US stocks slip despite positive jobs figures
US stock indices dipped slightly Thursday despite fewer new jobless claims and boosts in other economic data.
Initial jobless claims fell to 388,000 last week, the first weekly figure below 400,000 in more than two years, the Labour Department said. Sales of existing homes hit a seven-month high, rising 3.5 percent in November.
But the good news failed to push markets into positive territory on the day as trading remained light with investors taking some time off during the holiday season and still dealing with a blizzard that continued to make travel difficult in the New York area.
The blue-chip Dow Jones Industrial Average shed 15.67 points, or 0.14 percent, to 11,569.71. The broader Standard & Poor's 500 Index fell 1.90 points, or 0.15 percent, to 1,257.88. The technology-heavy Nasdaq Composite Index was down 3.95 points, or 0.15 percent, to 2,662.98.
The US currency fell against the euro to 75.24 euro cents from 75.62 euro cents Wednesday. The dollar fell against the Japanese currency to 81.50 yen from 81.68 yen.
Friday will mark the final trading day of 2010, and all major indices are poised to end the year up more than 10 percent.
Thursday, December 30, 2010
U.S. Dollar Fails to Find Support on Drop in Initial Jobless Claims
The pace of expansion in the manufacturing sector for the Asian giant slowed to 54.4 from 55.3 weighing on risk appetite. Indeed, the PBOC’s recent steps to cool their economy before it overheats could spell the end of robust activity from the engine of the global recovery. The Australian dollar has taken the brunt of the punishment, after posting a record all-time high of 1.0197 the AUD/USD slipped to a low of 1.0131. The Swiss Franc was the primary beneficiary of the flight to safety, with the currency posting fresh record highs against the dollar, euro and pound.
A virtually empty European docket left the Euro to continue its bullish trend before the positive jobs data sparked greenback support. A rise in Italian business confidence to 103 from 101.7 in November reflects the lack of concern that we have seen from the region’s business leaders over the debt crisis which is helping drive underlining support for the single currency. ECB member Ewald Nowotny was on the wires today stating that the central bank remains focused on price stability and that there will be a mechanism in place by 2013 to help avoid the potential for future crisis. Meanwhile, a report from the monetary authority revealed that loans to households and businesses rose 2% from a year earlier as confidence in the recovery continues to grow. If concerns over sovereign debt remain quiet then we could see the single currency extend its current rally into the New Year on the strength of the sustainability of the recovery.
The British Pound fell sharply overnight as it remains plagued by U.K. growth concerns, with the GBP/USD falling to 1.5402 and nearly erasing all of its gains from yesterday. The pair continues to remain range bound as rising inflation has kept the BoE handcuffed and the lack of potential stimulus in the face of harsher austerity measures has significantly dimmed the outlook for the domestic economy. The pair may remain range bound with the greenback losing favor as well, by more signs of an improving labor market in could see the dollar strengthen against the pound.
The greenback was mixed on the day with it losing ground to the Euro, Franc and Yen whiling making up ground versus the Aussie and Sterling. The strong labor data was only able to generate brief support as market may be waiting to see the upcoming housing and manufacturing data. The pending home sales and Chicago PMI readings may generate the last bout of volatility before the end of the year. Manufacturing in the Midwest is forecasted to have slowed to 61.0 form 62.5 but remains well in expansionary territory and a sign that the sector will continue to contribute to GDP. Meanwhile, the housing sector has come under scrutiny with analyst forecasting another 5% drop in prices. Therefore expectations for an increase in pending home sales will fail to remove those concerns and could drag the reserve currency lower on the day.
The pace of expansion in the manufacturing sector for the Asian giant slowed to 54.4 from 55.3 weighing on risk appetite. Indeed, the PBOC’s recent steps to cool their economy before it overheats could spell the end of robust activity from the engine of the global recovery. The Australian dollar has taken the brunt of the punishment, after posting a record all-time high of 1.0197 the AUD/USD slipped to a low of 1.0131. The Swiss Franc was the primary beneficiary of the flight to safety, with the currency posting fresh record highs against the dollar, euro and pound.
A virtually empty European docket left the Euro to continue its bullish trend before the positive jobs data sparked greenback support. A rise in Italian business confidence to 103 from 101.7 in November reflects the lack of concern that we have seen from the region’s business leaders over the debt crisis which is helping drive underlining support for the single currency. ECB member Ewald Nowotny was on the wires today stating that the central bank remains focused on price stability and that there will be a mechanism in place by 2013 to help avoid the potential for future crisis. Meanwhile, a report from the monetary authority revealed that loans to households and businesses rose 2% from a year earlier as confidence in the recovery continues to grow. If concerns over sovereign debt remain quiet then we could see the single currency extend its current rally into the New Year on the strength of the sustainability of the recovery.
The British Pound fell sharply overnight as it remains plagued by U.K. growth concerns, with the GBP/USD falling to 1.5402 and nearly erasing all of its gains from yesterday. The pair continues to remain range bound as rising inflation has kept the BoE handcuffed and the lack of potential stimulus in the face of harsher austerity measures has significantly dimmed the outlook for the domestic economy. The pair may remain range bound with the greenback losing favor as well, by more signs of an improving labor market in could see the dollar strengthen against the pound.
The greenback was mixed on the day with it losing ground to the Euro, Franc and Yen whiling making up ground versus the Aussie and Sterling. The strong labor data was only able to generate brief support as market may be waiting to see the upcoming housing and manufacturing data. The pending home sales and Chicago PMI readings may generate the last bout of volatility before the end of the year. Manufacturing in the Midwest is forecasted to have slowed to 61.0 form 62.5 but remains well in expansionary territory and a sign that the sector will continue to contribute to GDP. Meanwhile, the housing sector has come under scrutiny with analyst forecasting another 5% drop in prices. Therefore expectations for an increase in pending home sales will fail to remove those concerns and could drag the reserve currency lower on the day.
Tuesday, December 28, 2010
BEFORE THE BELL: US Stock Futures Down
U.S. stock futures were pointing to losses for Wall Street as investors return on Monday after the long Christmas weekend, with rate hikes from China the first item of business with which to contend.
Futures for the Dow Jones Industrial Average fell 40 points, or 0.3%, to 11482 and those for the S&P 500 index fell 5 points, or 0.4%, to 1248. Futures for the Nasdaq 100 index fell 4.75 points, or 0.2%, to 2225.75.
Weaker European and Asia markets were setting the tone after China hiked its key lending and deposit rates by a quarter-point each on Saturday. Analysts said the move could mean Beijing is now picking up the pace in efforts to slow the economy. See China's hike signals no more soft touch
In Europe, stocks fell with auto makers leading the declines, as China is one of the world's biggest car markets.
The Dow Jones Industrial Average managed a fresh two-year closing high on Thursday, up 14 points, or 0.12% to 11573.49, though the Nasdaq Composite and S&P 500 indexes fell. Markets were positive on the week, with the Dow Industrials up 0.7%, the S&P 500 up 1% and Nasdaq up 0.9%.
There is no major economic or corporate news on the calendar for Monday, though retailers could be in focus as heavy snowstorms battered the East Coast on Sunday, making it difficult for shoppers to get out on one of the biggest shopping days of the year.
Airlines such as US Airways Group Inc. (LCC) and United Continental Holdings (UAL) could also be in the spotlight as travel was severely disrupted due to those storms. New York's JFK Airport closed until 5 a.m. Monday, EST, due to blizzard conditions.
Ford Motor Co. (F) on Monday said it plans to introduce start-stop technology on many cars in 2012 and will eventually be unveiled across all global markets. According to media reports, Ford is due to reveal the new fuel-saving measure in January at the North American International Auto Show in Detroit.
Shares of Cal-Maine Foods Inc. (CALM) could be in focus after the egg producer said second-quarter net income fell 5.6% on 2.3% higher sales. While specialty-egg sales have continued to grow, feed costs hurt profits in the period and "remained a concern for fiscal 2011," said Dolph Baker, president and chief executive.
In Europe, autos such as Volkswagen AG (VOW.XE, VLKAY) fell over 5% while BWM AG (BMW.XE) and Daimler AG (DAI.XE, DDAIY) fell at least by 4%, dragging the German and overall Stoxx Europe 600 index lower, in the wake of that China hike. Peugeot SA fell 2.5% in Paris.
Volume was lacking in Europe as well, with London markets closed until Wednesday for the Christmas holiday.
In Asia, China's Shanghai Composite Index finished nearly 2% lower, led by financials such as China Construction Bank (0939.HK, 601939.SH, CICHY). One analyst said the hikes in China Saturday, plus other tightening moves in recent weeks, have triggered worries about the lending capability of Chinese banks.
Gold futures for February delivery rose $1.50 to $1,382 an ounce, while crude oil futures for February fell 46 cents to $91.05 a barrel.
The dollar was mostly weaker across the board, off 0.3% against the euro at $1.3162.
-By Barbara Kollmeyer; 34 91 395 8131; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Monday's session are Cal-Maine Foods Inc. (CALM), A-Power Energy Generation Systems Ltd. (APWR) and Alimera Sciences Inc. (ALIM).
Cal-Maine Foods' fiscal second-quarter earnings fell 5.6% as the largest U.S. producer and distributor of fresh shell eggs reported that higher feed costs and weak demand in September following a nationwide egg recall more than offset the benefit of recently improved market conditions. The bottom line missed analysts' expectations. Shares fell 4.2% to $32.40 premarket.
A-Power Energy Generation Systems Ltd. (APWR), a wind-turbine maker and provider of electricity-generation systems in China, signed a contract to design and build a coal-based power plant in the province of Inner Mongolia. Shares were up 12% to $5.75 premarket.
Biotech company Alimera Sciences said the U.S. Food and Drug Administration won't approve its application for its most advanced product, Iluvien, in its current form. Shares plunged in premarket trading, dropping 20% to $8.93. Shares in Alimera's partner on the drug, pSivida Corp. (PSDV), were also down, dropping 23% premarket to $4.90.
NGAS Resources Inc. (NGAS) reached a definitive agreement to be acquired by Magnum Hunter Resources Corp. (MHR) in an all-stock deal worth about $43 million. Under the terms of the deal, each share of NGAS, a horizontal drilling company operating in the southern Appalachian Basin, will be transferred to Magnum for the right to receive 0.0846 share of Magnum. That values NGAS at 55 cents a share, a 41% premium to its close Thursday. Shares of NGAS rose 36% premarket to 52 cents, while Magnum dropped 1.6% to $6.61.
IncrediMail Ltd. (MAIL), a digital-media company that builds downloadable consumer products, said it has signed a new two-year agreement with Google Inc. (GOOG). The terms of the agreement weren't detailed. IncrediMail shares were up 8.7% premarket to $7.72.
AMR Corp.'s (AMR) American Airlines said Thursday that Expedia (EXPE) was hiding its flights, in the first fallout from the carrier's decision to stop selling flights through Orbitz Worldwide (OWW).
DryShips Inc. (DRYS) said it is entering the tanker industry with a $770 million purchase of 12 vessels from a South Korean shipyard and planned to set the new segment up for a spinoff or initial public offering.
U.S. stock futures were pointing to losses for Wall Street as investors return on Monday after the long Christmas weekend, with rate hikes from China the first item of business with which to contend.
Futures for the Dow Jones Industrial Average fell 40 points, or 0.3%, to 11482 and those for the S&P 500 index fell 5 points, or 0.4%, to 1248. Futures for the Nasdaq 100 index fell 4.75 points, or 0.2%, to 2225.75.
Weaker European and Asia markets were setting the tone after China hiked its key lending and deposit rates by a quarter-point each on Saturday. Analysts said the move could mean Beijing is now picking up the pace in efforts to slow the economy. See China's hike signals no more soft touch
In Europe, stocks fell with auto makers leading the declines, as China is one of the world's biggest car markets.
The Dow Jones Industrial Average managed a fresh two-year closing high on Thursday, up 14 points, or 0.12% to 11573.49, though the Nasdaq Composite and S&P 500 indexes fell. Markets were positive on the week, with the Dow Industrials up 0.7%, the S&P 500 up 1% and Nasdaq up 0.9%.
There is no major economic or corporate news on the calendar for Monday, though retailers could be in focus as heavy snowstorms battered the East Coast on Sunday, making it difficult for shoppers to get out on one of the biggest shopping days of the year.
Airlines such as US Airways Group Inc. (LCC) and United Continental Holdings (UAL) could also be in the spotlight as travel was severely disrupted due to those storms. New York's JFK Airport closed until 5 a.m. Monday, EST, due to blizzard conditions.
Ford Motor Co. (F) on Monday said it plans to introduce start-stop technology on many cars in 2012 and will eventually be unveiled across all global markets. According to media reports, Ford is due to reveal the new fuel-saving measure in January at the North American International Auto Show in Detroit.
Shares of Cal-Maine Foods Inc. (CALM) could be in focus after the egg producer said second-quarter net income fell 5.6% on 2.3% higher sales. While specialty-egg sales have continued to grow, feed costs hurt profits in the period and "remained a concern for fiscal 2011," said Dolph Baker, president and chief executive.
In Europe, autos such as Volkswagen AG (VOW.XE, VLKAY) fell over 5% while BWM AG (BMW.XE) and Daimler AG (DAI.XE, DDAIY) fell at least by 4%, dragging the German and overall Stoxx Europe 600 index lower, in the wake of that China hike. Peugeot SA fell 2.5% in Paris.
Volume was lacking in Europe as well, with London markets closed until Wednesday for the Christmas holiday.
In Asia, China's Shanghai Composite Index finished nearly 2% lower, led by financials such as China Construction Bank (0939.HK, 601939.SH, CICHY). One analyst said the hikes in China Saturday, plus other tightening moves in recent weeks, have triggered worries about the lending capability of Chinese banks.
Gold futures for February delivery rose $1.50 to $1,382 an ounce, while crude oil futures for February fell 46 cents to $91.05 a barrel.
The dollar was mostly weaker across the board, off 0.3% against the euro at $1.3162.
-By Barbara Kollmeyer; 34 91 395 8131; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Monday's session are Cal-Maine Foods Inc. (CALM), A-Power Energy Generation Systems Ltd. (APWR) and Alimera Sciences Inc. (ALIM).
Cal-Maine Foods' fiscal second-quarter earnings fell 5.6% as the largest U.S. producer and distributor of fresh shell eggs reported that higher feed costs and weak demand in September following a nationwide egg recall more than offset the benefit of recently improved market conditions. The bottom line missed analysts' expectations. Shares fell 4.2% to $32.40 premarket.
A-Power Energy Generation Systems Ltd. (APWR), a wind-turbine maker and provider of electricity-generation systems in China, signed a contract to design and build a coal-based power plant in the province of Inner Mongolia. Shares were up 12% to $5.75 premarket.
Biotech company Alimera Sciences said the U.S. Food and Drug Administration won't approve its application for its most advanced product, Iluvien, in its current form. Shares plunged in premarket trading, dropping 20% to $8.93. Shares in Alimera's partner on the drug, pSivida Corp. (PSDV), were also down, dropping 23% premarket to $4.90.
NGAS Resources Inc. (NGAS) reached a definitive agreement to be acquired by Magnum Hunter Resources Corp. (MHR) in an all-stock deal worth about $43 million. Under the terms of the deal, each share of NGAS, a horizontal drilling company operating in the southern Appalachian Basin, will be transferred to Magnum for the right to receive 0.0846 share of Magnum. That values NGAS at 55 cents a share, a 41% premium to its close Thursday. Shares of NGAS rose 36% premarket to 52 cents, while Magnum dropped 1.6% to $6.61.
IncrediMail Ltd. (MAIL), a digital-media company that builds downloadable consumer products, said it has signed a new two-year agreement with Google Inc. (GOOG). The terms of the agreement weren't detailed. IncrediMail shares were up 8.7% premarket to $7.72.
AMR Corp.'s (AMR) American Airlines said Thursday that Expedia (EXPE) was hiding its flights, in the first fallout from the carrier's decision to stop selling flights through Orbitz Worldwide (OWW).
DryShips Inc. (DRYS) said it is entering the tanker industry with a $770 million purchase of 12 vessels from a South Korean shipyard and planned to set the new segment up for a spinoff or initial public offering.
Sunday, December 26, 2010
Japanese Yen To Hold Range
The Japanese Yen strengthened against the greenback during the holiday trade, with the USD/JPY retracing the advance from earlier this month, but the exchange rate is likely to trend sideways going into 2011 as it maintains the narrow range carried over from November. As currency traders return from the Christmas holiday, the dollar-yen is likely to face increased volatility over the following week, and the pair may consolidate ahead of the New Year as price action continues to hold above the 50-Day moving average at 82.65.
After holding the benchmark interest rate at 0.10% earlier this week, the Bank of Japan pledged to “steadily purchase various financial assets and provide longer-term funds” in order to stimulate the ailing economy, and reassured that the central bank will take the appropriate steps to curb the risks for deflation as the economic recovery seems to be “pausing.” At the same time, Japan’s Cabinet Office said the government "will continue to take bold action including currency intervention” as the rise in global trade tapers off, and the BoJ policy meeting minutes due out next week could highlight an increased willingness to expand monetary policy further as the central bank struggles to stem the downside risks for growth and inflation. The BoJ may look at alternative measures to weaken the national currency further as it aims to encourage an export-led recovery, but the uncertainties underlying the global outlook could spur increased demands for the Japanese Yen as market sentiment falters.
In turn, speculation for a BoJ intervention could lead the USD/JPY to reverse course and pave the way for a bullish breakout in the exchange rate, but the drop in market liquidity is likely to keep the pair within its current range as global investors close their books ahead of the New Year. As a result, we should see the dollar-yen consolidate in the week ahead, and the sideways price action certainly lays out a clear range-trade setup for the pair as price action continue to hold between 82.30-84.50. - DS
The Japanese Yen strengthened against the greenback during the holiday trade, with the USD/JPY retracing the advance from earlier this month, but the exchange rate is likely to trend sideways going into 2011 as it maintains the narrow range carried over from November. As currency traders return from the Christmas holiday, the dollar-yen is likely to face increased volatility over the following week, and the pair may consolidate ahead of the New Year as price action continues to hold above the 50-Day moving average at 82.65.
After holding the benchmark interest rate at 0.10% earlier this week, the Bank of Japan pledged to “steadily purchase various financial assets and provide longer-term funds” in order to stimulate the ailing economy, and reassured that the central bank will take the appropriate steps to curb the risks for deflation as the economic recovery seems to be “pausing.” At the same time, Japan’s Cabinet Office said the government "will continue to take bold action including currency intervention” as the rise in global trade tapers off, and the BoJ policy meeting minutes due out next week could highlight an increased willingness to expand monetary policy further as the central bank struggles to stem the downside risks for growth and inflation. The BoJ may look at alternative measures to weaken the national currency further as it aims to encourage an export-led recovery, but the uncertainties underlying the global outlook could spur increased demands for the Japanese Yen as market sentiment falters.
