US Stocks Edge Higher After Mixed Earnings
U.S. stocks edged higher on Thursday as a mixed crop of corporate earnings reports and subdued economic readings left the market struggling for direction.
The Dow Jones Industrial Average rose 10 points to 11996. On Wednesday the measure crossed the 12000 threshold, but slipped in late trading to close just below the key level.
The Nasdaq Composite rose 0.2% to 2746. The Standard & Poor's 500-stock index edged up less than one point to 1297.
Thursday's economic data doused earlier optimism over a slew of companies reporting quarterly earnings on Thursday.
Dampening optimism about the jobs market, the Labor Department said the number of U.S. workers filing new claims for unemployment benefits unexpectedly surged last week by 51,000 to 454,000 in the week ended Jan. 22. Economists surveyed by Dow Jones Newswires had expected claims would rise by just 1,000 to 405,000. However, the government cautioned that the week's data was likely distorted by bad weather.
Separately, orders for long-lasting goods unexpectedly declined by 2.5% in December, when forecasters had expected to see a rise of 1.4%.
Quarterly reports from a batch of bellwether consumer companies and a pair of drugmakers found a mixed reaction in the market.
Consumer giant Procter & Gamble sank 3.2% after its fiscal second-quarter profit slid 28% compared to a prior-year period that included a large gain from discontinued operations and margins fell as commodity costs grew.
Colgate-Palmolive, the world's largest toothpaste maker by sales, dropped 2.5% after its fourth-quarter earnings fell 1.1% on lower-than-expected revenue as higher materials costs hit margins. The company also forecast fiscal third-quarter earnings of 95 cents to $1 a share, potentially disappointing analysts looking for 99 cents.
Drug maker Bristol-Myers Squibb rose 0.9%, even after issuing a profit forecast for 2011 that fell short of Wall Street expectations, citing the effects of a product recall and higher costs associated with the health-care overhaul enacted last year. Fourth-quarter earnings plunged 94% from a year-earlier period that was inflated by a large gain on a divestiture.
Fellow drug maker Eli Lilly gained 0.4% after its fourth-quarter earnings rose 28%, as higher sales of an antidepressant and a cancer drug helped boost revenue.
Heavy-machinery maker Caterpillar edged up 0.1% after the company's fourth-quarter earnings soared, beating analysts' estimates as demand recovered from slumping levels a year earlier.
Home builder D.R. Horton slid 3.3% after swinging to a bigger-than-expected fiscal first-quarter loss, hurt by sharply lower home-sale revenue in the absence of a federal home-buyer credit.
The U.S. dollar strengthened against the yen after ratings agency Standard & Poor's cut Japan's long-term credit rating to double-A-minus from double-A, citing concerns over the country's high debt levels.
However, the dollar hit a two-month low against the euro, which was boosted by the weak U.S. economic data and hawkish rhetoric from a European Central Bank executive board member. French President Nicolas Sarkozy and German Chancellor Angela Merkel, speaking from Davos, pledged never to let the euro fail. The common currency was trading recently at $1.3728, up from $1.3691 late Wednesday in New York.
Demand for U.S. Treasurys weakened, lifting yield on the 10-year note up to 3.42%. Crude-oil prices edged down, while gold futures climbed.
Wednesday, January 26, 2011
US Stocks Close Up Slightly
The Dow Jones Industrial Average vaulted over 12000 for the first time in almost three years but couldn't hold its ground, closing just short of the milestone as investors digested President Obama's State of the Union address and the unanimous decision by the Federal Reserve to stay the course on supporting the economy.
The Dow finished up 8.25 points, or 0.07%, at 11985.44, restrained by disappointing earnings from Boeing. Leading on the upside was DuPont, up 2.6%.
The Nasdaq Composite Index rose 20.25 points, or 0.74%, to 2739.50, while the Standard & Poor's 500-stock index rose 5.45 points, or 0.42%, to 1296.63. The S&P 500 fell just short of the 1300 barrier, which it last held in August 2008, trading as high as 1299.74 in afternoon trading.
