Japanese Stock Futures Rise on Yen
Japanese stock futures rose as a weaker yen boosted the earnings outlook for companies dependent on overseas demand. Australian stocks fell after oil prices declined.
New York-traded securities of Canon Inc., a camera maker that gets 28 percent of its sales from the Americas, climbed 0.8 percent from the Tokyo close after the yen dropped to its lowest level since January against the dollar. Those of Advantest Corp., the world’s largest maker of memory-chip testers, gained 2 percent after U.S.-based Qualcomm Inc. raised forecasts. BHP Billiton Ltd., Australia’s largest oil company, sank 1 percent.
“If the yen stays at this level, pretax earnings at Japanese companies will more likely increase by 50 percent next fiscal year,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo. “That’ll be positive for the stock market.”
Japan’s fiscal year starts April 1.
Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 10,825 in Chicago yesterday, 0.5 percent higher than 10,775 in Singapore. They were bid in the pre-market at 10,830 as of 8:07 a.m. in Osaka, Japan.
Australia’s S&P/ASX 200 Index fell 0.2 percent to 4,874.60 as of 10:07 a.m. in Sydney. New Zealand’s NZX 50 Index dipped 0.1 percent in Wellington.
The MSCI Asia Pacific Index has lost 1.3 percent this week, set for its first weekly slump in five, after an interest-rate increase by India’s central bank spurred concern governments and central banks globally will unwind stimulus measures that helped pull the world’s economy out of recession. Stocks in the gauge trade at 18.8 times estimated earnings, compared with 15.1 times for the MSCI World Index of 23 developed nations.
U.S. Stocks Fall
Futures on the Standard & Poor’s 500 Index retreated 0.2 percent. Yesterday, the index fell 0.2 percent, as discord deepened among European leaders about how to rescue debt- stricken Greece.
The yen depreciated to 92.96 against the dollar around 2:40 a.m. in Tokyo, its weakest level since Jan. 8. It dropped to as low as 123.90 per euro from 122.44 at the 3 p.m. close of stock trading. A weaker yen boosts the value of overseas sales at Japanese companies when converted into their home currency.
Crude oil for May delivery fell 0.1 percent to $80.53 a barrel yesterday in New York.
‘Very, Very Bad’
European Central Bank President Jean-Claude Trichet said on a French television station yesterday that Europe needs to take responsibility for its members and that possible International Monetary Fund aid for Greece is “very, very bad.”
French President Nicolas Sarkozy bowed to German Chancellor Angela Merkel’s demand for an IMF role in a potential rescue package for Greece.
Qualcomm, the world’s biggest maker of mobile-phone chips, jumped 5 percent in New York after boosting its second-quarter profit and sales forecasts.
PetroChina Co., the world’s biggest company by market value, posted a smaller full-year profit than analysts estimated after oil prices fell from a record. Net income declined 9.7 percent, the company said yesterday after the close of the Hong Kong stock market.
Friday, March 26, 2010
U.S. Stock Futures Inch Higher Ahead of GDP Data
U.S. stock futures were slightly higher Friday as investors awaited the latest reading of fourth-quarter U.S. economic growth.
Over two hours before the start of trading, Dow Jones Industrial Average futures gained 27 points. The S&P 500 futures rose 2.7 points to 1165.40 and Nasdaq 100 futures gained 4.25 points to 1953.75. Changes in futures don't always accurately predict early market moves after the opening bell.
U.S. markets ended mixed Thursday after an early rally evaporated, as a strengthening dollar sapped gains in commodities and related shares, and further weak demand for Treasury notes also weighed. The Dow Jones Industrial Average closed up around five points, while the S&P 500 fell 1.99 points and the Nasdaq declined 1.35 points.
Investors will be focused Friday on revised fourth-quarter gross domestic product. Economists polled by MarketWatch expect growth to be cut to 5.7% from 5.9%.
Consumer sentiment for March from the University of Michigan will also be closely watched. Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said consumer sentiment likely will lag other indicators of economic improvement until the labor market improves. "A sustained improvement in household attitudes generally does not occur until the unemployment rate enters a noticeable downtrend—something we expect to become more apparent over the next couple of months," he said in a note to clients.
The dollar lost ground against the euro, reversing gains from the previous session, when it hit a ten-month high against the European currency after euro-zone members announced a plan to support debt-burdened Greece, if needed, through bilateral loans and the International Monetary Fund. In recent trading, the euro was up 0.5% at $1.3376.
In commodities, oil prices edged higher, with the May-dated light crude contract gaining 41 cents at $80.94 a barrel in electronic trading.
European markets were subdued, with Germany's DAX 30 Index dipping 0.2%, while many Asian markets posted strong gains, with Japan's Nikkei 225 Average jumping 1.5%.
U.S. stock futures were slightly higher Friday as investors awaited the latest reading of fourth-quarter U.S. economic growth.
Over two hours before the start of trading, Dow Jones Industrial Average futures gained 27 points. The S&P 500 futures rose 2.7 points to 1165.40 and Nasdaq 100 futures gained 4.25 points to 1953.75. Changes in futures don't always accurately predict early market moves after the opening bell.
U.S. markets ended mixed Thursday after an early rally evaporated, as a strengthening dollar sapped gains in commodities and related shares, and further weak demand for Treasury notes also weighed. The Dow Jones Industrial Average closed up around five points, while the S&P 500 fell 1.99 points and the Nasdaq declined 1.35 points.
Investors will be focused Friday on revised fourth-quarter gross domestic product. Economists polled by MarketWatch expect growth to be cut to 5.7% from 5.9%.
Consumer sentiment for March from the University of Michigan will also be closely watched. Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said consumer sentiment likely will lag other indicators of economic improvement until the labor market improves. "A sustained improvement in household attitudes generally does not occur until the unemployment rate enters a noticeable downtrend—something we expect to become more apparent over the next couple of months," he said in a note to clients.
The dollar lost ground against the euro, reversing gains from the previous session, when it hit a ten-month high against the European currency after euro-zone members announced a plan to support debt-burdened Greece, if needed, through bilateral loans and the International Monetary Fund. In recent trading, the euro was up 0.5% at $1.3376.
In commodities, oil prices edged higher, with the May-dated light crude contract gaining 41 cents at $80.94 a barrel in electronic trading.
European markets were subdued, with Germany's DAX 30 Index dipping 0.2%, while many Asian markets posted strong gains, with Japan's Nikkei 225 Average jumping 1.5%.
FOREX-Euro gains on Greece plan
The euro lifted off a 10-month low against the dollar on Friday after euro zone leaders agreed on a safety net for Greece, though uncertainties remained over how Athens's debt burden would be managed in practice.
Euro zone leaders agreed a package under which Greece would receive both bilateral loans from euro zone partners and International Monetary Fund funding if it faced severe difficulties. [ID:nLDE62N2R1]
But the plan did not alleviate longer-term worries about Greece and other fiscally vulnerable economies, such as Portugal and Spain, limiting euro gains. It only offers Athens funding as a last resort and only with unanimous euro zone approval.
"This buys the euro a bit of time, but nothing fundamental has changed and Greece still has to roll over its debt," CMC Markets analyst Michael Hewson said.
"The fact that the IMF has had to be called in to make it more acceptable to Germany suggests the euro has a long way to go before it becomes a reserve currency."
Athens is saddled with borrowing costs more than double those of Germany and must borrow some 16 billion euros ($21.3 billion) between April 20 and May 23 to refinance maturing debt.
At 1127 GMT, the euro EUR= was up 0.9 percent against the dollar at $1.3393, recovering after hitting its weakest level since early May at $1.3267 on trading platform EBS.
Concerns about Greece's fiscal health have caused the single currency to lose around 12 percent of its value versus the dollar since early December, when it was trading above $1.51.
Hewson said the previous support around $1.3480 -- the 61.8 percent retracement of last year's move from the March lows below $1.30 to the December highs -- had become a significant resistance level.
A weekly close below here would "reinforce a downside trend in euro/dollar, potentially taking it down towards $1.3000".
DOUBTS ON GREECE DEAL
Traders said investors were encouraged after European Central Bank President Jean-Claude Trichet said the aid mechanism was "workable" although it was unlikely ever to be activated. [ID:nLDE62O2MJ]
Some analysts said the IMF's involvement could speed up Greece's fiscal reconstruction, although others said the deal's extremely strict conditions could harm the Greek economy.
"Going forward the market will be focusing more on whether Greece will be able to deliver the austerity measures it has promised," said Johan Javeus, currency strategist at SEB in Stockholm..
Against the yen, the euro rose EURJPY=R around 0.8 percent to touch a one-week high of 124.02 yen, while it gained 0.6 percent against sterling EURGBP=D4 to 90.12 pence.
The dollar index .DXY, a measure of its performance against six other major currencies, fell 0.5 percent to 81.692, still close to a 10-month high of 82.877 after gaining sharply in the past few days on higher U.S. yields.
The dollar struck its highest level since early January against the yen on Thursday at 92.96 yen JPY=, boosted by a rising differential between U.S. and Japanese yields, but trickled back on Friday to trade down 0.2 percent at 92.54.
The euro lifted off a 10-month low against the dollar on Friday after euro zone leaders agreed on a safety net for Greece, though uncertainties remained over how Athens's debt burden would be managed in practice.
Euro zone leaders agreed a package under which Greece would receive both bilateral loans from euro zone partners and International Monetary Fund funding if it faced severe difficulties. [ID:nLDE62N2R1]
But the plan did not alleviate longer-term worries about Greece and other fiscally vulnerable economies, such as Portugal and Spain, limiting euro gains. It only offers Athens funding as a last resort and only with unanimous euro zone approval.
"This buys the euro a bit of time, but nothing fundamental has changed and Greece still has to roll over its debt," CMC Markets analyst Michael Hewson said.
"The fact that the IMF has had to be called in to make it more acceptable to Germany suggests the euro has a long way to go before it becomes a reserve currency."
Athens is saddled with borrowing costs more than double those of Germany and must borrow some 16 billion euros ($21.3 billion) between April 20 and May 23 to refinance maturing debt.
At 1127 GMT, the euro EUR= was up 0.9 percent against the dollar at $1.3393, recovering after hitting its weakest level since early May at $1.3267 on trading platform EBS.
Concerns about Greece's fiscal health have caused the single currency to lose around 12 percent of its value versus the dollar since early December, when it was trading above $1.51.
Hewson said the previous support around $1.3480 -- the 61.8 percent retracement of last year's move from the March lows below $1.30 to the December highs -- had become a significant resistance level.
A weekly close below here would "reinforce a downside trend in euro/dollar, potentially taking it down towards $1.3000".
DOUBTS ON GREECE DEAL
Traders said investors were encouraged after European Central Bank President Jean-Claude Trichet said the aid mechanism was "workable" although it was unlikely ever to be activated. [ID:nLDE62O2MJ]
Some analysts said the IMF's involvement could speed up Greece's fiscal reconstruction, although others said the deal's extremely strict conditions could harm the Greek economy.
"Going forward the market will be focusing more on whether Greece will be able to deliver the austerity measures it has promised," said Johan Javeus, currency strategist at SEB in Stockholm..
Against the yen, the euro rose EURJPY=R around 0.8 percent to touch a one-week high of 124.02 yen, while it gained 0.6 percent against sterling EURGBP=D4 to 90.12 pence.
The dollar index .DXY, a measure of its performance against six other major currencies, fell 0.5 percent to 81.692, still close to a 10-month high of 82.877 after gaining sharply in the past few days on higher U.S. yields.
The dollar struck its highest level since early January against the yen on Thursday at 92.96 yen JPY=, boosted by a rising differential between U.S. and Japanese yields, but trickled back on Friday to trade down 0.2 percent at 92.54.
Wednesday, March 24, 2010
Asia stock markets rise in early trading
Asian stock markets rose in early trading Wednesday after the Dow Jones industrials posted their biggest gain in five weeks.
All markets in the region were modestly higher, with Australia's main index up 0.6 percent, hitting a two-month high in the morning. South Korea's Kospi climbed 0.7 percent, while the Shanghai Composite Index added 0.4 percent to 3,066.63.
Japan's benchmark Nikkei 225 stock average was up 0.7 percent at 10,845.74, led by a surging Nintendo Co.
The issue jumped 10 percent to 30,700 yen after the maker of the Wii said Tuesday it plans to release a 3-D version of its popular handheld gaming system, the Nintendo DS, by March 2011. The device will feature a 3-D display that does not require glasses.
Following other consumer electronics companies, Nintendo is turning to 3-D technology to help spur new demand and fend off emerging rivals like Apple's iPhone.
The government also released encouraging trade data for the world's second biggest economy. Driven by robust global demand for cars and gadgets, Japan's exports jumped 45 percent in February from a year earlier.
In Australia, mining shares were among the country's top gainers. BHP Billiton Ltd. rose 1.1 percent, while rival Rio Tinto jumped almost 2 percent.
Overall sentiment in Asia was lifted by a strong showing overnight on Wall Street.
Hopes for a big U.S. stock rally sent the Dow up 102.94, or 1 percent, to 10,888.83. The index hit a new high for 2010 and is at its highest level since Sept. 26, 2008.
Oil prices drifted Tuesday in New York before closing higher, as rising stock prices waged a tug-of-war with the stronger dollar and signs of lackluster energy demand. Benchmark crude for May delivery reversed earlier losses and gained 31 cents to settle at $81.91 a barrel.
In currencies, the dollar held steady at 90.41 yen. It rose slightly against the euro, which traded at $1.3469 from $1.3495 late Tuesday.
Asian stock markets rose in early trading Wednesday after the Dow Jones industrials posted their biggest gain in five weeks.
All markets in the region were modestly higher, with Australia's main index up 0.6 percent, hitting a two-month high in the morning. South Korea's Kospi climbed 0.7 percent, while the Shanghai Composite Index added 0.4 percent to 3,066.63.
Japan's benchmark Nikkei 225 stock average was up 0.7 percent at 10,845.74, led by a surging Nintendo Co.
The issue jumped 10 percent to 30,700 yen after the maker of the Wii said Tuesday it plans to release a 3-D version of its popular handheld gaming system, the Nintendo DS, by March 2011. The device will feature a 3-D display that does not require glasses.
Following other consumer electronics companies, Nintendo is turning to 3-D technology to help spur new demand and fend off emerging rivals like Apple's iPhone.
The government also released encouraging trade data for the world's second biggest economy. Driven by robust global demand for cars and gadgets, Japan's exports jumped 45 percent in February from a year earlier.
In Australia, mining shares were among the country's top gainers. BHP Billiton Ltd. rose 1.1 percent, while rival Rio Tinto jumped almost 2 percent.
Overall sentiment in Asia was lifted by a strong showing overnight on Wall Street.