In turn, speculation for a BoJ intervention could lead the USD/JPY to reverse course and pave the way for a bullish breakout in the exchange rate, but the drop in market liquidity is likely to keep the pair within its current range as global investors close their books ahead of the New Year. As a result, we should see the dollar-yen consolidate in the week ahead, and the sideways price action certainly lays out a clear range-trade setup for the pair as price action continue to hold between 82.30-84.50. - DS
Japanese Yen Strengthens Against Majors
The Japanese yen rallied across the board on Thursday in Asia as dismal third quarter GDP reports from U.S. and New Zealand along with persisting eurozone debt concerns propelled traders to seek safe-haven assets.
Asian stock markets are trading mixed with investors treading cautiously despite a positive lead from Wall Street where stocks edged higher overnight.
With investors mostly staying on the sidelines ahead of year-end vacation, movements are quite choppy in most of the markets in the region. A lack of prominent triggers is also contributing to the subdued trend.
South Korea's Kospi slipped 0.14% and China's Shanghai composite dropped 0.54%. At the same time, Taiwan's weighted average advanced 0.56%, Australia's All ordinaries index jumped 0.55% and New Zealand's NZX-50 rose 0.11%.
The Japanese stock markets are closed today in honor of the emperor's birthday.
The U.S. gross domestic product increased at an annual rate of 2.6 percent in the third quarter compared to the previously reported 2.5 percent growth. Economists had been expecting the pace of growth to be upwardly revised to about 2.8 percent.
The yen appreciated almost 0.6 percent to reach a 9-day high of 83.08 against the US dollar by 10:45 pm ET from Wednesday's North American session close of 83.53. On the upside, the Japanese currency may find target around the 82.80 level.
Against the euro, the yen advanced to a new 3-week high of 108.93 at this time and this may be compared to yesterday's close of 109.47. If the yen strengthens further, 108.35 is seen as the next resistance level. The euro-yen pair is presently trading at 109.03.
The euro has been in a descending track after the ratings agencies Moody's put Portugal and Fitch Ratings placed Greece on review for a possible downgrade.
Moody's said this week that Portugal's ratings could be lowered by a "notch or two" if the country's debt affordability deteriorates or the economic outlook worsens due to austerity measures.
The move came after Spain and Belgium were warned of possible rating cuts, while the Irish Republic's credit rating was slashed by five notches by Moody's.
The yen advanced to an 8-week high of 128.09 against the pound around 10:45 pm ET, compared to yesterday's close of 128.59. The pound-yen pair is presently worth 128.26 with 127.70 seen as the next likely target level.
The yen appreciated by 0.7 percent to reach as high as 87.39 against the Swiss franc on Thursday morning in Asia from yesterday's fresh multi-month low of 87.98. On the upside, 87.30 is seen as the next likely target level for the yen in near-term. The franc-yen pair that was worth 87.81 at Wednesday's North American close is currently quoted at 87.40.
The yen climbed to a 2-day high of 83.19 against the Australian dollar around 10:45 pm ET and the pair moved sideways thereafter. The aussie-yen pair that ended yesterday's deals at 83.48 is presently quoted at 83.28. On the upside, the Japanese currency may find target around the 82.70 level.
The Japanese yen climbed to a fresh 7-week high of 61.76 against the NZ dollar by this time and this may be compared to Wednesday's North American session close of 61.88. If the yen strengthens further, it may test resistance around the 61.50 level.
The New Zealand dollar declined after a report showed that the nation's GDP was minus 0.2 percent compared to the preceding quarter. For the full year to Q3, GDP growth was 1.5 percent. Both results were below analysts' estimates of 0.2 percent quarterly expansion and 1.9 percent annual growth.
The yen reached as high as 82.07 against the Canadian dollar before holding steady around 10:45 pm ET. The loonie-yen pair that closed yesterday's deals at 82.49 is presently quoted at 82.16.
Looking ahead, French consumer spending and PPI-both for November and the UK services index for October are expected in the upcoming European session.
Turning to the U.S., weekly jobless claims for the week ended December 18, University of Michigan's final report on consumer sentiment for December and new home sales for November are likely to be in focus in the North American session along with data on durable goods orders and personal income and spending.
Canada's Gross Domestic Product for October is also on tap in the New York session.
The Japanese yen rallied across the board on Thursday in Asia as dismal third quarter GDP reports from U.S. and New Zealand along with persisting eurozone debt concerns propelled traders to seek safe-haven assets.
Asian stock markets are trading mixed with investors treading cautiously despite a positive lead from Wall Street where stocks edged higher overnight.
With investors mostly staying on the sidelines ahead of year-end vacation, movements are quite choppy in most of the markets in the region. A lack of prominent triggers is also contributing to the subdued trend.
South Korea's Kospi slipped 0.14% and China's Shanghai composite dropped 0.54%. At the same time, Taiwan's weighted average advanced 0.56%, Australia's All ordinaries index jumped 0.55% and New Zealand's NZX-50 rose 0.11%.
The Japanese stock markets are closed today in honor of the emperor's birthday.
The U.S. gross domestic product increased at an annual rate of 2.6 percent in the third quarter compared to the previously reported 2.5 percent growth. Economists had been expecting the pace of growth to be upwardly revised to about 2.8 percent.
The yen appreciated almost 0.6 percent to reach a 9-day high of 83.08 against the US dollar by 10:45 pm ET from Wednesday's North American session close of 83.53. On the upside, the Japanese currency may find target around the 82.80 level.
Against the euro, the yen advanced to a new 3-week high of 108.93 at this time and this may be compared to yesterday's close of 109.47. If the yen strengthens further, 108.35 is seen as the next resistance level. The euro-yen pair is presently trading at 109.03.
The euro has been in a descending track after the ratings agencies Moody's put Portugal and Fitch Ratings placed Greece on review for a possible downgrade.
Moody's said this week that Portugal's ratings could be lowered by a "notch or two" if the country's debt affordability deteriorates or the economic outlook worsens due to austerity measures.
The move came after Spain and Belgium were warned of possible rating cuts, while the Irish Republic's credit rating was slashed by five notches by Moody's.
The yen advanced to an 8-week high of 128.09 against the pound around 10:45 pm ET, compared to yesterday's close of 128.59. The pound-yen pair is presently worth 128.26 with 127.70 seen as the next likely target level.
The yen appreciated by 0.7 percent to reach as high as 87.39 against the Swiss franc on Thursday morning in Asia from yesterday's fresh multi-month low of 87.98. On the upside, 87.30 is seen as the next likely target level for the yen in near-term. The franc-yen pair that was worth 87.81 at Wednesday's North American close is currently quoted at 87.40.
The yen climbed to a 2-day high of 83.19 against the Australian dollar around 10:45 pm ET and the pair moved sideways thereafter. The aussie-yen pair that ended yesterday's deals at 83.48 is presently quoted at 83.28. On the upside, the Japanese currency may find target around the 82.70 level.
The Japanese yen climbed to a fresh 7-week high of 61.76 against the NZ dollar by this time and this may be compared to Wednesday's North American session close of 61.88. If the yen strengthens further, it may test resistance around the 61.50 level.
The New Zealand dollar declined after a report showed that the nation's GDP was minus 0.2 percent compared to the preceding quarter. For the full year to Q3, GDP growth was 1.5 percent. Both results were below analysts' estimates of 0.2 percent quarterly expansion and 1.9 percent annual growth.
The yen reached as high as 82.07 against the Canadian dollar before holding steady around 10:45 pm ET. The loonie-yen pair that closed yesterday's deals at 82.49 is presently quoted at 82.16.
Looking ahead, French consumer spending and PPI-both for November and the UK services index for October are expected in the upcoming European session.
Turning to the U.S., weekly jobless claims for the week ended December 18, University of Michigan's final report on consumer sentiment for December and new home sales for November are likely to be in focus in the North American session along with data on durable goods orders and personal income and spending.
Canada's Gross Domestic Product for October is also on tap in the New York session.
Saturday, December 25, 2010
CANADA STOCKS-TSX slips in thin trade
Toronto's main stock market index fell broadly on Thursday morning, pulled down by weakness in resource issues and a slightly lower-than-expected reading on Canadian economic growth.
The economy resumed growing in October after a brief downturn in September, rising by 0.2 percent for the month. But that was below the 0.3 percent gain forecast by analysts polled by Reuters.
"There's some disappointing economic numbers today in Canada. It's showing that we're definitely slowing down," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
"Commodities have lifted but I'm not sure it's going tolift that much more by the end of the year."
At 10:37 a.m. (1537 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was 44.08 points, or 0.33 percent, lower at 13,336.62. All 10 of the index's main sectorsfell.
Resources were among key drags with the price of oil little changed above $90 a barrel and softer copper and gold prices.
The materials group was down 0.2 percent, while oil and gas slipped 0.46 percent.
Canadian Natural Resources (CNQ.TO) lost 0.9 percent to C$43.98, while Teck Resources (TCKb.TO) was down more than 1
percent at C$57.74.
Other key decliners included Canadian Imperial Bank of Commerce (CM.TO), down 0.47 percent at C$78.41, and Canadian National Railway (CNR.TO), off 1.04 percent at C$66.56.
Volume was very light due to holiday-thinned trading with about 76.5 million shares changing hands in early trade, while the trading range has also shrunk. Volume has trended lower since the beginning of this week, with about 151 million shares traded on Wednesday.
Toronto's main stock market index fell broadly on Thursday morning, pulled down by weakness in resource issues and a slightly lower-than-expected reading on Canadian economic growth.
The economy resumed growing in October after a brief downturn in September, rising by 0.2 percent for the month. But that was below the 0.3 percent gain forecast by analysts polled by Reuters.
"There's some disappointing economic numbers today in Canada. It's showing that we're definitely slowing down," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
"Commodities have lifted but I'm not sure it's going tolift that much more by the end of the year."
At 10:37 a.m. (1537 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was 44.08 points, or 0.33 percent, lower at 13,336.62. All 10 of the index's main sectorsfell.
Resources were among key drags with the price of oil little changed above $90 a barrel and softer copper and gold prices.
The materials group was down 0.2 percent, while oil and gas slipped 0.46 percent.
Canadian Natural Resources (CNQ.TO) lost 0.9 percent to C$43.98, while Teck Resources (TCKb.TO) was down more than 1
percent at C$57.74.
Other key decliners included Canadian Imperial Bank of Commerce (CM.TO), down 0.47 percent at C$78.41, and Canadian National Railway (CNR.TO), off 1.04 percent at C$66.56.
Volume was very light due to holiday-thinned trading with about 76.5 million shares changing hands in early trade, while the trading range has also shrunk. Volume has trended lower since the beginning of this week, with about 151 million shares traded on Wednesday.
Friday, December 24, 2010
TSX slips as oil rises, gold prices fall
Canada's benchmark stock index slipped on Thursday in a day of choppy trading, as the price of crude oil rose and gold fell.
The S&P/TSX closed at 13,371.20, a decline of 9.50 points, or 0.07 per cent, after swinging between gains and losses most of the afternoon. Only three of the 10 subindexes rose, including energy and materials. It was the first decline for the S&P/TSX in three sessions.
On the New York Mercantile Exchange, oil rose for the fifth straight session, gaining $1.03 to $91.51 -- its highest level in more than two years. The price of gold fell $6.80 to US$1,380.00.
Oil's performance greased the way for the Canadian dollar, which gained against its U.S. counterpart. The loonie rose 52 basis points to US99.12 ¢.
The U.S. dollar/Canadian dollar currency pair "has been less in tune with risk-seeking sentiment," Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut, told Bloomberg. "It's probably the choppiness in the Canadian and U.S. data that's batting around the pair."
That choppy data included a report from Statistics Canada on Thursday that the country's economy grew by 0.2% in October after a 0.1% decline in September -- but less than the 0.3% growth analysts had forecast.
"While certainly an improvement from the summer months, the modest rebound in October shows that the Canadian economy is now struggling to generate any serious momentum after a flashy start to the recovery," said Douglas Porter, deputy chief economist at BMOCapital Markets.
Reports in the U.S. on Thursday showed consumer spending rose in November for a fifth consecutive month and initial jobless claims declined last week.
The Dow Jones industrial average rose 14 points to 11,573.49, a gain of 0.12%, while the Nasdaq composite index slipped 5.88 points, or 0.22%, to 2,665.60.
Canada's junior Venture exchange gained 8.02 points, or 0.37%, to 2,175.36.
Fertilizer producers gained after the U.S. reported a jump in soybean exports. Agrium shares were up 1.7% to $86.87, while Potash Corp. of Saskatchewan rose 1.4% to $145.91.
The TSX's financials sector slipped on Thursday. Bank of Montreal shares fell 1.38% to $57.05 --the bank's share price has dropped 7.7% since last week when it announced it was buying Milwaukee-based Marshall & Illsley Corp. Manulife Financial saw its share price fall 1.15% to $17.21. Canada's railways also declined Thursday on news that GDP growth in October failed to meet expectations. CNR shares were down 1.2% to $66.63, while CPR shares slid 0.6% to $65.10.
Canada's benchmark stock index slipped on Thursday in a day of choppy trading, as the price of crude oil rose and gold fell.
The S&P/TSX closed at 13,371.20, a decline of 9.50 points, or 0.07 per cent, after swinging between gains and losses most of the afternoon. Only three of the 10 subindexes rose, including energy and materials. It was the first decline for the S&P/TSX in three sessions.
On the New York Mercantile Exchange, oil rose for the fifth straight session, gaining $1.03 to $91.51 -- its highest level in more than two years. The price of gold fell $6.80 to US$1,380.00.
Oil's performance greased the way for the Canadian dollar, which gained against its U.S. counterpart. The loonie rose 52 basis points to US99.12 ¢.
The U.S. dollar/Canadian dollar currency pair "has been less in tune with risk-seeking sentiment," Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut, told Bloomberg. "It's probably the choppiness in the Canadian and U.S. data that's batting around the pair."
That choppy data included a report from Statistics Canada on Thursday that the country's economy grew by 0.2% in October after a 0.1% decline in September -- but less than the 0.3% growth analysts had forecast.
"While certainly an improvement from the summer months, the modest rebound in October shows that the Canadian economy is now struggling to generate any serious momentum after a flashy start to the recovery," said Douglas Porter, deputy chief economist at BMOCapital Markets.
Reports in the U.S. on Thursday showed consumer spending rose in November for a fifth consecutive month and initial jobless claims declined last week.
The Dow Jones industrial average rose 14 points to 11,573.49, a gain of 0.12%, while the Nasdaq composite index slipped 5.88 points, or 0.22%, to 2,665.60.
Canada's junior Venture exchange gained 8.02 points, or 0.37%, to 2,175.36.
Fertilizer producers gained after the U.S. reported a jump in soybean exports. Agrium shares were up 1.7% to $86.87, while Potash Corp. of Saskatchewan rose 1.4% to $145.91.
The TSX's financials sector slipped on Thursday. Bank of Montreal shares fell 1.38% to $57.05 --the bank's share price has dropped 7.7% since last week when it announced it was buying Milwaukee-based Marshall & Illsley Corp. Manulife Financial saw its share price fall 1.15% to $17.21. Canada's railways also declined Thursday on news that GDP growth in October failed to meet expectations. CNR shares were down 1.2% to $66.63, while CPR shares slid 0.6% to $65.10.
Thursday, December 23, 2010
WORLD FOREX: Franc Falls Vs Dollar, Euro After Recent Surge
The Swiss franc fell against the euro and the dollar Thursday as many investors cashed out from its recent surge.
Some market participants said the franc's rally, which has consistently shattered record-high levels in the past few sessions, was overdone. The euro had dropped to a record low of CHF1.2440 versus the franc Wednesday as investors shunned the single currency on euro-zone sovereign debt woes.
"The franc's rapid appreciation was due for a short-term correction," said Paresh Upadhyaya, head of Americas G10 FX Strategy at Bank of America Merrill Lynch in New York. "But fundamentally I don't think the trend of a higher franc will be reversed."
The dollar was slightly firmer against the euro, but the U.S. currency fell against many other currencies, such as the Australian dollar and the New Zealand dollar, as many investors sought higher returns amid the recent strength in U.S. stocks.
Upadhyaya said should U.S. data such as jobless claims due at 8:30 a.m. EST be stronger than forecast, it could support the dollar against the euro but the dollar would decline versus higher-yielding counterparts.
Thursday morning, the euro was at $1.3084 from $1.3098 late Wednesday, according to EBS via CQG. The dollar was at Y83.35 from Y83.55, while the euro was at Y109.07 from Y109.42.
The Swiss franc fell against the euro and the dollar Thursday as many investors cashed out from its recent surge.
Some market participants said the franc's rally, which has consistently shattered record-high levels in the past few sessions, was overdone. The euro had dropped to a record low of CHF1.2440 versus the franc Wednesday as investors shunned the single currency on euro-zone sovereign debt woes.
"The franc's rapid appreciation was due for a short-term correction," said Paresh Upadhyaya, head of Americas G10 FX Strategy at Bank of America Merrill Lynch in New York. "But fundamentally I don't think the trend of a higher franc will be reversed."
The dollar was slightly firmer against the euro, but the U.S. currency fell against many other currencies, such as the Australian dollar and the New Zealand dollar, as many investors sought higher returns amid the recent strength in U.S. stocks.
Upadhyaya said should U.S. data such as jobless claims due at 8:30 a.m. EST be stronger than forecast, it could support the dollar against the euro but the dollar would decline versus higher-yielding counterparts.
Thursday morning, the euro was at $1.3084 from $1.3098 late Wednesday, according to EBS via CQG. The dollar was at Y83.35 from Y83.55, while the euro was at Y109.07 from Y109.42.
Wednesday, December 22, 2010
US Stock Futures Pare Gains After 3Q GDP Revision
U.S. stock futures pared earlier gains Wednesday morning as the latest reading of U.S. third-quarter economic growth, while representing an upward revision, came in slightly below expectations and showed consumer spending rose less than previously thought.
U.S. stock futures pared earlier gains Wednesday morning as the latest reading of U.S. third-quarter economic growth, while representing an upward revision, came in slightly below expectations and showed consumer spending rose less than previously thought.