The traversing of 12000, while fleeting, was the latest reminder of the durability of the stock market's bull run on a day dominated by headline news from the government and the Federal Reserve, whose massive interventions helped propel markets to the current levels.
The Dow made its first pass at 12000 in 2006, as credit expansion fueled a home-buying binge that eventually ended in the 2007-2008 housing bust. From a peak of 14198.10 in October 2007, the market tumbled to a March 2009 low of 6469.95, wiping out more than half of the blue-chip index's market capitalization.
However, a combination of fiscal and in particular monetary stimulus helped fuel optimism in the market. Since the Federal Reserve made clear its plans to embark on a second massive wave of asset buying last August, the market has climbed nearly 20%.
On Wednesday, the latest statement from the Federal Open Market Committee showed the central bank's commitment to stimulating the economy, with the committee arriving at a consensus decision after a shuffling of the voting membership.
Still, the bull market's reliance on the Fed has had some investors questioning the durability of the rally.
"Corporate earnings have been so dramatically better over the last two years that, even though it hasn't equated in a better economy, people see these earnings and want to get involved," said Peter Costa, a New York Stock Exchange floor trader with Empire Executions. "After the housing bubble that burst in 2007-08, I think we'll probably never see those levels again....9% to 10% of our people are just trying to make ends meet, and I'm not sure you can get that sort of a run-up when so many people are just trying to get basic needs met."
In the State of the Union speech Tuesday night, President Obama challenged lawmakers in both parties to rise above partisan divisions to tackle problems that will enable the U.S. to compete in the global economy. Among his proposals were calls for Congress to lower the corporate tax rate by closing industry-specific loopholes and find spending cuts across the government. The president also called for a five-year freeze on nondefense discretionary spending.
"A lot of what he said could have been said by a Republican," said Doug Roberts, chief investment strategist at Channel Capital Research. Mr. Roberts said much of the expectations of President Obama's move to the center had already been factored in by the market, but Tuesday's speech were still important for reaffirming market expectations of a more centrist government.
Wednesday morning, data on new-home sales came in much stronger than expected, pushing the market higher. Sales increased 17.5% from the prior month, rising to a seasonally adjusted annual pace of 329,000 homes. The increase was driven by a nearly 72% jump in the western U.S. Economists expected an increase to an annual rate of 299,000. The median sales price for a new home sold in December was up 8.5% from a year earlier.
"The positive home numbers correlate well with the consumer confidence numbers that came out earlier," said Chip Cobb, senior vice president at Bryn Mawr Trust Asset Management. Still, Mr. Cobb remained concerned about unemployment, saying he expects the jobless rate to stay above 9% this year.
Leading the way were materials and energy stocks. AK Steel Holding rose 5.2%, Cliffs Natural Resources climbed 7.3% and U.S. Steel added 3.8%. Halliburton surged 8% and Baker Hughes advanced 5.9%.
Among the day's slew of earnings announcements, aerospace giant Boeing posted an 8.2% decline in fourth-quarter profit as revenue and margins slid. Boeing offered a 2011 profit forecast well below consensus expectations, pushing shares down 3.1% to make it the steepest decliner among the Dow's 30 components.
United Technologies slipped 0.4% after the maker of Otis elevators and Pratt & Whitney plane engines reported a 12% rise in profit as sales climbed 6.3%, topping analysts' estimates. Revenue increased at five of the company's six segments.
Airline stocks were bolstered by hopes that carriers will be able to continue increasing airfares amid rising passenger demand. US Airways Group soared 6.6% after swinging to a fourth-quarter profit, despite significantly higher fuel prices amid a rebound in demand and cost controls.
United Continental Holdings jumped 7.1% as revenue increased more than expected on rising traffic and capacity. Even so, the company reported a wider loss. (It was listing combined results for the first time since October's merger between UAL Corp.'s United Airlines and Continental Airlines.)
American Airlines parent AMR rose 2.5%. Delta Air Lines added 3%.
Xerox tumbled 7.7% after fourth-quarter earnings declined 5%, hurt by restructuring costs and a modest first-quarter earnings outlook.
