.
Germany's
exports fell 3.4 percent in November from October, Destatis said.
Economists had forecast shipments to drop just 0.5 percent after rising
0.2 percent a month ago. Likewise, imports were down 3.7 percent,
reversing a 2.9 percent rise in October. Imports were forecast to rise
0.5 percent.
New orders received by German manufacturers decreased more than expected in November, owing mainly to a Sharp fall in overseas demand, preliminary data released by the Federal Ministry of Economics and showed.
Retail
sales in Eurozone rose 0.1 percent month-on-month in November,
recovering from three successive months of contractions, data from
Eurostat showed. At the same time, unemployment rate in the
single-currency region climbed to a new record high of 11.8 percent in
November from 11.7 percent in October.
Meanwhile, Eurozone
economic confidence improved more than expected to 87 in December from
85.7 a month ago, survey results from the European Commission revealed.
The reading was forecast to rise to 86.3.
The euro Stoxx 50 index of eurozone bluechip stocks is adding 0.28 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.19 percent.
The German DAX is marginally higher, while the French CAC 40, the UK's FTSE 100 and Switzerland's SMI are making modest to moderate gains.
In Frankfurt, Nivea maker Beiersdorf is gaining 2.4 percent and drug maker Merck is advancing 1.5 percent.
Deutsche Bank and Commerzbank are advancing 1.3 percent and 1 percent, respectively.
Praktiker
is gaining 4.6 percent. The firm reported a 2.7 percent decline in its
fourth-quarter sales, reflecting revenue losses from market changes to Max Bahr brand and fewer trading days. However, the company said it expects to develop better in Germany than the industry average.
Chemicals firm Lanxess is falling 1.6 percent. Insurer Munich Re is losing 1 percent after Merrill Lynch cut the stock to ''Underperform'' from ''Neutral.''
Merrill Lynch also reduced its rating on Hannover Rueckversicherung. The stock is falling nearly 2 percent.
TUI is losing 2.3 percent. Morgan Stanley cut the stock to ''Equalweight'' from ''Overweight.''
Deutsche Post and Deutsche Boerse are in negative territory.
In Paris, Credit Agricole, Societe Generale and BNP Paribas are gaining between 3.1 percent and 1.9 percent.
Veolia Environnement is adding 1.8 percent and chipmaker STMicroelectronics is rising 1.7 percent.
Air France-KLM reported
stable passenger traffic and marginal decline in capacity for December,
citing severe weather conditions, notably in North America. The stock
is down marginally.
Energy services provider Technip and speed-train maker Alstom are losing 3.1 percent and 1.8 percent, respectively.
Vodafone is gaining 2.6 percent in London on news that Verizon Communications Inc. might buy the U.K. mobile-phone giant's stake in Verizon Wireless.
Anglo American is gaining 2.6 percent. The miner tapped AngloGold Ashanti's Chief Executive Officer Mark Cutifani as its new chief to succeed Cynthia Carroll.
EasyJet is falling 1.2 percent after Credit Suisse reduced its rating on the stock.
Balfour Beatty
is dropping 1.1 percent. The infrastructure group appointed Andrew
McNaughton, currently Deputy Chief Executive and Chief Operating
Officer, as new Chief Executive, effective March 31.
TUI Travel is declining close to 4 percent. Morgan Stanley cut the stock to ''Underweight'' from ''Equalweight.''
Italian insurer Assicurazioni Generali SpA
agreed to buy the 49 percent stake it does not own in GPH joint venture
from privately-held financial firm PPF Group for 2.52 billion euros,
terminating their partnership in Central and Eastern Europe. The stock
is up 1.2 percent in Milan.
Across Asia/Pacific, major markets had a lower close. Australia's All Ordinaries fell 0.5 percent and China's Shanghai Composite Index dropped 0.4 percent. Hong Kong's Hang Seng and Japan's Nikkei 225 declined 0.9 percent each.