Dow Jones Industrial Average futures were up 3 points at 11474 Wednesday morning, while Standard & Poor's 500 futures edged up less than a point to 1251 and Nasdaq Composite futures slipped 2 points to 2233. Prior to the data, Dow futures had been up 8 points, S&P 500 futures were up 1 point and Nasdaq futures were flat. Changes in stock futures do not always accurately predict early stock moves after the open.
Gross domestic product, the value of all goods and services produced, rose at a seasonally and inflation-adjusted annual rate of 2.6% in July through September, the Commerce Department said Wednesday. In the government's previous report of how the economy performed, released a month ago, GDP was estimated to have increased by 2.5% in the third quarter.
But Wednesday's number, the third and final one made by the government for the July through September period, missed economists' expectations for GDP to have risen by a higher 2.9%. The main revisions were to consumer spending, which rose by less than previously estimated, and to company inventories, which increased by more than previously thought.
Meanwhile, gauges measuring inflation were even more muted than previously thought. The government's price index for personal consumption showed a 0.8% rise July through September, compared to a previously estimated 1.0% increase and following a flat reading in the second quarter.
The Federal Reserve's preferred gauge -- the PCE price index excluding volatile food and energy items -- rose at an annual rate of just 0.5% in the third quarter, the lowest since quarterly records began in 1959. That's lower than the original estimate of a 0.8% increase and down from the second quarter's 1.0% increase.
The euro edged up to $1.3104, boosted by reports that China is prepared to buy EUR4 billion to EUR5 billion of Portuguese debt. The Chinese endorsement comes a day after Moody's Investors Service warned it may lower Portugal's credit rating as much as two notches, dealing another blow to investor confidence in the euro zone.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, slipped 0.1%. Treasurys were also lower, lifting the yield on the 10-year note up to 3.33%.
Crude-oil futures climbed above $90 a barrel ahead of government inventory data. The American Petroleum Institute, an industry group, Tuesday reported a big drop of 5.8 million barrels in U.S. crude stocks for last week. Gold futures also edged higher.
Among stocks in focus, Walgreen jumped 6.2% in premarket trading after the drugstore operator posted a 19% increase in fiscal first-quarter earnings, with Chief Executive Greg Wasson citing cost controls and a slowing of new-store openings. The company posted higher prescription sales and said the front of the store saw "significant increases" due to improved merchandising.
Nike slipped 5.3% premarket. Emerging middle class consumers in countries from China to Brazil helped propel a 22% increase in the company's fiscal second-quarter earnings, but Nike warned that for the next three or four quarters it expects higher costs for labor, cotton and transportation. To offset the costs the company said it intended to minimize discounts and increase prices on high demand products.
Still to come, data on existing-home sales are due at 10 a.m. EST.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
Among the companies whose shares are expected to actively trade in Wednesday's session are Nike Inc. (NKE), Walgreen Co. (WAG) and Xilinx Inc. (XLNX).
Nike's fiscal second-quarter earnings rose a better-than-expected 22%, as the athletic-shoe maker continues to see strong interest in future orders. But shares were down 5.4% to $87.30 premarket, likely on concerns about rising costs and worse-than-expected future orders.
Walgreen's fiscal first-quarter earnings rose a much bigger-than-expected 19% as Chief Executive Greg Wasson said the drugstore operator benefited from cost controls and its slowing of new-store openings. Shares climbed 6.2% to $39.10 premarket.
Programmable-chip maker Xilinx slashed its third-quarter sales view, forecasting sales for the period will drop 7% to 9% sequentially because of weaker-than-expected demand from some of its large communications customers in the wireless segment. Shares dropped 4% to $27.27 in premarket trading, and its competitor Altera Corp. (ALTR) lost 2.9% to $34.76.
Berkshire Hills Bancorp Inc. (BHLB) agreed to acquire smaller peer Legacy Bancorp Inc. (LEGC) in a nearly $110 million deal that will further bolster its presence in western Massachusetts and neighboring New York. Berkshire also anticipates fourth-quarter earnings meeting or exceeding prior guidance. Shares in Legacy jumped 46% to $12.58 premarket.
Apparel company Oxford Industries Inc. (OXM) said it has bought upscale women's lifestyle brand Lilly Pulitzer for an undisclosed amount. Shares Oxford were up 3.9% to $23.03 in premarket trading.
Software giant Microsoft Corp. (MSFT) is planning to roll out a version of its Windows operating system that will compliment chips designed by U.K.-based ARM Holdings PLC (ARMH), according to media reports. American depositary shares of ARM rose 3.4% to $20.45 premarket, while Microsoft inched up 0.1% to $28.11.
Tibco Software Inc.'s (TIBX) fiscal fourth-quarter earnings rose 18% in results that beat the business-software company's upbeat guidance. Shares were up 4.8% to $22.20 premarket, as the company also increased the amount of shares it may repurchase.
Lindsay Corp.'s (LNN) fiscal first-quarter earnings fell a much bigger-than-expected 36% as the irrigation systems and infrastructure company reported weaker margins and higher operating costs. Shares fell 6.2% to $63.37 premarket.
Arena Pharmaceuticals Inc. (ARNA) and Eisai Inc. said they completed an end-of-review meeting on their obesity treatment lorcaserin with the U.S. Food and Drug Administration, and the companies have clarity on the next steps toward approval. Arena said it expects to resubmit its application for lorcaserin by the end of 2011. Arena shares 1% premarket to $2.08.
Sino Clean Energy Inc. (SCEI) said its planned offering of at least 5.5 million common shares priced at $5.25 each, a 7.4% discount to Tuesday's closing price. Shares of the China-based company, which produces a coal water mixture that is mainly used to fuel boilers and furnaces, slid 3% to $5.50 in premarket trading.
Gaming company Activision Blizzard Inc. (ATVI) said its war-reenactment game "Call of Duty: Black Ops" has crossed the $1 billion mark, just a month after its release. Activision said users have spent 600 million hours playing the game. Shares rose 1.8% to $12.45 premarket.
Corcept Therapeutics Inc. (CORT) announced positive results from its Phase 3 study of Corlux for the treatment of Cushing's Syndrome, news that sent the biotechnology company's shares up 12% to $4.68 premarket.
Red Hat Inc.'s (RHT) fiscal third-quarter earnings rose 59%, with revenue topping its own estimate, as sales and margins improved. Still, shares fell 1.5% to $47.14 premarket.
Nova Measuring Instruments Ltd. (NVMI), an Israel-based metrology-systems company, said a major foundry recently placed $10 million in orders for the company's integrated and standalone metrology tools. Shares rose 3.4% to $8.17 premarket.
Zoom Technologies Inc. (ZOOM), a China-based manufacturer of mobile phones, guided for record 2011 results, saying it expects 30% growth in both revenue and net income compared to the company's previously stated 2010 guidance. Shares jumped 30% premarket to $4.97.
Cumberland Pharmaceuticals Inc. (CPIX) declined after saying the U.S. Food and Drug Administration has asked for additional work before it could approve a new version of the specialty pharmaceutical company's liver failure drug Acetadote. Shares fell 17% to $5.75 premarket.
Hovnanian Enterprises Inc. (HOV) narrowed its fiscal fourth-quarter loss as the home builder saw lower land-related charges than a year earlier, though revenue and contracts slid. Shares fell 6.4% to $4.08 after hours.
Watch List:
Aeropostale Inc. (ARO) promoted a new chief financial officer as it unveiled a number of executive changes Tuesday, the reshuffling coming after co-Chief Executive Mindy Meads announced her departure earlier this month.
Cintas Corp.'s (CTAS) fiscal second-quarter earnings fell 2.3%, though they met analysts' estimates, as the uniform and business-supply company's revenue rose but costs also increased.
Enzon Pharmaceuticals Inc. (ENZN) said it has put in place a new $200 million stock-buyback authorization after it exhausted its last one.
Finish Line Inc.'s (FINL) fiscal third-quarter earnings fell as a prior-year gain from ending a takeover masked better-than-expected results. Shares in the athletic outfitter were down 1.5% at $18.50 in after-hours trading.
Jazz Pharmaceuticals Inc. (JAZZ) won a new patent for sleep-disorder treatment Xyrem, its marquee drug, as a narcolepsy solution.
Progress Software Corp.'s (PRGS) fiscal fourth-quarter earnings rose 28%, topping its own target, as sales improved. The company also said its board has approved a three-for-two stock split that will be accomplished via dividend "to obtain wider distribution and greater liquidity" for the stock.
Smith & Wesson Holding Corp. (SWHC) said it has named Jeffrey D. Buchanan as its new chief financial officer, filling a position left empty when William Spengler said in October he was taking a job with another company.
Vertex Pharmaceuticals Inc. (VRTX) eliminated one of the four remaining arms of a midstage study of its lead hepatitis-C treatment candidate, telaprevir, which combined its application with another developmental treatment for the virus.
Tuesday, December 21, 2010
Gold Heads Toward $1,390/oz On Euro Worries
Moody's said it has put Portugal on review for a possible downgrade, according to Reuters article this morning.
Moody's downgraded Irish debt on Friday and said on Monday it may cut the ratings on Spanish banks.
Spot gold was bid at $1,385/oz in early morning trading, U.S. gold futures for February delivery rose 40 cents to $1,386.50.
"Recent strength in the dollar and gold has been tied to increasing concerns over the health of the euro, especially after the ECB voiced concern yesterday over Ireland's newly passed debt restructuring law," MF Global said in a note.
Gold has risen 26 year-to-date, with euro debt conflicts fueling the upward momentum. Traditionally, the precious metal is a hedge against a falling currency and inflation. However the euro has been weakening as gold prices have been rising. The gold manufacturers have been rising as well, playing such stocks as NovaGold Resources (AMEX: NG), Agnico-Eagle Mines (NYSE: AEM [FREE Stock Trend Analysis]), SPDR Gold Trust (NYSE: GLD), Eldorado Gold
Read more: http://www.benzinga.com/trading-ideas/long-ideas/10/12/720706/gold-heads-toward-1-390oz-on-euro-worries-ng-aem-gld-ego#ixzz18l6dwMlZ
Moody's said it has put Portugal on review for a possible downgrade, according to Reuters article this morning.
Moody's downgraded Irish debt on Friday and said on Monday it may cut the ratings on Spanish banks.
Spot gold was bid at $1,385/oz in early morning trading, U.S. gold futures for February delivery rose 40 cents to $1,386.50.
"Recent strength in the dollar and gold has been tied to increasing concerns over the health of the euro, especially after the ECB voiced concern yesterday over Ireland's newly passed debt restructuring law," MF Global said in a note.
Gold has risen 26 year-to-date, with euro debt conflicts fueling the upward momentum. Traditionally, the precious metal is a hedge against a falling currency and inflation. However the euro has been weakening as gold prices have been rising. The gold manufacturers have been rising as well, playing such stocks as NovaGold Resources (AMEX: NG), Agnico-Eagle Mines (NYSE: AEM [FREE Stock Trend Analysis]), SPDR Gold Trust (NYSE: GLD), Eldorado Gold
Read more: http://www.benzinga.com/trading-ideas/long-ideas/10/12/720706/gold-heads-toward-1-390oz-on-euro-worries-ng-aem-gld-ego#ixzz18l6dwMlZ
Monday, December 20, 2010
US Blue-Chip Stocks Lag, Weighed By AmEx Tumble
-U.S. blue-chip stocks lagged Monday, weighed by a tumble in American Express stock, even as other financial companies climbed.
The Dow Jones Industrial Average fell 33 points, or 0.3% to 11459. American Express was the measure's worst performer, falling 4.2% after Stifel Nicolaus said the global-services company is "more exposed" following last week's Federal Reserve proposals on debit-card interchange fees, as investors worried about what could be next for credit cards.
Boeing was also weak, sliding 2.7%. Over the weekend the chief executive of Qatar Airways said the company could cancel orders for Boeing's 787 Dreamliner if there are further delays to its delivery. Boeing on Monday said it plan to boost production of a separate aircraft, the 777 airplane, starting in 2013.
The Nasdaq Composite edged up 0.1% to 2644. The Standard & Poor's 500-stock index rose 0.1% to 1245, as other financial stocks gained. J.P. Morgan Chase rose 1.1%, while Bank of America added 0.8%.
In light of last week's takeover news, banks are "very well-positioned," said Dan McMahon, director of equity trading at Raymond James. "We're anticipating them starting to pay dividends or buybacks."
The benchmark stock indexes have traded quietly in the past two weeks. Last week, the Dow added 0.7% to cap its third straight week of gains. Encouraged by recent U.S. economic data, investors predicted the muted climb would likely continue through the end of the year. However, trading volume is likely to thin across the holiday-shortened week, which could exaggerate any market moves.
Investors will likely just be "looking to hold on," McMahon said. "You're going to find more and more investors doing less and less this week and next, given the holidays."
Meanwhile, the euro fell to a series of all-time lows against the Swiss franc as investors concerned about the euro zone's festering government-debt problems continued to shun the common currency. The euro was trading recently at $1.3113, down from $1.3185 late Friday in New York. The U.S. Dollar Index, which tracks the dollar against a basket of other currencies, gained 0.3%.
Among stocks in focus, Jefferies Group shed 1% after the investment bank's preliminary fiscal fourth-quarter profit fell 24% from a year ago, hurt by higher costs and investment impacts.
AT&T shed 0.3% after the company said it will pay $1.93 billion for a swath of spectrum licenses from Qualcomm as AT&T looks to bolster its 4G service while Qualcomm said it plans to shut down its mobile broadcast video service. Shares of Qualcomm added 0.1%, while Verizon Communications rose 0.2%.
Defense contractor Raytheon fell 0.4% after agreeing to pay about $490 million to buy intelligence and reconnaissance products company Applied Signal Technology, whose shares jumped 7.9%. Raytheon will pay $38 a share, an 8.5% premium to Applied Signal's Friday's closing price of $35.02.
Medtronic rose 1.3% after the medical-device maker said William A. Hawkins, its chairman and chief executive, will retire in April, the end of the company's current fiscal year.
Sara Lee gained 1.4% after the company's talks on selling itself to Brazil's JBS have hit a snag over price, Bloomberg News reported Monday on its website, citing two unnamed people with direct knowledge of the situation.
Adobe Systems rose 2% ahead of its fiscal fourth-quarter results after the close.
Demand for Treasurys increased, sending yield on the 10-year note down to 3.28%. Prices of crude-oil edged up, while gold futures also rose.
-U.S. blue-chip stocks lagged Monday, weighed by a tumble in American Express stock, even as other financial companies climbed.
The Dow Jones Industrial Average fell 33 points, or 0.3% to 11459. American Express was the measure's worst performer, falling 4.2% after Stifel Nicolaus said the global-services company is "more exposed" following last week's Federal Reserve proposals on debit-card interchange fees, as investors worried about what could be next for credit cards.
Boeing was also weak, sliding 2.7%. Over the weekend the chief executive of Qatar Airways said the company could cancel orders for Boeing's 787 Dreamliner if there are further delays to its delivery. Boeing on Monday said it plan to boost production of a separate aircraft, the 777 airplane, starting in 2013.
The Nasdaq Composite edged up 0.1% to 2644. The Standard & Poor's 500-stock index rose 0.1% to 1245, as other financial stocks gained. J.P. Morgan Chase rose 1.1%, while Bank of America added 0.8%.
In light of last week's takeover news, banks are "very well-positioned," said Dan McMahon, director of equity trading at Raymond James. "We're anticipating them starting to pay dividends or buybacks."
The benchmark stock indexes have traded quietly in the past two weeks. Last week, the Dow added 0.7% to cap its third straight week of gains. Encouraged by recent U.S. economic data, investors predicted the muted climb would likely continue through the end of the year. However, trading volume is likely to thin across the holiday-shortened week, which could exaggerate any market moves.
Investors will likely just be "looking to hold on," McMahon said. "You're going to find more and more investors doing less and less this week and next, given the holidays."
Meanwhile, the euro fell to a series of all-time lows against the Swiss franc as investors concerned about the euro zone's festering government-debt problems continued to shun the common currency. The euro was trading recently at $1.3113, down from $1.3185 late Friday in New York. The U.S. Dollar Index, which tracks the dollar against a basket of other currencies, gained 0.3%.
Among stocks in focus, Jefferies Group shed 1% after the investment bank's preliminary fiscal fourth-quarter profit fell 24% from a year ago, hurt by higher costs and investment impacts.
AT&T shed 0.3% after the company said it will pay $1.93 billion for a swath of spectrum licenses from Qualcomm as AT&T looks to bolster its 4G service while Qualcomm said it plans to shut down its mobile broadcast video service. Shares of Qualcomm added 0.1%, while Verizon Communications rose 0.2%.
Defense contractor Raytheon fell 0.4% after agreeing to pay about $490 million to buy intelligence and reconnaissance products company Applied Signal Technology, whose shares jumped 7.9%. Raytheon will pay $38 a share, an 8.5% premium to Applied Signal's Friday's closing price of $35.02.
Medtronic rose 1.3% after the medical-device maker said William A. Hawkins, its chairman and chief executive, will retire in April, the end of the company's current fiscal year.
Sara Lee gained 1.4% after the company's talks on selling itself to Brazil's JBS have hit a snag over price, Bloomberg News reported Monday on its website, citing two unnamed people with direct knowledge of the situation.
Adobe Systems rose 2% ahead of its fiscal fourth-quarter results after the close.
Demand for Treasurys increased, sending yield on the 10-year note down to 3.28%. Prices of crude-oil edged up, while gold futures also rose.
BEFORE THE BELL:US Stock Futures Near Flat
U.S. stock futures were little changed Friday, with a multinotch downgrade of Ireland's debt providing a focus as investors also awaited data on leading indicators./
Futures for the Dow Jones Industrial Average recently rose 2 points to 11433. However, S&P 500 futures were off half a point to 1238, and futures for the Nasdaq 100 fell 2 points to 2217.25.
As the last full trading week of the year winds down, strategists said volumes were thinning out.
"There's no incentive to buying stocks right now," said Philip Shaw, chief economist at Investec Securities. "A lot of money has been taken off the table. It's more a matter of getting the positions you want for the new year."
"There's certainly an end-of-year feel in markets at the moment and it's really only the odd one or two events that are generating any sort of market movements," he added. "European debt is one of those."
Markets in Europe gave way to selling toward midday as Moody's Investors Service cut Ireland's credit rating by five notches to Baa1 from Aa2.
While the move was mostly expected, Shaw noted it still had an impact, with credit spreads for peripheral debt widening out.
"The impact could be felt in the opening hours of U.S. trading," he said.