Hopes for a big U.S. stock rally sent the Dow up 102.94, or 1 percent, to 10,888.83. The index hit a new high for 2010 and is at its highest level since Sept. 26, 2008.
Oil prices drifted Tuesday in New York before closing higher, as rising stock prices waged a tug-of-war with the stronger dollar and signs of lackluster energy demand. Benchmark crude for May delivery reversed earlier losses and gained 31 cents to settle at $81.91 a barrel.
In currencies, the dollar held steady at 90.41 yen. It rose slightly against the euro, which traded at $1.3469 from $1.3495 late Tuesday.
Tuesday, March 23, 2010
FOREX-Euro falls vs dollar
The euro fell against the dollar on Tuesday as wrangling among European Union leaders over possible support for Greece continued in the run-up to a summit later this week.
Growing concerns that EU leaders may not reach a decision this week kept the euro close to a three-week low hit on Monday and fanned risk aversion, supporting safe-haven flows into the U.S. dollar.
German Chancellor Angela Merkel, facing fierce opposition in Germany to any bailout of the highly indebted country, said there was no need to discuss an aid mechanism at an EU summit starting on Thursday.
This prompted European Commission President Jose Manuel Barroso to call on Merkel to rise above domestic politics and agree on a financial safety net for Athens or risk harm to the common currency.
"We've got a game of to-ing and fro-ing and people just want to stay away from the euro at the moment," said Geoffrey Yu, currency strategist at UBS in London.
At 0850 GMT, the euro fell 0.3 percent against the dollar EUR= to $1.3514, not far from Monday's three-week low around $1.3461, though it held above the $1.35 mark. The euro also lost 0.1 percent versus the Japanese yen EURJPY=R to 121.99 yen.
The dollar index .DXY, a measure of its performance against six other currencies, rose 0.2 percent to 80.820, edging closer towards an eight-month high of 81.342 set in February.
NO RESPITE FOR EURO
European Central Bank President Jean-Claude Trichet also took a tough line on Greece, saying aid could only take the form of a loan with strict conditions, not a subsidy. [ID:nLDE62L22T]
"This lack of action on Europe's part could well force Greece to carry out their threat to go to the IMF ... and so the internal wrangling goes on and in the meantime the euro will continue to remain under pressure," CMC Markets analyst Michael Hewson said in a note.
Against the Swiss franc, the euro was steady EURCHF= at 1.4342 francs, having earlier spiked briefly to a session high of 1.4371 after Swiss National Bank Chairman Philipp Hildebrand pledged again to counter any excessive Swiss franc rise.
"If you look at the evolution of the SNB's language it suggests they're not so worried about it (Swiss franc appreciation) any more," UBS' Yu said.
Sterling underperformed ahead of UK inflation data at 0930 GMT, falling 0.5 percent against the dollar GBP=D4 to $1.5024.
The dollar edged up 0.2 percent to 90.27 yen JPY= after dipping as far as 89.83 yen on Monday when Tokyo was shut.
However, it is roughly in the middle of an 88-92 yen trading range seen since mid-January, with prospects for U.S. rate hikes still distant after the Federal Reserve reiterated a pledge to keep rates low for an extended period, a stance reinforced by a non-voting Fed official on Tuesday.
The euro fell against the dollar on Tuesday as wrangling among European Union leaders over possible support for Greece continued in the run-up to a summit later this week.
Growing concerns that EU leaders may not reach a decision this week kept the euro close to a three-week low hit on Monday and fanned risk aversion, supporting safe-haven flows into the U.S. dollar.
German Chancellor Angela Merkel, facing fierce opposition in Germany to any bailout of the highly indebted country, said there was no need to discuss an aid mechanism at an EU summit starting on Thursday.
This prompted European Commission President Jose Manuel Barroso to call on Merkel to rise above domestic politics and agree on a financial safety net for Athens or risk harm to the common currency.
"We've got a game of to-ing and fro-ing and people just want to stay away from the euro at the moment," said Geoffrey Yu, currency strategist at UBS in London.
At 0850 GMT, the euro fell 0.3 percent against the dollar EUR= to $1.3514, not far from Monday's three-week low around $1.3461, though it held above the $1.35 mark. The euro also lost 0.1 percent versus the Japanese yen EURJPY=R to 121.99 yen.
The dollar index .DXY, a measure of its performance against six other currencies, rose 0.2 percent to 80.820, edging closer towards an eight-month high of 81.342 set in February.
NO RESPITE FOR EURO
European Central Bank President Jean-Claude Trichet also took a tough line on Greece, saying aid could only take the form of a loan with strict conditions, not a subsidy. [ID:nLDE62L22T]
"This lack of action on Europe's part could well force Greece to carry out their threat to go to the IMF ... and so the internal wrangling goes on and in the meantime the euro will continue to remain under pressure," CMC Markets analyst Michael Hewson said in a note.
Against the Swiss franc, the euro was steady EURCHF= at 1.4342 francs, having earlier spiked briefly to a session high of 1.4371 after Swiss National Bank Chairman Philipp Hildebrand pledged again to counter any excessive Swiss franc rise.
"If you look at the evolution of the SNB's language it suggests they're not so worried about it (Swiss franc appreciation) any more," UBS' Yu said.
Sterling underperformed ahead of UK inflation data at 0930 GMT, falling 0.5 percent against the dollar GBP=D4 to $1.5024.
The dollar edged up 0.2 percent to 90.27 yen JPY= after dipping as far as 89.83 yen on Monday when Tokyo was shut.
However, it is roughly in the middle of an 88-92 yen trading range seen since mid-January, with prospects for U.S. rate hikes still distant after the Federal Reserve reiterated a pledge to keep rates low for an extended period, a stance reinforced by a non-voting Fed official on Tuesday.
Sunday, March 21, 2010
US Stock Futures Edge Lower
U.S. stock futures on Friday pointed to a re-run of the prior aimless session, with the market focusing on individual companies like Palm after handset maker's light sales outlook.
S&P 500 futures fell eight-tenths of a point to 1160.50 and Nasdaq 100 futures slipped three-quarters of a point to 1941.00. Futures on the Dow Jones Industrial Average fell 6 points.
U.S. stocks finished an uneven Thursday with major indexes split, as the Dow Jones Industrial Average rose 45 points to take a winning run to eight sessions, while the broader S&P 500 finished fractionally lower. A decline in weekly jobless claims and tepid inflation was countered by rumors of another discount rate hike and jitters around Greece.
Friday's session could be impacted by quadruple witching, when contracts for stock index futures, stock index options, stock options and single stock futures all expire.
Palm Inc. (PALM) dropped 15% in premarket trade after the company's weaker-than-forecast sales outlook for the fourth quarter. Palm lost $18.5 million in the third quarter.
Tim Long, an analyst at BMO Capital Markets, said customers "have little interest" in Palm's devices and operating system as he kept an underperform rating with a $4 price target. He also doesn't think Palm will be purchased by a rival anytime soon.
"We think an acquisition is less and less likely as consumers clearly aren't interested in the OS and generally in the handset market, larger vendors tend to wait for smaller vendors to approach zero before they think about acquisition," he said.
U.S. listed shares of Lloyds Banking Group PLC (LYG) jumped 9% in premarket trade after the partly U.K. government-held lender said it would be profitable in 2010.
Best Buy Co., Inc. (BBY) rose nearly 3% on an upgrade to buy from neutral at Goldman Sachs.
Oil futures fell under $82 a barrel, while the British pound slumped on jitters on the upcoming election.
Asian markets ended mostly higher Friday, with the Nikkei 225 up 0.8% in Tokyo, and the banking news helped push the FTSE 100 up by 0.6% in London.
-By Steve Goldstein;44 2078 429 424; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Palm Inc. (PALM), SunPower Corp. (SPWRA, SPWRB) and AP Pharma Inc. (APPA).
Smart-phone company Palm Inc.'s (PALM) fiscal third-quarter loss narrowed--even after excluding the effects of a large gain--but that promising sign was tempered by a decline in unit sales to retail customers. Shares sank 14% to $4.84 in late trading.
Solar-panel maker SunPower concluded an internal accounting investigation related to its Philippines operations and said it would restate several of the company's financial statements. Shares fell 9.4% to $19.98 after hours.
AP Pharma said U.S. regulators need more answers about the company's lead drug candidate, a treatment for chemotheraphy-induced nausea, before they can approve the company's new-drug application. Shares plunged 51% to $1 premarket.
Addus HomeCare Corp.'s (ADUS) fourth-quarter loss widened, despite higher revenue, on rising operating expenses and weak results in the home health segment, which was weighed down by a slowdown in admissions. Shares plunged 15% to $7.54 in after-hours trading as the provider of in-home nursing and rehabilitative therapies saw results widely miss Wall Street estimates.
Goldman Sachs upgraded Best Buy Co. (BBY) to buy from neutral, on valuation and hopes for a stronger 2010. With the shares trading at "one of the lowest multiples in hardlines retailing," the firm predicts two positives now drive the stock higher: "the market's recognition that upside risk to 2010/2011 results from fresh TV product matches downside risk from margin contraction; and, deployment of the firm's cash horde and free cash flow." Shares rose 3.3% to $41.80 premarket.
Lloyds Banking Group PLC (LYG) Friday surprised investors and shareholders by saying it expects to return to profit this year as its trading performance picked up and impairments eased after two years of hefty losses.
Oppenheimer cut its rating on Synaptics Inc. (SYNA) to perform from outperform, saying channel checks suggest the maker of interfaces for portable electronics' mobile business is continuing to struggle with share loss and average selling price erosion. "These factors are undercutting the lift Synaptics should be enjoying from the volume growth in capacitive touch handsets," the firm wrote. Shares slipped 1.4% to $27.27 premarket.
Janney upgraded Tetra Tech Inc. (TTEK) to buy from neutral as the provider of consulting, engineering and technical services' shares have suffered since it said in January that fiscal 2010 earnings would be below views because of project delays. "We thought the stock would settle into the mid-20s while investors awaited more positive news that would be a catalyst for recovery; however, it has settled closer to $20 and is oversold in our view," the firm said.
Trina Solar Ltd. (TSL) priced its offer of at least 7.9 million American depositary shares at a 1.4% discount to Thursday's close as it raises funds for expansion. Shares slipped 1.7% to $20.19 premarket.
Watch List
Cintas Corp.'s (CTAS) fiscal third-quarter profit dropped 32% as high unemployment continued to hurt demand. But results for the uniform and business-supplies company slightly topped its guidance.
ICX Technologies Inc.'s (ICXT) fourth-quarter loss widened slightly on lower sales, although margins improved. Revenue for the maker of homeland-security products topped Wall Street's expectations, though its loss was bigger than expected. Shares rose 9.4% to $3.73 premarket.
Perry Ellis International Inc. (PERY) swung to a fiscal fourth-quarter profit following prior-year write-downs. The clothing maker posted its first quarter of revenue growth over the past year and kept margins high by avoiding the steep markdowns of a year earlier.
U.S. stock futures on Friday pointed to a re-run of the prior aimless session, with the market focusing on individual companies like Palm after handset maker's light sales outlook.
S&P 500 futures fell eight-tenths of a point to 1160.50 and Nasdaq 100 futures slipped three-quarters of a point to 1941.00. Futures on the Dow Jones Industrial Average fell 6 points.
U.S. stocks finished an uneven Thursday with major indexes split, as the Dow Jones Industrial Average rose 45 points to take a winning run to eight sessions, while the broader S&P 500 finished fractionally lower. A decline in weekly jobless claims and tepid inflation was countered by rumors of another discount rate hike and jitters around Greece.
Friday's session could be impacted by quadruple witching, when contracts for stock index futures, stock index options, stock options and single stock futures all expire.
Palm Inc. (PALM) dropped 15% in premarket trade after the company's weaker-than-forecast sales outlook for the fourth quarter. Palm lost $18.5 million in the third quarter.
Tim Long, an analyst at BMO Capital Markets, said customers "have little interest" in Palm's devices and operating system as he kept an underperform rating with a $4 price target. He also doesn't think Palm will be purchased by a rival anytime soon.
"We think an acquisition is less and less likely as consumers clearly aren't interested in the OS and generally in the handset market, larger vendors tend to wait for smaller vendors to approach zero before they think about acquisition," he said.
U.S. listed shares of Lloyds Banking Group PLC (LYG) jumped 9% in premarket trade after the partly U.K. government-held lender said it would be profitable in 2010.
Best Buy Co., Inc. (BBY) rose nearly 3% on an upgrade to buy from neutral at Goldman Sachs.
Oil futures fell under $82 a barrel, while the British pound slumped on jitters on the upcoming election.
Asian markets ended mostly higher Friday, with the Nikkei 225 up 0.8% in Tokyo, and the banking news helped push the FTSE 100 up by 0.6% in London.
-By Steve Goldstein;44 2078 429 424; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Palm Inc. (PALM), SunPower Corp. (SPWRA, SPWRB) and AP Pharma Inc. (APPA).
Smart-phone company Palm Inc.'s (PALM) fiscal third-quarter loss narrowed--even after excluding the effects of a large gain--but that promising sign was tempered by a decline in unit sales to retail customers. Shares sank 14% to $4.84 in late trading.
Solar-panel maker SunPower concluded an internal accounting investigation related to its Philippines operations and said it would restate several of the company's financial statements. Shares fell 9.4% to $19.98 after hours.
AP Pharma said U.S. regulators need more answers about the company's lead drug candidate, a treatment for chemotheraphy-induced nausea, before they can approve the company's new-drug application. Shares plunged 51% to $1 premarket.
Addus HomeCare Corp.'s (ADUS) fourth-quarter loss widened, despite higher revenue, on rising operating expenses and weak results in the home health segment, which was weighed down by a slowdown in admissions. Shares plunged 15% to $7.54 in after-hours trading as the provider of in-home nursing and rehabilitative therapies saw results widely miss Wall Street estimates.
Goldman Sachs upgraded Best Buy Co. (BBY) to buy from neutral, on valuation and hopes for a stronger 2010. With the shares trading at "one of the lowest multiples in hardlines retailing," the firm predicts two positives now drive the stock higher: "the market's recognition that upside risk to 2010/2011 results from fresh TV product matches downside risk from margin contraction; and, deployment of the firm's cash horde and free cash flow." Shares rose 3.3% to $41.80 premarket.
Lloyds Banking Group PLC (LYG) Friday surprised investors and shareholders by saying it expects to return to profit this year as its trading performance picked up and impairments eased after two years of hefty losses.
Oppenheimer cut its rating on Synaptics Inc. (SYNA) to perform from outperform, saying channel checks suggest the maker of interfaces for portable electronics' mobile business is continuing to struggle with share loss and average selling price erosion. "These factors are undercutting the lift Synaptics should be enjoying from the volume growth in capacitive touch handsets," the firm wrote. Shares slipped 1.4% to $27.27 premarket.