SAP advanced 2.4% in New York after Europe's largest software maker showed operational strength, despite taking a fourth-quarter hit to cover the costs of its lawsuit with rival Oracle. The German company said it would raise its dividend for 2010 by 20%, and it expects sales and profit growth in 2011.
Yahoo fell 2.8% after the Internet search company late Tuesday gave a current-quarter revenue forecast that fell short of Wall Street's expectations.
Toyota Motor shed 1.9% in New York after the auto maker said it was recalling more than 1.7 million vehicles world-wide to fix problems, including fuel-system defects.
The euro held steady at $1.3689, from $1.3685 late Tuesday. Oil rose 1.3% to break a six-day losing streak, while gold edged down. Treasurys slumped broadly, pushing the yield on the benchmark 10-year note to 3.43%.
The Dow Jones Industrial Average vaulted over 12000 for the first time in almost three years but couldn't hold its ground, closing just short of the milestone as investors digested President Obama's State of the Union address and the unanimous decision by the Federal Reserve to stay the course on supporting the economy.
The Dow finished up 8.25 points, or 0.07%, at 11985.44, restrained by disappointing earnings from Boeing. Leading on the upside was DuPont, up 2.6%.
The Nasdaq Composite Index rose 20.25 points, or 0.74%, to 2739.50, while the Standard & Poor's 500-stock index rose 5.45 points, or 0.42%, to 1296.63. The S&P 500 fell just short of the 1300 barrier, which it last held in August 2008, trading as high as 1299.74 in afternoon trading.
The traversing of 12000, while fleeting, was the latest reminder of the durability of the stock market's bull run on a day dominated by headline news from the government and the Federal Reserve, whose massive interventions helped propel markets to the current levels.
The Dow made its first pass at 12000 in 2006, as credit expansion fueled a home-buying binge that eventually ended in the 2007-2008 housing bust. From a peak of 14198.10 in October 2007, the market tumbled to a March 2009 low of 6469.95, wiping out more than half of the blue-chip index's market capitalization.
However, a combination of fiscal and in particular monetary stimulus helped fuel optimism in the market. Since the Federal Reserve made clear its plans to embark on a second massive wave of asset buying last August, the market has climbed nearly 20%.
On Wednesday, the latest statement from the Federal Open Market Committee showed the central bank's commitment to stimulating the economy, with the committee arriving at a consensus decision after a shuffling of the voting membership.
Still, the bull market's reliance on the Fed has had some investors questioning the durability of the rally.
"Corporate earnings have been so dramatically better over the last two years that, even though it hasn't equated in a better economy, people see these earnings and want to get involved," said Peter Costa, a New York Stock Exchange floor trader with Empire Executions. "After the housing bubble that burst in 2007-08, I think we'll probably never see those levels again....9% to 10% of our people are just trying to make ends meet, and I'm not sure you can get that sort of a run-up when so many people are just trying to get basic needs met."
In the State of the Union speech Tuesday night, President Obama challenged lawmakers in both parties to rise above partisan divisions to tackle problems that will enable the U.S. to compete in the global economy. Among his proposals were calls for Congress to lower the corporate tax rate by closing industry-specific loopholes and find spending cuts across the government. The president also called for a five-year freeze on nondefense discretionary spending.
"A lot of what he said could have been said by a Republican," said Doug Roberts, chief investment strategist at Channel Capital Research. Mr. Roberts said much of the expectations of President Obama's move to the center had already been factored in by the market, but Tuesday's speech were still important for reaffirming market expectations of a more centrist government.
Wednesday morning, data on new-home sales came in much stronger than expected, pushing the market higher. Sales increased 17.5% from the prior month, rising to a seasonally adjusted annual pace of 329,000 homes. The increase was driven by a nearly 72% jump in the western U.S. Economists expected an increase to an annual rate of 299,000. The median sales price for a new home sold in December was up 8.5% from a year earlier.
"The positive home numbers correlate well with the consumer confidence numbers that came out earlier," said Chip Cobb, senior vice president at Bryn Mawr Trust Asset Management. Still, Mr. Cobb remained concerned about unemployment, saying he expects the jobless rate to stay above 9% this year.