U.S. stocks finished higher on Thursday, lifted by upbeat economic reports and a cheerier forecast from FedEx Corp. (FDX).
The Dow Jones Industrial Average (DJI) rose 41.78 points, or 0.4%, to 11,499.25.
In Washington, the U.S. House of Representatives narrowly passed a two-year extension of tax cuts dating back to the presidency of George W. Bush just before midnight on Thursday, following weeks of intense debate. The bill has already passed a Senate vote. Analysts said this event largely went as expected and was unlikely to have much market impact.
Data on tap for Friday include leading economic indicators for November due at 10 a.m. Eastern time.
On the corporate front, shares of AstraZenca PLC (AZN) fell nearly 6% in preopening trade after the firm was dealt a blow by the U.S. Food and Drug Administration over its Brilinta blood-thinning drug.
The FDA has asked for additional analysis related to a study on the drug, a move which may hold back final approval of the drug by at least six months.
Oracle Corp. (ORCL) shares rose 4.7% in premarket trade after the software group beat analysts' expectations with its second-quarter report late Thursday.
Shares of Research in Motion Ltd. (RIMM) gained 1.8% in premarket trade after the group beat forecasts for third fiscal-quarter earnings, aided by buoyant sales for its BlackBerry smartphones.
Also reporting late the prior session, Take-Two Interactive Software Inc. (TTWO) said it swung to a profit for the quarter ended Oct. 31, helped by upbeat sales of a key basketball game and other video games.
European stocks shifted mostly weaker, led by heavy losses for AstraZeneca, while banks were also weak, taking no inspiration from the German Ifo Institute's business-climate gauge, which ended 2010 at a record high.
Markets will continue to watch a summit in the EU, which wraps up Friday. A day earlier, leaders in Brussels said they would amend an EU treaty to allow for the creation of a permanent rescue fund for countries to counter sovereign-debt issues.
In Asia, Taiwanese stocks hit a 31-month high on a continuation of fund flows, while Chinese stocks struggled amid still-present concerns of an official tightening of interest rates.
Gold for February delivery was flat at $1,371 an ounce, while crude-oil futures for January delivery slipped 61 cents to $87.09 a barrel.
-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Marshall & Ilsley Corp. (MI), AstraZeneca PLC (AZN) and InterMune Inc. (ITMN).
Bank of Montreal (BMO) will acquire Marshall & Ilsley in a stock-for-stock deal valued at about US$4.1 billion, further strengthening the Canadian bank's position in the U.S. Midwest. Marshall & Ilsley gained 25% to $7.23 in premarket trading. News of the deal also is helping push up other money-losing regionals. Premarket Regions Financial Corp. (RF) climbs 7% to $6.57 and Zions Bancorporation (ZION) adds 4.5% to $22.32.
AstraZeneca's new blood-thinning drug Brilinta has again failed to win approval from U.S. regulators, jeopardizing new revenue the group needs to offset the impact of expiring patents on some of its top-selling products. Shares of the U.K.-based drug maker fell 5.5% to $46.51 in premarket trading.
InterMune said a panel from the European medicines regulator gave a positive opinion on its application to market its pirfenidone treatment for the fatal condition known as idiopathic pulmonary fibrosis. Shares more than doubled premarket, up 115% to $30.61.
Oracle Corp.'s (ORCL) fiscal second-quarter earnings rose 28% as the business-software giant continued to see strength in both its traditional software side and its new hardware business. Shares were up 4.2% at $31.55 premarket as the results beat the company's guidance.
Two Harbors Investment Corp. (TWO) announced plans to offer 10 millions shares of its common stock. Shares of the real estate investment trust fell 3% to $9.45 in premarket trading.
Massey Energy Co. (MEE) is looking at options including a sale of the company or a takeover of Wilbur Ross's International Coal Group Inc. (ICO), Bloomberg News reported Friday on its website, citing three unnamed people with knowledge of the matter. International Coal's shares surged 7.5% to $7.50 in premarket trading.
Research In Motion Ltd.'s (RIMM, RIM.T) fiscal third-quarter earnings rose 45%, topping its own targets, as revenue increased and the company said it shipped a record number of its BlackBerry smartphones. The company also forecast current-quarter earnings and revenue above analysts' view. Shares rose 2.7% premarket to $60.85.
Accenture PLC's (ACN) fiscal first-quarter earnings rose 20%, beating analysts' estimates, as the company's revenue improved. Accenture also raised its current-year forecast and gave a current-quarter revenue view that was above analysts' estimate. Shares rose 4.5% to $48.75 premarket.
Take-Two Interactive Software Inc. (TTWO) swung to a fiscal fourth-quarter profit as the company posted sharply higher sales of its critically acclaimed titles. The videogame maker gained 6.4% to $12.70 premarket.
Watch List:
Smart Modular Technologies WWH Inc.'s (SMOD) fiscal first-quarter earnings jumped 74%, with adjusted results topping its own forecasts, as sales increased sharply. But the company also forecast current-quarter earnings below analysts' estimate.
Quiksilver Inc.'s (ZQK) fiscal fourth-quarter loss sharply widened as the outdoor-sports outfitter booked almost $45 million in charges and saw revenue slide again. In the just-begun fiscal year, Quiksilver expects slight growth in revenue, though it warned visibility is limited. For the current quarter, it expects revenue to fall about 5%. Analysts polled by Thomson Reuters projected flat sales for the year and a 6% drop.
Franklin Resources Inc. (BEN) boosted its quarterly dividend and announced plans to buy back up to an additional 10 million shares, joining the ranks of companies looking to return value to shareholders.
Pilgrim's Pride Corp. (PPC) appointed poultry veteran William W. Lovette as chief executive to succeed Don Jackson, who is departing to take the top post at JBS USA, the poultry producer's parent.
Prestige Brands Holdings Inc. (PBH) agreed to buy the Dramamine brand of motion-sickness medicine from Johnson & Johnson (JNJ) unit McNeil-PPC Inc. for $76 million cash.
Steelcase Inc.'s (SCS) fiscal third-quarter earnings rose more than expected from the office-furniture company's break-even bottom line a year earlier, as revenue gains bested its guidance.
Yahoo Inc. (YHOO) said on Thursday it is planning to shut down several "underperforming" and "non-core" Web properties as it continues a years-long turnaround effort.
U.S. stock futures were little changed Friday, with a multinotch downgrade of Ireland's debt providing a focus as investors also awaited data on leading indicators./
Futures for the Dow Jones Industrial Average recently rose 2 points to 11433. However, S&P 500 futures were off half a point to 1238, and futures for the Nasdaq 100 fell 2 points to 2217.25.
As the last full trading week of the year winds down, strategists said volumes were thinning out.
"There's no incentive to buying stocks right now," said Philip Shaw, chief economist at Investec Securities. "A lot of money has been taken off the table. It's more a matter of getting the positions you want for the new year."
"There's certainly an end-of-year feel in markets at the moment and it's really only the odd one or two events that are generating any sort of market movements," he added. "European debt is one of those."
Markets in Europe gave way to selling toward midday as Moody's Investors Service cut Ireland's credit rating by five notches to Baa1 from Aa2.
While the move was mostly expected, Shaw noted it still had an impact, with credit spreads for peripheral debt widening out.
"The impact could be felt in the opening hours of U.S. trading," he said.
U.S. stocks finished higher on Thursday, lifted by upbeat economic reports and a cheerier forecast from FedEx Corp. (FDX).
The Dow Jones Industrial Average (DJI) rose 41.78 points, or 0.4%, to 11,499.25.
In Washington, the U.S. House of Representatives narrowly passed a two-year extension of tax cuts dating back to the presidency of George W. Bush just before midnight on Thursday, following weeks of intense debate. The bill has already passed a Senate vote. Analysts said this event largely went as expected and was unlikely to have much market impact.
Data on tap for Friday include leading economic indicators for November due at 10 a.m. Eastern time.
On the corporate front, shares of AstraZenca PLC (AZN) fell nearly 6% in preopening trade after the firm was dealt a blow by the U.S. Food and Drug Administration over its Brilinta blood-thinning drug.
The FDA has asked for additional analysis related to a study on the drug, a move which may hold back final approval of the drug by at least six months.
Oracle Corp. (ORCL) shares rose 4.7% in premarket trade after the software group beat analysts' expectations with its second-quarter report late Thursday.
Shares of Research in Motion Ltd. (RIMM) gained 1.8% in premarket trade after the group beat forecasts for third fiscal-quarter earnings, aided by buoyant sales for its BlackBerry smartphones.
Also reporting late the prior session, Take-Two Interactive Software Inc. (TTWO) said it swung to a profit for the quarter ended Oct. 31, helped by upbeat sales of a key basketball game and other video games.
European stocks shifted mostly weaker, led by heavy losses for AstraZeneca, while banks were also weak, taking no inspiration from the German Ifo Institute's business-climate gauge, which ended 2010 at a record high.
Markets will continue to watch a summit in the EU, which wraps up Friday. A day earlier, leaders in Brussels said they would amend an EU treaty to allow for the creation of a permanent rescue fund for countries to counter sovereign-debt issues.
In Asia, Taiwanese stocks hit a 31-month high on a continuation of fund flows, while Chinese stocks struggled amid still-present concerns of an official tightening of interest rates.
Gold for February delivery was flat at $1,371 an ounce, while crude-oil futures for January delivery slipped 61 cents to $87.09 a barrel.
-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Marshall & Ilsley Corp. (MI), AstraZeneca PLC (AZN) and InterMune Inc. (ITMN).
Bank of Montreal (BMO) will acquire Marshall & Ilsley in a stock-for-stock deal valued at about US$4.1 billion, further strengthening the Canadian bank's position in the U.S. Midwest. Marshall & Ilsley gained 25% to $7.23 in premarket trading. News of the deal also is helping push up other money-losing regionals. Premarket Regions Financial Corp. (RF) climbs 7% to $6.57 and Zions Bancorporation (ZION) adds 4.5% to $22.32.
AstraZeneca's new blood-thinning drug Brilinta has again failed to win approval from U.S. regulators, jeopardizing new revenue the group needs to offset the impact of expiring patents on some of its top-selling products. Shares of the U.K.-based drug maker fell 5.5% to $46.51 in premarket trading.
InterMune said a panel from the European medicines regulator gave a positive opinion on its application to market its pirfenidone treatment for the fatal condition known as idiopathic pulmonary fibrosis. Shares more than doubled premarket, up 115% to $30.61.
Oracle Corp.'s (ORCL) fiscal second-quarter earnings rose 28% as the business-software giant continued to see strength in both its traditional software side and its new hardware business. Shares were up 4.2% at $31.55 premarket as the results beat the company's guidance.
Two Harbors Investment Corp. (TWO) announced plans to offer 10 millions shares of its common stock. Shares of the real estate investment trust fell 3% to $9.45 in premarket trading.
Massey Energy Co. (MEE) is looking at options including a sale of the company or a takeover of Wilbur Ross's International Coal Group Inc. (ICO), Bloomberg News reported Friday on its website, citing three unnamed people with knowledge of the matter. International Coal's shares surged 7.5% to $7.50 in premarket trading.
Research In Motion Ltd.'s (RIMM, RIM.T) fiscal third-quarter earnings rose 45%, topping its own targets, as revenue increased and the company said it shipped a record number of its BlackBerry smartphones. The company also forecast current-quarter earnings and revenue above analysts' view. Shares rose 2.7% premarket to $60.85.
Accenture PLC's (ACN) fiscal first-quarter earnings rose 20%, beating analysts' estimates, as the company's revenue improved. Accenture also raised its current-year forecast and gave a current-quarter revenue view that was above analysts' estimate. Shares rose 4.5% to $48.75 premarket.
Take-Two Interactive Software Inc. (TTWO) swung to a fiscal fourth-quarter profit as the company posted sharply higher sales of its critically acclaimed titles. The videogame maker gained 6.4% to $12.70 premarket.
Watch List:
Smart Modular Technologies WWH Inc.'s (SMOD) fiscal first-quarter earnings jumped 74%, with adjusted results topping its own forecasts, as sales increased sharply. But the company also forecast current-quarter earnings below analysts' estimate.
Quiksilver Inc.'s (ZQK) fiscal fourth-quarter loss sharply widened as the outdoor-sports outfitter booked almost $45 million in charges and saw revenue slide again. In the just-begun fiscal year, Quiksilver expects slight growth in revenue, though it warned visibility is limited. For the current quarter, it expects revenue to fall about 5%. Analysts polled by Thomson Reuters projected flat sales for the year and a 6% drop.
Franklin Resources Inc. (BEN) boosted its quarterly dividend and announced plans to buy back up to an additional 10 million shares, joining the ranks of companies looking to return value to shareholders.
Pilgrim's Pride Corp. (PPC) appointed poultry veteran William W. Lovette as chief executive to succeed Don Jackson, who is departing to take the top post at JBS USA, the poultry producer's parent.
Prestige Brands Holdings Inc. (PBH) agreed to buy the Dramamine brand of motion-sickness medicine from Johnson & Johnson (JNJ) unit McNeil-PPC Inc. for $76 million cash.
Steelcase Inc.'s (SCS) fiscal third-quarter earnings rose more than expected from the office-furniture company's break-even bottom line a year earlier, as revenue gains bested its guidance.
Yahoo Inc. (YHOO) said on Thursday it is planning to shut down several "underperforming" and "non-core" Web properties as it continues a years-long turnaround effort.
Wednesday, December 15, 2010
BEFORE THE BELL:US Stock Futures Drop
U.S. stock futures dropped Wednesday before the release of inflation and manufacturing data, while euro-zone debt worries returned to the spotlight after a major ratings agency warned it may downgrade Spain's credit rating.
Gold and oil futures also declined, while the dollar advanced against its major rivals.
Futures on the Dow Jones Industrial Average slipped 28 points to 11393, S&P 500 futures fell 3.40 points to 1233.40 and Nasdaq 100 futures dropped 6.25 points to 2207.70.
On Tuesday, the blue-chip Dow index rose 0.4%, posting its highest closing value since September 2008.
Investors were awaiting a string of U.S. economic reports early Wednesday.
The Empire State manufacturing survey for December and consumer-price-inflation data for November are due at 8:30 a.m. Eastern time.
At 9:15 a.m. Eastern, data on industrial production for November will be released.
After the market opens, at 10 a.m. Eastern, the NAHB housing-market index for December is due.
In Europe, Spain led regional stock markets lower after Moody's Investors Service put Spain's Aa1 ratings on review for a possible downgrade. The agency said Spain is vulnerable to funding stress, given its high refinancing needs in 2011 and fragile market confidence.
Madrid's IBEX 35 stock index slumped 1.8% in intraday trading.
The euro pared earlier losses against the dollar to trade little changed at $1.3366.
The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.2% to 79.539.
Commodity prices posted losses, with gold futures dropping $12.20 to $1,392.10 an ounce in electronic trading on Globex. Oil futures retreated 65 cents to $87.63 a barrel ahead of weekly data on U.S. inventories.
On the corporate front, U.S.-listed shares of Novartis AG (NVS) rallied 8.7% in premarket trading. The Swiss drug giant said Wednesday that it will take full ownership of eye-care specialist Alcon Inc. (ACL) for $12.9 billion. Previously, Novartis controlled about 77% of Alcon. After the merger is completed, Alcon will become the new eye-care division of Novartis.
Shares of Alcon rose 2.5% in premarket trade.
In the technology sector, shares of Yahoo Inc. (YHOO) may be active after the firm said late Tuesday that it's laying off 4% of its roughly 14,000 employees.
Shares of Joy Global Inc. (JOYG) advanced nearly 6% in premarket trading after the mining-equipment company reported quarterly profit that beat market expectations.
In deal news, Dynegy Inc. (DYN) said it will be acquired by Icahn Enterprises L.P. (IEP) for $5.50 a share in cash. Shares of Dynegy gained 3% in premarket trade.
U.S. stock futures dropped Wednesday before the release of inflation and manufacturing data, while euro-zone debt worries returned to the spotlight after a major ratings agency warned it may downgrade Spain's credit rating.
Gold and oil futures also declined, while the dollar advanced against its major rivals.
Futures on the Dow Jones Industrial Average slipped 28 points to 11393, S&P 500 futures fell 3.40 points to 1233.40 and Nasdaq 100 futures dropped 6.25 points to 2207.70.
On Tuesday, the blue-chip Dow index rose 0.4%, posting its highest closing value since September 2008.
Investors were awaiting a string of U.S. economic reports early Wednesday.
The Empire State manufacturing survey for December and consumer-price-inflation data for November are due at 8:30 a.m. Eastern time.
At 9:15 a.m. Eastern, data on industrial production for November will be released.
After the market opens, at 10 a.m. Eastern, the NAHB housing-market index for December is due.
In Europe, Spain led regional stock markets lower after Moody's Investors Service put Spain's Aa1 ratings on review for a possible downgrade. The agency said Spain is vulnerable to funding stress, given its high refinancing needs in 2011 and fragile market confidence.
Madrid's IBEX 35 stock index slumped 1.8% in intraday trading.
The euro pared earlier losses against the dollar to trade little changed at $1.3366.
The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.2% to 79.539.
Commodity prices posted losses, with gold futures dropping $12.20 to $1,392.10 an ounce in electronic trading on Globex. Oil futures retreated 65 cents to $87.63 a barrel ahead of weekly data on U.S. inventories.
On the corporate front, U.S.-listed shares of Novartis AG (NVS) rallied 8.7% in premarket trading. The Swiss drug giant said Wednesday that it will take full ownership of eye-care specialist Alcon Inc. (ACL) for $12.9 billion. Previously, Novartis controlled about 77% of Alcon. After the merger is completed, Alcon will become the new eye-care division of Novartis.
Shares of Alcon rose 2.5% in premarket trade.
In the technology sector, shares of Yahoo Inc. (YHOO) may be active after the firm said late Tuesday that it's laying off 4% of its roughly 14,000 employees.
Shares of Joy Global Inc. (JOYG) advanced nearly 6% in premarket trading after the mining-equipment company reported quarterly profit that beat market expectations.
In deal news, Dynegy Inc. (DYN) said it will be acquired by Icahn Enterprises L.P. (IEP) for $5.50 a share in cash. Shares of Dynegy gained 3% in premarket trade.
Tuesday, December 14, 2010
TSX up slightly despite declining oil and gold prices
The Toronto Stock Exchange was holding on to modest gains at midday on Tuesday despite declining oil and gas prices.
At midday, the S&P/TSX composite index was ahead 15 points, or 0.11 per cent, to about 13,310.