Janney upgraded Tetra Tech Inc. (TTEK) to buy from neutral as the provider of consulting, engineering and technical services' shares have suffered since it said in January that fiscal 2010 earnings would be below views because of project delays. "We thought the stock would settle into the mid-20s while investors awaited more positive news that would be a catalyst for recovery; however, it has settled closer to $20 and is oversold in our view," the firm said.
Trina Solar Ltd. (TSL) priced its offer of at least 7.9 million American depositary shares at a 1.4% discount to Thursday's close as it raises funds for expansion. Shares slipped 1.7% to $20.19 premarket.
Watch List
Cintas Corp.'s (CTAS) fiscal third-quarter profit dropped 32% as high unemployment continued to hurt demand. But results for the uniform and business-supplies company slightly topped its guidance.
ICX Technologies Inc.'s (ICXT) fourth-quarter loss widened slightly on lower sales, although margins improved. Revenue for the maker of homeland-security products topped Wall Street's expectations, though its loss was bigger than expected. Shares rose 9.4% to $3.73 premarket.
Perry Ellis International Inc. (PERY) swung to a fiscal fourth-quarter profit following prior-year write-downs. The clothing maker posted its first quarter of revenue growth over the past year and kept margins high by avoiding the steep markdowns of a year earlier.
Saturday, March 20, 2010
FOREX-Euro falls vs dollar as Greek worries linger
The euro fell on Friday over doubts Greece would win euro-zone aid, capping its worst week since January, and concerns about the UK economy hit sterling.
A report on Thursday that Greece saw limited prospects for euro-zone assistance raised concerns about the country's ability to service its debt. On Friday, the euro fell as far as $1.3502, its lowest level in more than two weeks. It was down 1.7 percent this week, its worst showing since late January.
Greece said it may have to turn to the International Monetary Fund for help, though it dismissed news reports it was planning to do so as early as April. [ID:nLDE62H0LL].
If Greece fails to win euro-zone support, analysts say the market may view the euro zone as unwilling or unable to solve internal financial crises.
"The tensions surrounding Greece are escalating. This whole IMF situation has become a game of brinkmanship and the whole uncertainty is undermining the euro," said Michael Woolfolk, senior currency strategist, at BNY Mellon in New York.
European Union leaders are set to meet next week to discuss rescue plans for Greece. The euro was last trading at 1,3535 EUR=, down about half a percent, while investors demanded a higher premium to buy 10-year Greek debt over German bunds.
Sterling also fell sharply, dipping briefly below $1.50 GBP, after a Bank of England policy maker said there was some risk of a double-dip recession in Britain. The pound was last down about 1.5 percent at $1.5017.
European Central Bank President Jean-Claude Trichet and other officials have ruled out IMF assistance to Greece, but German policy makers have said the IMF may have a role to play.
"From the perspective of the investor, events continue to be frustratingly opaque," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut. "Repeated meetings result in no clear statement other than a commitment that now appears far less solid than before."
A decline in major U.S. stock indexes on Friday reflects heightened risk aversion, BNY Mellon's Woolfolk said, and could spell more trouble for the euro.
"I really don't see any support for the euro. We may have to test that low below $1.3450 in the near term," he said.
YEN FLAT, SWISS FRANC RISES
The dollar was up 0.2 percent at 90.47 yen JPY= while the euro fell 0.4 percent to 1.4346 Swiss francs EURCHF=.
Earlier, the euro slipped as far as 1.4320 francs, a 17-month low, following Thursday's remarks from a Swiss National Bank official. Board member Jean-Pierre Danthine said interest rates cannot stay low forever and Swiss firms and consumers should prepare for higher borrowing costs.
But at a policy meeting last week, the SNB's statement did not drop a pledge to counter excessive gains in the franc as it continues to appreciate against the euro.
Traders are focusing on the 1.4300 area, the record low, as the next support level. Options structures were said to be prevalent at that level.
The euro fell on Friday over doubts Greece would win euro-zone aid, capping its worst week since January, and concerns about the UK economy hit sterling.
A report on Thursday that Greece saw limited prospects for euro-zone assistance raised concerns about the country's ability to service its debt. On Friday, the euro fell as far as $1.3502, its lowest level in more than two weeks. It was down 1.7 percent this week, its worst showing since late January.
Greece said it may have to turn to the International Monetary Fund for help, though it dismissed news reports it was planning to do so as early as April. [ID:nLDE62H0LL].
If Greece fails to win euro-zone support, analysts say the market may view the euro zone as unwilling or unable to solve internal financial crises.
"The tensions surrounding Greece are escalating. This whole IMF situation has become a game of brinkmanship and the whole uncertainty is undermining the euro," said Michael Woolfolk, senior currency strategist, at BNY Mellon in New York.
European Union leaders are set to meet next week to discuss rescue plans for Greece. The euro was last trading at 1,3535 EUR=, down about half a percent, while investors demanded a higher premium to buy 10-year Greek debt over German bunds.
Sterling also fell sharply, dipping briefly below $1.50 GBP, after a Bank of England policy maker said there was some risk of a double-dip recession in Britain. The pound was last down about 1.5 percent at $1.5017.
European Central Bank President Jean-Claude Trichet and other officials have ruled out IMF assistance to Greece, but German policy makers have said the IMF may have a role to play.
"From the perspective of the investor, events continue to be frustratingly opaque," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut. "Repeated meetings result in no clear statement other than a commitment that now appears far less solid than before."
A decline in major U.S. stock indexes on Friday reflects heightened risk aversion, BNY Mellon's Woolfolk said, and could spell more trouble for the euro.
"I really don't see any support for the euro. We may have to test that low below $1.3450 in the near term," he said.
YEN FLAT, SWISS FRANC RISES
The dollar was up 0.2 percent at 90.47 yen JPY= while the euro fell 0.4 percent to 1.4346 Swiss francs EURCHF=.
Earlier, the euro slipped as far as 1.4320 francs, a 17-month low, following Thursday's remarks from a Swiss National Bank official. Board member Jean-Pierre Danthine said interest rates cannot stay low forever and Swiss firms and consumers should prepare for higher borrowing costs.
But at a policy meeting last week, the SNB's statement did not drop a pledge to counter excessive gains in the franc as it continues to appreciate against the euro.
Traders are focusing on the 1.4300 area, the record low, as the next support level. Options structures were said to be prevalent at that level.
Wednesday, March 17, 2010
Hartford to Raise $2.25 Billion in Stock Sale
Hartford Financial Services Group Inc., the bailed-out insurer that hired a new chief executive officer last year, said it plans to raise as much as $2.25 billion by selling shares to repay the U.S. government rescue.
Hartford will sell about 52.3 million common shares at $27.75 apiece and 20 million preferred shares at $25, the insurer said yesterday in a statement. Underwriters Goldman Sachs Group Inc. and JPMorgan Chase & Co. have the option to buy as much as 8 million common shares and 3 million preferred shares.
Proceeds will be used to buy back $3.4 billion in preferred shares sold to the U.S. Treasury Department last year as part of the government’s financial-rescue program. The rest of the purchase price will come from a debt offering and cash on hand, said the Hartford, Connecticut-based insurer.
“They must have some good visibility into the future path of earnings and feel pretty comfortable with it,” Drew Woodbury, an analyst with Morningstar Inc. in Chicago, said before the pricing was announced. “It’s a sign of how open the capital markets are. Previously the government was the only reasonable source of funding.”
Hartford announced plans for the stock sale on March 16 in a statement. The shares jumped 4.8 percent to $28.58 yesterday in New York Stock Exchange composite trading. The insurer has quadrupled in the past 12 months.
Hartford returned to profit in the last three months of 2009, CEO Liam McGee’s first quarter on the job, after more than $4 billion of net losses in the prior 15 months. Credit-card issuer Discover Financial Services also said it plans to repay $1.2 billion in Troubled Asset Relief Program funding.
Credit Grades
Hartford had its credit grades affirmed by Moody’s Investors Service and Fitch Ratings. Standard & Poor’s placed the insurer’s ratings on negative outlook.
“The improvement in Hartford’s earnings is slower than previously expected due to impairments and realized losses on investments,” S&P said. Hartford’s “modest prospective financial flexibility in the face of its ongoing sensitivity to equity markets, and investment results could converge to erode the company’s financial strength.”
The insurer said in a filing it may use “available funds” to help with the repayment. The Treasury Department will still hold warrants to buy about 52 million Hartford shares at $9.79 each. The company said it has no plans to repurchase the warrants. Hartford said in its 2009 annual report that its common stock outstanding was 384 million shares.
Preferred Stock
The Hartford offerings will include $500 million of mandatory convertible preferred stock and $425 million of senior debt. Hartford also plans to issue an additional $675 million in senior notes to repurchase senior debt maturing in 2010 and 2011. Goldman Sachs Group Inc. and JPMorgan Chase & Co. will manage offerings for the common stock and mandatory convertible preferred shares.
Allianz SE, the German insurer that injected $2.5 billion of capital into Hartford in 2008, said in a letter filed with the Securities and Exchange Commission that it waived its right to purchase new Hartford shares in the offering.
McGee, the former Bank of America Corp. executive, is reviewing Hartford’s businesses and reducing risk in the investment portfolio as he plans an April 1 presentation to outline his strategy.
Rising stock and bond markets helped return Hartford to profit. Hartford last month said net income in the fourth quarter was $557 million, its first profit in six quarters.
“Hartford always viewed this investment as temporary capital and intended to return it as soon as it was prudent,” McGee said in the statement.
The insurer’s investments and sales suffered in 2008 and into 2009 as an economic slump left companies and homeowners struggling to pay debt. McGee’s predecessor as CEO, Ramani Ayer, secured the aid package that ranks Hartford second to American International Group Inc. among bailed-out U.S. insurers.
The Treasury Department recouped $130.2 billion of the $204.9 billion borrowed by banks under the Capital Purchase Program and about $4.3 billion from the sale of warrants, according to a March 12 transaction report.
Hartford Financial Services Group Inc., the bailed-out insurer that hired a new chief executive officer last year, said it plans to raise as much as $2.25 billion by selling shares to repay the U.S. government rescue.
Hartford will sell about 52.3 million common shares at $27.75 apiece and 20 million preferred shares at $25, the insurer said yesterday in a statement. Underwriters Goldman Sachs Group Inc. and JPMorgan Chase & Co. have the option to buy as much as 8 million common shares and 3 million preferred shares.
Proceeds will be used to buy back $3.4 billion in preferred shares sold to the U.S. Treasury Department last year as part of the government’s financial-rescue program. The rest of the purchase price will come from a debt offering and cash on hand, said the Hartford, Connecticut-based insurer.
“They must have some good visibility into the future path of earnings and feel pretty comfortable with it,” Drew Woodbury, an analyst with Morningstar Inc. in Chicago, said before the pricing was announced. “It’s a sign of how open the capital markets are. Previously the government was the only reasonable source of funding.”
Hartford announced plans for the stock sale on March 16 in a statement. The shares jumped 4.8 percent to $28.58 yesterday in New York Stock Exchange composite trading. The insurer has quadrupled in the past 12 months.
Hartford returned to profit in the last three months of 2009, CEO Liam McGee’s first quarter on the job, after more than $4 billion of net losses in the prior 15 months. Credit-card issuer Discover Financial Services also said it plans to repay $1.2 billion in Troubled Asset Relief Program funding.
Credit Grades
Hartford had its credit grades affirmed by Moody’s Investors Service and Fitch Ratings. Standard & Poor’s placed the insurer’s ratings on negative outlook.
“The improvement in Hartford’s earnings is slower than previously expected due to impairments and realized losses on investments,” S&P said. Hartford’s “modest prospective financial flexibility in the face of its ongoing sensitivity to equity markets, and investment results could converge to erode the company’s financial strength.”
The insurer said in a filing it may use “available funds” to help with the repayment. The Treasury Department will still hold warrants to buy about 52 million Hartford shares at $9.79 each. The company said it has no plans to repurchase the warrants. Hartford said in its 2009 annual report that its common stock outstanding was 384 million shares.
Preferred Stock
The Hartford offerings will include $500 million of mandatory convertible preferred stock and $425 million of senior debt. Hartford also plans to issue an additional $675 million in senior notes to repurchase senior debt maturing in 2010 and 2011. Goldman Sachs Group Inc. and JPMorgan Chase & Co. will manage offerings for the common stock and mandatory convertible preferred shares.
Allianz SE, the German insurer that injected $2.5 billion of capital into Hartford in 2008, said in a letter filed with the Securities and Exchange Commission that it waived its right to purchase new Hartford shares in the offering.
McGee, the former Bank of America Corp. executive, is reviewing Hartford’s businesses and reducing risk in the investment portfolio as he plans an April 1 presentation to outline his strategy.
Rising stock and bond markets helped return Hartford to profit. Hartford last month said net income in the fourth quarter was $557 million, its first profit in six quarters.
“Hartford always viewed this investment as temporary capital and intended to return it as soon as it was prudent,” McGee said in the statement.
The insurer’s investments and sales suffered in 2008 and into 2009 as an economic slump left companies and homeowners struggling to pay debt. McGee’s predecessor as CEO, Ramani Ayer, secured the aid package that ranks Hartford second to American International Group Inc. among bailed-out U.S. insurers.
The Treasury Department recouped $130.2 billion of the $204.9 billion borrowed by banks under the Capital Purchase Program and about $4.3 billion from the sale of warrants, according to a March 12 transaction report.
FOREX-Dollar falls vs most majors
The dollar fell against higher-yielding currencies such as the Australian dollar while the yen weakened on Wednesday, as the Federal Reserve's and Japan's commitment to low interest rates prompted investors to seek higher returns elsewhere.
The euro fell from five-week highs against the dollar as sentiment remained negative on the single euro-zone currency despite European Union members' pronouncements of support for debt-strapped Greece.
"If you look at the broader picture, we're seeing most major currencies -- sterling, Australian, and New Zealand dollars -- rallying against the U.S. dollar. Clearly, risk appetite is up," said John McCarthy, director of FX trading at ING Capital Markets in New York.
"But the euro is not following the rally in risky assets. It did touch above $1.38, but that's it. That tells me that the market still wants to sell the euro and if we fall below $1.37 again, you'll see selling in the euro gain momentum."
The Fed on Tuesday kept its pledge to keep interest rates low for an "extended period", while the Bank of Japan eased monetary policy, by doubling the funds available to banks for three-month loans at the policy rate.
The moves by the U.S and Japanese central banks generally supported risk assets. U.S. stocks gained and Tokyo's Nikkei share average rose to an eight-week closing high. European shares .FTEU3 followed suit, with the FTSEurofirst 300 .FTEU3 hitting its highest in two months.
Higher oil prices boosted commodity-linked currencies, including the Canadian dollar CAD=D4, which rallied to a 20-month high versus its U.S. counterpart.