Leading the way were materials and energy stocks. AK Steel Holding rose 5.2%, Cliffs Natural Resources climbed 7.3% and U.S. Steel added 3.8%. Halliburton surged 8% and Baker Hughes advanced 5.9%.
Among the day's slew of earnings announcements, aerospace giant Boeing posted an 8.2% decline in fourth-quarter profit as revenue and margins slid. Boeing offered a 2011 profit forecast well below consensus expectations, pushing shares down 3.1% to make it the steepest decliner among the Dow's 30 components.
United Technologies slipped 0.4% after the maker of Otis elevators and Pratt & Whitney plane engines reported a 12% rise in profit as sales climbed 6.3%, topping analysts' estimates. Revenue increased at five of the company's six segments.
Airline stocks were bolstered by hopes that carriers will be able to continue increasing airfares amid rising passenger demand. US Airways Group soared 6.6% after swinging to a fourth-quarter profit, despite significantly higher fuel prices amid a rebound in demand and cost controls.
United Continental Holdings jumped 7.1% as revenue increased more than expected on rising traffic and capacity. Even so, the company reported a wider loss. (It was listing combined results for the first time since October's merger between UAL Corp.'s United Airlines and Continental Airlines.)
American Airlines parent AMR rose 2.5%. Delta Air Lines added 3%.
Xerox tumbled 7.7% after fourth-quarter earnings declined 5%, hurt by restructuring costs and a modest first-quarter earnings outlook.
SAP advanced 2.4% in New York after Europe's largest software maker showed operational strength, despite taking a fourth-quarter hit to cover the costs of its lawsuit with rival Oracle. The German company said it would raise its dividend for 2010 by 20%, and it expects sales and profit growth in 2011.
Yahoo fell 2.8% after the Internet search company late Tuesday gave a current-quarter revenue forecast that fell short of Wall Street's expectations.
Toyota Motor shed 1.9% in New York after the auto maker said it was recalling more than 1.7 million vehicles world-wide to fix problems, including fuel-system defects.
The euro held steady at $1.3689, from $1.3685 late Tuesday. Oil rose 1.3% to break a six-day losing streak, while gold edged down. Treasurys slumped broadly, pushing the yield on the benchmark 10-year note to 3.43%.
Dow hits 12,000 as U.S. stocks post moderate gains
The Dow Jones Industrial Average briefly hit 12,000 points at about 11 am EST this morning, as U.S. stocks continue to post moderate gains.
The gains come in the wake of strong earnings reports, President Obama’s austere spending plans in his state of the Union address, shrugging off a December housing report showing less-then-expected sales of new homes in the U.S.
The Dow is up 0.14 percent to 11,993.42, while the Nasdaq is up 0.75 percent and the S&P 500 index is up 0.47 percent. The 10-year bond yield is up slightly by 0.07 percent, while oil is up 0.24 percent has after two consecutive down days. The cost of gold is flat, after dropping yesterday.
Boeing Co. (NYSE: BA) is down 3.55 percent after reporting an 8 percent drop in sales for the fourth quarter. E.I. du Pont de Nemours and Co. (NYSE: DD) is the top performer so far, up 2.59 percent on its far better-than-expected earnings report of 50 cents per share for 2010.
Microsoft Corp. (Nasdaq: MSFT) is up 1.59 percent, despite analysts’ expectations of a 7 percent drop in earnings in the second quarter.
Home Depot (NYSE: HD) is up 1.39 percent in mid-morning trading as it reported strong profit growth in the fourth quarter, and its rival, Lowe’s Cos. (NYSE: LOW) is up 1.56 percent as it announced plans to eliminate 1,700 managerial jobs.
Verizon Communications (NYSE: VZ) is up 1.09 percent after the announcement two weeks ago that Apple’s popular iPhone would be available to its subscribers.
Close
The Dow Jones Industrial Average briefly hit 12,000 points at about 11 am EST this morning, as U.S. stocks continue to post moderate gains.