On the New York Mercantile Exchange the price of oil was down 10 cents to $88.50 U.S. a barrel, and gold was $1.00 lower at $1,397.00 U.S. an ounce.
The Canadian dollar advanced 20 basis points to 99.44 cents U.S. in late-morning trading.
"Global markets have been in a holding pattern this morning as investors await the last U.S. Federal Reserve interest rate and quantitative easing decision for the year," analyst Colin Cieszynski of CMC Markets wrote in a morning note. "With no changes expected, the Street may focus on the accompanying commentary for indications of whether the Fed may be leaning toward increasing or decreasing QE next year."
Statistics Canada reported Tuesday that its composite index of leading indicators rose 0.3 per cent during November. It was the second straight increase in the index, following a similar revised increase in October, but it was less than the 0.5 per cent analysts had forecast.
Also on Tuesday, retail sales in the U.S. in November doubled analysts' estimates, which boosted markets south of the border.
At midday, the Dow Jones industrial average was ahead by 66 points, or 0.58 per cent to about 11,494.86, and the Nasdaq composite index was up about 10 points, or 0.38 per cent to 2,635.
The Toronto Stock Exchange was holding on to modest gains at midday on Tuesday despite declining oil and gas prices.
At midday, the S&P/TSX composite index was ahead 15 points, or 0.11 per cent, to about 13,310.
On the New York Mercantile Exchange the price of oil was down 10 cents to $88.50 U.S. a barrel, and gold was $1.00 lower at $1,397.00 U.S. an ounce.
The Canadian dollar advanced 20 basis points to 99.44 cents U.S. in late-morning trading.
"Global markets have been in a holding pattern this morning as investors await the last U.S. Federal Reserve interest rate and quantitative easing decision for the year," analyst Colin Cieszynski of CMC Markets wrote in a morning note. "With no changes expected, the Street may focus on the accompanying commentary for indications of whether the Fed may be leaning toward increasing or decreasing QE next year."
Statistics Canada reported Tuesday that its composite index of leading indicators rose 0.3 per cent during November. It was the second straight increase in the index, following a similar revised increase in October, but it was less than the 0.5 per cent analysts had forecast.
Also on Tuesday, retail sales in the U.S. in November doubled analysts' estimates, which boosted markets south of the border.
At midday, the Dow Jones industrial average was ahead by 66 points, or 0.58 per cent to about 11,494.86, and the Nasdaq composite index was up about 10 points, or 0.38 per cent to 2,635.
Japan's Stock Futures Rise on U.S. Retail Sales; Australian Shares Advance
Japanese stock futures rose as better-than-forecast retail sales in the U.S. boosted confidence in the strength of global demand. Australian stocks rose.
American depositary receipts of Hitachi Ltd., an electronics maker that gets more than 40 percent of its revenue outside Japan, rose 0.7 percent from the closing share price in Tokyo. Those of Komatsu Ltd., the world’s second-largest maker of construction and mining equipment, climbed 0.3 percent. Newcrest Mining Ltd., Australia’s biggest gold producer, gained 0.3 percent in Sydney today after the price of precious metal increased.
“U.S. consumption is recovering, and the global economy is mildly improving,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.
Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,335 in Chicago yesterday, compared with 10,315 in Singapore. They were bid in the pre-market at 10,330 in Osaka, Japan, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index increased 0.3 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.
Futures on the Standard & Poor’s 500 Index were little changed today. In New York, the index gained 0.1 percent as data showing retail sales that beat estimates helped equities withstand a surge in Treasury yields. Yields on 10-year Treasuries surged as much as 0.22 percentage point to 3.49 percent after the Federal Reserve said the U.S. recovery is continuing and maintained a $600 billion plan to buy debt.
U.S. Retail Sales
Purchases at U.S. retailers increased 0.8 percent, following a 1.7 percent gain in October, Commerce Department figures showed yesterday. The median forecast of economists surveyed by Bloomberg News called for a 0.6 percent rise.
The MSCI Asia Pacific Index increased 11 percent through yesterday in 2010, matching the gain by the S&P 500 and beating the 9.4 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.8 times estimated earnings on average, compared with 14.5 times for the S&P 500 and 12.4 times for the Stoxx 600.
Gold futures for February delivery rose 0.4 percent in New York yesterday. Crude oil for January delivery declined 0.4 percent to settle at $88.28 a barrel yesterday. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.2 percent yesterday.
The 25-day Toraku index, a measure of daily stock winners and losers on the Topix, was 150 yesterday, according to Bloomberg data. A level of more than 120 suggests to some investors the market is poised to fall.
The Bank of Japan yesterday said it will start buying exchange-traded funds and Japanese real-estate investment trusts as soon as today as part of an asset-purchase program aimed at bolstering trading.
The Bank of Japan’s Tankan report released at 8:50 a.m. showed an index of sentiment among large manufacturers slid to five from eight. Economist had expected the measure would drop to three.
Japanese stock futures rose as better-than-forecast retail sales in the U.S. boosted confidence in the strength of global demand. Australian stocks rose.
American depositary receipts of Hitachi Ltd., an electronics maker that gets more than 40 percent of its revenue outside Japan, rose 0.7 percent from the closing share price in Tokyo. Those of Komatsu Ltd., the world’s second-largest maker of construction and mining equipment, climbed 0.3 percent. Newcrest Mining Ltd., Australia’s biggest gold producer, gained 0.3 percent in Sydney today after the price of precious metal increased.
“U.S. consumption is recovering, and the global economy is mildly improving,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.
Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,335 in Chicago yesterday, compared with 10,315 in Singapore. They were bid in the pre-market at 10,330 in Osaka, Japan, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index increased 0.3 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.
Futures on the Standard & Poor’s 500 Index were little changed today. In New York, the index gained 0.1 percent as data showing retail sales that beat estimates helped equities withstand a surge in Treasury yields. Yields on 10-year Treasuries surged as much as 0.22 percentage point to 3.49 percent after the Federal Reserve said the U.S. recovery is continuing and maintained a $600 billion plan to buy debt.
U.S. Retail Sales
Purchases at U.S. retailers increased 0.8 percent, following a 1.7 percent gain in October, Commerce Department figures showed yesterday. The median forecast of economists surveyed by Bloomberg News called for a 0.6 percent rise.
The MSCI Asia Pacific Index increased 11 percent through yesterday in 2010, matching the gain by the S&P 500 and beating the 9.4 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.8 times estimated earnings on average, compared with 14.5 times for the S&P 500 and 12.4 times for the Stoxx 600.
Gold futures for February delivery rose 0.4 percent in New York yesterday. Crude oil for January delivery declined 0.4 percent to settle at $88.28 a barrel yesterday. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.2 percent yesterday.
The 25-day Toraku index, a measure of daily stock winners and losers on the Topix, was 150 yesterday, according to Bloomberg data. A level of more than 120 suggests to some investors the market is poised to fall.
The Bank of Japan yesterday said it will start buying exchange-traded funds and Japanese real-estate investment trusts as soon as today as part of an asset-purchase program aimed at bolstering trading.
The Bank of Japan’s Tankan report released at 8:50 a.m. showed an index of sentiment among large manufacturers slid to five from eight. Economist had expected the measure would drop to three.
FOREX-Euro hits 3-week high vs dlr as U.S
The euro hit three-week highs versus the dollar and the yen in thin trade on Tuesday, as investors took the view that the recent rise in front-end U.S. yields had gone too far, prompting a squeeze of euro shorts.
Traders said the market was lightening positions ahead of the Federal Reserve's policy meeting later on Tuesday.
"The recent rise in front-end U.S. yields looks overdone as core inflation isn't going to pick up quickly," said Gavin Friend, currency strategist at nabCapital.
"Also euro zone bond spreads seem to have stabilised on the back of the recent ECB buying which has helped the euro," he said.
The European Central Bank stepped up its purchases of government bonds last week, although the amount was still well below levels reached last spring.
The dollar's decline this week has coincided with an abrupt drop in U.S. Treasury yields and a Moody's warning that it could move a step closer to cutting the U.S. triple-A credit rating.
The euro EUR= rallied to $1.3476 on trading platform EBS, its highest since Nov. 23, having opened the week in Asia around $1.3205. It stood at $1.3446, up 0.4 percent on the day, after being capped by resistance at $1.3475, the 38.2 percent retracement of the euro's November decline.
"It looks like it was more a squeeze of positioning than anything else, particularly in the euro because we know the market is well short," a trader at a U.S. investment bank said.
Traders reported stop-loss orders lurking at $1.3490/1.3500, adding the move looked to be driven by speculators in a thin year-end market.
The dollar fell broadly, hitting a three-week low versus a currency basket at 78.952 .DXY. It slipped 0.2 percent to 83.25 yen JPY= after shedding 0.6 percent on Monday, with traders seeing decent bids from 83.20 to 83.00.
Buyers for U.S. bonds emerged after benchmark Treasury yields surged to six-month highs on Monday. This helped knock the 10-year yield down to 3.28 percent from 3.39 percent US10YT=RR.
The yields fell even as Moody's said that if U.S. President Barack Obama's tax and unemployment benefit package became law, in a plan agreed last week, debt levels could rise, making a negative outlook on the rating more likely. [ID:nN13105751]
"The dollar is under pressure as Treasury yields, especially in the medium-term zone, have dropped quite significantly ahead of the FOMC meeting," said Gen Kawabe, manager at Chuo Mitsui Trust and Banking.
The Federal Reserve policy board meets later on Tuesday and is expected to reaffirm its quantitative easing policy while acknowledging the recent better run of data. [ID:nFEDAHEAD]
"The Fed will continue ploughing on with its QE stance. It won't divert from its intention to buy $600 billion in government debt until next spring at least," said Friend at nabCapital.
The Australian dollar was at $0.9973 AUD=D4, near a one-month high of $0.9983 hit on Monday.
The Aussie rose above NZ$1.3250 for the first time since late 2000, with the kiwi dollar coming under pressure after New Zealand retail sales fell in October, leading the market to further push out the timing of any hike in interest rates.
The euro hit three-week highs versus the dollar and the yen in thin trade on Tuesday, as investors took the view that the recent rise in front-end U.S. yields had gone too far, prompting a squeeze of euro shorts.
Traders said the market was lightening positions ahead of the Federal Reserve's policy meeting later on Tuesday.
"The recent rise in front-end U.S. yields looks overdone as core inflation isn't going to pick up quickly," said Gavin Friend, currency strategist at nabCapital.
"Also euro zone bond spreads seem to have stabilised on the back of the recent ECB buying which has helped the euro," he said.
The European Central Bank stepped up its purchases of government bonds last week, although the amount was still well below levels reached last spring.
The dollar's decline this week has coincided with an abrupt drop in U.S. Treasury yields and a Moody's warning that it could move a step closer to cutting the U.S. triple-A credit rating.
The euro EUR= rallied to $1.3476 on trading platform EBS, its highest since Nov. 23, having opened the week in Asia around $1.3205. It stood at $1.3446, up 0.4 percent on the day, after being capped by resistance at $1.3475, the 38.2 percent retracement of the euro's November decline.
"It looks like it was more a squeeze of positioning than anything else, particularly in the euro because we know the market is well short," a trader at a U.S. investment bank said.
Traders reported stop-loss orders lurking at $1.3490/1.3500, adding the move looked to be driven by speculators in a thin year-end market.
The dollar fell broadly, hitting a three-week low versus a currency basket at 78.952 .DXY. It slipped 0.2 percent to 83.25 yen JPY= after shedding 0.6 percent on Monday, with traders seeing decent bids from 83.20 to 83.00.
Buyers for U.S. bonds emerged after benchmark Treasury yields surged to six-month highs on Monday. This helped knock the 10-year yield down to 3.28 percent from 3.39 percent US10YT=RR.
The yields fell even as Moody's said that if U.S. President Barack Obama's tax and unemployment benefit package became law, in a plan agreed last week, debt levels could rise, making a negative outlook on the rating more likely. [ID:nN13105751]
"The dollar is under pressure as Treasury yields, especially in the medium-term zone, have dropped quite significantly ahead of the FOMC meeting," said Gen Kawabe, manager at Chuo Mitsui Trust and Banking.
The Federal Reserve policy board meets later on Tuesday and is expected to reaffirm its quantitative easing policy while acknowledging the recent better run of data. [ID:nFEDAHEAD]
"The Fed will continue ploughing on with its QE stance. It won't divert from its intention to buy $600 billion in government debt until next spring at least," said Friend at nabCapital.
The Australian dollar was at $0.9973 AUD=D4, near a one-month high of $0.9983 hit on Monday.
The Aussie rose above NZ$1.3250 for the first time since late 2000, with the kiwi dollar coming under pressure after New Zealand retail sales fell in October, leading the market to further push out the timing of any hike in interest rates.
Sunday, December 12, 2010
US Stock Futures Rise As US Exports Surge
U.S. stock futures climbed Friday morning as the U.S. trade deficit for October unexpectedly narrowed as exports surged to their highest levels in more than two years and the trade gap with China fell.
Dow Jones Industrial Average futures rose 25 points to 11322 while S&P 500 futures added 4 points to 1232 and Nasdaq Composite futures advanced 6 points to 2206. Prior to the data, Dow futures had been up 30 points, S&P 500 futures were up 5 points and Nasdaq futures were up 8 points. Changes in stock futures do not always accurately predict early stock moves after the open.
The total U.S. deficit in international trade of goods and services fell more than 13% to $38.71 billion from an revised $44.60 billion the month before, the Commerce Department said Friday. The September trade gap was originally reported as $44.00 billion. Economists had predicted a $44.0 billion trade gap.
The U.S. trade deficit with China narrowed 8.3% to $25.52 billion as exports to the country surged 29.8% to a record high of $9.30 billion and imports fell slightly to $34.82 billion.
Separate data showed U.S. import prices posted a second strong gain in November, easing deflation concerns and suggesting a little inflationary pressure within an economy struggling to recover from a deep recession. The price of goods imported into the U.S. rose by 1.3% compared to the prior month, the Labor Department said Friday. Economists were expecting an 0.8% increase in November.
Earlier Friday morning, China's central bank said it will raise banks' reserve requirement ratio by 0.50 percentage points, the sixth such hike this year, as inflationary pressures strengthen. The announcement came as China's latest economic data showed its exports and imports both soared to record highs in November, while the country's trade surplus narrowed to $22.9 billion from October's $27.15 billion. The surplus was greater than economists' $22.3 billion median forecast.
The dollar slipped, with the U.S. Dollar Index, tracking the U.S. currency against a basket of six others, off 0.1%. Crude-oil futures rose while gold futures slipped.
Treasurys were mixed, with increased demand for the two-year note pushing its yield down to 0.61%, while a decline in the 10-year lifted its yield to 3.26%.
Among stocks in focus, Community Health Systems said Tenet Healthcare has rejected a takeover offer valued at $6 a share of cash and stock, or a roughly 40% premium to Thursday's closing price. Community Health Systems slipped 4.6% in premarket trading while Tenet surged 52%.
Beckman Coulter jumped 26% premarket after The Wall Street Journal reported that the company has put itself up for sale.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Tenet Healthcare Corp. (THC), Green Mountain Coffee Roasters Inc. (GMCR) and Beckman Coulter Inc. (BEC).
Community Health Systems Inc. (CYH) made a $3.3 billion unsolicited offer for smaller rival Tenet Healthcare, in a deal that would create the country's largest hospital operator as measured by number of facilities. Tenet, which rejected the offer, surged 52% to $6.53 in premarket trading, above the $6 per share bid price, while Community's stock was down 4% at $30.51.
Green Mountain's fiscal fourth-quarter profit surged 92% as the specialty roaster reported K-cup shipments climbed sharply and revenue soared. Results for the latest quarter topped the company's expectations, but shares slumped 15% to $31.70 premarket as the profit outlook for the current quarter missed expectations and the company warned of volatility in coffee prices for the new year.
Beckman Coulter, which makes diagnostic instruments used in clinical testing, has put itself on the block and could fetch more than $5 billion in a sale, The Wall Street Journal reported, citing people familiar with the matter. Beckman rose 27% to $72.30 premarket.
National Semiconductor Corp.'s (NSM) fiscal second-quarter earnings jumped 78%, beating analysts' estimates, as sales jumped sharply and margins improved. But shares fell 5.8% to $14.10 premarket as the company forecast current-quarter revenue well below estimates.
Jackson Hewitt Tax Service Inc.'s (JTX) fiscal second-quarter loss narrowed slightly, topping analysts' estimates, as the company's costs declined. Shares rose 14% to $1.25 in recent premarket trading. Shares of the tax preparer surged 34% Thursday after saying it has secured full assisted-refund coverage for the 2011 tax season. With an assisted refund, customers don't have to pay for tax preparation up front. The tax preparation cost and other fees are deducted from the refund.
Aastrom Biosciences Inc. (ASTM) said Thursday it plans to offer an undisclosed number of common stock and warrants, with plans to use the proceeds to fund research and development and other capital expenditures. Shares of the biotechnology company slumped 17% to $2.54 premarket.
Standard & Poor's announced a number of changes to its indexes, including adding Cablevision Systems Corp. (CVC) and Netflix Inc. (NFLX) to its S&P 500 index, in moves that it says better reflect the market value of the companies. F5 Networks Inc. (FFIV) and Newfield Exploration Co. (NFX) were also added to the S&P 500 index, in changes that will take place after the close of trading on Dec. 17. Cablevision rose 5.5% to $35.20 premarket, as Netflix gained 4.2% to $199, F5 climbed 4.4% to $145.03 and Newfield moved up 3.9% to $72.80.
Borders Group Inc. (BGP) reported another dismal quarter, as it continues to be hurt by dropping sales and higher margins, and it faces a potential liquidity crunch next year while it considers a merger with larger rival Barnes & Noble Inc. (BKS), a move suggested recently by its second-largest shareholder. Shares dropped 12% to $1.20 premarket.
Pfizer Inc. (PFE) voluntarily withdrew its Thelin drug from markets where it's currently available and is halting global clinical studies as it said the pulmonary arterial hypertension treatment's adverse effects on the liver outweigh its benefits. Shares of the drug giant fell 0.5% to $16.68 premarket.
Fuel Systems Solutions Inc. (FSYS), a maker of alternative fuel components, said its planned sale of at least 2 million shares priced at a 5.2% discount to Thursday's close as the company seeks to pay down a credit line. Shares fell 4.1% to $30.33 premarket.
United Technologies Corp. (UTX) predicted sales in the coming year will be below analysts' expectations, though its earnings forecast was in line with views. Shares were slid 0.9% to $76.93 premarket.