Sterling was also one of the day's biggest movers, rising after the number of Britons claiming unemployment benefits in February fell. The pound's strength was mostly felt against the euro, which also weakened against the dollar and Swiss franc.
In midday New York trading, the euro fell 0.2 percent to $1.3745 EUR=, after hitting a five-week high of $1.3817, according to Reuters data. That earlier rally was a carry-over from news on Tuesday that Standard and Poor's removed Greece's ratings from a downgrade review.
The euro also fell to a 17-month low against the Swiss franc at 1.4480 EURCHF= as investors took out option barriers at 1.4500. The pair last traded at 1.4488, down 0.2 percent.
The ICE Futures' dollar index .DXY, which tracks the performance of the greenback versus a basket of six major currencies, was up 0.1 percent on the day at 79.822, after slipping to a six-week low of 79.520 in early European trade.
The dollar was up 0.2 percent at 90.39 yen JPY= against a broadly weaker Japanese currency.
The BoJ's decision to increase the funds available to banks was widely flagged. However, it left the duration of fixed-rate loans unchanged at three months and two of its seven board members dissented.
BoJ Governor Masaaki Shirakawa said the liquidity operation was not aimed at affecting exchange rates. Some in the market speculate Japanese authorities want to stem yen strength.
Sterling GBP=D4 jumped to $1.5382, its strongest against the dollar in nearly three weeks after jobs data. The pound was last at $1.5287, up 0.3 percent.
Minutes from the Bank of England's policy meeting earlier this month showed board members voted unanimously not to extend quantitative easing, which also boosted the pound.
Against the Canadian dollar, the U.S. unit fell as low as C$1.0097 CAD=D4, its weakest since July 2008, as the Canadian currency extended gains on the back of higher oil prices and a recent batch of strong economic data.
The dollar fell against higher-yielding currencies such as the Australian dollar while the yen weakened on Wednesday, as the Federal Reserve's and Japan's commitment to low interest rates prompted investors to seek higher returns elsewhere.
The euro fell from five-week highs against the dollar as sentiment remained negative on the single euro-zone currency despite European Union members' pronouncements of support for debt-strapped Greece.
"If you look at the broader picture, we're seeing most major currencies -- sterling, Australian, and New Zealand dollars -- rallying against the U.S. dollar. Clearly, risk appetite is up," said John McCarthy, director of FX trading at ING Capital Markets in New York.
"But the euro is not following the rally in risky assets. It did touch above $1.38, but that's it. That tells me that the market still wants to sell the euro and if we fall below $1.37 again, you'll see selling in the euro gain momentum."
The Fed on Tuesday kept its pledge to keep interest rates low for an "extended period", while the Bank of Japan eased monetary policy, by doubling the funds available to banks for three-month loans at the policy rate.
The moves by the U.S and Japanese central banks generally supported risk assets. U.S. stocks gained and Tokyo's Nikkei share average rose to an eight-week closing high. European shares .FTEU3 followed suit, with the FTSEurofirst 300 .FTEU3 hitting its highest in two months.
Higher oil prices boosted commodity-linked currencies, including the Canadian dollar CAD=D4, which rallied to a 20-month high versus its U.S. counterpart.
Sterling was also one of the day's biggest movers, rising after the number of Britons claiming unemployment benefits in February fell. The pound's strength was mostly felt against the euro, which also weakened against the dollar and Swiss franc.
In midday New York trading, the euro fell 0.2 percent to $1.3745 EUR=, after hitting a five-week high of $1.3817, according to Reuters data. That earlier rally was a carry-over from news on Tuesday that Standard and Poor's removed Greece's ratings from a downgrade review.
The euro also fell to a 17-month low against the Swiss franc at 1.4480 EURCHF= as investors took out option barriers at 1.4500. The pair last traded at 1.4488, down 0.2 percent.
The ICE Futures' dollar index .DXY, which tracks the performance of the greenback versus a basket of six major currencies, was up 0.1 percent on the day at 79.822, after slipping to a six-week low of 79.520 in early European trade.
The dollar was up 0.2 percent at 90.39 yen JPY= against a broadly weaker Japanese currency.
The BoJ's decision to increase the funds available to banks was widely flagged. However, it left the duration of fixed-rate loans unchanged at three months and two of its seven board members dissented.
BoJ Governor Masaaki Shirakawa said the liquidity operation was not aimed at affecting exchange rates. Some in the market speculate Japanese authorities want to stem yen strength.
Sterling GBP=D4 jumped to $1.5382, its strongest against the dollar in nearly three weeks after jobs data. The pound was last at $1.5287, up 0.3 percent.
Minutes from the Bank of England's policy meeting earlier this month showed board members voted unanimously not to extend quantitative easing, which also boosted the pound.
Against the Canadian dollar, the U.S. unit fell as low as C$1.0097 CAD=D4, its weakest since July 2008, as the Canadian currency extended gains on the back of higher oil prices and a recent batch of strong economic data.
Tuesday, March 16, 2010
Hartford To Sell $2.38B In Stock
Hartford Financial Services Group Inc. (HIG) said it will sell $2.38 billion in stock and debt to raise money to repay federal funds it received under the Troubled Asset Relief Program.
Shares fell 2.1% to $26.70 in after-hours trading. The stock has quadrupled in the past year.
The insurer, which has a market capitalization of $10.18 billion, plans to buy back $3.4 billion in its preferred shares issued to the Treasury Department in exchange for a capital infusion last year.
After the repayment, the Treasury will hold warrants to purchase about 52 million shares at an initial exercise price of $9.79 a share. Hartford doesn't plan to repurchase the warrants.
Taxpayers will win in this deal. With its common shares closing at $27.26 Tuesday, it means the government-owned warrants in Hartford are worth about $990 million, estimates Linus Wilson, professor of finance at the University of Louisiana. The Treasury hasn't disclosed plans to sell the warrants, but since Hartford had declined to buy them, the government is free to do so.
Combined with the $122 million in interest Hartford has paid the U.S. Treasury for its investment, it means taxpayers are poised to earn a total $1.1 billion on the $3.4 billion TARP investment, making it "one of Treasury's most lucrative investments," said Wilson.
Another winner will be German insurer Allianz SE (ALIZF, ALV.XE, AZSEY). It invested $2.5 billion in Hartford in 2008 and in return received warrants for 69.3 million shares in the company.
In 2009, Hartford renegotiated its agreement with Allianz extending the term of the warrants to 10 years from seven years, the same as the warrants issued the federal government. In a separate filing three days ago, the companies renewed their agreement in light of the new stock and debt offering.
The stock offerings will consist of $1.45 billion of common shares and $500 million of mandatory convertible preferred stock, represented by depositary shares.
Hartford also plans to sell $425 million in senior notes, and it will issue another $675 million in senior notes to "pre-fund" the repurchase of its senior debt maturing in 2010 and 2011.
"We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets, and we are pleased to announce a plan to repurchase Treasury's investment in fewer than 10 months," said Chairman and Chief Executive Liam McGee.
He pointed out the company ended 2009 with a strong capital position and its core earnings improved in the fourth quarter for the third quarter in a row.
After stock and bond markets rebounded sharply last year, the four giant U.S. banks--Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Wells Fargo & Co. (WFC)--repaid a combined $95 billion in TARP money, in part to escape regulations on pay for their high-priced employees.
Every bank that has repaid TARP aid has raised capital by selling shares as part of the process. Such stock sales can hurt current investors by diluting the value of their shares.
Hartford Financial Services Group Inc. (HIG) said it will sell $2.38 billion in stock and debt to raise money to repay federal funds it received under the Troubled Asset Relief Program.
Shares fell 2.1% to $26.70 in after-hours trading. The stock has quadrupled in the past year.
The insurer, which has a market capitalization of $10.18 billion, plans to buy back $3.4 billion in its preferred shares issued to the Treasury Department in exchange for a capital infusion last year.
After the repayment, the Treasury will hold warrants to purchase about 52 million shares at an initial exercise price of $9.79 a share. Hartford doesn't plan to repurchase the warrants.
Taxpayers will win in this deal. With its common shares closing at $27.26 Tuesday, it means the government-owned warrants in Hartford are worth about $990 million, estimates Linus Wilson, professor of finance at the University of Louisiana. The Treasury hasn't disclosed plans to sell the warrants, but since Hartford had declined to buy them, the government is free to do so.
Combined with the $122 million in interest Hartford has paid the U.S. Treasury for its investment, it means taxpayers are poised to earn a total $1.1 billion on the $3.4 billion TARP investment, making it "one of Treasury's most lucrative investments," said Wilson.
Another winner will be German insurer Allianz SE (ALIZF, ALV.XE, AZSEY). It invested $2.5 billion in Hartford in 2008 and in return received warrants for 69.3 million shares in the company.
In 2009, Hartford renegotiated its agreement with Allianz extending the term of the warrants to 10 years from seven years, the same as the warrants issued the federal government. In a separate filing three days ago, the companies renewed their agreement in light of the new stock and debt offering.
The stock offerings will consist of $1.45 billion of common shares and $500 million of mandatory convertible preferred stock, represented by depositary shares.
Hartford also plans to sell $425 million in senior notes, and it will issue another $675 million in senior notes to "pre-fund" the repurchase of its senior debt maturing in 2010 and 2011.
"We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets, and we are pleased to announce a plan to repurchase Treasury's investment in fewer than 10 months," said Chairman and Chief Executive Liam McGee.
He pointed out the company ended 2009 with a strong capital position and its core earnings improved in the fourth quarter for the third quarter in a row.
After stock and bond markets rebounded sharply last year, the four giant U.S. banks--Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Wells Fargo & Co. (WFC)--repaid a combined $95 billion in TARP money, in part to escape regulations on pay for their high-priced employees.
Every bank that has repaid TARP aid has raised capital by selling shares as part of the process. Such stock sales can hurt current investors by diluting the value of their shares.
FOREX-Dollar falls vs euro
The dollar fell against the euro and a basket of currencies on Tuesday on expectations the Federal Reserve would repeat a pledge to keep interest rates very low for a long time, encouraging investors to buy riskier assets at the expense of the greenback.
The policy-setting Federal Open Market Committee, which will announce its decision at about 2:15 pm (1815 GMT), is widely expected to hold benchmark U.S. rates near zero and repeat that conditions warrant keeping them "exceptionally low" for an "extended period."
Investors will focus on the Fed's assessment of the economic outlook and on whether there are more dissenters wanting to drop the "extended period" reference after recent economic data showed U.S. consumers are buying more and firms seem ready to hire again.
"The anticipation for the Fed is that they're going to give a slightly more upbeat outlook for the U.S. economy, but at the same time they're going to keep the language intact and not signal any rate increase any time soon," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. "That combination is going to be risk positive."
Near zero U.S. rates have pressured the dollar over the past months as investors borrowed in the greenback and used the proceeds to buy higher-yielding, riskier currencies such as the Australian dollar.
In early trading, the dollar index .DXY, a gauge of its performance against six major currencies, was down 0.4 percent at 79.969, with near term resistance seen around 80.85, its March 10 high.
Another focus was whether the Fed would begin laying the groundwork for a shift in the "extended period" language. The vast majority of primary dealers see a change as early as April.
Still, most do not see an interest rate increase until the second half of this year.
"The market looks about right in pricing November as the start of the Fed tightening cycle, but the prospect that excess liquidity is withdrawn earlier suggests the risk to U.S. yields and the dollar remains to the upside," said Chris Turner, head of FX strategy at ING.
EURO UPSIDE HEAVY
The euro rose 0.4 percent to $1.3726 EUR=. It touched session highs against the dollar and yen after data showed German ZEW institute's economic sentiment index came in higher than expected.
Concerns about an immediate meltdown over Greece's massive debt have eased as euro zone finance ministers on Monday agreed on a plan to help Greece if needed. [ID:nLDE62D08S]
But with little known about the plan's details, underlying sentiment toward the euro remained cautious.
Against the yen, the dollar JPY= was little changed at 90.48 yen, while the euro gained 0.4 percent to 124.25 yen EURJPY=R.
The yen has come under pressure on speculation the Bank of Japan is leaning towards monetary easing steps this week, but that was partly offset as Japanese firms repatriated funds ahead of the financial year-end on March 31.
Tensions over China's currency practices brewed after a letter by 130 U.S. lawmakers on Monday called on the Obama administration to get tough with Beijing, a day after Chinese Premier Wen Jiabao brushed off accusations of currency manipulation
The dollar fell against the euro and a basket of currencies on Tuesday on expectations the Federal Reserve would repeat a pledge to keep interest rates very low for a long time, encouraging investors to buy riskier assets at the expense of the greenback.
The policy-setting Federal Open Market Committee, which will announce its decision at about 2:15 pm (1815 GMT), is widely expected to hold benchmark U.S. rates near zero and repeat that conditions warrant keeping them "exceptionally low" for an "extended period."
Investors will focus on the Fed's assessment of the economic outlook and on whether there are more dissenters wanting to drop the "extended period" reference after recent economic data showed U.S. consumers are buying more and firms seem ready to hire again.
"The anticipation for the Fed is that they're going to give a slightly more upbeat outlook for the U.S. economy, but at the same time they're going to keep the language intact and not signal any rate increase any time soon," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. "That combination is going to be risk positive."
Near zero U.S. rates have pressured the dollar over the past months as investors borrowed in the greenback and used the proceeds to buy higher-yielding, riskier currencies such as the Australian dollar.
In early trading, the dollar index .DXY, a gauge of its performance against six major currencies, was down 0.4 percent at 79.969, with near term resistance seen around 80.85, its March 10 high.
Another focus was whether the Fed would begin laying the groundwork for a shift in the "extended period" language. The vast majority of primary dealers see a change as early as April.
Still, most do not see an interest rate increase until the second half of this year
"The market looks about right in pricing November as the start of the Fed tightening cycle, but the prospect that excess liquidity is withdrawn earlier suggests the risk to U.S. yields and the dollar remains to the upside," said Chris Turner, head of FX strategy at ING.
EURO UPSIDE HEAVY
The euro rose 0.4 percent to $1.3726 EUR=. It touched session highs against the dollar and yen after data showed German ZEW institute's economic sentiment index came in higher than expected.
Concerns about an immediate meltdown over Greece's massive debt have eased as euro zone finance ministers on Monday agreed on a plan to help Greece if needed. [ID:nLDE62D08S]
But with little known about the plan's details, underlying sentiment toward the euro remained cautious.
Against the yen, the dollar JPY= was little changed at 90.48 yen, while the euro gained 0.4 percent to 124.25 yen EURJPY=R.
The yen has come under pressure on speculation the Bank of Japan is leaning towards monetary easing steps this week, but that was partly offset as Japanese firms repatriated funds ahead of the financial year-end on March 31.
