Stocks Moving Back To The Upside In Early Trading
Stocks moved
to the upside at the start of trading on Wednesday, regaining some
ground after moving mostly lower over the two previous sessions. The
major averages climbed into positive territory but have not seen much
follow-through on the initial upward move.
The major averages are currently posting modest gains, near their highs for the young session. The Dow is up 57.28 points or 0.4 percent at 13,386.13, the Nasdaq is up 7.97 points or 0.3 percent at 3,099.78 and the S&P 500 is up 4.06 points or 0.3 percent at 1,461.21.
The early strength on Wall Street is partly due to a positive reaction to quarterly results from Alcoa (AA), with the aluminum giant up by 1.2 percent in early trading.
Kicking
off the earnings season after the close of trading on Tuesday, Alcoa
reported fourth quarter adjusted earnings of $0.06 per share compared to
a year ago loss of $0.03 per share. The earnings matched analyst
estimates.
Alcoa also reported fourth quarter revenues that fell
by less than expected and forecast a 7 percent increase in aluminum
demand in 2013.
Nonetheless, traders seem somewhat reluctant to continue buying stocks following last week's rally, with continued uncertainty about the outlook for earnings helping to keep buying interest subdued.
Electronic storage stocks have shown a strong move to the upside in early trading, however, driving the NYSE Arca Disk Drive Index up by 1.3 percent. Seagate technology (STX) has helped to lead the storage sector higher after raising its second quarter guidance.
Semiconductor, networking, and railroad stocks are also seeing early strength, while most of the other major sectors are showing only modest moves.
Among individual stocks, shares of Clearwire (CLWR)
are moving sharply higher after the wireless broadband operator
received an unsolicited takeover bid from Dish Network (DISH) valuing
the company at $3.30 per share.
Social media giant Facebook (FB)
is also seeing early after the company issued a mysterious invitation
to journalists to "Come and see what we're building." Some are
speculating that the company plans to unveil a Facebook phone.
On the other hand, shares of Apollo Group
(APOL) have come under pressure in early trading after the parent of
the University of Phoenix reported first quarter earnings that fell
year-over-year amid a continued drop in new enrollment.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index ended the day up by 0.5 percent.
The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.7 percent, the French CAC 40 Index and the German DAX Index are up by 0.3 percent and 0.2 percent, respectively.
In the bond market, treasuries are seeing modest strength, climbing further off their recent lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 1.86 percent.
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TSX Edges Up At Open Wednesday
Toronto stocks edged
up at open Wednesday amid buying across a variety of sectors, with the
S&P/TSX Composite Index adding 18.35 points or 0.15 percent to
12,523.16.
The Diversified Materials Index rose close to 1 percent, with Teck Resources and Inmet Mining adding over 1 percent each.
First Quantum Minerals
eased 0.25 percent after it said it has formally commenced its offer to
acquire Inmet Mining Corp. for total consideration of approximately
C$5.1 billion.
In the oil patch, Pacific Rubiales Energy rose over 1 percent.
Hanfeng Evergreen Inc.
jumped 18 percent after it announced that its received a privatization
proposal from one of its major shareholder at a price of C$2.20 in cash
per share.
Among gold plays, Alacer Gold dived 5 percent. On the other hand, Centamin Plc gained 7 percent after announcing fourth quarter gold production update.
The price of crude oil was
steady above $93 Wednesday morning as global equities were firm after
aluminum giant Alcoa forecast higher demand for this year. Today during
trading hours, the EIA will release its crude oil inventories report for
the weekended January 04. Analysts expect a rise of 1.5 million barrels
for crude oil and an increase of 2.6 million barrels in gasoline
stocks.
Crude for February eased $0.09 to $93.06 a barrel.
The price of gold was
little changed Wednesday morning as global equity markets were steady
after Alcoa Inc.'s results and outlook. Gold for February edged up $2.20
to $1,664.40 an ounce.
Media and communications company Shaw Communications Inc. reported a rise in first-quarter net income to C$224 million, from C$192 million a year before.
Cameco Corp.
announced it has obtained all required regulatory approvals and
completed the acquisition of NUKEM Energy GmbH, one of the world's
leading traders and brokers of nuclear fuel products and services, for
$140 million.
Asia Bio-Chem Group Corp. announced that it
has completed the acquisition of all the issued and outstanding shares
of Tieling Wanshunda Starch Company Ltd. for C$44.8 million. Yesterday,
the stock surged over 40 percent to C$0.085.
Bio pharmaceutical company Cangene Corp. announced that the US FDA has approved its Varicella or chickenpox drug, VARIZIG.
Coal mining company Coalspur Mines Ltd.
said its largest shareholder, the Highland Park Group, has elected to
exercise its option to purchase an additional 12.72 million ordinary
shares in the company at an exercise price of A$0.70 per share through
its affiliate Borrowdale Park S.A.
