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| US Market | ||||||||||||
| The major U.S. index futures are pointing to a sharply lower opening on
Tuesday, with sentiment seeing marked weakness as the markets are
overwhelmed by geopolitical concerns. The Syrian crisis has given risen
to supply concerns regarding crude oil, given the ramification, an
escalation of tensions in the Middle East can have on the global crude
oil market. Additionally, fears concerning premature withdrawal of
stimulus is also weighing heavily in the minds of traders, as reflected
by a sell-off in emerging market currencies. The markets, which have
already retreated into the oversold markets, could continue to languish
until any positive catalyst support them. U.S. stocks declined in a late hour sell-off on Monday as traders digested weak durable goods orders data amid apprehension concerning the geopolitical developments in Syria. The major averages opened little changed following the release of a Commerce Department report showing a steeper than expected drop in durable goods orders. As traders weighed for the impact of the data on the itinerary for stimulus withdrawal, buying emerged and the averages moved roughly sideways above the unchanged line for much of the session before retreating sharply in the final hour of trading. The Dow Industrials ended down 64.05 points or 0.43 percent at 14,947 and the S&P 500 Index closed 6.72 points or 0.40 percent lower at 1,657, while the Nasdaq Composite Index edged down a mere 0.22 points or 0.01 percent to 3,658. Twenty-six of the Dow components closed lower, while the remaining stocks advanced. Johnson & Johnson , JP Morgan Chase , Coca-Cola , Microsoft , Pfizer , Procter & Gamble , AT&T (T) and Verizon were among the biggest decliners of the session. On the other hand, Home Depot rallied 2.08 percent. On the economic front, durable goods orders fell 7.3 percent month-over-month in July, dragged down by a steep drop in aircraft and defense orders. Non-defense capital goods orders, excluding aircraft and parts, fell 3.3 percent, although this measure is up 8.4 percent year-over-year. Shipments of this category of goods that are directly plugged in to GDP calculations fell 1.4 percent. Computer equipment orders fell 20 percent and electrical equipment/appliance orders fell 4.3 percent. The Dow Industrials is rebounding slightly from the extremely oversold territory, with the index's 14-day RSI currently at 18.77. Immediate upside resistance for the index is around 15,001. Above this level, the index could also find resistances around 15,008, its 100-day MA (currently at 15,126), 15,175, 50-day MA (currently at 15,261) and 21-day MA (currently at 15,314). On the downside, the index has support around the 14,908, 14,846 and 14,753 levels. | ||||||||||||
| US Economic Reports | ||||||||||||
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The results of the S&P/Case-Shiller house price survey for June are scheduled to be released at 9 am ET. Economists expect the 20-city composite house price index for the month to increase by a seasonally adjusted 1 percent month-over-month. Annually, the index is expected to increase by an unadjusted 12.2 percent. The Conference Board is due to release the results of its consumer confidence survey at 10 am ET. The consensus estimates call for a small decline in the index to 78 in August from 80.3 in July. The index measuring U.S. consumer confidence declined 1.8 points to 80.3 in July. The present situations index rose 4.9 points to 73.6, representing a 5-year high, while the expectations index slipped 6.4 points to 84.7. Also at 10 am ET, the Richmond Federal Reserve will release the results of its manufacturing survey for August. Economists expect the index to improve to 0 from -11 in July. The Treasury will announce the results of its auction of 2-year notes at 1 pm ET. | ||||||||||||
| Stocks in Focus | ||||||||||||
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Integrated Device Technology announced that its President and CEO Dr. Ted Tewksbury has resigned, effective August 27th, 2013. The company also said it has appointed board member Jeffrey McCreary as interim President and CEO. Dean Foods said its previously announced 1-for-2 stock split became effective at 4:15 pm ET on August 26th, 2013. The company's stock will begin trading on a split-adjusted basis on the NYSE on August 27th, 2013. The company updated its earnings guidance to account for the impact of the reverse split, with the company now expecting third quarter adjusted earnings of 10-16 cents per share and full year adjusted earnings of 94 cents to $1.06 per share. Meanwhile, the company reiterated its earnings guidance for both periods on a pre-split basis. Tiffany's second quarter profit improved and topped Wall Street view. Worldwide net sales rose 4 percent, but missed the consensus estimate. At the same time, the company raised its fiscal year earnings guidance, in-line with Street view. Sanderson Farms reported third quarter earnings and net sales that were higher than in the year-ago period and topped Wall Street view. J. C. Penney is reacting to an announcement by William Ackman's Pershing Square Capital Management that it has prices an offering of 39.07 million shares of the company's common stock owned by it at $12.90 per share. TiVo , WMS Industries (WMS) and Wet Seal are among the companies due to release their quarterly results after the close of trading. | ||||||||||||
| European Market | ||||||||||||
After opening lower, European stocks rebounded in early trading but failed to move above the unchanged. The indexes subsequently retreated and are currently trading notably lower. In corporate news, Petrofac reported a decline in its first-half profits, while it said it is confident of delivering a strong second quarter performance. Miner Antofagasta reported a 39 percent decline in its first-half profits on higher costs and lower metal products. The IfO Institute released the results of its business confidence survey for Germany, which showed that business confidence improved more than expected in August. The business confidence index based on the survey rose to 107.5 from 106.2 in July. Economists expected a more modest improvement to 107. | ||||||||||||
| Asian Markets | ||||||||||||
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Most Asian stocks declined, as the negative lead from Wall Street weighed on sentiment on the markets in the region. The U.S. stance on Syria heightened the risk aversion of the markets. Meanwhile, the Chinese and Australian market bucked the downtrend. Japan's Nikkei 225 average opened lower but pared its losses over the course of the morning and moved higher amid some volatility. However, the index retreated yet again in the afternoon before moving sideways in late trading. The index closed down 93.91 points or 0.69 percent at 13,542. Export stocks declined, while pharma, material and electric utility stocks gained ground. Hong Kong's Hang Seng Index closed 130.55 points or 0.59 percent lower at 21,875. The Indian and Indonesian markets came under intense selling pressure due to the depreciation in the value of their currencies. After spending the better part of the session in negative territory, Australia's All Ordinaries sneaked above the unchanged line in the final few minutes of trading. At the close of trading, the index was up 3.70 points or 0.07 percent at 5,131. Most sectors saw modest buying interest, with the exception of energy, material and industrial stocks. China's Shanghai Composite Index added 7.09 points or 0.34 percent before closing at 2,104. On the economic front, a report released by the Chinese National Bureau of Statistics showed that industrial profits of Chinese firms rose 11.6 percent year-over-year in July following a 6.3 percent increase in June. | ||||||||||||
| Currency and Commodities Markets | ||||||||||||
Crude oil futures are rising $2.26 to $108.18 a barrel after moving down $0.50 to $105.92 a barrel on Monday. Gold futures are currently adding $25.60 to $1,418.70 an ounce. In the previous session, Gold fell $2.70 to $1,393.10 an ounce. Among currencies, the U.S. dollar is trading 97.46 yen compared to the 98.50 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3332 compared to yesterday's $1.3368. | ||||||||||||
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