Tensions over China's currency practices brewed after a letter by 130 U.S. lawmakers on Monday called on the Obama administration to get tough with Beijing, a day after Chinese Premier Wen Jiabao brushed off accusations of currency manipulation
Thursday, March 11, 2010
US Stock Futures Lower On China Inflation Worries
U.S. stock futures slipped Thursday on worries that China, the engine of the world economy, may have to slam the brakes to combat accelerating prices.
S&P 500 futures fell 2.2 points to 1143.50 and Nasdaq 100 futures lost 2.5 points to 1916.20. Futures on the Dow Jones Industrial Average sank 14 points.
U.S. stocks edged higher Wednesday, with government-backed financials American International Group Inc. (AIG) and Citigroup Inc. (C) extending gains, and technology companies also performing well. The blue chip Dow Jones Industrial Average rose fractionally but the S&P 500 gained 0.5% and the Nasdaq Composite rose 0.8%.
Driven by a jump in food prices, Chinese CPI climbed 2.7% in February. Lending by Chinese banks rose 700.1 billion yuan ($102.5 billion) in February, while money supply as measured by M2 was up 25.5%.
"Today's monetary and inflation data out of China do not make for comfortable reading," said Diana Choyleva, of Lombard Street Research.
"Given the force of the monetary expansion, it is highly likely that the People's Bank of China will have to tighten too much because it left it too late."
The Shanghai Composite finished the session up 0.1%, and most Europe indexes saw modest losses.
In the U.S., the data calendar features weekly jobless claims and January trade data.
The British pound recaptured the $1.50 level, and in energy, crude-oil futures traded over $82 a barrel.
Devon Energy Corp. (DVN) rose nearly 3% in the premarket after agreeing to sell Brazil, Gulf of Mexico and Azerbaijan assets to BP PLC (BP) for $7 billion and buying half of a BP oil sands project in Canada for $500 million. BP drifted lower in London trade.
Meanwhile, Exxon Mobil Corp. (XOM) will be holding its annual meeting. Exxon may outline its capital spending and stock buyback plan, analysts say.
Outside of the oil space, the International Air Transport Association halved its loss forecast for the global airlines industry in 2010 to $2.8 billion, from a December prediction of $5.6 billion, citing a much stronger-than-expected recovery in demand since the start of the year, particularly in Asia Pacific and Latin America.
-By Steve Goldstein;44 2078 429 424; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Thursday's session are Men's Wearhouse Inc. (MW), Hot Topic Inc. (HOTT) and Clean Energy Fuels Corp. (CLNE).
Men's Wearhouse swung to a fiscal fourth-quarter loss on a write-down and lower sales and margins. The suit and apparel retailer has struggled alongside other clothiers throughout the recession, forced to cut prices--and margins--to keep traffic. However, same-store sales declines have started to slow. Shares fell 5.8% to $23.40 in late trading.
Hot Topic's fiscal fourth-quarter profit slid 44% on continued sales weakness and falling margins. The teen retailer also projected a first-quarter loss of 2 cents to 5 cents, including 2 cents a share in expenses related to the company's online music site, and based on a high single-digit decline in same-store sales. Analysts expected a 2-cent loss. Shares dropped 4.9% to $6.23 after hours.
Clean Energy's fourth-quarter loss narrowed sharply as demand for alternative fuels helped the company buck weak economic trends. Shares were up 3% to $19.89 in after-hours trading as results topped analysts' expectations.
Investors' enthusiastic reception for Citigroup Inc.'s (C) sale of $2 billion of trust preferred securities Wednesday takes the once-tottering bank another step closer to repairing its balance sheet and repaying taxpayers. But it has many more steps ahead. Shares rose 1.8% to $3.96 premarket.
U.K. oil major BP PLC (BP) Thursday said it bought into a diverse and broad deepwater exploration portfolio offshore Brazil, Azerbaijan and the U.S in a $7 billion deal with U.S. independent oil and gas producer Devon Energy Corp. (DVN). Devon's shares rose 3.2% to $73.99 premarket.
Gymboree Corp.'s (GYMB) fiscal fourth-quarter profit grew 13% as the children's apparel maker posted higher sales and margins. Shares gained 5.6% to $48.90 in after-hours trading as the earnings topped the company's February projection.
Clarient Inc.'s (CLRT) fourth-quarter loss widened as revenue growth was offset by higher expenses for the developer of cancer diagnostics. Saying it began 2010 with solid commercial and operating momentum, the company said it expects to report annual revenue of $108 million to $115 million and a bottom line in the black, in line with the $113 million and six cents a share Wall Street is projecting. Shares fell 7.2% to $2.31 in late trading.
Semtech Corp.'s (SMTC) fiscal fourth-quarter profit climbed 51% on double-digit sales growth and higher margins. Shares gained 5.1% to $18.24 in after-hours trading as the semiconductor maker's revenue topped its forecast and it projected first-quarter results far above Wall Street's expectations.
FuelCell Energy Inc.'s (FCEL) loss narrowed for the fourth quarter in a row on sales of higher-margin products and cost-cutting. Shares climbed 3.4% to $3.05 as fiscal first-quarter earnings for the maker of fuel cells as power sources met Wall Street's expectations, though its revenue fell far short of analysts' estimate.
Cinemark Holdings Inc. (CNK) said it plans to convert 700 to 900 screens to 3-D technology by the end of this year, then begin making all its theaters worldwide digital. Shares fell 3.6% to $17.50 in after-hours trading.
Hill International Inc.'s (HIL) fourth-quarter earnings more than doubled as reimbursable-expenses-growth revenue overcame a decline in consulting fees. Shares grew 2.8% to $6.28 in after-hours trading as the company's revenue growth easily topped Wall Street's expectations.
Jo-Ann Stores Inc.'s (JAS) fiscal fourth-quarter profit jumped 82%, again on improved sales in the company's sewing and craft businesses and higher margins. For the new year, the fabric and craft retailer projected earnings of $2.75 to $2.90 a share, compared with Wall Street's view of $2.85. Postmarket, shares dropped 1.3% to $39.50.
Providence Service Corp. (PRSC) swung to a fourth-quarter profit as the social-services provider and manager continued to benefit from increased Medicaid enrollments and shed a big charge that hurt the previous period's results. Shares slid 2.6% to $14.22 after hours.
U.S. stock futures slipped Thursday on worries that China, the engine of the world economy, may have to slam the brakes to combat accelerating prices.
S&P 500 futures fell 2.2 points to 1143.50 and Nasdaq 100 futures lost 2.5 points to 1916.20. Futures on the Dow Jones Industrial Average sank 14 points.
U.S. stocks edged higher Wednesday, with government-backed financials American International Group Inc. (AIG) and Citigroup Inc. (C) extending gains, and technology companies also performing well. The blue chip Dow Jones Industrial Average rose fractionally but the S&P 500 gained 0.5% and the Nasdaq Composite rose 0.8%.
Driven by a jump in food prices, Chinese CPI climbed 2.7% in February. Lending by Chinese banks rose 700.1 billion yuan ($102.5 billion) in February, while money supply as measured by M2 was up 25.5%.
"Today's monetary and inflation data out of China do not make for comfortable reading," said Diana Choyleva, of Lombard Street Research.
"Given the force of the monetary expansion, it is highly likely that the People's Bank of China will have to tighten too much because it left it too late."
The Shanghai Composite finished the session up 0.1%, and most Europe indexes saw modest losses.
In the U.S., the data calendar features weekly jobless claims and January trade data.
The British pound recaptured the $1.50 level, and in energy, crude-oil futures traded over $82 a barrel.
Devon Energy Corp. (DVN) rose nearly 3% in the premarket after agreeing to sell Brazil, Gulf of Mexico and Azerbaijan assets to BP PLC (BP) for $7 billion and buying half of a BP oil sands project in Canada for $500 million. BP drifted lower in London trade.
Meanwhile, Exxon Mobil Corp. (XOM) will be holding its annual meeting. Exxon may outline its capital spending and stock buyback plan, analysts say.
Outside of the oil space, the International Air Transport Association halved its loss forecast for the global airlines industry in 2010 to $2.8 billion, from a December prediction of $5.6 billion, citing a much stronger-than-expected recovery in demand since the start of the year, particularly in Asia Pacific and Latin America.
-By Steve Goldstein;44 2078 429 424; AskNewswires@dowjones.com
Among the companies whose shares are expected to actively trade in Thursday's session are Men's Wearhouse Inc. (MW), Hot Topic Inc. (HOTT) and Clean Energy Fuels Corp. (CLNE).
Men's Wearhouse swung to a fiscal fourth-quarter loss on a write-down and lower sales and margins. The suit and apparel retailer has struggled alongside other clothiers throughout the recession, forced to cut prices--and margins--to keep traffic. However, same-store sales declines have started to slow. Shares fell 5.8% to $23.40 in late trading.
Hot Topic's fiscal fourth-quarter profit slid 44% on continued sales weakness and falling margins. The teen retailer also projected a first-quarter loss of 2 cents to 5 cents, including 2 cents a share in expenses related to the company's online music site, and based on a high single-digit decline in same-store sales. Analysts expected a 2-cent loss. Shares dropped 4.9% to $6.23 after hours.
Clean Energy's fourth-quarter loss narrowed sharply as demand for alternative fuels helped the company buck weak economic trends. Shares were up 3% to $19.89 in after-hours trading as results topped analysts' expectations.
Investors' enthusiastic reception for Citigroup Inc.'s (C) sale of $2 billion of trust preferred securities Wednesday takes the once-tottering bank another step closer to repairing its balance sheet and repaying taxpayers. But it has many more steps ahead. Shares rose 1.8% to $3.96 premarket.
U.K. oil major BP PLC (BP) Thursday said it bought into a diverse and broad deepwater exploration portfolio offshore Brazil, Azerbaijan and the U.S in a $7 billion deal with U.S. independent oil and gas producer Devon Energy Corp. (DVN). Devon's shares rose 3.2% to $73.99 premarket.
Gymboree Corp.'s (GYMB) fiscal fourth-quarter profit grew 13% as the children's apparel maker posted higher sales and margins. Shares gained 5.6% to $48.90 in after-hours trading as the earnings topped the company's February projection.
Clarient Inc.'s (CLRT) fourth-quarter loss widened as revenue growth was offset by higher expenses for the developer of cancer diagnostics. Saying it began 2010 with solid commercial and operating momentum, the company said it expects to report annual revenue of $108 million to $115 million and a bottom line in the black, in line with the $113 million and six cents a share Wall Street is projecting. Shares fell 7.2% to $2.31 in late trading.
Semtech Corp.'s (SMTC) fiscal fourth-quarter profit climbed 51% on double-digit sales growth and higher margins. Shares gained 5.1% to $18.24 in after-hours trading as the semiconductor maker's revenue topped its forecast and it projected first-quarter results far above Wall Street's expectations.
FuelCell Energy Inc.'s (FCEL) loss narrowed for the fourth quarter in a row on sales of higher-margin products and cost-cutting. Shares climbed 3.4% to $3.05 as fiscal first-quarter earnings for the maker of fuel cells as power sources met Wall Street's expectations, though its revenue fell far short of analysts' estimate.
Cinemark Holdings Inc. (CNK) said it plans to convert 700 to 900 screens to 3-D technology by the end of this year, then begin making all its theaters worldwide digital. Shares fell 3.6% to $17.50 in after-hours trading.
Hill International Inc.'s (HIL) fourth-quarter earnings more than doubled as reimbursable-expenses-growth revenue overcame a decline in consulting fees. Shares grew 2.8% to $6.28 in after-hours trading as the company's revenue growth easily topped Wall Street's expectations.
Jo-Ann Stores Inc.'s (JAS) fiscal fourth-quarter profit jumped 82%, again on improved sales in the company's sewing and craft businesses and higher margins. For the new year, the fabric and craft retailer projected earnings of $2.75 to $2.90 a share, compared with Wall Street's view of $2.85. Postmarket, shares dropped 1.3% to $39.50.
Providence Service Corp. (PRSC) swung to a fourth-quarter profit as the social-services provider and manager continued to benefit from increased Medicaid enrollments and shed a big charge that hurt the previous period's results. Shares slid 2.6% to $14.22 after hours.
Wednesday, March 10, 2010
FOREX-Yen up after strong China data
The yen rose on Thursday after data showed China's economy grew at a brisk pace while inflation picked up, adding to expectations that the country will take more monetary tightening steps and let the yuan rise.
The yen climbed as traders cut their long positions in other higher-yielding currencies after the data showed Chinese consumer inflation rose more than expected in the year to February, helping the Japanese currency to cut some of the losses it suffered the previous day. [ID:nTOE62806N]
The Australian dollar extended its fall against the greenback and the yen after the strong China data, following initial drops on numbers showing a smaller-than-expected rise in Australian employment.
"Cross/yen pairs fell after strong Chinese data suggested a greater chance that China will take monetary tightening steps. But no panic was felt in the market," said a senior prop trader for a Japanese bank.
Traders also said the Aussie's downward stretch could be brief with market players still expecting the Australian central bank to raise interest rates in coming months.
Australian employment barely rose in February as hiring took a breather after a very strong run, though the jobless rate remained low at 5.3 percent and full-time employment showed healthy growth. [ID:nSGE62904B]
"The Australian economy is basically strong and the central bank is leaning towards raising rates. So the data seems to have been taken as a factor for profit-taking in the Aussie, but the market remains in favour of the currency," said Hideki Hayashi, a global economist at Mizuho Securities.
The dollar JPY= fell 0.3 percent to 90.25 yen, having climbed as far as 90.83 on trading platform EBS on Wednesday, its highest in two weeks.
But gains in the yen were expected to be limited after sources told Reuters that the Bank of Japan may ease monetary policy as early as next week as it remains under government pressure to help pull the country out of grinding deflation. [ID:nTOE6290C0]
The euro edged down 0.1 percent to $1.3636 EUR= after rising 0.4 percent on Wednesday, dragged down by its fall against the yen. It dropped 0.4 percent to 123.07 yen EURJPY=R.
Sterling dipped 0.1 percent to $1.4955 GBP=D4 after an unexpected drop in British industrial production data for January released the previous day.
The Australian dollar fell as far as $0.9113 AUD=D4 before standing at $0.9120, down 0.3 percent on the day. The Aussie is off a seven-week high of $0.9193 hit on Wednesday, its highest since Jan. 20, according to Reuters data.
The Aussie slipped 0.6 percent to 82.25 yen AUDJPY=R.
The New Zealand dollar declined after the central bank said there was no urgency to lift rates off their current record lows, dashing expectations of an early start to rate rises or an aggressive tightening cycle. The Reserve Bank of New Zealand (RBNZ) kept interest rates steady at a record low and reaffirmed plans to hold them there until around the middle of the year.
The yen rose on Thursday after data showed China's economy grew at a brisk pace while inflation picked up, adding to expectations that the country will take more monetary tightening steps and let the yuan rise.