In
the U.S., futures point to a lower open on Wall Street. In the previous
session, the major averages ended the day in negative territory but
well off their lows for the session. The Dow fell 0.4 percent, the Nasdaq edged down 0.1 percent and the S&P 500 dipped 0.3 percent.
In the commodity space, Crude for February delivery is gaining $0.29 to $93.48 per barrel while February gold is rising $6.5 to $1652.8 a troy ounce. |
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Asian Markets Trade Weak
Asian stock are mostly trading weak on Tuesday with investors tracking cues from Wall Street where stocks ended lower overnight following a bout of profit taking.
After
a positive start and a subsequent smart upmove, the Australian stock
market is trading marginally down with investors pressing sales at
higher levels, amid a lack of fresh triggers.
Consumer staples,
energy, care, information and telecommunications stocks are finding some
support, while shares from financial, industrial and mining sections
are trading mixed.
The benchmark S&P/ASX 200 index, which rose to 4,736.5 in early trades, is currently down 2.8 points at 4,714.5. The broader All Ordinaries index is down 3.2 points t 4,734.9, more than 20 points off the day's high of 4,756.2.
Energy stocks Woodside Petroleum, Santos, Oil Search and Caltex Australia are up 1.2 to 1.6 percent. Origin Energy is trading higher by 0.6 percent.
Among top miners, BHP Billiton (BHP, BBL) and Newcrest Mining are up marginally, while Rio Tinto (RIO, RIO.L) and Fortescue Metals are down 1.3 percent and 1.2 percent, respectively.
In the banking space, ANZ Bank and National Australia Bank are trading flat, Commonwealth Bank of Australia is trading lower by over 1 percent and Westpac is trading in positive territory with a gain of about 0.6 percent. Bendigo & Adelaide Bank is up 0.7 percent and Bank of Queensland is trading 0.3 percent down.
Alumina , Aristocrat Leisure, Lend Lease Group, Toll Holdings and Adelaide Brighton are up 2 to 4 percent. SP Ausnet, Commonwealth Property Office Fund, Boral, Harvey Norman Holdings, AMP and Computershare are trading higher by 1.5 to 2 percent.
Atlas Iron, Aurizon Holdings, Lynas Corp., Treasury Wine Estates, Sims Metal Management and Bluescope Steel are trading lower by 1.4 to 2.4 percent.
In economic news, Australia saw
a seasonally-adjusted merchandise trade deficit of A$2.64 billion in
November, the Australian Bureau of Statistics said Tuesday. That missed
forecasts for a shortfall of A$2.30 billion following the downwardly
revised deficit of A$2.443 billion in October, originally A$2.088
billion.
Exports were up 1.0 percent on month to A$24.68 billion, while imports climbed 2.0 percent to A$27.32 billion.
Meanwhile,
an index measuring construction activity in Australia came in with a
score of 38.8 in December, the Australian Industry Group said. That's up
from 37.0 in November, but it remains significantly below the
boom-or-bust level of 50 that separates expansion from contraction. In
all, the index has climbed higher in each of the last three months.
Among
the individual components of the survey, commercial construction
activity fell at the slowest pace in two years, while the decline in
engineering construction also slowed.
The Japanese stock market opened lower, with investors tracking cues from Wall Street where stocks ended lower overnight. Profit taking after recent gains and the yen's surge against the U.S. dollar too contributed to the weak start.
Banking,
precision instruments, rubber and pulp & paper stocks mostly opened
weak, but subsequently regained some lost ground. Foods, manufacturing,
communications, oil and non-ferrous metals stocks traded mixed.
The benchmark Nikkei 225 index,
which rebounded to 10,602 after declining to 10,532 in early trades,
was down 50.5 points or 0.5 percent at 10,548.6 when the morning session
ended.
NTN Corp., Alps Electric, Mitsui Chemicals and Tokuyama Corp. shares lost more than 4 percent.