Analogic Corp.'s (ALOG) fiscal first-quarter earnings soared from its very narrow profit a year earlier as the jump in the adjusted bottom line was better than analysts expected, though revenue fell short of views. The company unveiled a program to repurchase up to $30 million of its common stock, about 5% of its current market value. Shares of the maker of health- and security-imaging products were up 4.5% to $49.86 premarket.
Carrizo Oil & Gas Inc. (CRZO) announced plans to sell at least 3.5 million shares, with the oil-and-gas exploration company saying it plans to use proceeds from the offering to repay borrowings under its revolving credit facility. Shares slid 1% to $30 in premarket trading as the number of shares outstanding would rise by about 10%.
Pall Corp.'s (PLL) fiscal first-quarter earnings jumped 51%, beating analysts' expectations. The maker of filtration and purification products also raised its outlook for the year. Shares were up 4.6% to $50.25 premarket.
Harry Winston Diamond Corp. (HWD, HW.T) swung to a fiscal third-quarter profit--its second in a row after six in the red--as rough diamond volume and pricing grew, with rising demand seen across all markets. Shares fell 9.5% to $13 premarket.
Esterline Technologies Corp. (ESL) reported a surprise surge in profit to a record high in the company's fiscal fourth quarter as revenue climbed. Shares in the aerospace and defense manufacturer were up 5.4% at $68.05 in after-hours trading, which would represent its highest level ever, as the company projected earnings for the just-begun fiscal year ahead of estimates.
SeaChange International Inc. (SEAC) reported it swung to a fiscal third-quarter loss as results were stung by higher charges, while revenue and margins also fell. Results for the provider of software and hardware for video-on-demand television missed its downbeat expectations. Shares fell 5% to $7.95 in light after-hours trading.
Watch List
Canadian sporting-goods retailer Forzani Group Ltd.'s (FGL.T, FRZNF) third-quarter profit jumped a bigger-than-expected 20% on higher sales and margins as its restructuring efforts continue to bear fruit.
Energen Corp. (EGN) agreed to buy assets in the Permian Basin in Texas for $110 million from SandRidge Energy Inc. (SD), resulting in the energy holding company boosting its production and earnings forecast for 2011.
Standard & Poor's Ratings Services lowered General Maritime Corp. (GMR) by two notches to highly speculative territory and put the oil-tanker company on watch for further downgrades as liquidity evaporates.
Nara Bancorp (NARA) has reached an agreement to buy Center Financial Corp. (CLFC) in an all-stock deal worth $270 million, saying it will create the only Korean-American bank with a national footprint.
U.S. stock futures climbed Friday morning as the U.S. trade deficit for October unexpectedly narrowed as exports surged to their highest levels in more than two years and the trade gap with China fell.
Dow Jones Industrial Average futures rose 25 points to 11322 while S&P 500 futures added 4 points to 1232 and Nasdaq Composite futures advanced 6 points to 2206. Prior to the data, Dow futures had been up 30 points, S&P 500 futures were up 5 points and Nasdaq futures were up 8 points. Changes in stock futures do not always accurately predict early stock moves after the open.
The total U.S. deficit in international trade of goods and services fell more than 13% to $38.71 billion from an revised $44.60 billion the month before, the Commerce Department said Friday. The September trade gap was originally reported as $44.00 billion. Economists had predicted a $44.0 billion trade gap.
The U.S. trade deficit with China narrowed 8.3% to $25.52 billion as exports to the country surged 29.8% to a record high of $9.30 billion and imports fell slightly to $34.82 billion.
Separate data showed U.S. import prices posted a second strong gain in November, easing deflation concerns and suggesting a little inflationary pressure within an economy struggling to recover from a deep recession. The price of goods imported into the U.S. rose by 1.3% compared to the prior month, the Labor Department said Friday. Economists were expecting an 0.8% increase in November.
Earlier Friday morning, China's central bank said it will raise banks' reserve requirement ratio by 0.50 percentage points, the sixth such hike this year, as inflationary pressures strengthen. The announcement came as China's latest economic data showed its exports and imports both soared to record highs in November, while the country's trade surplus narrowed to $22.9 billion from October's $27.15 billion. The surplus was greater than economists' $22.3 billion median forecast.
The dollar slipped, with the U.S. Dollar Index, tracking the U.S. currency against a basket of six others, off 0.1%. Crude-oil futures rose while gold futures slipped.
Treasurys were mixed, with increased demand for the two-year note pushing its yield down to 0.61%, while a decline in the 10-year lifted its yield to 3.26%.
Among stocks in focus, Community Health Systems said Tenet Healthcare has rejected a takeover offer valued at $6 a share of cash and stock, or a roughly 40% premium to Thursday's closing price. Community Health Systems slipped 4.6% in premarket trading while Tenet surged 52%.
Beckman Coulter jumped 26% premarket after The Wall Street Journal reported that the company has put itself up for sale.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Tenet Healthcare Corp. (THC), Green Mountain Coffee Roasters Inc. (GMCR) and Beckman Coulter Inc. (BEC).
Community Health Systems Inc. (CYH) made a $3.3 billion unsolicited offer for smaller rival Tenet Healthcare, in a deal that would create the country's largest hospital operator as measured by number of facilities. Tenet, which rejected the offer, surged 52% to $6.53 in premarket trading, above the $6 per share bid price, while Community's stock was down 4% at $30.51.
Green Mountain's fiscal fourth-quarter profit surged 92% as the specialty roaster reported K-cup shipments climbed sharply and revenue soared. Results for the latest quarter topped the company's expectations, but shares slumped 15% to $31.70 premarket as the profit outlook for the current quarter missed expectations and the company warned of volatility in coffee prices for the new year.
Beckman Coulter, which makes diagnostic instruments used in clinical testing, has put itself on the block and could fetch more than $5 billion in a sale, The Wall Street Journal reported, citing people familiar with the matter. Beckman rose 27% to $72.30 premarket.
National Semiconductor Corp.'s (NSM) fiscal second-quarter earnings jumped 78%, beating analysts' estimates, as sales jumped sharply and margins improved. But shares fell 5.8% to $14.10 premarket as the company forecast current-quarter revenue well below estimates.
Jackson Hewitt Tax Service Inc.'s (JTX) fiscal second-quarter loss narrowed slightly, topping analysts' estimates, as the company's costs declined. Shares rose 14% to $1.25 in recent premarket trading. Shares of the tax preparer surged 34% Thursday after saying it has secured full assisted-refund coverage for the 2011 tax season. With an assisted refund, customers don't have to pay for tax preparation up front. The tax preparation cost and other fees are deducted from the refund.
Aastrom Biosciences Inc. (ASTM) said Thursday it plans to offer an undisclosed number of common stock and warrants, with plans to use the proceeds to fund research and development and other capital expenditures. Shares of the biotechnology company slumped 17% to $2.54 premarket.
Standard & Poor's announced a number of changes to its indexes, including adding Cablevision Systems Corp. (CVC) and Netflix Inc. (NFLX) to its S&P 500 index, in moves that it says better reflect the market value of the companies. F5 Networks Inc. (FFIV) and Newfield Exploration Co. (NFX) were also added to the S&P 500 index, in changes that will take place after the close of trading on Dec. 17. Cablevision rose 5.5% to $35.20 premarket, as Netflix gained 4.2% to $199, F5 climbed 4.4% to $145.03 and Newfield moved up 3.9% to $72.80.
Borders Group Inc. (BGP) reported another dismal quarter, as it continues to be hurt by dropping sales and higher margins, and it faces a potential liquidity crunch next year while it considers a merger with larger rival Barnes & Noble Inc. (BKS), a move suggested recently by its second-largest shareholder. Shares dropped 12% to $1.20 premarket.
Pfizer Inc. (PFE) voluntarily withdrew its Thelin drug from markets where it's currently available and is halting global clinical studies as it said the pulmonary arterial hypertension treatment's adverse effects on the liver outweigh its benefits. Shares of the drug giant fell 0.5% to $16.68 premarket.
Fuel Systems Solutions Inc. (FSYS), a maker of alternative fuel components, said its planned sale of at least 2 million shares priced at a 5.2% discount to Thursday's close as the company seeks to pay down a credit line. Shares fell 4.1% to $30.33 premarket.
United Technologies Corp. (UTX) predicted sales in the coming year will be below analysts' expectations, though its earnings forecast was in line with views. Shares were slid 0.9% to $76.93 premarket.
Analogic Corp.'s (ALOG) fiscal first-quarter earnings soared from its very narrow profit a year earlier as the jump in the adjusted bottom line was better than analysts expected, though revenue fell short of views. The company unveiled a program to repurchase up to $30 million of its common stock, about 5% of its current market value. Shares of the maker of health- and security-imaging products were up 4.5% to $49.86 premarket.
Carrizo Oil & Gas Inc. (CRZO) announced plans to sell at least 3.5 million shares, with the oil-and-gas exploration company saying it plans to use proceeds from the offering to repay borrowings under its revolving credit facility. Shares slid 1% to $30 in premarket trading as the number of shares outstanding would rise by about 10%.
Pall Corp.'s (PLL) fiscal first-quarter earnings jumped 51%, beating analysts' expectations. The maker of filtration and purification products also raised its outlook for the year. Shares were up 4.6% to $50.25 premarket.
Harry Winston Diamond Corp. (HWD, HW.T) swung to a fiscal third-quarter profit--its second in a row after six in the red--as rough diamond volume and pricing grew, with rising demand seen across all markets. Shares fell 9.5% to $13 premarket.
Esterline Technologies Corp. (ESL) reported a surprise surge in profit to a record high in the company's fiscal fourth quarter as revenue climbed. Shares in the aerospace and defense manufacturer were up 5.4% at $68.05 in after-hours trading, which would represent its highest level ever, as the company projected earnings for the just-begun fiscal year ahead of estimates.
SeaChange International Inc. (SEAC) reported it swung to a fiscal third-quarter loss as results were stung by higher charges, while revenue and margins also fell. Results for the provider of software and hardware for video-on-demand television missed its downbeat expectations. Shares fell 5% to $7.95 in light after-hours trading.
Watch List
Canadian sporting-goods retailer Forzani Group Ltd.'s (FGL.T, FRZNF) third-quarter profit jumped a bigger-than-expected 20% on higher sales and margins as its restructuring efforts continue to bear fruit.
Energen Corp. (EGN) agreed to buy assets in the Permian Basin in Texas for $110 million from SandRidge Energy Inc. (SD), resulting in the energy holding company boosting its production and earnings forecast for 2011.
Standard & Poor's Ratings Services lowered General Maritime Corp. (GMR) by two notches to highly speculative territory and put the oil-tanker company on watch for further downgrades as liquidity evaporates.
Nara Bancorp (NARA) has reached an agreement to buy Center Financial Corp. (CLFC) in an all-stock deal worth $270 million, saying it will create the only Korean-American bank with a national footprint.
Friday, December 10, 2010
Dollar Flat Vs Yen On View US Yields To Rise Again
-The dollar held its ground against the yen in Asia Friday, as investors bet that falls in U.S. Treasury yields overnight that had pushed the greenback down may prove short-lived.
Japanese importers also gave the U.S. currency a helping hand, buying it on a regular settlement day, dealers said.
At 0450 GMT, the dollar stood at Y83.69, unchanged from late Thursday in New York.
Investors' unwillingness to ditch the dollar despite a 5.3 basis point fall in the benchmark U.S. Treasury yield to 3.219% overnight suggests skepticism that yields will keep falling, dealers said. A strong 30-year Treasury auction Thursday drove the drop in yields, but dealers said broader forces that have pushed yields up in recent weeks could again prevail.
"The yield moves are now the biggest driver for the dollar-yen, but people want to see more data from the U.S., such as upcoming retail sales figures, to gauge where the yields are going now," said Hiroshi Maeba, a senior foreign exchange analyst at Nomura Securities. If yields pick up again in coming sessions the dollar could rise toward Y85 next week, Maeba said.
If U.S. economic indicators in the coming weeks add to evidence that the economy remains on a recovery track, despite lingering signs of sluggishness in the jobs market, that will pressure share prices and yields up, dealers said.
A Treasury dealer at a major Japanese securities house in Tokyo echoed the view that recovery in the Treasury market and sustained falls in yields may be some weeks off. "Yesterday's 30-year Treasury auction was a positive sign but I don't know that we're out of the woods yet," the trader said.
"There's a lot happening for year-end when banks and others concerned about their balance sheets are still selling Treasurys," keeping upward pressure on yields to the greenback's benefit, he said.
Meanwhile, the euro was up slightly against the dollar at $1.3254 at 0450 GMT from $1.3243 late Thursday in New York. The common currency also edged up against the yen, buoyed by Japanese importer buying, at Y110.91 from Y110.82.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro and yen, was at 79.978 from 80.019.
-The dollar held its ground against the yen in Asia Friday, as investors bet that falls in U.S. Treasury yields overnight that had pushed the greenback down may prove short-lived.
Japanese importers also gave the U.S. currency a helping hand, buying it on a regular settlement day, dealers said.
At 0450 GMT, the dollar stood at Y83.69, unchanged from late Thursday in New York.
Investors' unwillingness to ditch the dollar despite a 5.3 basis point fall in the benchmark U.S. Treasury yield to 3.219% overnight suggests skepticism that yields will keep falling, dealers said. A strong 30-year Treasury auction Thursday drove the drop in yields, but dealers said broader forces that have pushed yields up in recent weeks could again prevail.
"The yield moves are now the biggest driver for the dollar-yen, but people want to see more data from the U.S., such as upcoming retail sales figures, to gauge where the yields are going now," said Hiroshi Maeba, a senior foreign exchange analyst at Nomura Securities. If yields pick up again in coming sessions the dollar could rise toward Y85 next week, Maeba said.
If U.S. economic indicators in the coming weeks add to evidence that the economy remains on a recovery track, despite lingering signs of sluggishness in the jobs market, that will pressure share prices and yields up, dealers said.
A Treasury dealer at a major Japanese securities house in Tokyo echoed the view that recovery in the Treasury market and sustained falls in yields may be some weeks off. "Yesterday's 30-year Treasury auction was a positive sign but I don't know that we're out of the woods yet," the trader said.
"There's a lot happening for year-end when banks and others concerned about their balance sheets are still selling Treasurys," keeping upward pressure on yields to the greenback's benefit, he said.
Meanwhile, the euro was up slightly against the dollar at $1.3254 at 0450 GMT from $1.3243 late Thursday in New York. The common currency also edged up against the yen, buoyed by Japanese importer buying, at Y110.91 from Y110.82.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro and yen, was at 79.978 from 80.019.
Thursday, December 9, 2010
GLOBAL MARKETS: European Stocks Mostly Higher; Mood Bullish
European stocks were mostly higher Thursday, with market participants turning their focus from the doom and gloom of the euro zone's finances to this year's solid gains by the major global indexes.
"The bull case for equities is winning the battle at the moment, even though reading many headlines at the moment you'd be right to think that sentiment was at all-time lows and markets were falling," said Simon Denham, head of Capital Spreads in London.
All the indexes seem to be heading higher, with Asian stocks putting in modest gains early Thursday and U.S. markets closing at their second-highest level of the year Wednesday, said Denham, noting that investors are opposing the trend, "but not as much as we would expect when markets are at their highs, so maybe this time there's a feeling that the trend is your friend."
By 1200 GMT, the Stoxx Europe 600 index was up 0.2% at 275.61. Among the benchmark indexes, London's FTSE 100 was up 0.3% at 5812.07, Frankfurt's DAX index was down 0.1% at 6966.36 and Paris's CAC-40 index was 0.5% higher at 3851.87.
Optimism that the global economy remains on track, and a double dip can be avoided given the strength of recent economic and corporate data, pushed cyclical stocks--which outperform in periods of economic optimism--sharply higher, with financial stocks among the top performers. Traders said market participants appeared comfortable to take on more risk as the euro-zone debt situation was being tamed by policymakers and authorities. The Stoxx Europe 600 insurance sector added 2.0%, while the Stoxx Europe 600 banks index rose 1.3%.
Moreover, if the authorities continue to control extreme systemic risks, then the outlook for global markets is actually quite rosy, said Deutsche Bank. "We are still in the early stages of the cycle by historical standards and corporate balance sheets remain robust. Corporate non-financial credit remains far removed from the epicenter of this crisis," it added.
Still, traders said the markets remain cautious, citing news that Fitch Ratings has downgraded Ireland's debt rating by three notches to BBB+. Additionally, expectations of a further tightening of monetary policy by China, perhaps as soon as the coming weekend, has worried market participants, as they anticipate that China--which has a history of announcing tightening measures outside market hours--may announce a rate hike before the release of inflation data for November on Monday.
Meanwhile, the Bank of England left interest rates on hold at 0.5%, while the asset-purchase total was also left at GBP200 billion.
In the U.S., investors will watch for the release of initial jobless claims data at 1330 GMT, particularly after last week's surprise jump in claims, said Credit Agricole CIB. "The data will give clues as to whether this was a mere aberration or more worryingly a change in trend," it said. U.S. wholesale inventories are also scheduled for release at 1500 GMT.
Ahead of the U.S. economic data, the December Dow Jones Industrial Average future was up 0.3% at 11,402, and the December S&P 500 contract was up 0.3% at 1232.70.
In Asia, stock markets ended mostly higher Thursday, with shares in Sydney powering to a four-week high after the strong employment report. However, the China market was hobbled by concerns about an imminent rate hike from Beijing, after the People's Bank of China halted the sale of three-year bonds.
Japan's Nikkei Stock Average ended up 0.5% and South Korea's Kospi Composite rose 1.7%. Hong Kong's Hang Sang Index was higher by 0.3% but the Shanghai Composite index was off 1.3%.
In the European foreign exchanges, the euro eased back after initially gaining ground against the dollar. By 1215 GMT, the euro was trading at $1.3215, down from $1.3262 late Wednesday in New York. Elsewhere, the dollar was at Y84.05, up from Y84.03.
Among commodities, spot gold was at $1384.95, per troy ounce, up $2.90 from New York, while January Nymex crude oil futures were up 28 cents at $88.56 per barrel. In the bond markets, the March bund futures contract was up 0.45 at 124.84.
European stocks were mostly higher Thursday, with market participants turning their focus from the doom and gloom of the euro zone's finances to this year's solid gains by the major global indexes.
"The bull case for equities is winning the battle at the moment, even though reading many headlines at the moment you'd be right to think that sentiment was at all-time lows and markets were falling," said Simon Denham, head of Capital Spreads in London.