In economic news, Canada Mortgage & Housing Corp.
said construction starts were 198,000 at a seasonally adjusted annual
pace last month. Economists expected a reading of 195,000.
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European Markets Higher After Alcoa Results
The European markets
are in positive territory on Wednesday, after Alcoa, Inc., the largest
U.S. aluminum producer, on Tuesday reported in-line profit for the
fourth-quarter, while sales topped estimates. The company also expects
global aluminum demand to grow 7 percent this year, up from 6 percent in
2012.
Germany's industrial production rose 0.2 percent in
November from a month ago, the Federal Ministry of Economics and
technology said. Although it reversed a 2 percent fall logged in
October, the growth rate was weaker than the 1 percent rise forecast by
economists.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.14 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.32 percent.
The German DAX and the French CAC 40 are marginally higher, while the UK's FTSE 100 and Switzerland's SMI are advancing between 0.3 percent and 0.4 percent.
In Frankfurt, Lenders Commerzbank and Deutsche Bank are gaining 2.9 percent and 1 percent, respectively. Air Berlin,
Germany's second-largest airline, increased its capacity utilization
rate in December 2012 by 3.1 percentage points to 77.82 percent. The stock is gaining close to 5 percent. ProSiebenSat.1 Media is gaining 2.4 percent. Goldman Sachs added the stock to ''Conviction Buy.''
Machinery & equipment firm Rational is
adding 2.2 percent. Berenberg raised the stock to ''Hold'' from
''Sell.'' Kuka, which received a downgrade, is falling 2.3 percent.
Lanxess is falling 2.3 percent. Citigroup cut the stock to ''Sell'' from ''Neutral.''
Insurer Allianz is losing 1.3 percent, following a broker downgrade at Credit Suisse. PATRIZIA Immobilien is declining 3.2 percent. JPMorgan reduced its rating on the stock.
In Paris, EADS is gaining 3.4 percent. France Telecom is advancing 2.7 percent. Societe Generale and Credit Agricole are rising 1.9 percent and 1.2 percent, respectively. However, BNP Paribas is losing 0.9 percent.
Vivendi is losing 0.6 percent. Goldman Sachs cut the stock to ''Neutral'' from ''Buy.'' Grocery retailer Carrefour is falling 2.5 percent and speed-train maker Alstom is losing 1.5 percent.
Renault is down 0.9 percent. Peugeot is losing 1 percent after stating that annual sales of assembled vehicles and CKD units fell 16.5 percent. CGG Veritas is falling 4.6 percent, reportedly on a broker downgrade.
In London, Lloyds Banking is surging 3.8 percent. UBS raised the stock to ''Buy'' from ''Neutral.'' Standard Chartered is advancing 2.4 percent. Barclays and Royal Bank of Scotland are rising 1.8 percent.
Meggit is gaining 3.6 percent and John Wood Group is up 2.8 percent. Sainsbury is losing 3.4 percent. The company reported third-quarter sales.
Aviva is falling 2.2 percent. The company is selling its remaining stake in Dutch insurer Delta Lloyd. Delta Lloyd is gaining 6.6 percent in Amsterdam.
Richemont is gaining 3.1 percent in Zurich on a positive recommendation from Credit Suisse.
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Asian Stocks Rebound On US Earnings Optimism
Asian stocks rose
broadly on Wednesday, snapping a two-day losing streak, after U.S.
aluminum giant Alcoa, the first Dow component to report earnings
results, said it swung to a profit in the fourth quarter benefiting from
cost-cutting efforts and stabilizing prices for raw aluminum. The
company forecast higher demand for 2013 as growth in China appears to be
coming back.
Tokyo stocks bounced back from two days of
losses, with export-oriented auto and electronics makers benefiting from
the yen's weakness against both the dollar and euro. The Nikkei average rose 0.7 percent, while the broader Topix index added 0.8 percent. Among automakers, Honda Motors ended up 1.6 percent, reversing a sharp early loss, Fuji Heavy Industries, the maker of Subaru automobiles, rallied 3.8 percent and Toyota Motor advanced 1.6 percent.
Realty firm Mitsubishi Estate jumped 3.3 percent, brokerage Nomura Holdings climbed 3.5 percent, insurer Dai-ichi Life Insurance added 2.5 percent and lender Mitsubishi UFJ Financial Group
rose 1.5 percent. Seven & i Holdings rose 1.8 percent after the
convenience-store chain operator reported a 16 percent rise in its
profit for the nine months through November and raised its dividend
outlook.
