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| US Market | ||||||||||||
| The major U.S. index futures are pointing to a higher opening on
Tuesday, with sentiment reflecting buoyancy on the back of some positive
data points from China and amid frantic international efforts to
diffuse the Syrian crisis. Russia is working overtime to arrive at a
solution to temper the U.S. stance on Syria's purported use of chemical
weapons. Hopes that the crisis will not precipitate could leave the
traders relieved. Additionally, China released a trio of economic data
that exemplified the positive economic momentum of a country that drives
economic performance of several other nations by virtue of its
privilege of being a major consumer and producer. These positive tidings
could help to maintain momentum of the markets. U.S. stocks advanced on Monday, capitalizing on positive Chinese data and hopes that the Fed will delay the withdrawal of stimulus. The major averages opened higher and moved sideways till early afternoon trading. After advancing till late afternoon trading, the indexes consolidated once again before ending notably higher. The Dow Industrials added 140.62 points or 0.94 percent before closing at 15,063, the S&P 500 Index ended up 16.54 points or 1 percent at 1,672 and the Nasdaq Composite closed at 3,706, up 46.17 points or 1.26 percent. Twenty-nine of the thirty Dow components closed higher, while 1 stock declined. Alcoa , Caterpillar (CAT) and United Technologies were among the biggest gainers of the session. Housing, transportation, biotechnology, basic material, oil service sector, retail, semiconductor, computer hardware and brokerage stocks found notable buying interest. On the economic front, the Federal Reserve reported that outstanding consumer credit rose at a seasonally adjusted annual rate of 4.4 percent or by $10.4 billion month-over-month in July. Non-revolving credit tied to auto loans rose by 12.2 billion, while revolving credit tied to credit cards fell 1.8 billion. The Dow Industrials settled above its 21-day MA (currently at 15,029) on Monday and therefore is likely to be strongly supported at this level. Further downward, the index has support around the 14,912, 14,992 and 14,808 levels. On the upside, the index has resistance around its 100-day MA (currently at 15,142) and 50-day MA (currently at 15,250). | ||||||||||||
| US Economic Reports | ||||||||||||
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The Treasury is scheduled to announce the results of its auction of 3-year notes at 1 pm ET. | ||||||||||||
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| Stocks in Focus | ||||||||||||
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PVH reported second quarter non-GAAP earnings of $1.39 per share on revenues of $1.965 billion, up 47 percent. The results are above expectations. The company expects non-GAAP earnings of $2.20 per share on revenues of $2.2 billion. Additionally, the company expects full year non-GAAP earnings of $6.58 per share on revenues of $8.25 billion. The guidance was lackluster. Pep Boys reported second quarter net income of 10 cents per share, lower than 61 cents per share in the year-ago quarter. Revenues edged up 0.4 percent to $527.62 million, with revenues missing expectations. Casey's reported first quarter earnings of $1.43 per share on revenues of $2.11 billion. The results exceeded estimates. Maxim Integrated announced that it has received anti-trust clearance from the U.S. anti-trust agencies for its acquisition of Volterra Semiconductor following the expiration of the relevant waiting period. SAIC (SAI) announced that its board approved the separation of its technical, engineering and enterprise information technology service business. The company's board also declared a pro rata dividend to its stockholders, effective after the close of trading on Friday. The company also said on the date of distribution, it will change its name to Leidos Holdings and on September 30th, its shares will begin trading on the NYSE under the ticker symbol LDOS and shares of Science Applications, the spun off business, will begin trading under the ticker SAIC. ConAgra Foods lowered its fiscal 2014 earnings guidance, reflecting lower-than-planned fiscal first-quarter earnings per share. The company said challenging industry conditions have weighed on overall results and that the softer-than-planned first-quarter comparable EPS performance principally relates to the Consumer Foods segment, where difficult conditions for some branded retail categories and some customers have negatively impacted sales and profits. Crocs lowered its third quarter guidance, citing continued weakness in its Americas region where at once orders in the wholesale channel, as well as performance in the direct to consumer channel, were below prior expectations. | ||||||||||||
| European Market | ||||||||||||
European stocks have shaken off their lackluster sentiment seen for much of the session yesterday and are rallying strongly, as geopolitical and global economic concerns recede. In economic news, a survey by the Royal Institute of Chartered Surveyors showed that house prices in the U.K. improved. The house price balance came in at a positive 40 in August compared to a positive 37 in July. | ||||||||||||
| Asian Markets | ||||||||||||
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The Asian markets ended higher across the board, as Chinese economic data continued to be encouraging. Additionally, diplomatic efforts on to diffuse the Syrian crisis also served as a relief to the markets. Japan's Nikkei 225 average opened higher and moved roughly sideways in the morning. The index legged up in the afternoon before closing up 218.13 points or 1.54 percent at 14,423. Construction and related stocks rose for the second straight day on the Olympic boost, Taisei, Kajima, Hitachi Construction, Kajima and Taiheiyo Cement leading the gains. Australia's All Ordinaries opened higher and rose sharply in early trading and moved sideways thereafter, closing up 19.50 points or 0.38 percent at 5,199. Most sectors advanced, with the exception of defensive healthcare, real estate and utility stocks Hong Kong's Hang Seng Index closed at 22,977, up 226 points or 0.99 percent and China's Shanghai Composite closed 25.47 points or 1.15 percent higher at 2,238. On the economic front, data from the National Bureau of Statistics revealed that industrial production in China increased 10.4 percent year-over-year in August compared with forecasts of 9.9 percent growth. Retail sales were up 13.4 percent annually, faster than the 13.3 percent increase expected by economists. This followed the 13.2 percent increase in the previous month. The statistical office also reported that China's fixed asset investment rose 20.3 percent in the January to August period compared with the same period last year. This was slightly higher than the 20.2 percent increase forecast by economists. The minutes of the August Bank of Japan's monetary policy meeting showed that the members of the board believe that the domestic economy is beginning to see a moderate recovery. At the meeting, the bank maintained its quantitative easing program unchanged. A report released by the Japan's Ministry of Economy, Trade and Industry showed that its index measuring activity in the tertiary industries fell 0.4 percent in July compared to expectations for a 0.5 percent drop. Business confidence in Australia rose to the highest level since 2011 in August, according to the results of a survey by the National Australian Bank. The business confidence index rose to 6 in August from -3 in July. At the same time, the business conditions index remained at depressed levels at -6 despite improving by a point. | ||||||||||||
| Currency and Commodities Markets | ||||||||||||
Crude oil futures are slipping $2.06 to $107.46 a barrel after declining $1.01 to $109.52 a barrel on Monday. Gold futures are currently trading down $23.70 at $1,363 an ounce. In the previous session, Gold edged up $0.20 to $1,386.70 an ounce. Among currencies, the U.S. dollar is trading at 100.20 Yen compared to the 99.57 Yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3248 compared to yesterday's $1.3255. | ||||||||||||
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