The gains come in the wake of strong earnings reports, President Obama’s austere spending plans in his state of the Union address, shrugging off a December housing report showing less-then-expected sales of new homes in the U.S.
The Dow is up 0.14 percent to 11,993.42, while the Nasdaq is up 0.75 percent and the S&P 500 index is up 0.47 percent. The 10-year bond yield is up slightly by 0.07 percent, while oil is up 0.24 percent has after two consecutive down days. The cost of gold is flat, after dropping yesterday.
Boeing Co. (NYSE: BA) is down 3.55 percent after reporting an 8 percent drop in sales for the fourth quarter. E.I. du Pont de Nemours and Co. (NYSE: DD) is the top performer so far, up 2.59 percent on its far better-than-expected earnings report of 50 cents per share for 2010.
Microsoft Corp. (Nasdaq: MSFT) is up 1.59 percent, despite analysts’ expectations of a 7 percent drop in earnings in the second quarter.
Home Depot (NYSE: HD) is up 1.39 percent in mid-morning trading as it reported strong profit growth in the fourth quarter, and its rival, Lowe’s Cos. (NYSE: LOW) is up 1.56 percent as it announced plans to eliminate 1,700 managerial jobs.
Verizon Communications (NYSE: VZ) is up 1.09 percent after the announcement two weeks ago that Apple’s popular iPhone would be available to its subscribers.
Close
US Stocks Turn Mixed On Disappointing Boeing Earnings
-The Dow Jones Industrial Average pulled back modestly Wednesday after briefly rising above the 12000 mark for the first time in nearly three years as investors digested resurgent home sales and President Barack Obama's State of the Union address.
The Dow was up 5.5 points to 11983 in mid-day trading, dragged down by disappointing earnings from Boeing. Leading on the upside was Dupont, up 2.7%. A finish above 12000 would reclaim a level that the blue-chip index last surrendered in June 2008.
The Nasdaq Composite gained 16 points to 2735, while the Standard & Poor's 500-stock index was up five points at 1296, putting it on the cusp of 1300, a level it last held in August 2008.
The traversing of the 12000 barrier, while temporary, was the latest reminder of the durability of the stock market bull run on a trading day dominated by headline news from the government and the Federal Reserve, whose massive interventions helped propel markets to its current levels.
The Dow made its first pass at 12000 in 2006, as credit expansion fueled a home-buying binge that eventually ended in the 2007-2008 housing bust. From a peak of 14198.10 in October 2007, the market tumbled to a March 2009 low of 6469.95, wiping out more than half of the blue-chip index's market capitalization.
However, a combination of fiscal and in particular monetary stimulus helped fuel optimism in the market. Since the Federal Reserve made clear its plans to embark on a second massive wave of asset buying last August, the market has gained nearly 20%.
The bull market's reliance on the Fed, however, has had some investors questioning the durability of the rally.
"Corporate earnings have been so dramatically better over the last two years that, even though it hasn't equated in a better economy, people see these earnings and want to get involved," said Peter Costa, a New York Stock Exchange floor trader with Empire Executions. "After the housing bubble that burst in 2007-08, I think we'll probably never see those levels again.... Nine to ten percent of our people are just trying to make ends meet, and I'm not sure you can get that sort of a run-up when so many people are just trying to get basic needs met."
Wednesday's moves came after Obama's State of the Union speech Tuesday night challenged lawmakers in both major parties to rise above partisan divisions to tackle problems that will allow the U.S. to compete in the global economy. Among his proposals, the president called on Congress to lower the corporate tax rate by closing industry-specific loopholes and find spending cuts across the government. The president also called for a five-year freeze on nondefense discretionary spending.
"A lot of what he said could have been said by a Republican," said Doug Roberts, chief investment strategist at Channel Capital Research. Mr. Roberts said much of the expectations of President Obama's move to the center had already been factored in by the market, but Tuesday's speech were still important for reaffirming market expectations of a more centrist government.