All the indexes seem to be heading higher, with Asian stocks putting in modest gains early Thursday and U.S. markets closing at their second-highest level of the year Wednesday, said Denham, noting that investors are opposing the trend, "but not as much as we would expect when markets are at their highs, so maybe this time there's a feeling that the trend is your friend."
By 1200 GMT, the Stoxx Europe 600 index was up 0.2% at 275.61. Among the benchmark indexes, London's FTSE 100 was up 0.3% at 5812.07, Frankfurt's DAX index was down 0.1% at 6966.36 and Paris's CAC-40 index was 0.5% higher at 3851.87.
Optimism that the global economy remains on track, and a double dip can be avoided given the strength of recent economic and corporate data, pushed cyclical stocks--which outperform in periods of economic optimism--sharply higher, with financial stocks among the top performers. Traders said market participants appeared comfortable to take on more risk as the euro-zone debt situation was being tamed by policymakers and authorities. The Stoxx Europe 600 insurance sector added 2.0%, while the Stoxx Europe 600 banks index rose 1.3%.
Moreover, if the authorities continue to control extreme systemic risks, then the outlook for global markets is actually quite rosy, said Deutsche Bank. "We are still in the early stages of the cycle by historical standards and corporate balance sheets remain robust. Corporate non-financial credit remains far removed from the epicenter of this crisis," it added.
Still, traders said the markets remain cautious, citing news that Fitch Ratings has downgraded Ireland's debt rating by three notches to BBB+. Additionally, expectations of a further tightening of monetary policy by China, perhaps as soon as the coming weekend, has worried market participants, as they anticipate that China--which has a history of announcing tightening measures outside market hours--may announce a rate hike before the release of inflation data for November on Monday.
Meanwhile, the Bank of England left interest rates on hold at 0.5%, while the asset-purchase total was also left at GBP200 billion.
In the U.S., investors will watch for the release of initial jobless claims data at 1330 GMT, particularly after last week's surprise jump in claims, said Credit Agricole CIB. "The data will give clues as to whether this was a mere aberration or more worryingly a change in trend," it said. U.S. wholesale inventories are also scheduled for release at 1500 GMT.
Ahead of the U.S. economic data, the December Dow Jones Industrial Average future was up 0.3% at 11,402, and the December S&P 500 contract was up 0.3% at 1232.70.
In Asia, stock markets ended mostly higher Thursday, with shares in Sydney powering to a four-week high after the strong employment report. However, the China market was hobbled by concerns about an imminent rate hike from Beijing, after the People's Bank of China halted the sale of three-year bonds.
Japan's Nikkei Stock Average ended up 0.5% and South Korea's Kospi Composite rose 1.7%. Hong Kong's Hang Sang Index was higher by 0.3% but the Shanghai Composite index was off 1.3%.
In the European foreign exchanges, the euro eased back after initially gaining ground against the dollar. By 1215 GMT, the euro was trading at $1.3215, down from $1.3262 late Wednesday in New York. Elsewhere, the dollar was at Y84.05, up from Y84.03.
Among commodities, spot gold was at $1384.95, per troy ounce, up $2.90 from New York, while January Nymex crude oil futures were up 28 cents at $88.56 per barrel. In the bond markets, the March bund futures contract was up 0.45 at 124.84.
Tuesday, December 7, 2010
TSX headed for first negative close in seven sessions
The Toronto Stock Exchange was on track for its first negative close in seven sessions on Tuesday as gold producers fell after U.S. President Barack Obama agreed to extend Bush-era tax cuts.
The benchmark S&P/TSX composite index started out strong on Tuesday, but had lost those early gains by midday and for the rest of the day struggled to stay in positive territory. As the close approached it had fallen 25.34 points, or 0.19 per cent to 13,250.67, weighed down by its materials index.
The price of gold dropped $7.10 to $1,409.00 U.S. an ounce on Tuesday.
"Copper versus gold is the trade," said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, told Bloomberg. "The market is net down because gold is a very big weight in the index now. Plus, gold was trading at an all-time high. Whenever you have a new high come up, people always want to take a step back and take some profits."
The price of crude oil also fell on Tuesday, closing down 69 cents at $88.69 U.S. a barrel.
The Canadian dollar dropped 73 basis points to 98.90 cents U.S. in late-day trading.
U.S. markets were buoyed for most of the day by the announcement that tax cuts would be extended, in exchange for employment benefit extensions and other considerations.
But at the closing bell the Dow Jones industrial average was down 2.8 points, or 0.02 per cent, to 11,359.39. The Nasdaq composite held on to its gains, ahead 3.57 points, or 0.14 per cent, to 2,598.49.
Overseas markets advanced for the most part on Tuesday, with the exception of Tokyo's Nikkei index, which declined.
The Toronto Stock Exchange was on track for its first negative close in seven sessions on Tuesday as gold producers fell after U.S. President Barack Obama agreed to extend Bush-era tax cuts.
The benchmark S&P/TSX composite index started out strong on Tuesday, but had lost those early gains by midday and for the rest of the day struggled to stay in positive territory. As the close approached it had fallen 25.34 points, or 0.19 per cent to 13,250.67, weighed down by its materials index.
The price of gold dropped $7.10 to $1,409.00 U.S. an ounce on Tuesday.
"Copper versus gold is the trade," said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, told Bloomberg. "The market is net down because gold is a very big weight in the index now. Plus, gold was trading at an all-time high. Whenever you have a new high come up, people always want to take a step back and take some profits."
The price of crude oil also fell on Tuesday, closing down 69 cents at $88.69 U.S. a barrel.
The Canadian dollar dropped 73 basis points to 98.90 cents U.S. in late-day trading.
U.S. markets were buoyed for most of the day by the announcement that tax cuts would be extended, in exchange for employment benefit extensions and other considerations.
But at the closing bell the Dow Jones industrial average was down 2.8 points, or 0.02 per cent, to 11,359.39. The Nasdaq composite held on to its gains, ahead 3.57 points, or 0.14 per cent, to 2,598.49.
Overseas markets advanced for the most part on Tuesday, with the exception of Tokyo's Nikkei index, which declined.
Canadian stocks rise for a sixth day
Canadian stocks rose for a sixth day on Monday. The S&P/TSX Composite Index closed up 97.06 points, or 0.74 percent, at 13,276.01.
The index measuring the financial sector on the Toronto Stock Exchange (TSX) decreased 0.36 percent on Monday. Toronto-Dominion Bank (TSX:TD.R) (TSX:TD.P) (TSX:TD.Q) (TSX:TD.O) (TSX:TD.N) (TSX:TD.M) (NYSE:TD) (TSX:TD) dropped 1.90 percent. Royal Bank of Canada
The index measuring the materials sector on the TSX rallied 1. 99 percent after the U.S. Federal Reserve Chair Ben Bernanke hinted on Sunday at further monetary policy easing. Kinross Gold Corp. (TSX:K''D) (TSX:K''C) (TSX:K''B) (OOTC:KNRSF) (NYSE:KGC) (TSX:K) surged 3.09 percent. Yamana Gold Inc. (NYSE:AUY) (TSX:YRI) added 1.75 percent.
The index measuring the diversified metals and mining sector on the TSX climbed 2.20 percent. Teck Resources Ltd., Canada's largest base-metals producer, advanced 3.39 percent.
The BlackBerry maker Research in Motion Ltd. (NASDAQ:RIMM) rose 1.67 percent.
Bank of Nova Scotia, which announced it is acquiring Uruguay's number four private bank, rose 0.88 percent.
The S&P/TSX Composite Index closed up 14.22 points, or 0.68 percent, at 2109.95 on Monday.
On the economical front, Canadian building permits declined 6.5 percent in October, data released by Statistics Canada showed on Monday.
On the currency front, the Canadian dollar weakened slightly against its U.S. counterpart on Monday.
One U.S. dollar was buying 1.0055 Canadian dollars at 5 p.m. local time on Monday, compared with one U.S. dollar buying 1.0038 Canadian dollars on Friday.
Canadian stocks rose for a sixth day on Monday. The S&P/TSX Composite Index closed up 97.06 points, or 0.74 percent, at 13,276.01.
The index measuring the financial sector on the Toronto Stock Exchange (TSX) decreased 0.36 percent on Monday. Toronto-Dominion Bank (TSX:TD.R) (TSX:TD.P) (TSX:TD.Q) (TSX:TD.O) (TSX:TD.N) (TSX:TD.M) (NYSE:TD) (TSX:TD) dropped 1.90 percent. Royal Bank of Canada
The index measuring the materials sector on the TSX rallied 1. 99 percent after the U.S. Federal Reserve Chair Ben Bernanke hinted on Sunday at further monetary policy easing. Kinross Gold Corp. (TSX:K''D) (TSX:K''C) (TSX:K''B) (OOTC:KNRSF) (NYSE:KGC) (TSX:K) surged 3.09 percent. Yamana Gold Inc. (NYSE:AUY) (TSX:YRI) added 1.75 percent.
The index measuring the diversified metals and mining sector on the TSX climbed 2.20 percent. Teck Resources Ltd., Canada's largest base-metals producer, advanced 3.39 percent.
The BlackBerry maker Research in Motion Ltd. (NASDAQ:RIMM) rose 1.67 percent.
Bank of Nova Scotia, which announced it is acquiring Uruguay's number four private bank, rose 0.88 percent.
The S&P/TSX Composite Index closed up 14.22 points, or 0.68 percent, at 2109.95 on Monday.
On the economical front, Canadian building permits declined 6.5 percent in October, data released by Statistics Canada showed on Monday.
On the currency front, the Canadian dollar weakened slightly against its U.S. counterpart on Monday.
One U.S. dollar was buying 1.0055 Canadian dollars at 5 p.m. local time on Monday, compared with one U.S. dollar buying 1.0038 Canadian dollars on Friday.
Forex – GBP/USD Hits 2-day High As Focus Stays On Euro Zone
The pound was up against the U.S. dollar on Tuesday, rising to a 2-day high as investors focused on euro zone debt problems ahead of a meeting of European finance ministers to formally to approve an aid package for Ireland.
GBP/USD hit 1.5778 during late Asian trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.5775, gaining 0.39%.
Cable was likely to find support at 1.5655, Monday’s low and resistance at 1.5836, the high of November 24.
Earlier in the day, the British Retail Consortium said U.K. retail sales slowed in November, rising at an annualized rate of 0.7%, compared with a 0.8% gain in October, as consumers proved reluctant to splash out on expensive items at a time of public spending cuts and higher taxes.
“It has been another tough month,” said BRC Director General Stephen Robertson. “Total sales growth has been weak now for eight months in a row and given that VAT has pushed up annual inflation – boosting sales values – underlying volume growth is virtually zero.”
The pound also edged higher against the euro, with EUR/GBP slipping 0.02% to hit 0.8466.
Later Monday, the U.K. was to release official data on manufacturing and industrial production.
The pound was up against the U.S. dollar on Tuesday, rising to a 2-day high as investors focused on euro zone debt problems ahead of a meeting of European finance ministers to formally to approve an aid package for Ireland.
GBP/USD hit 1.5778 during late Asian trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.5775, gaining 0.39%.
Cable was likely to find support at 1.5655, Monday’s low and resistance at 1.5836, the high of November 24.
Earlier in the day, the British Retail Consortium said U.K. retail sales slowed in November, rising at an annualized rate of 0.7%, compared with a 0.8% gain in October, as consumers proved reluctant to splash out on expensive items at a time of public spending cuts and higher taxes.
“It has been another tough month,” said BRC Director General Stephen Robertson. “Total sales growth has been weak now for eight months in a row and given that VAT has pushed up annual inflation – boosting sales values – underlying volume growth is virtually zero.”
The pound also edged higher against the euro, with EUR/GBP slipping 0.02% to hit 0.8466.
Later Monday, the U.K. was to release official data on manufacturing and industrial production.
MARKET SNAPSHOT: U.S. Stocks Vie For Fourth Day Of Gains
- U.S. stocks on Monday tentatively grasped a fourth day of gains after Federal Reserve Chairman Ben Bernanke said the Fed may increase U.S.-debt purchases and worries about Europe abated.
Bernanke, in an interview that aired Sunday night on CBS News' "60 Minutes," said the central bank could commit more funds to boost the recovery after last month announcing $600 billion in asset purchases.
Bernanke's "willingness to go to the mat to continue to stimulate the economy, even if it means going out to 2015 -- and it sounds like he is willing to do that -- is certainly bullish for stocks," said Jack Ablin, chief market officer at Harris Private Bank.
Wavering up and down after three days of gains, the Dow Jones Industrial Average (DJI) was up 3.07 points at 11,385.16, with 15 of its 30 components rising.
Cisco Systems Inc. (CSCO) climbed the most on the Dow, up 2.3%, after Oppenheimer & Co. upgraded from market perform to outperform the maker of computer networking equipment.
Among other blue chips on the rise, shares of Pfizer Inc. (PFE) added 1.1% after the world's biggest pharmaceutical company unexpectedly announced late Sunday that Jeffrey Kindler was retiring as chief executive and chairman. .
The S&P 500 Index (SPX) climbed less than half a point to 1,225.06, with energy up the most and health-care companies the weakest performers among its 10 industry groups.
The Nasdaq Composite (RIXF) added 5.39 points, or 0.2%, to 2,596.85.
For every seven stocks that fell, eight rose on the New York Stock Exchange, where 555 million shares had traded as of 3:20 p.m. Eastern.
On the New York Mercantile Exchange, crude oil edged up to end at $89.38 a barrel, while gold rose to a record $1,416.10 an ounce.
In Europe, officials were meeting Monday in Brussels on possible steps to stabilize the region and avoid more costly bailouts, as Moody's Investor Service downgraded Hungary's public-debt rating, saying its fiscal policies would be insufficient for the long haul.
Europe's debt crisis, which weighed on stock-index futures before Wall Street's open, often eases late in the day, after European markets close.
"Generally speaking we shrug off a lot of the premarket negativity during the course of the day," said Ablin of the afternoon's reversal.
- U.S. stocks on Monday tentatively grasped a fourth day of gains after Federal Reserve Chairman Ben Bernanke said the Fed may increase U.S.-debt purchases and worries about Europe abated.
Bernanke, in an interview that aired Sunday night on CBS News' "60 Minutes," said the central bank could commit more funds to boost the recovery after last month announcing $600 billion in asset purchases.
Bernanke's "willingness to go to the mat to continue to stimulate the economy, even if it means going out to 2015 -- and it sounds like he is willing to do that -- is certainly bullish for stocks," said Jack Ablin, chief market officer at Harris Private Bank.
Wavering up and down after three days of gains, the Dow Jones Industrial Average (DJI) was up 3.07 points at 11,385.16, with 15 of its 30 components rising.
Cisco Systems Inc. (CSCO) climbed the most on the Dow, up 2.3%, after Oppenheimer & Co. upgraded from market perform to outperform the maker of computer networking equipment.
Among other blue chips on the rise, shares of Pfizer Inc. (PFE) added 1.1% after the world's biggest pharmaceutical company unexpectedly announced late Sunday that Jeffrey Kindler was retiring as chief executive and chairman. .
The S&P 500 Index (SPX) climbed less than half a point to 1,225.06, with energy up the most and health-care companies the weakest performers among its 10 industry groups.
The Nasdaq Composite (RIXF) added 5.39 points, or 0.2%, to 2,596.85.
For every seven stocks that fell, eight rose on the New York Stock Exchange, where 555 million shares had traded as of 3:20 p.m. Eastern.
On the New York Mercantile Exchange, crude oil edged up to end at $89.38 a barrel, while gold rose to a record $1,416.10 an ounce.
In Europe, officials were meeting Monday in Brussels on possible steps to stabilize the region and avoid more costly bailouts, as Moody's Investor Service downgraded Hungary's public-debt rating, saying its fiscal policies would be insufficient for the long haul.
Europe's debt crisis, which weighed on stock-index futures before Wall Street's open, often eases late in the day, after European markets close.
"Generally speaking we shrug off a lot of the premarket negativity during the course of the day," said Ablin of the afternoon's reversal.
Saturday, December 4, 2010
BEFORE THE BELL: US Stock Futures Edge Higher Before Payrolls Data
U.S. stock futures edge slightly higher Friday as investors waited on the sidelines ahead of the closely watched nonfarm payrolls figures for November.
Futures on the Dow Jones Industrial Average rose 4 points to 11367 and S&P 500 futures rose 0.4 point to 1223.10. Nasdaq 100 futures were up 1 point at 2188.00.
The steady start for futures came after U.S. markets rallied for a second straight day on Thursday, as upbeat reports on retail and home sales helped the Dow Jones Industrial Average rise 106.63 points, or 1%.
Friday will serve up plenty more economic data, with November's nonfarm payrolls figures at 8:30 a.m., EST, likely to drive investor sentiment.
Analysts polled by MarketWatch are expecting payrolls to rise by about 155,000 in November. That would be a slight improvement on the 151,000 rise in October, but not enough to dent the unemployment rate, which is expected to hold steady at 9.6%.
"The markets are taking a bit of a breather ahead of nonfarm payrolls, [it's] an excuse for traders to sit on their hands today," said Manoj Ladwa, senior trader at ETX Capital.
Ladwa said there's a risk of fairly heavy market losses if the payrolls figures come in much below expectations, because the economy needs another three to four months of payrolls growth at around the 150,000 level to have an impact on the 9.6% unemployment rate.
After markets open there will be a further round of data, including ISM non-manufacturing figures for November and factory orders for October.
Crude oil and gold prices edged slightly higher as the dollar weakened.
The euro was up 0.4% at $1.3256, while the dollar fell 0.3% against the yen to Y83.64.
On the corporate front, coal producer Walter Energy Inc. (WLT) agreed to buy Canada's Western Coal Corp. (WTN.T, WTNCF) in a cash and stock deal with an enterprise value of around $3.3 billion.
Shares in Walter Energy dropped 2.5% in thin premarket trading.
Shares in Verifone systems Inc. (PAY) could rise after the company late Thursday forecast fiscal first-quarter earnings and revenue ahead of Wall Street expectations.
Retailer Big Lots Inc. (BIG) cut its outlook for the year as it reported earnings of 23 cents a share for the latest quarter--one cent below the consensus forecast.
The group said it now expects to earn between $2.75 and $2.81 a share from continuing operations for the year, having forecast in August that earnings would be between $2.82 and $2.90 a share.
European markets held fairly steady ahead of the U.S. payrolls figures while Asian markets closed mostly higher.
The U.K.'s FTSE 100 index rose 0.1% in midday trading and Japan's Nikkei 225 closed up 0.1%.
-Simon Kennedy; 44 207 842 9427; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are VeriFone Systems Inc. (PAY), CNinsure Inc. (CISG) and Yingli Green Energy Holding Co. (YGE).