Utilities Tokyo Electric Power and Shikoku Electric Power fell
2-3 percent, weighed down by reports that the Nuclear Regulation
Authority is considering setting new safety requirements for atomic
plants that will cost the power companies tens of billions of yen. Heavyweight Fast Retailing slipped 0.4 percent on profit taking after recent sharp gains.
China's Shanghai Composite index edged down marginally ahead of trade and inflation data due this week, while Hong Kong's Hang Seng index ended up half a percent, snapping a three-day losing streak.
Australian shares gained ground despite mixed domestic data and weak cues from Wall Street. Both the benchmark S&P/ASX 200 as well as the broader All Ordinaries
index ended up about 0.4 percent each, helped by gains in miners and
defensive stocks. Miners posted modest gains, helped by another gain in
iron ore prices overnight on optimism over rising Chinese demand and
supply disruptions in key producing nations such as Australia and India.
BHP Billiton edged up 0.2 percent and rival Rio Tinto gained 0.3 percent. Chemical maker Nufarm soared 6.2 percent after agricultural products giant Monsanto boosted its 2013 earnings forecast. Telecom giant Telstra rose half a percent, retailer Wesfarmers edged up 0.2 percent and lender Commonwealth added a percent.
In economic news, Australian retail sales
unexpectedly declined in November amid a sharp reduction in sales at
department stores and in household goods category, the latest figures
from the Australian Bureau of Statistics showed. Retail sales
fell 0.1 percent month-over-month to A$21.5 billion on a seasonally
adjusted basis against expectations for 0.3 percent growth. On the
positive side, figures from the Housing Industry Association revealed that new home sales
in Australia increased for the second consecutive month in November,
driven by an encouraging lift in sales of detached houses.
Seoul stocks lost ground, falling for a fifth consecutive session on apprehensions over fourth-quarter earnings. The benchmark Kospi average slipped 0.3 percent. Market heavyweight Samsung Electronics
ended on a flat note following the 1.3 percent decline yesterday after
the company said it likely earned a quarterly operating profit of 8.8
trillion won in the fourth quarter of 2012. Online game developer NCsoft tumbled 4.5 percent after Morgan Stanley cut its price target on the stock.
New Zealand shares rose modestly, lifting the benchmark NZX-50 index up 0.3 percent to a five-year high. Gold miner OceanaGold
led the gainers on the exchange, climbing 6.2 percent after gold prices
rebounded on Tuesday on short covering and bargain hunting following
recent losses owing to uncertainty about future action from the U.S.
Federal Reserve.
Rural services firm PGG Wrightson, heavyweight Telecom and children's clothing chain Kathmandu Holdings rose around 2-3 percent, while Contact Energy and Skellerup fell more than 2 percent each.
Elsewhere, Malaysia's KLSE Composite edged up marginally, Singapore's Straits Times index was gaining half a percent and the Taiwan Weighted average added 0.2 percent, while benchmark indexes in India and Indonesia were subdued.
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Crude Steady Above $93
The price of crude oil was
steady above $93 Wednesday morning as global equities were firm after
aluminum giant Alcoa forecast higher demand for this year.
Alcoa predicted
a 7 percent increase in demand in 2013, marginally better than the 6
percent increase seen in 2012. The company's fourth-quarter earnings
were in line with forecasts while revenue exceeded Street expectations.
Light Sweet Crude Oil
(WTI) futures for February delivery, eased $0.14 to $93.01 a barrel.
Yesterday, oil settled almost flat as traders were anxious over future
action from the U.S. Federal Reserve.
In its latest Short-Term
Energy Outlook, issued Tuesday, the EIA forecasts a fairly loose oil
market in the next 2 years, with higher global consumption more than
offset by increasing global supply.
Tuesday after the market hours, the API said
US crude oil inventories increased by 2.4 million barrels as compared
to the expectations for a 1.5 million barrel and gasoline stocks
expanded by 7.9 million barrels in the week, compared with expectations
for a 2.3 million barrel build in the week ended January 04, 2013.
The price of gold was little changed Wednesday morning as global equity markets were steady after Alcoa Inc.'s results and outlook.
Gold for
February delivery, the most actively traded contract, edged up $0.20 to
$1,662.40 an ounce. Yesterday, gold recovered from a four-month low on
value buying in the face of adverse currency market action.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 1,339.84 tons from 1,340.74 tons.
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
little changed against the Swiss franc.
In economic news from the euro zone, Germany's industrial production
rose 0.2 percent in November from a month ago, the Federal Ministry of
Economics and technology showed. Although it reversed a 2 percent fall
logged in October, the growth rate was weaker than the 1 percent rise
forecast by economists.
Today during trading hours, the EIA will
release its crude oil inventories report for the weekended January 04.
Analysts expect a rise of 1.5 million barrels for crude oil and an
increase of 2.6 million barrels in gasoline stocks.
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