New-home sales data also came in much stronger than expected, pushing the market higher. Sales increased 17.5% compared with the prior month, rising to a seasonally adjusted annual sales pace of 329,000. The increase was driven by a nearly 72% jump in the West. Economists had expected an increase to an annual rate of 299,000. The median sales price for a new home sold in December was up 8.5% from the same month a year ago.
Investors are still awaiting the latest statement from the Federal Open Market Committee at 2:15 p.m. EST. The market will be watching for confirmation that the central bank still sees the economy as improving, but still in need of its stimulus. Investors are also curious to see how many dissenters there will be to the continuation of the quantitative-easing program, given that there will be a different mix of Fed presidents voting. Just one or two of the Fed presidents are expected to dissent, so no policy changes are likely.
Leading the way on Wednesday were materials and energy stocks. AK Steel Holding rose 4.1%, Cliffs Natural Resources gained 3.1% and U.S. Steel added 2.5%. Halliburton surged 5.5% and Baker Huges advanced 4%.
Among Wednesday's slew of earnings announcements, aerospace giant Boeing posted an 8.2% decline in fourth-quarter profit, despite a tax-related gain adding to the bottom line, as revenue and margins slid. Boeing offered a 2011 profit forecast of $3.80 to $4 a share, below FactSet Research consensus estimates of $4.59 a share. Shares fell 3.6%, the deepest decliner among the Dow's 30 components.
United Technologies fell 1.1% after strong gains on Tuesday. The maker of Otis elevators and Pratt & Whitney plane engines reported a 12% rise in profit to $1.2 billion as sales grew 6.3%, topping analysts' estimates. Revenue increased at five of the company's six segments.
Airline stocks were also bolstered by hopes that carriers will be able to continue increasing airfares amid rising passenger demand. US Airways Group soared 12% after swinging to a fourth-quarter profit, despite significantly higher fuel prices amid a rebound in demand and cost controls.
United Continental Holdings jumped 8.6% as revenues grew better than expected growth amid rising traffic and capacity. Even so, the company--reporting combined results for the first time since October's merger between UAL Corp.'s United Airlines and Continental Airlines--reported a widening loss.
American Airlines parent AMR Corp. gained 4.7% while Delta Air Lines added 2.1%.
Xerox tumbled 7.3% after fourth-quarter earnings declined 5%, hurt by restructuring costs and a modest first-quarter earnings outlook.
SAP AG gained 1.7% in New York after Europe's largest software maker showed operational strength, despite taking a fourth-quarter hit on charges of almost one billion euros to cover the costs of its lawsuit with rival Oracle. The German company said it would raise its dividend for 2010 by 20%, and it expects sales and profit growth in 2011.
Yahoo fell 2.8% after the Internet search company late Tuesday gave a current-quarter revenue forecast that fell short of Wall Street's expectations.
Toyota Motor shares lost 1.9% in New York after the auto maker said it was recalling more than 1.7 million vehicles worldwide to fix problems, including fuel-system defects.
The euro slipped to $1.3675, from $1.3685 late Tuesday, while oil edged up and gold fell. Treasurys slumped broadly, pushing the yield on the benchmark 10-year note to 3.395%.
-The Dow Jones Industrial Average pulled back modestly Wednesday after briefly rising above the 12000 mark for the first time in nearly three years as investors digested resurgent home sales and President Barack Obama's State of the Union address.
The Dow was up 5.5 points to 11983 in mid-day trading, dragged down by disappointing earnings from Boeing. Leading on the upside was Dupont, up 2.7%. A finish above 12000 would reclaim a level that the blue-chip index last surrendered in June 2008.
The Nasdaq Composite gained 16 points to 2735, while the Standard & Poor's 500-stock index was up five points at 1296, putting it on the cusp of 1300, a level it last held in August 2008.
The traversing of the 12000 barrier, while temporary, was the latest reminder of the durability of the stock market bull run on a trading day dominated by headline news from the government and the Federal Reserve, whose massive interventions helped propel markets to its current levels.
The Dow made its first pass at 12000 in 2006, as credit expansion fueled a home-buying binge that eventually ended in the 2007-2008 housing bust. From a peak of 14198.10 in October 2007, the market tumbled to a March 2009 low of 6469.95, wiping out more than half of the blue-chip index's market capitalization.
