Daily Markets Bulletin.

ADVFN III World Daily Markets Bulletin

Daily world financial news Tuesday, 15 October

US Market

The major U.S. index futures are pointing to a roughly flat opening on Tuesday, with sentiment reflecting nervousness of traders as the deal is not done yet. Meanwhile, earnings news has been mixed, with Citi reporting below consensus earnings, while the earnings report from Coca-Cola and Johnson & Johnson were encouraging. The first glimpse into the manufacturing conditions for the month of October revealed softness, as the New York Fed’s survey showed a slowdown in the pace of expansion. The results of the ongoing discussions among Senate leaders to resolve the deadlock may determine the course of the markets. U.S. stocks staged a remarkable turnaround by mid-day on Monday, ending higher for the third straight session, as signals emerging from Washington hinted that lawmakers are inching closer to an agreement. The major averages opened notably lower and moved sideways in early trading. The averages began to recoup their losses by early afternoon trading and moved above the unchanged line by the late afternoon. The averages continued to climb steadily thereafter, closing moderately higher. The Dow Industrials ended up 64.15 points or 0.42 percent at 15,301 and the S&P 500 Index closed 6.94 points or 0.41 percent higher at 1,710, while the Nasdaq Composite closed at 3,815, up 23.40 points or 0.62 percent. Twenty-two of the Dow components closed higher, with Pfizer, Boeing, Disney, and Microsoft leading the gains. On the other hand, Merck declined 1.14 percent. Biotechnology, oil service and airline stocks were among the biggest advancers of the session. The Dow Industrials broke past its 21-day MA currently at 15,242 with Monday’s rally. If the talks among lawmakers come to fruition, the index could be well on its way to challenge overhead resistances around the 15,329, 15,394, 15,450 and 15,538 levels. On the downside, the index has support around its 21-day MA, its 100-day MA currently at 15,213 and its 50-day MA currently at 15,180. Additional support levels are found around 15,120, 15,064 and 14,994

US Economic Reports

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Activity in the manufacturing sector in the New York region expanded at a slower rate in October, according to a report released by the New York Federal Reserve. The general business conditions based on the survey fell 5 points to 1.5 in October. Economists expected the index to improve to 7 from 6.29 in September. The shipments index fell 3 points to 13.1, while the new orders index rose 5 points to 7.8. The employment indexes were mixed, with the number of employees index slipping 4 points to 3.6, while the average workweek index edged up to 3.6. New York Federal Reserve Bank President William Dudley is scheduled to speak to a Bank of Mexico conference in Mexico City at 10 am ET. San Francisco Federal Reserve Bank President John Williams will speak on the economy in San Franscisco at 11:10 am ET. Additionally, Dallas Federal Reserve Bank President Richard Fisher is due to speak on the outlook and monetary policy to NYU Money Marketeers in New York at 7:15 pm ET.

Stocks in Focus

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Johnson & Johnson’s third quarter profit edged up from the year-ago quarter and its adjusted earnings per share topped Wall Street view. Sales for the rose and also topped the consensus estimate. Coca-Cola reported third quarter profit that improved from the prior year period, while its net operating revenues declined from the last year quarter. At the same time, the company increased its full-year 2013 adjusted earnings guidance. Citigroup’s third quarter profit surged from the prior year period, but was below Street view. Total revenues improved from the year-ago quarter. Meanwhile, revenues, excluding CVA/DVA and the third quarter 2012 MSSB loss, were down by 5 percent year-over-year. Packaging Corp. of America reported third quarter adjusted net income of 91 cents per share compared to 55 cents per share last year. Net sales rose to $845.4 million from $723.5 million last year. The results exceeded estimates. For the fourth quarter, the company expects adjusted earnings of 84 cents per share, in line with estimates. Coldwater Creek said its board has authorized the evaluation of strategic alternatives, including partnerships, joint ventures, and the sale or merger of the company to enhance shareholder value. Wintrust Financial reported third quarter net income of 71 cents per share compared to 66 cents per share in the year-ago period. Revenues rose to $196.44 million from $195.52 million last year. The results exceeded estimates. Newfield Exploration announced that its CFO and one of its founders Terry Rathert will retire in 2014. The company also said it intends to appoint Lawrence Massari to succeed Rathert as its CFO, effective November 11th, 2013. Brown & Brown reported third quarter net income of 39 cents per share compared to 34 cents per share last year. The results included 1 cent per share in acquisition related expenses. Revenues rose 18.3 percent to $359.31 million. The earnings were in line with estimates. Savient Pharma announced that it has elected to file voluntary petitions under the Chapter 11 Bankruptcy Code. The company also filed a motion seeking authorization to pursue a sale process under Section 363 of the U.S. Bankruptcy Code. CSX, Intel, Linear Technology, Yahoo! and Interactive Brokers are among the companies due to release their quarterly results after the close of trading.

