World Daily Markets Bulletin.

ADVFN III World Daily Markets Bulletin

Daily world financial news Wednesday, 23 October 2013

US Market

The major U.S. index futures are pointing to a lower opening on Wednesday, with sentiment reflecting the return of risk aversion as economic concerns have returned to haunt traders. Earnings news of the day has been mixed once again, with Boeing reporting forecast beating results, while United Technologies' results have been downbeat. With not many first-tier economic data to drive the markets, traders may prefer to take profit on their recent gains, as they seek better visibility into the economic outlook. U.S. stocks advanced on Tuesday, thanks to soft payrolls data that brightened the possibility of the Fed delaying the withdrawal of stimulus. The major averages opened higher, with The Dow Industrials and the S&P 500 Index hovering above the unchanged line throughout the session, while the NASDAQ Composite Index experienced some volatility after a firmer start and moved back and forth across the unchanged line before closing modestly higher. The Dow Industrials added 75.46 points or 0.49 percent before closing at 15,468 and the S&P 500 Index closed 10.01 points or 0.57 percent higher at 1,755, while the NASDAQ Composite Index closed at 3,930, up 9.52 points or 0.24 percent. Nineteen of the thirty Dow components closed higher, while the remaining eleven stocks retreated. Disney, Caterpillar, Procter & Gamble and Wal-Mart were among the biggest gainers of the session, while United Technologies , JP Morgan Chase , Microsoft and Cisco Systems came under selling pressure. Airline, biotechnology, utility, resource and housing stocks advanced strongly in the session. On the economic front, the September non-farm payrolls report showed that the U.S. economy added a less than expected 148,000 jobs in September. The private sector added merely 126,000 jobs, with much of the increase coming from the construction sector. The manufacturing sector saw only a modest increase in jobs, while the financial sector saw job losses. The unemployment rate edged down to a 5-year low of 7.2 percent, while the participation rate stayed at a 35-year low of 63.2 percent. The Commerce Department reported that construction spending rose 0.6 percent month-over-month in August. The spending growth for July was upwardly revised by 0.8 percentage points to 1.4 percent. Residential construction spending climbed 1.2 percent, while non-residential construction spending was up a much more modest 0.1 percent. At the same time, public construction spending rose 0.4 percent. The Dow Industrials is slowly and steadily approaching its all time high, supported by the removal of the overhang surrounding the debt ceiling, although temporarily. If earnings remain supportive, the index could climb back towards a resistance around 15,544. Above this level, the index also has resistance around the 15,622 level. Downside support for the index lies around the 15,417, 15,328 and 15,230 levels.

US Economic Reports

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Import prices in the U.S. rose in line with economist estimates in the month of September, according to a report released by the Labor Department, while export prices showed an unexpected increase for the month. The report said import prices rose by 0.2 percent in September, matching the revised increase reported for August as well as economist estimates. Additionally, the Labor Department said export prices rose by 0.3 percent in September after falling by 0.5 percent in the previous month. Economists had expected export prices to edge down by 0.1 percent. The Federal House Finance Agency is due to release its house price index for August at 9 am ET. The consensus estimates call for a 0.8 percent month-over-month increase in house prices for the month. The Energy Information Administration will release its petroleum status report for the week ended October 18th at 10:30 am ET.