The yen climbed as traders cut their long positions in other higher-yielding currencies after the data showed Chinese consumer inflation rose more than expected in the year to February, helping the Japanese currency to cut some of the losses it suffered the previous day. [ID:nTOE62806N]
The Australian dollar extended its fall against the greenback and the yen after the strong China data, following initial drops on numbers showing a smaller-than-expected rise in Australian employment.
"Cross/yen pairs fell after strong Chinese data suggested a greater chance that China will take monetary tightening steps. But no panic was felt in the market," said a senior prop trader for a Japanese bank.
Traders also said the Aussie's downward stretch could be brief with market players still expecting the Australian central bank to raise interest rates in coming months.
Australian employment barely rose in February as hiring took a breather after a very strong run, though the jobless rate remained low at 5.3 percent and full-time employment showed healthy growth. [ID:nSGE62904B]
"The Australian economy is basically strong and the central bank is leaning towards raising rates. So the data seems to have been taken as a factor for profit-taking in the Aussie, but the market remains in favour of the currency," said Hideki Hayashi, a global economist at Mizuho Securities.
The dollar JPY= fell 0.3 percent to 90.25 yen, having climbed as far as 90.83 on trading platform EBS on Wednesday, its highest in two weeks.
But gains in the yen were expected to be limited after sources told Reuters that the Bank of Japan may ease monetary policy as early as next week as it remains under government pressure to help pull the country out of grinding deflation. [ID:nTOE6290C0]
The euro edged down 0.1 percent to $1.3636 EUR= after rising 0.4 percent on Wednesday, dragged down by its fall against the yen. It dropped 0.4 percent to 123.07 yen EURJPY=R.
Sterling dipped 0.1 percent to $1.4955 GBP=D4 after an unexpected drop in British industrial production data for January released the previous day.
The Australian dollar fell as far as $0.9113 AUD=D4 before standing at $0.9120, down 0.3 percent on the day. The Aussie is off a seven-week high of $0.9193 hit on Wednesday, its highest since Jan. 20, according to Reuters data.
The Aussie slipped 0.6 percent to 82.25 yen AUDJPY=R.
The New Zealand dollar declined after the central bank said there was no urgency to lift rates off their current record lows, dashing expectations of an early start to rate rises or an aggressive tightening cycle. The Reserve Bank of New Zealand (RBNZ) kept interest rates steady at a record low and reaffirmed plans to hold them there until around the middle of the year.
Tuesday, March 9, 2010
US Stock Futures Down On Anniversary Of Rebound
U.S. equity futures edged lower on Tuesday, as caution dominated sentiment on the one-year anniversary of the beginning of the stock market's rebound from its lows last year.
S&P 500 futures fell 3.2 points to 1133.90 and Nasdaq 100 futures dropped 4.75 points to 1883.50. Futures on the Dow Jones Industrial Average declined 19 points to 10,519.
Stocks finished mixed on Monday, with the Dow Jones Industrial Average dropping 0.1%. The Nasdaq Composite gained 0.3%, while the S&P 500 index edged down 0.02%.
Through March 4, the S&P 500 was up 66% from its March 9, 2009 low.
"It may be the first anniversary of the global equity-market rebound from the lows of March 2009, but with volumes slowing and Wall Street finishing rather mixed, the temptation may well be to leave the champagne on ice for a little longer yet as this latest rally runs out of steam," said Ben Potter, research analyst at IG Markets, in a note to clients.
No economic data are due for release on Tuesday. Chicago Fed President Charles Evans will speak on the economic outlook at 9:30 a.m., EST.
In Washington, Greece's Prime Minister George Papandreou is scheduled to meet with U.S. President Barack Obama. Pressure on debt-laden Greece has eased after the nation approved additional austerity measures and successfully sold a new 10-year bond last week.
Speaking at the Brookings Institution on Monday, Papandreou reiterated that Greece hasn't requested a bailout, but he wants European support to ensure that his nation can borrow in the global markets.
On the corporate front, Cisco Systems Inc. (CSCO) is due to make a major announcement on Tuesday morning that it says "will forever change the Internet." Analysts believe it is a new networking technology for wireless carriers.
Shares of Marsh & McLennan Cos. (MMC) could be in focus on a report that the company has put its corporate investigations unit Kroll up for sale, with a price tag of around $1.3 billion, the Financial Times reported.
General Growth Properties Inc. (GGP) said it received a proposal from Fairholme Capital Management, one of its largest unsecured creditors, and Pershing Square Capital Management, one of GGP's largest equity holders and a significant unsecured creditor to help it emerge from bankruptcy.
Several companies, including Kroger Co. (KR), J. Crew Group Inc. (JCG) and Collective Brands Inc. (PSS), will release quarterly results.
Texas Instruments Inc. (TXN) on late Monday narrowed its sales and earnings outlook for the first quarter.
TiVo Inc. (TIVO), meanwhile, reported a wider fourth-quarter loss due to greater costs.
European equity markets and commodity futures were also weaker on Tuesday.
The Stoxx Europe 600 index fell 0.1% in intraday trading. Shares of European Aeronautic Defence & Space Co. (EAD.FR, EADSY), or EADS, dropped more than 5% in Paris after the aerospace and defense firm swung to a fourth-quarter loss of EUR1.06 billion, compared with net income of EUR812 million in the same period a year ago.
In the commodity markets, April oil futures dropped $1.25 to $80.62 a barrel in electronic trading on Globex. The American Petroleum Institute will release its weekly inventory data at 4:30 p.m., EST. Analysts polled by Platts expect an increase of 2.1 million barrels in U.S. crude oil stocks.
Gold futures also dropped, with the April contract down $6 to $1,118 an ounce.
The U.S. dollar rose against most other major currencies, weighing on dollar-denominated commodities such as gold and oil.
The dollar index, which tracks the greenback against a trade-weighted basket of currencies, gained 0.2% to 80.667.
U.S. equity futures edged lower on Tuesday, as caution dominated sentiment on the one-year anniversary of the beginning of the stock market's rebound from its lows last year.
S&P 500 futures fell 3.2 points to 1133.90 and Nasdaq 100 futures dropped 4.75 points to 1883.50. Futures on the Dow Jones Industrial Average declined 19 points to 10,519.
Stocks finished mixed on Monday, with the Dow Jones Industrial Average dropping 0.1%. The Nasdaq Composite gained 0.3%, while the S&P 500 index edged down 0.02%.
Through March 4, the S&P 500 was up 66% from its March 9, 2009 low.
"It may be the first anniversary of the global equity-market rebound from the lows of March 2009, but with volumes slowing and Wall Street finishing rather mixed, the temptation may well be to leave the champagne on ice for a little longer yet as this latest rally runs out of steam," said Ben Potter, research analyst at IG Markets, in a note to clients.
No economic data are due for release on Tuesday. Chicago Fed President Charles Evans will speak on the economic outlook at 9:30 a.m., EST.
In Washington, Greece's Prime Minister George Papandreou is scheduled to meet with U.S. President Barack Obama. Pressure on debt-laden Greece has eased after the nation approved additional austerity measures and successfully sold a new 10-year bond last week.
Speaking at the Brookings Institution on Monday, Papandreou reiterated that Greece hasn't requested a bailout, but he wants European support to ensure that his nation can borrow in the global markets.
On the corporate front, Cisco Systems Inc. (CSCO) is due to make a major announcement on Tuesday morning that it says "will forever change the Internet." Analysts believe it is a new networking technology for wireless carriers.
Shares of Marsh & McLennan Cos. (MMC) could be in focus on a report that the company has put its corporate investigations unit Kroll up for sale, with a price tag of around $1.3 billion, the Financial Times reported.
General Growth Properties Inc. (GGP) said it received a proposal from Fairholme Capital Management, one of its largest unsecured creditors, and Pershing Square Capital Management, one of GGP's largest equity holders and a significant unsecured creditor to help it emerge from bankruptcy.
Several companies, including Kroger Co. (KR), J. Crew Group Inc. (JCG) and Collective Brands Inc. (PSS), will release quarterly results.
Texas Instruments Inc. (TXN) on late Monday narrowed its sales and earnings outlook for the first quarter.
TiVo Inc. (TIVO), meanwhile, reported a wider fourth-quarter loss due to greater costs.
European equity markets and commodity futures were also weaker on Tuesday.
The Stoxx Europe 600 index fell 0.1% in intraday trading. Shares of European Aeronautic Defence & Space Co. (EAD.FR, EADSY), or EADS, dropped more than 5% in Paris after the aerospace and defense firm swung to a fourth-quarter loss of EUR1.06 billion, compared with net income of EUR812 million in the same period a year ago.
In the commodity markets, April oil futures dropped $1.25 to $80.62 a barrel in electronic trading on Globex. The American Petroleum Institute will release its weekly inventory data at 4:30 p.m., EST. Analysts polled by Platts expect an increase of 2.1 million barrels in U.S. crude oil stocks.
Gold futures also dropped, with the April contract down $6 to $1,118 an ounce.
The U.S. dollar rose against most other major currencies, weighing on dollar-denominated commodities such as gold and oil.
The dollar index, which tracks the greenback against a trade-weighted basket of currencies, gained 0.2% to 80.667.
Monday, March 8, 2010
Dollar Reverses Decline As Demand For Risk Wilts
The dollar reversed its overnight decline Monday, with the euro and the U.K. pound slipping into negative territory versus the greenback as demand for stocks and other riskier assets wilted.
The euro's advance against the pound drove sterling lower in late morning trading, said Steve Butler, director of foreign exchange at Scotia Capital in Toronto. The pound is vulnerable because of continuing concerns about Britain's fiscal situation, Butler said.
The euro continued to hover just above the CHF1.4620 area agains the Swiss franc, near the levels suspected of prompting intervention by the Swiss National Bank to weaken the franc in the past.
Monday morning, the euro was at $1.3615 from $1.3620 late Friday and down sharply from a high at $1.3705 in overnight trading. The euro was also at Y122.95 from Y123.04 late Friday. The dollar was at Y90.26 from Y90.33. The dollar was at CHF1.0742 from CHF1.0742. The pound was at $1.5055 from $1.5152.
The ICE U.S. Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.468 from 80.571.
Demand for risk whetted by the strong U.S. jobs report Friday, favorable developments in Greece and positive data from Japan had lifted the euro and other risk sensitive currencies earlier Monday.
"We walked in this morning and the world was a very, very safe place," said Scotia's Butler.
But investors' enthusiasm for risk was undermined by news the New York Federal Reserve will expand the set of counterparties that it can use to help it drain cash from the financial system when the time is right, Butler said.
Such measures, though necessary, will likely continue to unnerve the market by reminding traders the U.S. central bank is moving towards normalizing monetary conditions, he said.
A reminder of the strength of the U.S. economy came with the payrolls data for February on Friday, which showed the number of jobs falling by only 36,000 last month instead of by the 75,000 expected. The employment report has tended to favor risk- and growth-sensitive assets, although currencies haven't been shaken from recent ranges.
Over the weekend, French President Nicholas Sarkozy helped provide the reassurance the market had been seeking that other euro-zone countries will come to Greece's aid.
After talks in Paris Sunday with Greek Prime Minister George Papandreou, the French president said major euro-zone members will do what is needed to ensure that Greece isn't isolated and that precise measures for helping the country are being discussed.
Other reports indicated key euro-zone countries are considering the creation of a European equivalent to the International Monetary Fund.
A German Finance Ministry spokesman said Monday the proposal by German Finance Minister Wolfgang Schaeuble to set up a European Monetary Fund in light of Greece's financial problems isn't a short-term measure but should be seen as a topic for general discussion.
The EMF proposal isn't designed to solve the Greek issue in the short term but is more of an overall concept, the spokesman said.
German Chancellor Merkel said the European monetary fund idea was "good and interesting" late Monday morning, and said Greec is not facing an emergency situation now.
Currency strategists at ING in London said the Greek issue may take a backseat for a few weeks, noting that the EcoFin group of European finance ministers will likely approve Greece's austerity plan on March 16.
ING said it suspects international investors will be reluctant to chase the common currency too high against the dollar.
Any recovery for the euro may also prove to be limited given that the euro-zone recovery could lag well behind that of the U.S. and ensure that the euro remains unattractive on a yield basis.
Japan also provided good news, reporting that its current-account surplus for January was sharply higher at Y899.8 billion as exports continued to rise. The market had been looking for the surplus to come in lower, at Y783.9 billion.
Elsewhere, China stirred speculation of an early yuan appreciation with its latest suggestion that the currency peg could be adjusted.
People's Bank of China Governor Zhou Xiaochuan said: "This is a part of our package of policies for dealing with the global financial crisis. Sooner or later, we will exit the policies."
A higher yuan could be helpful for the Japanese economy by making Chinese exports less competitive.
However, the implied tightening in Chinese monetary policy and the likely decline in Chinese demand means that commodity currencies, which have been benefiting from China's strong growth, could suffer.
The dollar reversed its overnight decline Monday, with the euro and the U.K. pound slipping into negative territory versus the greenback as demand for stocks and other riskier assets wilted.
The euro's advance against the pound drove sterling lower in late morning trading, said Steve Butler, director of foreign exchange at Scotia Capital in Toronto. The pound is vulnerable because of continuing concerns about Britain's fiscal situation, Butler said.
The euro continued to hover just above the CHF1.4620 area agains the Swiss franc, near the levels suspected of prompting intervention by the Swiss National Bank to weaken the franc in the past.
Monday morning, the euro was at $1.3615 from $1.3620 late Friday and down sharply from a high at $1.3705 in overnight trading. The euro was also at Y122.95 from Y123.04 late Friday. The dollar was at Y90.26 from Y90.33. The dollar was at CHF1.0742 from CHF1.0742. The pound was at $1.5055 from $1.5152.
The ICE U.S. Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.468 from 80.571.
Demand for risk whetted by the strong U.S. jobs report Friday, favorable developments in Greece and positive data from Japan had lifted the euro and other risk sensitive currencies earlier Monday.
"We walked in this morning and the world was a very, very safe place," said Scotia's Butler.
But investors' enthusiasm for risk was undermined by news the New York Federal Reserve will expand the set of counterparties that it can use to help it drain cash from the financial system when the time is right, Butler said.
Such measures, though necessary, will likely continue to unnerve the market by reminding traders the U.S. central bank is moving towards normalizing monetary conditions, he said.
A reminder of the strength of the U.S. economy came with the payrolls data for February on Friday, which showed the number of jobs falling by only 36,000 last month instead of by the 75,000 expected. The employment report has tended to favor risk- and growth-sensitive assets, although currencies haven't been shaken from recent ranges.
Over the weekend, French President Nicholas Sarkozy helped provide the reassurance the market had been seeking that other euro-zone countries will come to Greece's aid.