VeriFone Systems swung to a fiscal fourth-quarter profit, beating its own estimates, as the online-payment company's revenue and margins improved. Shares rose 5.3% premarket to $38.69.
CNinsure, an independent insurance intermediary company operating in China, said it will be repurchasing up to $100 million of its American depositary shares by June 30. American depositary shares of the company rose 6% to $19.50 in premarket trading.
Wells Fargo raised its stock-investment rating on solar company Yingli Green Energy to outperform from market weight, as the firm said both Yingli and Trina Solar Ltd. (TSL) are defensive plays, and the two can absorb pricing pressure better than peers while gaining share profitability. American depositary shares of Yingli rose 3.9% to $10.58 premarket as Trina was recently up 1.8% to $23.11.
Coldwater Creek Inc. (CWTR) said Thursday its fiscal third-quarter loss widened after adjusting for large tax charges the prior year, as the women's retailer discounted to clear out its stores' unpopular fall inventory. The results modestly beat the company's guidance, which it slashed in October. Shares rose 1.7% to $3.50 in premarket trading.
Big Lots Inc.'s (BIG) fiscal third-quarter earnings fell 42% following a prior-year divestiture gain as the discount retailer's sales increased and operating costs climbed. Profit just missed expectations and the company, which helps manufacturers clear their warehouses of discounted and overproduced goods, cut its fourth-quarter earnings target. Shares fell 1% to $30.78 in premarket trading.
Phillips-Van Heusen Corp.'s (PVH) fiscal third-quarter profit declined 3.5% as the company reported more charges related to its $3 billion acquisition of Tommy Hilfiger, which again masked higher revenue and improved margins. Shares of the retail-apparel giant dropped 1.1% to $70.45 in premarket trading.
Walter Energy Inc. (WLT), a producer of metallurgical coal, has formally agreed to buy peer Western Coal Corp. (WTN.T, WTNCF) in a cash-and-stock deal valued at $3.3 billion, in line with its bid for the company last month. Walter shares fell 2.2% to $103.30 in premarket trading, while Western shares were recently flat.
Encompass Digital Media Inc., a U.S.-based digital media services provider, said it has agreed to acquire the global content distribution business of Ascent Media Corporation (ASCMA) for approximately $120 million. Shares of Ascent rose 6.5% to $33 premarket.
Teekay Offshore Partners LP (TOO) plans to sell at least 5.6 million units to the public, using the proceeds to buy vessels, among other uses. The Bermuda-based oil transporter has about 45 million units outstanding, and they fell 4.9% to $27.69 in premarket trading.
SPS Commerce (SPSC), a provider of on-demand supply chain management solutions, said it priced an offering of 2.9 million shares at $12.25 each, a 5.4% discount to Thursday's close. Shares fell 2.9% to $12.58 premarket.
Realty Income Corp. (O) said it plans to sell at least 5.9 million shares, using the proceeds to pay down the line of credit it uses for acquisitions. Shares of the real-estate investment trust fell 2.1% to $33.40 premarket.
Flow International Corp. (FLOW) swung to a small fiscal second-quarter loss on income-tax impacts, as revenue for the industrial water-jet maker were better than Wall Street expected. Shares still dropped 3.5% to $3.36 in very light after-hours trading.
Ulta Salon Cosmetics & Fragrance Inc.'s (ULTA) fiscal third-quarter earnings climbed 68%, as the beauty-products retailer beat its upbeat guidance across the board. Shares rose 1% to $36.09.
Avago Technologies Ltd. (AVGO) swung to a fiscal fourth-quarter profit as revenue from the company's largest businesses grew and gross margins widened, while the year-ago period was hurt by a $54 million advisory fee. Shares dropped 2.5% to $27.70 in after-hours trading even as earnings topped expectations.
Watch List:
Bank of Nova Scotia (BNS) posted slightly better-than-expected fourth-quarter earnings, wrapping up what's been a mixed week for Canadian bank results.
Cascade Corp.'s (CASC) fiscal third-quarter profit surged as increased demand for forklift attachments and other products for the lift-truck industry drove higher volumes, helping sales rise from last year's poor results. Results handily topped analysts' expectations.
Dollar Financial Corp. (DLLR) agreed to acquire Sweden-based Sefina Finance AB for about $73 million in a deal that will expand its pawn lending business into Sweden and Finland.
Ecolab Inc.'s (ECL) board raised the cleaning company's quarterly dividend by 13%, marking the 19th straight year of increases as the company joins a slew of others increasing payouts to holders.
Halozyme Therapeutics Inc. (HALO) said President and Chief Executive Jonathan Lim has resigned "to pursue other opportunities." Co-founder Gregory Frost has been appointed to fill those posts at the biopharmaceutical company.
Mitel Networks Corp. (MITL) swung to a fiscal second-quarter profit, boosted by an $80 million tax allowance, as revenue fell slightly and adjusted profit fell just short of analysts' forecasts.
Novell Inc. (NOVL) swung to a dramatic fiscal fourth-quarter profit on a tax gain, while the year-ago results were stung by a steep write-down. The software company also reported lower revenue in the latest period.
WellPoint Inc. (WLP) said two executives who were involved in controversies that buffeted the insurer during the health-overhaul debate are leaving the company
U.S. stock futures edge slightly higher Friday as investors waited on the sidelines ahead of the closely watched nonfarm payrolls figures for November.
Futures on the Dow Jones Industrial Average rose 4 points to 11367 and S&P 500 futures rose 0.4 point to 1223.10. Nasdaq 100 futures were up 1 point at 2188.00.
The steady start for futures came after U.S. markets rallied for a second straight day on Thursday, as upbeat reports on retail and home sales helped the Dow Jones Industrial Average rise 106.63 points, or 1%.
Friday will serve up plenty more economic data, with November's nonfarm payrolls figures at 8:30 a.m., EST, likely to drive investor sentiment.
Analysts polled by MarketWatch are expecting payrolls to rise by about 155,000 in November. That would be a slight improvement on the 151,000 rise in October, but not enough to dent the unemployment rate, which is expected to hold steady at 9.6%.
"The markets are taking a bit of a breather ahead of nonfarm payrolls, [it's] an excuse for traders to sit on their hands today," said Manoj Ladwa, senior trader at ETX Capital.
Ladwa said there's a risk of fairly heavy market losses if the payrolls figures come in much below expectations, because the economy needs another three to four months of payrolls growth at around the 150,000 level to have an impact on the 9.6% unemployment rate.
After markets open there will be a further round of data, including ISM non-manufacturing figures for November and factory orders for October.
Crude oil and gold prices edged slightly higher as the dollar weakened.
The euro was up 0.4% at $1.3256, while the dollar fell 0.3% against the yen to Y83.64.
On the corporate front, coal producer Walter Energy Inc. (WLT) agreed to buy Canada's Western Coal Corp. (WTN.T, WTNCF) in a cash and stock deal with an enterprise value of around $3.3 billion.
Shares in Walter Energy dropped 2.5% in thin premarket trading.
Shares in Verifone systems Inc. (PAY) could rise after the company late Thursday forecast fiscal first-quarter earnings and revenue ahead of Wall Street expectations.
Retailer Big Lots Inc. (BIG) cut its outlook for the year as it reported earnings of 23 cents a share for the latest quarter--one cent below the consensus forecast.
The group said it now expects to earn between $2.75 and $2.81 a share from continuing operations for the year, having forecast in August that earnings would be between $2.82 and $2.90 a share.
European markets held fairly steady ahead of the U.S. payrolls figures while Asian markets closed mostly higher.
The U.K.'s FTSE 100 index rose 0.1% in midday trading and Japan's Nikkei 225 closed up 0.1%.
-Simon Kennedy; 44 207 842 9427; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are VeriFone Systems Inc. (PAY), CNinsure Inc. (CISG) and Yingli Green Energy Holding Co. (YGE).
VeriFone Systems swung to a fiscal fourth-quarter profit, beating its own estimates, as the online-payment company's revenue and margins improved. Shares rose 5.3% premarket to $38.69.
CNinsure, an independent insurance intermediary company operating in China, said it will be repurchasing up to $100 million of its American depositary shares by June 30. American depositary shares of the company rose 6% to $19.50 in premarket trading.
Wells Fargo raised its stock-investment rating on solar company Yingli Green Energy to outperform from market weight, as the firm said both Yingli and Trina Solar Ltd. (TSL) are defensive plays, and the two can absorb pricing pressure better than peers while gaining share profitability. American depositary shares of Yingli rose 3.9% to $10.58 premarket as Trina was recently up 1.8% to $23.11.
Coldwater Creek Inc. (CWTR) said Thursday its fiscal third-quarter loss widened after adjusting for large tax charges the prior year, as the women's retailer discounted to clear out its stores' unpopular fall inventory. The results modestly beat the company's guidance, which it slashed in October. Shares rose 1.7% to $3.50 in premarket trading.
Big Lots Inc.'s (BIG) fiscal third-quarter earnings fell 42% following a prior-year divestiture gain as the discount retailer's sales increased and operating costs climbed. Profit just missed expectations and the company, which helps manufacturers clear their warehouses of discounted and overproduced goods, cut its fourth-quarter earnings target. Shares fell 1% to $30.78 in premarket trading.
Phillips-Van Heusen Corp.'s (PVH) fiscal third-quarter profit declined 3.5% as the company reported more charges related to its $3 billion acquisition of Tommy Hilfiger, which again masked higher revenue and improved margins. Shares of the retail-apparel giant dropped 1.1% to $70.45 in premarket trading.
Walter Energy Inc. (WLT), a producer of metallurgical coal, has formally agreed to buy peer Western Coal Corp. (WTN.T, WTNCF) in a cash-and-stock deal valued at $3.3 billion, in line with its bid for the company last month. Walter shares fell 2.2% to $103.30 in premarket trading, while Western shares were recently flat.
Encompass Digital Media Inc., a U.S.-based digital media services provider, said it has agreed to acquire the global content distribution business of Ascent Media Corporation (ASCMA) for approximately $120 million. Shares of Ascent rose 6.5% to $33 premarket.
Teekay Offshore Partners LP (TOO) plans to sell at least 5.6 million units to the public, using the proceeds to buy vessels, among other uses. The Bermuda-based oil transporter has about 45 million units outstanding, and they fell 4.9% to $27.69 in premarket trading.
SPS Commerce (SPSC), a provider of on-demand supply chain management solutions, said it priced an offering of 2.9 million shares at $12.25 each, a 5.4% discount to Thursday's close. Shares fell 2.9% to $12.58 premarket.
Realty Income Corp. (O) said it plans to sell at least 5.9 million shares, using the proceeds to pay down the line of credit it uses for acquisitions. Shares of the real-estate investment trust fell 2.1% to $33.40 premarket.
Flow International Corp. (FLOW) swung to a small fiscal second-quarter loss on income-tax impacts, as revenue for the industrial water-jet maker were better than Wall Street expected. Shares still dropped 3.5% to $3.36 in very light after-hours trading.
Ulta Salon Cosmetics & Fragrance Inc.'s (ULTA) fiscal third-quarter earnings climbed 68%, as the beauty-products retailer beat its upbeat guidance across the board. Shares rose 1% to $36.09.
Avago Technologies Ltd. (AVGO) swung to a fiscal fourth-quarter profit as revenue from the company's largest businesses grew and gross margins widened, while the year-ago period was hurt by a $54 million advisory fee. Shares dropped 2.5% to $27.70 in after-hours trading even as earnings topped expectations.
Watch List:
Bank of Nova Scotia (BNS) posted slightly better-than-expected fourth-quarter earnings, wrapping up what's been a mixed week for Canadian bank results.
Cascade Corp.'s (CASC) fiscal third-quarter profit surged as increased demand for forklift attachments and other products for the lift-truck industry drove higher volumes, helping sales rise from last year's poor results. Results handily topped analysts' expectations.
Dollar Financial Corp. (DLLR) agreed to acquire Sweden-based Sefina Finance AB for about $73 million in a deal that will expand its pawn lending business into Sweden and Finland.
Ecolab Inc.'s (ECL) board raised the cleaning company's quarterly dividend by 13%, marking the 19th straight year of increases as the company joins a slew of others increasing payouts to holders.
Halozyme Therapeutics Inc. (HALO) said President and Chief Executive Jonathan Lim has resigned "to pursue other opportunities." Co-founder Gregory Frost has been appointed to fill those posts at the biopharmaceutical company.
Mitel Networks Corp. (MITL) swung to a fiscal second-quarter profit, boosted by an $80 million tax allowance, as revenue fell slightly and adjusted profit fell just short of analysts' forecasts.
Novell Inc. (NOVL) swung to a dramatic fiscal fourth-quarter profit on a tax gain, while the year-ago results were stung by a steep write-down. The software company also reported lower revenue in the latest period.
WellPoint Inc. (WLP) said two executives who were involved in controversies that buffeted the insurer during the health-overhaul debate are leaving the company
FOREX: Dollar may have Lost its Euro Driver
The dollar is doing more than taking a mere break. The benchmark currency may have been knocked off its bullish path. With the euro finding a tangible level of stability and risk appetite trends failing to play to the dollar’s role as a ‘safe haven’ currency, the fundamental drive is sputtering. This does not mean that a full-on selling effort is inevitable; but it does significantly reduce the probability that the greenback will quickly revive the recovery effort that it launched at the beginning of November. Assessing the dollar’s performance, Friday’s close produced the third consecutive decline and subsequently marked the first weekly loss in four. More specifically, the tumble through the final 24 hour period was the sharpest since October 20th. And, this wasn’t the most the most discouraging development for the currency. Far more troublesome is the reality that the dollar plunged against high risk (fundamental and yield-based labels) and fellow safe havens alike. The fact that EURUSD plunged 1.6 percent and AUDUSD rallied an equivalent distance is not as remarkable as the more balanced USDJPY suffering its biggest dive (2.2 percent) since May 20th while USDCHF endured its worst decline (1.9 percent) going back to May 8th of last year.
When selling pressure was levied on the dollar Wednesday and Thursday, both USDJPY and USDCHF would buck the trend and hold up remarkably well. What changed to migration away from the benchmark? Momentum was a key component in this equation. As the flow through EURUSD and other benchmark pairs increased, the spillover would naturally impact the more ‘resilient’ pairs. That said, the true turning point here was simply capitulation amongst currency traders. Fundamentally, the dollar is a naturally weak currency due to the global progress towards diversifying away from the uniform reserve currency and given the Federal Reserve’s consistent effort to increase the money supply through the Treasury purchases. Consequently, the dollar needs an active catalyst to keep it buoyant. And, since Wednesday, we have seen the dollar’s most potent support – euro selling – reverse course. Like the dollar’s rebound a month ago, the euro has marked its turning point around its central bank decision. The ECB did little to expand its official support of the region’s financial system; but there has been considerable talk that the central bank is buying up government debt to narrow yield spreads that symbolized the region’s financial troubles.
Moving forward, the greatest potential for fundamental influence still lies with risk appetite trends. Interestingly enough, the S&P 500 put in for its smallest advance in the three-day rally and subsequently fell short of marking a new two-year high. However, given the proximity to this psychological level, it would be particularly easy for the benchmark equity index to overtake the technical milestone and carry investor sentiment along with the way. This could have transpired to end this past week had the US employment statistics not dampened confidence. In a bigger-picture sense, the monthly nonfarm payrolls will do little to alter the health of the underlying economy. In fact, at this pace, it would take approximately 200,000 to 250,000 net additions each month for the next six years for employment to return to pre-crisis levels. Nonetheless, the NFPs report is an assumed catalyst for volatility; and so, the market fulfills expectations with a reaction. Thus, a 39,000 net increase that represents the biggest shortfall from expectations will curb an already hesitant sense of confidence.
The dollar is doing more than taking a mere break. The benchmark currency may have been knocked off its bullish path. With the euro finding a tangible level of stability and risk appetite trends failing to play to the dollar’s role as a ‘safe haven’ currency, the fundamental drive is sputtering. This does not mean that a full-on selling effort is inevitable; but it does significantly reduce the probability that the greenback will quickly revive the recovery effort that it launched at the beginning of November. Assessing the dollar’s performance, Friday’s close produced the third consecutive decline and subsequently marked the first weekly loss in four. More specifically, the tumble through the final 24 hour period was the sharpest since October 20th. And, this wasn’t the most the most discouraging development for the currency. Far more troublesome is the reality that the dollar plunged against high risk (fundamental and yield-based labels) and fellow safe havens alike. The fact that EURUSD plunged 1.6 percent and AUDUSD rallied an equivalent distance is not as remarkable as the more balanced USDJPY suffering its biggest dive (2.2 percent) since May 20th while USDCHF endured its worst decline (1.9 percent) going back to May 8th of last year.
When selling pressure was levied on the dollar Wednesday and Thursday, both USDJPY and USDCHF would buck the trend and hold up remarkably well. What changed to migration away from the benchmark? Momentum was a key component in this equation. As the flow through EURUSD and other benchmark pairs increased, the spillover would naturally impact the more ‘resilient’ pairs. That said, the true turning point here was simply capitulation amongst currency traders. Fundamentally, the dollar is a naturally weak currency due to the global progress towards diversifying away from the uniform reserve currency and given the Federal Reserve’s consistent effort to increase the money supply through the Treasury purchases. Consequently, the dollar needs an active catalyst to keep it buoyant. And, since Wednesday, we have seen the dollar’s most potent support – euro selling – reverse course. Like the dollar’s rebound a month ago, the euro has marked its turning point around its central bank decision. The ECB did little to expand its official support of the region’s financial system; but there has been considerable talk that the central bank is buying up government debt to narrow yield spreads that symbolized the region’s financial troubles.
Moving forward, the greatest potential for fundamental influence still lies with risk appetite trends. Interestingly enough, the S&P 500 put in for its smallest advance in the three-day rally and subsequently fell short of marking a new two-year high. However, given the proximity to this psychological level, it would be particularly easy for the benchmark equity index to overtake the technical milestone and carry investor sentiment along with the way. This could have transpired to end this past week had the US employment statistics not dampened confidence. In a bigger-picture sense, the monthly nonfarm payrolls will do little to alter the health of the underlying economy. In fact, at this pace, it would take approximately 200,000 to 250,000 net additions each month for the next six years for employment to return to pre-crisis levels. Nonetheless, the NFPs report is an assumed catalyst for volatility; and so, the market fulfills expectations with a reaction. Thus, a 39,000 net increase that represents the biggest shortfall from expectations will curb an already hesitant sense of confidence.
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