ADVFN III World Daily Markets Bulletin.

ADVFN III World Daily Markets Bulletin

Daily world financial news Wednesday, 28 August 2013

US Market

Caution Prevails as Syrian Crisis Rages The major U.S. index futures are pointing to a higher opening on Wednesday, with sentiment suggesting that the markets may rebound from the previous session’s declines. Commodities are still firmer, reflecting the nervousness of traders over a possible intervention by the U.S. in Syria. The Syrian crisis has put stimulus fears on then backburner, although it is still in the back of the minds of traders. With these preoccupations, the pending home sales data due to be released shortly after the markets open may have less of a repercussion. U.S. stocks came under intense selling pressure on Tuesday, as the escalation of geopolitical tensions following Syria’s reported use of chemical weapons on civilians became the latest addition to the markets’ list of worries. The purported action drew the ire of the U.S., who threatened the Middle East nation with dire consequences, setting in motion concerns about crude oil supplies. The major averages opened lower and moved roughly sideways until early afternoon trading. Thereafter, the averages declined steadily, closing notably lower, as crude oil climbed to a 6-month high. The Dow Industrials ended down 170.33 points or 1.14 percent at 14,776 and the S&P 500 Index closed 26.30 points or 1.59 percent lower at 1,631, while the Nasdaq Composite slid 79.05 points or 2.16 percent before closing at 3,579. Twenty-eight of the thirty Dow components declined in the session, while only two stocks managed to end marginally higher. American Express, Boeing, Bank of America, JP Morgan Chase, Microsoft, and United Technologies were among the biggest decliners of the session. The market witnessed a broad based sell-off, with transportation, biotechnology, financial, retail, housing, semiconductor and computer hardware stocks coming under intense selling pressure. On the economic front, the Conference Board’s survey showed that consumer confidence unexpectedly improved in August. The consumer confidence index rose to 81.5 in August from 81 in July. The expectations index increased 1.7 points to 88.7, while the present situation index fell to 70.7 from 73.6. The Dow Industrials settled close to a support level after yesterday’s sell-off. If bargain hunting supports the oversold markets, the Dow could attempt to break above a resistance around 14,851. Further upward, the index also has resistance around 14,906, 14,979 as well as its 21, 50 and 100-day moving averages currently at 15,128, 15,253 and 15,278, respectively. Support for the index lies around 14,673.

US Economic Reports

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The National Association of Realtors is scheduled to release its pending home sales index for July at 10 am ET. Economists estimate a 1 percent month-over-month drop in pending home sales. Pending home sales index fell 0.4 percent month-over-month in June. Pending home sales fell in the South and the Midwest and were unchanged in the Northeast, while pending sales were up in the West. The Energy Information Administration is due to release its weekly petroleum inventory report for the week ended August 23rd at 10:30 am ET. Crude oil stockpiles fell by 1.4 million barrels to 359.10 million barrels in the week ended August 16th. Inventories of crude oil remained near the upper limit of the average range for this time of the year. Gasoline inventories declined by 4 million barrels and yet were in the upper half of the average range. Meanwhile, distillate inventories rose by 0.9 million barrels and were in the lower limit of the average range notwithstanding the increase. Refinery capacity utilization averaged 90.6 percent over the four weeks ended August 16th compared to 91 percent over the four weeks ended August 9th. The Treasury will announce the results of its auction of 5-year notes at 1 pm ET.

Stocks in Focus

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TiVo reported second quarter earnings of $1.96 per share compared to a loss of 23 cents per share in the year ago period. Service and technology revenues rose 42 percent to $77 million and exceeded the consensus estimate of $71.48 million. For the first quarter, the company expects net income in the range of $6 million to $8 million and service and technology revenues in the range of $80 million to $82 million, also ahead of the consensus estimates. Wet Seal reported second quarter non-GAAP adjusted earnings of 1 cent per share compared to a non-GAAP adjusted loss of 7 cents per share last year. Net sales rose to $137.2 million from $135.3 million in the year-ago period. The earnings were in line, while the revenues were slightly shy of estimates. For the third quarter, the company expects a net loss in the range of 2-3 cents per share on net sales of $135 million to $135.5 million. The guidance was lukewarm. Zale Corp. reported a fourth quarter net loss that narrowed from the year-ago quarter. Revenues for the quarter improved from last year and topped Street view. Chico's FAS’ second quarter results missed Wall Street view. Joy Global Inc. reported third quarter profit that declined from the year-ago period. Net sales fell year-over-year, but came above the consensus estimate. The company also authorized the repurchase up to $1.0 billion in shares of its common stock over the next 36 months. Books-A-Million reported a second quarter net loss from continuing operations of 61 cents per share compared to a loss of 6 cents per share in the year-ago period. Revenues fell 8.6 percent to $109.2 million. Guess,  Shanda Games and Williams-Sonoma are among the companies due to release their quarterly results after the close of trading.

European Market

European stocks opened lower but have since then trimmed their losses and are currently-trading lower amid the release of a lukewarm German consumer confidence reading. In corporate news, France’s Buoygues reported a 10 percent increase in its second quarter profits, although its first half profits declined from the year-ago period. The company lowered its sales guidance for the year. Accor reported a 6.6 percent drop in its first half profits. U.K. security firm G4S reversed to a loss in its first half and announced plans to sell its Canadian Cash solutions business and its Columbia Data Solutions business for 100 million pounds. On the economic front, sentiment among German consumers is set to ease marginally heading into September after reaching a six year-high in August, according to the results of a survey by market research group GfK. The forward-looking consumer confidence indicator for September slipped to 6.9 from a six year high of 7 in August. The outcome defied expectations for an increase in the indicator to 7.1. A report released by the German Federal Statistical Office showed that German import prices fell 2.6 percent year-on-year in July following a 2.2 percent drop in June. The annual rate was slightly steeper than the 2.5 percent rate forecast by economists. On a monthly basis, import prices rose 0.3 percent, in line with estimates The French Labor Ministry reported that the number of unemployed people in mainland France rose by 6,300 month-over-month in July. The unemployment rate rose by 0.2 percentage points to 10 percent.

Asian Markets

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Most Asian markets declined, as the Syrian crisis continued to haunt traders, although the Indonesian and Taiwanese markets bucked the downtrend. Japan’s Nikkei 225 average opened notably lower and moved sideways till late trading. After trimming some of its losses, the index closed down 203.91 points or 1.51 percent at 13,339. A majority of stocks declined, with export stocks declining the most on the yen’s strength. The yen firmed up as risk aversion increased in the wake of the geopolitical tensions. Australia’s All Ordinaries opened lower and dipped sharply in early trading. Thereafter, the index closed down 52.80 points or 1.03 percent at 5,078. Material stocks fell the most and energy and financial stocks also came under selling pressure. Hong Kong’s Hang Seng Index closed 350.20 points or 1.60 percent lower at 21,525, while China’s Shanghai Composite ended at 2,101, down 2.27 points or 0.11 percent.

Currency and Commodities Markets

Commodities Market Crude oil futures are surging up $1.22 to $110.23 a barrel after jumping $3.09 to $109.01 a barrel on Tuesday. An ounce of gold is currently fetching $1,428.40, up $8.20 from the previous session’s close of $1,420.20. In the previous session, gold added $27.10. Currency Market Among currencies, the U.S. dollar is trading at 97.46 yen compared to the 97.03 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3351 compared to yesterday’s $1.3393.