Aozora Bank
declined by over 3 percent following the bank confirming that Cerberus
Capital Management LP will offload most of its stake in the firm.
Konami Corp., Yaskawa Electric, Mazda Motor, Sumco Corp., Casio Computer, Fujitsu, Mitsubishi Chemical Holdings, Nomura Holdings, Komatsu and Nippon Electric Glass were down 2 to 4 percent at the break.
Isuzu Motors, Suzuki Motor, Nissan Motor, Japan Steel Works, Sumitomo Mitsui Trust Holdings, Tokyo Electric Power, Mitsubishi UFJ Financial (MTU), Kobe Steel and Mitsubishi Materials also posted notable losses.
Sharp Corp. gained more than 5 percent on expectations of a Sharp jump in earnings. Nitto Boseki moved up by about 4 percent. Hitachi Zosen and ComSys Holdings Corp. gained around 3.3 percent.
Shiseido Co. shares moved up more than 3 percent following a rating upgrade of the stock.
Pioneer
Corp., Konica Minolta Holdings, Mitsui OSK Lines, Unitika, Japan
Tobacco, Shinsei Bank, Mitsubishi Heavy Industries, Chugai
Pharmaceutical, East Japan Railway and Canon Inc. also posted strong gains.
In the currency market, the U.S. dollar was trading in the lower 87 yen range in early deals in Tokyo. The yen is currently trading at 87.40 to the dollar.
Among
other markets in the Asia-Pacific region, Hong Kong, Shanghai and
Taiwan are trading notably lower. Malaysia, Singapore and South Korea
are down with modest losses, while Indonesia and New Zealand are bucking
the trend and trading marginally higher.
On Wall Street, stocks
mostly ended lower on Monday, as traders cashed in on the recent
strength in the markets. The major averages ended the day in negative
territory, but well off their lows for the session.
The Dow declined 50.9 points or 0.4 percent to 13,384.3, the Nasdaq edged down 2.8 points or 0.1 percent to 3,098.8 and the S&P 500 dipped 4.6 points or 0.3 percent to 1,461.9.
Major European markets too closed weak on Monday. The U.K.'s FTSE 100 index ended down 0.4 percent, while the German DAX index and the French CAC 40 Index lost 0.6 percent and 0.7 percent, respectively.
U.S. Crude oil ended higher on Monday as the dollar weakened. Supporting Crude prices were the U.S. Energy Information Administration's weekly oil report last week which showed a huge decline in Crude oil inventories.
Crude for February delivery moved up $0.10 or 0.1 percent to close at $93.19 a barrel on the New York Mercantile Exchange. |
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Crude Advances Near 4-month High
The price of Crude oil was
advancing toward a four-month high Tuesday morning even as traders were
anxious over future action from the U.S. Federal Reserve.
Light Sweet Crude oil futures for February delivery, added $0.51 to $93.70 a barrel. Yesterday, oil settled marginally higher as the dollar weakened
even as investors tracked declining equity while weighing the Fed
Reserve possible move to halt its monthly bond purchases program later
this year.
This morning, the U.S. dollar was leveling off
from its three-week high versus the euro, while ticking higher against
sterling. The buck continued to hover around its 2-year high versus the yen and trading flat against the Swiss franc.
In economic news from the euro zone,
Germany's exports fell 3.4 percent in November from October, Destatis
reported. Economists had forecast shipments to drop just 0.5 percent
after rising 0.2 percent a month ago.
Meanwhile, data from Eurostat showed retail sales in the euro zone
rose 0.1 percent month-on-month in November, recovering from three
successive months of contractions. At the same time, unemployment rate
in the single-currency region climbed to a new record high. The
seasonally-adjusted unemployment rate for euro area rose to 11.8 percent in November from 11.7 percent in October. There were 18.82 million unemployed in euro area in November, according to Eurostat
Today after the market hours, the API will release its US Crude oil inventories report for the weekended January 04. |
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