European Market

European stocks opened higher on the deal optimism and are seen hovering above the unchanged line. In corporate news, big miner Rio Tinto released its third quarter production report, which showed that iron ore production rose to a record 53.4 million tons. Copper production was also improved to 162,300 tons. The company also raised its 2013 refined copper output forecast to 270,000 tons. Casino reported third quarter sales of 11.78 billion euros, about in line with estimates by most analysts, as it benefited from a strong performance by its Brazilian unit. The company also expressed its comfort with the market expectations for 2013 EBIT. Swedish retailer H&M reported comparable unit sales that fell by 2 percent in September, but total sales climbed 7 percent year-over-year. At the same time, U.K. luxury retailer Burberry reported 13 percent comparable store sales growth for the first half, while its underlying revenues rose 14 percent. The company also announced that its CEO Angela Ahrendts will step down by mid-2014 and be replaced by chief creative officer Christopher Bailey. Ahrendts is set to take over the role of SVP for retail and online stores at Apple. On the economic front, a report released by the German Federal Statistical Office showed that German import prices fell for the 8th straight month in August, dropping 3.4 percent year-over-year following the 2.6 percent decline in July. Economists expected a 3.9 percent decline for the month. The decline in export prices also quickened to 1 percent from 0.8 percent. French inflation, as measured by the harmonized index of consumer prices, remained steady at 1 percent in September, according to a report released by French statistical office Insee. The increase was in line with estimates. The U.K. Office for National Statistics reported that U.K. annual inflation remained unchanged at 2.7 percent in September compared to expectations for a slowdown to 2.6 percent. A separate report showed that house prices in the U.K. increased at a faster pace of 3.8 percent year-over-year. Economists expected a more modest 3.4 percent increase. The producer price inflation report released by the statistical office showed that the output price index rose 1.2 percent year-over-year in September, slower than the 1.3 percent increase expected by economists. At the same time, input prices rose at a notably slower pace of 1.1 percent.

Asian Markets

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The Asian markets closed mostly higher, encouraged by the positive close on Wall Street overnight, as the prospects of a deal brightened. The Australian, South Korean and Taiwanese markets advanced strongly in the session. Additionally, the Japanese, Hong Kong and New Zealand markets also moved to the upside, while the Chinese markets retreated. The Indonesian, Malaysian and Singaporean markets were closed for public holidays. Japan’s Nikkei 225 opened higher but declined through the morning before moving roughly sideways in the afternoon. The index closed 36.80 points or 0.26 percent higher at 14,442. Paper and resource stocks revealed strength, while financial and real estate stocks moved to the downside. Oji Holdings, Nippon Paper, Ube Industries, Mazda Motors and Denki Kagaku Kogyo were among the biggest gainers of the session. Australia’s All Ordinaries opened higher and rose sharply in early trading. Thereafter, the average moved sideways before closing up 52.70 points or 1.01 percent at 5,259. Energy, material and financial stocks closed solidly higher, while defensive healthcare and utility stocks came under selling pressure. Hong Kong’s Hang Seng Index closed at 23,337, up 118.20 points or 0.51 percent. Meanwhile, China’s Shanghai Composite Index closed at 2,233, down 4.36 points or 0.19 percent. On the economic front, the minutes of the Reserve Bank of Australia’s October monetary policy board meeting revealed that the board did not rule out the possibility of applying further stimulus to the economy, although it did not signal that any such action was imminently forthcoming. A report released by the Australian Bureau of Statistics showed that new motor vehicle sales edged down a seasonally adjusted 0.1 percent month-over-month in September following the 0.8 percent increase in August. Revised estimates released by Japan’s Ministry of Economy, Trade and Industry showed that Japan’s industrial output fell more than initially estimated in August. Industrial output fell 0.9 percent month-over-month, steeper than the 0.7 percent drop estimated initially. Annually, output was down 0.4 percent.

Currency and Commodities Markets

Crude oil futures are falling $0.89 to $101.52 a barrel after advancing $0.39 to $102.41 a barrel on Monday. Gold futures are currently sliding $15.10 to $1,261.50 an ounce. In the previous session, the precious metal rose $8.40 to $1,276.60 an ounce. Among currencies, the U.S. dollar is trading at 98.51 yen compared to the 98.57 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3493 compared to yesterday’s $1.3561.