After talks in Paris Sunday with Greek Prime Minister George Papandreou, the French president said major euro-zone members will do what is needed to ensure that Greece isn't isolated and that precise measures for helping the country are being discussed.
Other reports indicated key euro-zone countries are considering the creation of a European equivalent to the International Monetary Fund.
A German Finance Ministry spokesman said Monday the proposal by German Finance Minister Wolfgang Schaeuble to set up a European Monetary Fund in light of Greece's financial problems isn't a short-term measure but should be seen as a topic for general discussion.
The EMF proposal isn't designed to solve the Greek issue in the short term but is more of an overall concept, the spokesman said.
German Chancellor Merkel said the European monetary fund idea was "good and interesting" late Monday morning, and said Greec is not facing an emergency situation now.
Currency strategists at ING in London said the Greek issue may take a backseat for a few weeks, noting that the EcoFin group of European finance ministers will likely approve Greece's austerity plan on March 16.
ING said it suspects international investors will be reluctant to chase the common currency too high against the dollar.
Any recovery for the euro may also prove to be limited given that the euro-zone recovery could lag well behind that of the U.S. and ensure that the euro remains unattractive on a yield basis.
Japan also provided good news, reporting that its current-account surplus for January was sharply higher at Y899.8 billion as exports continued to rise. The market had been looking for the surplus to come in lower, at Y783.9 billion.
Elsewhere, China stirred speculation of an early yuan appreciation with its latest suggestion that the currency peg could be adjusted.
People's Bank of China Governor Zhou Xiaochuan said: "This is a part of our package of policies for dealing with the global financial crisis. Sooner or later, we will exit the policies."
A higher yuan could be helpful for the Japanese economy by making Chinese exports less competitive.
However, the implied tightening in Chinese monetary policy and the likely decline in Chinese demand means that commodity currencies, which have been benefiting from China's strong growth, could suffer.
Sunday, March 7, 2010
Stock indexes up 1% on hopes for recovery
Signs of slowing job losses in the U.S. sparked the best one-day gain in stocks in more than two weeks yesterday as investors bet more aggressively on economic recovery.
The Dow Jones industrial average ended 122.06 points higher, up 1.2 percent, at 10,566.20, its best one-day increase in both point and percentage terms since Feb.16.
The Standard & Poor's 500 stock index gained 1.4percent. Its financial sector rose 2 percent, getting a boost after an afternoon report showed that borrowing by consumers unexpectedly climbed in January.
The Nasdaq composite index finished up 1.5percent, helped by a 3.9percent gain in Apple after the electronics maker said its iPad tablet will be available in the U.S. on April 3.
The Labor Department said nonfarm payrolls fell by 36,000 in February. The unemployment rate held steady at 9.7percent.
Signs of slowing job losses in the U.S. sparked the best one-day gain in stocks in more than two weeks yesterday as investors bet more aggressively on economic recovery.
The Dow Jones industrial average ended 122.06 points higher, up 1.2 percent, at 10,566.20, its best one-day increase in both point and percentage terms since Feb.16.
The Standard & Poor's 500 stock index gained 1.4percent. Its financial sector rose 2 percent, getting a boost after an afternoon report showed that borrowing by consumers unexpectedly climbed in January.
The Nasdaq composite index finished up 1.5percent, helped by a 3.9percent gain in Apple after the electronics maker said its iPad tablet will be available in the U.S. on April 3.
The Labor Department said nonfarm payrolls fell by 36,000 in February. The unemployment rate held steady at 9.7percent.
Saturday, March 6, 2010
FOREX-Dollar rises vs yen
The dollar soared against the yen on Friday after a government report showed U.S. employers cut fewer jobs than expected last month, boosting hopes a U.S. economic recovery was still on track.
The renewed optimism also encouraged investors to buy stocks and higher-yielding currencies, such as the Australian and New Zealand dollars.
Meanwhile, the euro rose as concerns about Greece's debt crisis ebbed after Thursday's successful debt auction.
The U.S. Labor Department said the economy lost 36,000 jobs in February, leaving the unemployment rate unchanged at 9.7 percent. Analysts polled by Reuters expected 50,000 job cuts and a 9.8 percent jobless rate. For more, see [ID:nN04252324]
"The fact that the U.S. labor market is in better shape than we were thinking supports the U.S. recovery story and it encourages market participants to put on risky trades," said BNY Mellon currency strategist Michael Woolfolk.
The dollar peaked at 90.58 yen JPY=, the strongest level in more than a week, according to Reuters data. It was last at 90.35 yen, up 1.4 percent its biggest daily gain since Feb. 17. The dollar is up 1.7 percent against the yen this week.
The euro rose 1.7 percent to 123.06 yen EURJPY= and the New Zealand dollar added 2.9 percent to 62.93 yen NZDJPY=R, at current prices its best one-day performance since May.
Low interest rates mean the yen tends to fall when risk appetite rises and as investors borrow the yen to finance more lucrative trades in other currencies and assets.
Adding to pressure on the currency was a report the Bank of Japan was likely to debate whether to ease its ultra-loose monetary policy again as it tries to pull Japan out of deflation. [ID:nTOE6230A7]
In contrast, U.S. short-term interest rate futures showed rising expectations of a Federal Reserve interest rate hike this year. [ID:nN05202417]
"The U.S. economy looks like it's in pretty good shape, but on the other hand, Japan's economy is still struggling and now there's talk that more easing could be coming from the BoJ, so the yen is weakening," said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York.
EURO HOLDS FIRM
Against the greenback, the euro rose 0.3 percent to $1.3620, according to Reuters data, reversing earlier losses as risk appetite increased. EUR=
The euro also got a respite as concerns about debt problems in Greece eased after a 10-year Greek bond sale on Thursday attracted strong demand. The spread between yields on Greek government bonds and benchmark German bunds narrowed.
However, German Chancellor Angela Merkel did not spell out any specific aid mechanisms for Greece during talks on Friday with her Greek counterpart. [ID:nDEK000020]
"I think the Greek situation and sovereign debt in general is going to continue to pop its head up every now and then," said Ronald Simpson, director of currency research at Action Economics in Tampa, Florida. "For now it appears it has subsided."
The dollar soared against the yen on Friday after a government report showed U.S. employers cut fewer jobs than expected last month, boosting hopes a U.S. economic recovery was still on track.
The renewed optimism also encouraged investors to buy stocks and higher-yielding currencies, such as the Australian and New Zealand dollars.
Meanwhile, the euro rose as concerns about Greece's debt crisis ebbed after Thursday's successful debt auction.
The U.S. Labor Department said the economy lost 36,000 jobs in February, leaving the unemployment rate unchanged at 9.7 percent. Analysts polled by Reuters expected 50,000 job cuts and a 9.8 percent jobless rate. For more, see [ID:nN04252324]
"The fact that the U.S. labor market is in better shape than we were thinking supports the U.S. recovery story and it encourages market participants to put on risky trades," said BNY Mellon currency strategist Michael Woolfolk.
The dollar peaked at 90.58 yen JPY=, the strongest level in more than a week, according to Reuters data. It was last at 90.35 yen, up 1.4 percent its biggest daily gain since Feb. 17. The dollar is up 1.7 percent against the yen this week.
The euro rose 1.7 percent to 123.06 yen EURJPY= and the New Zealand dollar added 2.9 percent to 62.93 yen NZDJPY=R, at current prices its best one-day performance since May.
Low interest rates mean the yen tends to fall when risk appetite rises and as investors borrow the yen to finance more lucrative trades in other currencies and assets.
Adding to pressure on the currency was a report the Bank of Japan was likely to debate whether to ease its ultra-loose monetary policy again as it tries to pull Japan out of deflation. [ID:nTOE6230A7]
In contrast, U.S. short-term interest rate futures showed rising expectations of a Federal Reserve interest rate hike this year. [ID:nN05202417]
"The U.S. economy looks like it's in pretty good shape, but on the other hand, Japan's economy is still struggling and now there's talk that more easing could be coming from the BoJ, so the yen is weakening," said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York.
EURO HOLDS FIRM
Against the greenback, the euro rose 0.3 percent to $1.3620, according to Reuters data, reversing earlier losses as risk appetite increased. EUR=
The euro also got a respite as concerns about debt problems in Greece eased after a 10-year Greek bond sale on Thursday attracted strong demand. The spread between yields on Greek government bonds and benchmark German bunds narrowed.
However, German Chancellor Angela Merkel did not spell out any specific aid mechanisms for Greece during talks on Friday with her Greek counterpart. [ID:nDEK000020]
"I think the Greek situation and sovereign debt in general is going to continue to pop its head up every now and then," said Ronald Simpson, director of currency research at Action Economics in Tampa, Florida. "For now it appears it has subsided."
Friday, March 5, 2010
US Stock Futures Rise
U.S. stock futures climbed higher Friday morning after the government reported the U.S. economy shed fewer jobs than expected in February and the unemployment rate was steady at 9.7%.
Following the report, Dow Jones Industrial Average futures were up 59 points at 10490 while Standard & Poor's 500 futures rose 8 points and Nasdaq Composite futures climbed 11 points. Prior to the data, Dow futures had been up about 25 points, while S&P 500 futures were up 4 points and Nasdaq futures were up 5 points.
The Labor Department said Friday that nonfarm payrolls fell by 36,000 compared with a revised 26,000 drop in January. Economists polled by Dow Jones Newswires were expecting payrolls to fall by 75,000 mainly because of the severe weather. The January figure was revised from an originally reported 20,000 decline.
The unemployment rate remained at 9.7% last month. Economists had forecast the jobless rate would edge higher to 9.8%.
The better-than-expected jobs data came despite stormy weather on the East Coast last month which the government said may have temporarily hit payrolls and work hours.
Also in focus Friday morning, a report from the Nikkei newspaper said the Bank of Japan may take further easing measures, news that sent the Nikkei 225 up over 2% in Tokyo and lifted the dollar against the Japanese yen.
The dollar also strengthened against the euro while Treasurys edged lower, with the 10-year note off 5/32 to yield 3.625%. Crude-oil futures rose, as did gold futures.
Among stocks in focus, communications chip maker Marvell Technology Group fell 2.6% premarket despite reporting a fourth-quarter profit rise and first-quarter guidance that beat analyst estimates.
InterMune surged 80% premarket after the company said U.S. government regulators will review the new drug application for its pirfenidone idiopathic pulmonary fibrosis treatment next week.
Still to come are data on consumer credit, due at 3 p.m. EST.
U.S. stock futures climbed higher Friday morning after the government reported the U.S. economy shed fewer jobs than expected in February and the unemployment rate was steady at 9.7%.
Following the report, Dow Jones Industrial Average futures were up 59 points at 10490 while Standard & Poor's 500 futures rose 8 points and Nasdaq Composite futures climbed 11 points. Prior to the data, Dow futures had been up about 25 points, while S&P 500 futures were up 4 points and Nasdaq futures were up 5 points.
The Labor Department said Friday that nonfarm payrolls fell by 36,000 compared with a revised 26,000 drop in January. Economists polled by Dow Jones Newswires were expecting payrolls to fall by 75,000 mainly because of the severe weather. The January figure was revised from an originally reported 20,000 decline.
The unemployment rate remained at 9.7% last month. Economists had forecast the jobless rate would edge higher to 9.8%.
The better-than-expected jobs data came despite stormy weather on the East Coast last month which the government said may have temporarily hit payrolls and work hours.
Also in focus Friday morning, a report from the Nikkei newspaper said the Bank of Japan may take further easing measures, news that sent the Nikkei 225 up over 2% in Tokyo and lifted the dollar against the Japanese yen.
The dollar also strengthened against the euro while Treasurys edged lower, with the 10-year note off 5/32 to yield 3.625%. Crude-oil futures rose, as did gold futures.
Among stocks in focus, communications chip maker Marvell Technology Group fell 2.6% premarket despite reporting a fourth-quarter profit rise and first-quarter guidance that beat analyst estimates.
InterMune surged 80% premarket after the company said U.S. government regulators will review the new drug application for its pirfenidone idiopathic pulmonary fibrosis treatment next week.
Still to come are data on consumer credit, due at 3 p.m. EST.
FOREX-Euro dips on ECB
The dollar rose broadly on Thursday and the euro fell after the chief of the European Central Bank said recovery would be uneven, reducing the chances of a near-term rise in record low euro zone interest rates.
Analysts said worries about Greece and other heavily indebted euro zone countries also weighed on the euro, even as a sale of fresh Greek 10-year debt drew solid demand.
Greece had announced plans on Wednesday for a further $6.5 billion in public sector pay cuts and tax hikes to whittle its budget deficit, though it was unclear if the measures will generate additional help from larger euro zone countries such as Germany and France.
While the ECB took a small step toward unwinding some extraordinary support for the economy of the 16-nation euro zone, it extended until October a program that provides unlimited funds to banks at flat rates, longer than most analysts had expected.
ECB President Jean-Claude Trichet said the move on the lending program was "exactly appropriate, taking into account the present situation." .
"There's still a lot of concern about Greece and deficits, and that's a burden when it comes to tighter monetary policy. So that helped trigger a sell-off in the euro," said Kathy Lien, director of research at GFT Forex in New York.
The euro was last down 0.8 percent at $1.3585 EUR=. Earlier, it rose above $1.37 following the Greek debt auction.
As expected, the ECB on Thursday kept benchmark interest rates at 1 percent for the 10th month running.
Sterling fell 0.4 percent to $1.5036 GBP= after The Bank of England left rates unchanged and left emergency lending measures in place.
The dollar rose 0.8 percent to 89.12 yen JPY= and 0.8 percent to 1.0764 Swiss francs CHF=.
U.S. PAYROLLS DATA DUE
The Federal Reserve also is expected to hold interest rates at a record low near zero when it meets in mid-March. But most investors expect the Fed to raise rates before the ECB does, which also has lent support to the dollar. Higher interest rates make a currency more attractive to global investors.
Data showing a decline in the number of Americans filing for first-time jobless benefits also stoked hope about the U.S. economy. Markets expect Friday's key monthly report on non-farm payrolls to show employers cut 50,000 jobs last month, though analysts expect some of that will have been influenced by bad weather.
"The market is being a bit cautious ahead of payrolls," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto, though he added a better-than-expected number could provoke more dollar buying.
By contrast, he said, there are still "uncertainties about Greece, about the potential financial assistance it can expect, the opposition from domestic unions," he said. "Uncertainty is still very much with us, and that's why the market is not willing to take the euro much above $1.37."
The dollar rose broadly on Thursday and the euro fell after the chief of the European Central Bank said recovery would be uneven, reducing the chances of a near-term rise in record low euro zone interest rates.
Analysts said worries about Greece and other heavily indebted euro zone countries also weighed on the euro, even as a sale of fresh Greek 10-year debt drew solid demand.