Stocks in Focus

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Amgen reported third quarter adjusted earnings of $1.94 per share, up 16 percent year-over-year. Revenues climbed 10 percent to $4.7 billion. For 2013, the company expects adjusted earnings of $7.35-$7.45 per share on revenues of $18.3 billion to $18.5 billion. The results exceeded estimates and the guidance was upbeat. Juniper Networks reported third quarter non-GAAP earnings of 33 cents per share, up from 29 cents per share last year. Revenues rose 3 percent to $1.19 billion. For the fourth quarter, the company expects non-GAAP earnings of 35-37 cents per share on revenues of $1.20 billion to $1.23 billion. The results exceeded estimates, but the guidance was lukewarm. Broadcom reported better than expected third quarter results, while its fourth quarter revenue guidance was soft. Waste Connections' third quarter results were below expectations. Apollo Group reported better than expected fourth quarter results. Insurer ACE's third quarter operating earnings were ahead of estimates. The company also raised its full year operating earnings guidance. Boeing reported third quarter profit that improved from the previous year period. Revenue rose 11 percent and came in above the consensus estimate. The company also raised its full year earnings forecast and confirmed its 2013 revenue guidance. Eli Lilly's third quarter results topped Wall Street view. The company backed its full-year revenue forecast and tightened its earnings guidance range. Corning entered into a series of strategic and financial agreements with Samsung Display and will obtain full ownership of Samsung Corning Precision Materials. The company's board also authorized an additional $2 billion of share repurchases. Corning also announced preliminary third-quarter 2013 results. Caterpillar reported third quarter earnings and revenues declined from the year ago period and missed analysts' expectations. The company also lowered its 2013 guidance and stated that it is holding outlook for 2014 sales and revenues flat with 2013 in a plus or minus 5 percent range. Altera's third quarter earnings were ahead of expectations, while its revenues missed estimates. The company's fourth quarter revenue guidance surrounded the consensus estimate. RF Micro Devices reported better than expected third quarter results and guided fourth quarter earnings above the consensus estimate. The company's revenue guidance was weak. Celestica's third quarter results were better than expected and its fourth quarter earnings guidance was in line, while its revenue guidance trailed expectations. Cree reported in line first quarter earnings, but its revenues were slightly shy of estimates. The company's second quarter earnings guidance was weak, while revenues are indicated to come in line. Unisys reported third quarter non-GAAP earnings of 25 cents per share compared to 85 cents per share last year. Revenues fell 10 percent to $792 million. The results trailed expectations. STMicroelectronics reported a third quarter non-GAAP loss of 3 cents per share, flat with last year. Net revenues were nearly flat at $2.01 billion. The results missed expectations. The company said it expects sequentially flat revenue performance for the fourth quarter, while it expects a return to positive cash flow generation as result of the wind down of ST-Ericsson. AmSurg reported below consensus earnings for its third quarter, while its revenues were ahead of expectations. The company's fourth quarter and full year guidance was in line with estimates. Fulton Financial's third quarter earnings of 21 cents per share were flat with the year-ago while coming in ahead of the 20 cents per share consensus estimate. Crown Castle said it has priced its public offering of 36 million shares of its common stock at $74 per share and 8.5 million shares of its 4.50 percent mandatory convertible preferred stock series A at $100 per share. Akamai Technologies , AT&T, Cheesecake Factory , Citrix Systems , E TRADE , Everest Re , F5 Networks , Knight Transportation , Logitech , O'Reilly , Swift Transportation , Symantec , TripAdvisor and Triquint Semiconductor are among the companies due to release their quarterly results after the close of trading.

European Market

European stocks opened lower and have seen further weakness since then. In corporate news, aluminum maker Norsk Hydro reversed to a profit in its third quarter, thanks to a decline in costs. France's Peugeot Citroen said its third quarter revenues fell 3.7 percent, hurt by weakness in Europe and production bottlenecks. French telecommunications giant Orange reported a decline in earnings and revenues for its third quarter. Beer maker Heineken, which has huge exposure to Europe, reported a marginal rise in sales, while volumes decline. The company also lowered its earnings guidance for the full year. On the economic front, the minutes of the October monetary policy meeting of the Bank of England showed that committee members voted unanimously to maintain rates at 0.50 percent and the asset purchase program at 375 billion pounds. Data released from Spain showed that the country exited a 2-year long recession in the third quarter.

Asian Markets

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Most Asian markets retreated, led by the Japanese markets, as the dollar weakened and the soft U.S. economic data brought back fears concerning a setback to the economic recovery in the world's largest economy. Japan's Nikkei 225 average opened higher and maintained its slim gains until the mid-session before pulling back sharply in the afternoon. The index retreated sharply over the course of the afternoon and ended down 287.20 points or 1.95 percent at 14,426. A majority of the stocks declined, as the yen strengthened to a 2-week high against the dollar. Nitto Denko, JTEKT, Mitsui Engineering, Nippon Soda and Amada were among the biggest decliners of the session. Australia's All Ordinaries hovered well above the unchanged line for the better part of the morning session before pulling back in the afternoon. The index closed 14.40 points or 0.27 percent lower at 5,357. Most sectors retreated, with the exception of IT and material stocks. Hong Kong's Hang Seng Index ended at 23,000, down 316.04 points or 1.36 percent, and China's Shanghai Composite closed 27.54 points or 1.25 percent lower at 2,183. On the economic front, a report released by the Conference Board showed that its leading economic indicators index for Australia declined 0.2 percent month-over-month in August. A report released by the Australian Bureau of Statistics showed that consumer prices rose 1.2 percent sequentially in the third quarter, while economists expected a 0.8 percent increase. At the same time, the Reserve Bank of Australia's trimmed mean measure of inflation was at 0.7 percent, higher than the 0.6 percent rate expected by economists.

Currency and Commodities Markets

In the first day of trading as the front month contract, Crude oil futures for December delivery are trading down $1.65 at $96.65 a barrel. The November futures expired at $97.80 a barrel, down $1.42, on Tuesday. The previous session's retreat came amid the release of the inventory report, which showed that Crude oil inventories rose by 4 million barrels to 374.5 million barrels in the week ended October 11th. Stockpiles were above the upper range for this time of the year. Meanwhile, gasoline inventories fell by 2.6 million barrels and yet were near the top of the average range. Distillate stockpiles also declined, dropping by 1.8 million barrels and remained near the lower limit of the average range. Refinery capacity utilization averaged 87.9 percent over the four weeks ended October 11th compared to 89.4 percent over the four weeks ended October 4th. An ounce of Gold is currently at $1,333, down $9.40 from the previous session's close of $1,342.60 an ounce. On Tuesday, Gold added $26.80. Among currencies, the U.S. dollar is trading at 97.45 yen compared to the 98.14 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3759 compared to yesterday's $1.3781.