Greece had announced plans on Wednesday for a further $6.5 billion in public sector pay cuts and tax hikes to whittle its budget deficit, though it was unclear if the measures will generate additional help from larger euro zone countries such as Germany and France.
While the ECB took a small step toward unwinding some extraordinary support for the economy of the 16-nation euro zone, it extended until October a program that provides unlimited funds to banks at flat rates, longer than most analysts had expected.
ECB President Jean-Claude Trichet said the move on the lending program was "exactly appropriate, taking into account the present situation." .
"There's still a lot of concern about Greece and deficits, and that's a burden when it comes to tighter monetary policy. So that helped trigger a sell-off in the euro," said Kathy Lien, director of research at GFT Forex in New York.
The euro was last down 0.8 percent at $1.3585 EUR=. Earlier, it rose above $1.37 following the Greek debt auction.
As expected, the ECB on Thursday kept benchmark interest rates at 1 percent for the 10th month running.
Sterling fell 0.4 percent to $1.5036 GBP= after The Bank of England left rates unchanged and left emergency lending measures in place.
The dollar rose 0.8 percent to 89.12 yen JPY= and 0.8 percent to 1.0764 Swiss francs CHF=.
U.S. PAYROLLS DATA DUE
The Federal Reserve also is expected to hold interest rates at a record low near zero when it meets in mid-March. But most investors expect the Fed to raise rates before the ECB does, which also has lent support to the dollar. Higher interest rates make a currency more attractive to global investors.
Data showing a decline in the number of Americans filing for first-time jobless benefits also stoked hope about the U.S. economy. Markets expect Friday's key monthly report on non-farm payrolls to show employers cut 50,000 jobs last month, though analysts expect some of that will have been influenced by bad weather.
"The market is being a bit cautious ahead of payrolls," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto, though he added a better-than-expected number could provoke more dollar buying.
By contrast, he said, there are still "uncertainties about Greece, about the potential financial assistance it can expect, the opposition from domestic unions," he said. "Uncertainty is still very much with us, and that's why the market is not willing to take the euro much above $1.37."
Thursday, March 4, 2010
US Stock Futures Higher After Jobless Data
U.S. stock futures worked their way higher on Thursday after weekly jobless claims data showed a halt to a two-week run of sharp rises and productivity data was revised up, as a string of retailers reported results.
S&P 500 futures rose 1.2 points to 1119.80, while Nasdaq 100 futures rose 5.5 points to 1857.50. Futures on the Dow Jones Industrial Average rose 18 points.
U.S. stocks ended slightly lower Wednesday after a late-day drop, as Pfizer reported disappointing results on an Alzheimer's drug and health stocks slipped on President Obama's new call for federal healthcare legislation.
Early data showed the number of people filing for initial unemployment benefits declined by 29,000 in the week ending Feb. 27 to a seasonally adjusted 469,000. That ends a two-week string of sharp increases. The four-week average of initial claims fell by 3,500 to 470,750.
"There is still very little evidence in this weekly, timely data, of any big pickup in hiring outside of some modest improvement. Tomorrow's Feb Payroll figure will also be impacted by the weather," Peter Boockvar, equity strategist at Miller Tabak, wrote in a note.
Meanwhile, productivity increased at a 6.9% annual rate in the fourth quarter, revised up from the 6.2% reported a month ago, while the third quarter was revised up to a 7.8% annual rate from 7.2% presently.
Still to come is data on factory orders at 10 a.m., EST.
Retailers were busy announcing same-store sales, and Pier 1 Imports Inc. (PIR) and Urban Outfitters Inc. (URBN) also reported fourth-quarter earnings ahead of estimates.
Shares of PetSmart Inc. (PETM) jumped nearly 11% in preopen trade after quarterly results beat analysts' estimates and the company said it sees a strong 2010.
Wal-Mart Stores Inc. (WMT) announced it's raising its dividend by 11% to $1.21 a share in 2011, from $1.09 paid during the 2010 fiscal year.
Boeing Co. (BA) could be in focus after an upgrade to neutral from sell by UBS AG (UBS). Other upgrades include Coca-Cola Co. (KO), lifted to buy at UBS and Walt Disney (DIS), raised to buy at Bank of America Merrill Lynch.
The Bank of England and European Central Bank each held interest rates unchanged at historically low levels, as expected.
As earnings season winds down, Ciena Corp. (CIEN) shares dropped 8.1% as it reported a widening loss and issued a cautious second-quarter target.
Anheuser-Busch InBev (ABI.BT, BUD) fell in Brussels after reporting a smaller-than-forecast rise in adjusted profit and offering cautious 2010 guidance.
Asian shares ended mostly lower Thursday, with Chinese banking and property shares losing ground a day before the mainland's annual National People's Congress amid concerns about policy tightening.
Europe stocks sagged after four winning sessions in a row.
Oil futures were weaker but held above the $80-a-barrel market, while gold futures slipped $4.90 an ounce.
The dollar index was slightly lower.
U.S. stock futures worked their way higher on Thursday after weekly jobless claims data showed a halt to a two-week run of sharp rises and productivity data was revised up, as a string of retailers reported results.
S&P 500 futures rose 1.2 points to 1119.80, while Nasdaq 100 futures rose 5.5 points to 1857.50. Futures on the Dow Jones Industrial Average rose 18 points.
U.S. stocks ended slightly lower Wednesday after a late-day drop, as Pfizer reported disappointing results on an Alzheimer's drug and health stocks slipped on President Obama's new call for federal healthcare legislation.
Early data showed the number of people filing for initial unemployment benefits declined by 29,000 in the week ending Feb. 27 to a seasonally adjusted 469,000. That ends a two-week string of sharp increases. The four-week average of initial claims fell by 3,500 to 470,750.
"There is still very little evidence in this weekly, timely data, of any big pickup in hiring outside of some modest improvement. Tomorrow's Feb Payroll figure will also be impacted by the weather," Peter Boockvar, equity strategist at Miller Tabak, wrote in a note.
Meanwhile, productivity increased at a 6.9% annual rate in the fourth quarter, revised up from the 6.2% reported a month ago, while the third quarter was revised up to a 7.8% annual rate from 7.2% presently.
Still to come is data on factory orders at 10 a.m., EST.
Retailers were busy announcing same-store sales, and Pier 1 Imports Inc. (PIR) and Urban Outfitters Inc. (URBN) also reported fourth-quarter earnings ahead of estimates.
Shares of PetSmart Inc. (PETM) jumped nearly 11% in preopen trade after quarterly results beat analysts' estimates and the company said it sees a strong 2010.
Wal-Mart Stores Inc. (WMT) announced it's raising its dividend by 11% to $1.21 a share in 2011, from $1.09 paid during the 2010 fiscal year.
Boeing Co. (BA) could be in focus after an upgrade to neutral from sell by UBS AG (UBS). Other upgrades include Coca-Cola Co. (KO), lifted to buy at UBS and Walt Disney (DIS), raised to buy at Bank of America Merrill Lynch.
The Bank of England and European Central Bank each held interest rates unchanged at historically low levels, as expected.
As earnings season winds down, Ciena Corp. (CIEN) shares dropped 8.1% as it reported a widening loss and issued a cautious second-quarter target.
Anheuser-Busch InBev (ABI.BT, BUD) fell in Brussels after reporting a smaller-than-forecast rise in adjusted profit and offering cautious 2010 guidance.
Asian shares ended mostly lower Thursday, with Chinese banking and property shares losing ground a day before the mainland's annual National People's Congress amid concerns about policy tightening.
Europe stocks sagged after four winning sessions in a row.
Oil futures were weaker but held above the $80-a-barrel market, while gold futures slipped $4.90 an ounce.
The dollar index was slightly lower.
Wednesday, March 3, 2010
Dollar recovering and trading at 88.59
The dollar gained territory against the yen and is trading at 88.59. Earlier, the pair had opened on 88.45 and posted an intraday high of 88.62. Since then, the pair has maintained upward tendencies. The USD/JPY finds support at 88.3087, resistance at 88.9017 and is considered slightly bullish.
According to the Federal Reserve's influential Beige Book, the US economy is improving though at a reduced rate. While the US economy has continued to improve this year, growth has not been even across al sectors. Manufacturing and consumer spending grew while property and construction weakened. The labour markets also remained soft.
Click here to find out more!
The dollar gained territory against the yen and is trading at 88.59. Earlier, the pair had opened on 88.45 and posted an intraday high of 88.62. Since then, the pair has maintained upward tendencies. The USD/JPY finds support at 88.3087, resistance at 88.9017 and is considered slightly bullish.
According to the Federal Reserve's influential Beige Book, the US economy is improving though at a reduced rate. While the US economy has continued to improve this year, growth has not been even across al sectors. Manufacturing and consumer spending grew while property and construction weakened. The labour markets also remained soft.
Click here to find out more!
Stock market rallies on Greece plan and U.S. data
The U.S. stock market rose on Wednesday after positive developments from Greece and encouraging U.S. economic data.
The S&P 500 Index rose 5.32 points, or 0.48 percent, to trade at 1,123.63 at 12:21 pm. The Dow Jones Industrial Average rose 34.08 points, or 0.33 percent, to trade at 10,440.06.
Rising Commodity Prices
Crude oil futures shook off a 10:30 a.m. EST report of higher than expected U.S. oil inventories.
NYMEX April crude oil futures briefly dipped to trade negative for the day in reaction to the news. However, the oil futures quickly recovered to trade up 1.32 percent. NYMEX April copper futures are also trading up 0.78 percent.
Firms involved in commodities are leading the rally Wednesday. The American Depository Receipts (ADRs) of Royal Dutch Shell (NYSE:RDS.A) rose 1.74 percent and those of BHP Billiton (NYSE:BBL) rose 3.45 percent. Freeport-McMoRan (NYSE:FCX) rose 2.88 percent and Newmont Mining (NYSE:NEM) rose 1.45 percent.
Greece Deficit
Recent comments made by top Greek officials seem to indicate the government's serious commitment its austerity measures.
Greece unveiled additional pay cuts and tax hikes on Wednesday that will cut its budget deficit by $6.54 billion this year.
There is also increasing speculation that the European Union is moving towards a rescue package for Greece. The cost of insuring its sovereign debt and the yields on its bonds fell Wednesday.
U.S. Economic Data
At 8:15 am EST, an ADP report showed that non-farm private payrolls decreased by 20,000 in February. The decrease is the lowest since February 2008.
The report eased investor sentiment ahead of Thursday's unemployment claims and Friday's unemployment rate and non-farm payroll change.
At 10:00 am EST, the Institute for Supply Management reported that the services sector grew for the second consecutive month. The reading beat the median forecast of economists according to Bloomberg and increased from last month.
The U.S. stock market rose on Wednesday after positive developments from Greece and encouraging U.S. economic data.
The S&P 500 Index rose 5.32 points, or 0.48 percent, to trade at 1,123.63 at 12:21 pm. The Dow Jones Industrial Average rose 34.08 points, or 0.33 percent, to trade at 10,440.06.
Rising Commodity Prices
Crude oil futures shook off a 10:30 a.m. EST report of higher than expected U.S. oil inventories.
NYMEX April crude oil futures briefly dipped to trade negative for the day in reaction to the news. However, the oil futures quickly recovered to trade up 1.32 percent. NYMEX April copper futures are also trading up 0.78 percent.
Firms involved in commodities are leading the rally Wednesday. The American Depository Receipts (ADRs) of Royal Dutch Shell (NYSE:RDS.A) rose 1.74 percent and those of BHP Billiton (NYSE:BBL) rose 3.45 percent. Freeport-McMoRan (NYSE:FCX) rose 2.88 percent and Newmont Mining (NYSE:NEM) rose 1.45 percent.
Greece Deficit
Recent comments made by top Greek officials seem to indicate the government's serious commitment its austerity measures.
Greece unveiled additional pay cuts and tax hikes on Wednesday that will cut its budget deficit by $6.54 billion this year.
There is also increasing speculation that the European Union is moving towards a rescue package for Greece. The cost of insuring its sovereign debt and the yields on its bonds fell Wednesday.
U.S. Economic Data
At 8:15 am EST, an ADP report showed that non-farm private payrolls decreased by 20,000 in February. The decrease is the lowest since February 2008.
The report eased investor sentiment ahead of Thursday's unemployment claims and Friday's unemployment rate and non-farm payroll change.
At 10:00 am EST, the Institute for Supply Management reported that the services sector grew for the second consecutive month. The reading beat the median forecast of economists according to Bloomberg and increased from last month.
FOREX-Euro rises after Greece unveils
The euro rose against the dollar on Wednesday after Greece pledged $6.5 billion in pay cuts and tax increases to reduce its deficit, easing worries about the country's debt crisis.
The euro gained roughly half a U.S. cent after Greece's cabinet approved a sweeping new austerity programme on Wednesday, but sentiment remained fragile as markets were wary over whether the package would be enough for Athens to win financial support from Germany and France.
"If the Germans and the French offer support for Greece, the sense of crisis may lift from the markets, and the euro/dollar could see a short-covering relief rally over the next several weeks," said Boris Schlossberg, director of currency research at GFT in New York.
In mid-morning trading, the euro was 0.3 percent higher on the day at $1.3651 EUR=. Stop-losses were seen at $1.3680 with a technical target at $1.3693, traders said.
The dollar fell 0.1 percent to 88.65 yen JPY= after reaching as low as 88.47 yen on electronic trading platform EBS, its lowest since December.
U.S. private employers shed 20,000 jobs in February, fewer than the 60,000 jobs lost in January, data showed on Wednesday. A separate industry report showed the U.S. services sector grew in February at its fastest pace in more than two years.
"The economy is very slowly improving, and this will over time support the dollar," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey
The euro rose against the dollar on Wednesday after Greece pledged $6.5 billion in pay cuts and tax increases to reduce its deficit, easing worries about the country's debt crisis.
The euro gained roughly half a U.S. cent after Greece's cabinet approved a sweeping new austerity programme on Wednesday, but sentiment remained fragile as markets were wary over whether the package would be enough for Athens to win financial support from Germany and France.
"If the Germans and the French offer support for Greece, the sense of crisis may lift from the markets, and the euro/dollar could see a short-covering relief rally over the next several weeks," said Boris Schlossberg, director of currency research at GFT in New York.
In mid-morning trading, the euro was 0.3 percent higher on the day at $1.3651 EUR=. Stop-losses were seen at $1.3680 with a technical target at $1.3693, traders said.
The dollar fell 0.1 percent to 88.65 yen JPY= after reaching as low as 88.47 yen on electronic trading platform EBS, its lowest since December.
U.S. private employers shed 20,000 jobs in February, fewer than the 60,000 jobs lost in January, data showed on Wednesday. A separate industry report showed the U.S. services sector grew in February at its fastest pace in more than two years.
"The economy is very slowly improving, and this will over time support the dollar," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey
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