However, a combination of fiscal and in particular monetary stimulus helped fuel optimism in the market. Since the Federal Reserve made clear its plans to embark on a second massive wave of asset buying last August, the market has gained nearly 20%.
The bull market's reliance on the Fed, however, has had some investors questioning the durability of the rally.
"Corporate earnings have been so dramatically better over the last two years that, even though it hasn't equated in a better economy, people see these earnings and want to get involved," said Peter Costa, a New York Stock Exchange floor trader with Empire Executions. "After the housing bubble that burst in 2007-08, I think we'll probably never see those levels again.... Nine to ten percent of our people are just trying to make ends meet, and I'm not sure you can get that sort of a run-up when so many people are just trying to get basic needs met."
Wednesday's moves came after Obama's State of the Union speech Tuesday night challenged lawmakers in both major parties to rise above partisan divisions to tackle problems that will allow the U.S. to compete in the global economy. Among his proposals, the president called on Congress to lower the corporate tax rate by closing industry-specific loopholes and find spending cuts across the government. The president also called for a five-year freeze on nondefense discretionary spending.
"A lot of what he said could have been said by a Republican," said Doug Roberts, chief investment strategist at Channel Capital Research. Mr. Roberts said much of the expectations of President Obama's move to the center had already been factored in by the market, but Tuesday's speech were still important for reaffirming market expectations of a more centrist government.
New-home sales data also came in much stronger than expected, pushing the market higher. Sales increased 17.5% compared with the prior month, rising to a seasonally adjusted annual sales pace of 329,000. The increase was driven by a nearly 72% jump in the West. Economists had expected an increase to an annual rate of 299,000. The median sales price for a new home sold in December was up 8.5% from the same month a year ago.
Investors are still awaiting the latest statement from the Federal Open Market Committee at 2:15 p.m. EST. The market will be watching for confirmation that the central bank still sees the economy as improving, but still in need of its stimulus. Investors are also curious to see how many dissenters there will be to the continuation of the quantitative-easing program, given that there will be a different mix of Fed presidents voting. Just one or two of the Fed presidents are expected to dissent, so no policy changes are likely.
Leading the way on Wednesday were materials and energy stocks. AK Steel Holding rose 4.1%, Cliffs Natural Resources gained 3.1% and U.S. Steel added 2.5%. Halliburton surged 5.5% and Baker Huges advanced 4%.
Among Wednesday's slew of earnings announcements, aerospace giant Boeing posted an 8.2% decline in fourth-quarter profit, despite a tax-related gain adding to the bottom line, as revenue and margins slid. Boeing offered a 2011 profit forecast of $3.80 to $4 a share, below FactSet Research consensus estimates of $4.59 a share. Shares fell 3.6%, the deepest decliner among the Dow's 30 components.
United Technologies fell 1.1% after strong gains on Tuesday. The maker of Otis elevators and Pratt & Whitney plane engines reported a 12% rise in profit to $1.2 billion as sales grew 6.3%, topping analysts' estimates. Revenue increased at five of the company's six segments.
Airline stocks were also bolstered by hopes that carriers will be able to continue increasing airfares amid rising passenger demand. US Airways Group soared 12% after swinging to a fourth-quarter profit, despite significantly higher fuel prices amid a rebound in demand and cost controls.
United Continental Holdings jumped 8.6% as revenues grew better than expected growth amid rising traffic and capacity. Even so, the company--reporting combined results for the first time since October's merger between UAL Corp.'s United Airlines and Continental Airlines--reported a widening loss.
American Airlines parent AMR Corp. gained 4.7% while Delta Air Lines added 2.1%.
Xerox tumbled 7.3% after fourth-quarter earnings declined 5%, hurt by restructuring costs and a modest first-quarter earnings outlook.
SAP AG gained 1.7% in New York after Europe's largest software maker showed operational strength, despite taking a fourth-quarter hit on charges of almost one billion euros to cover the costs of its lawsuit with rival Oracle. The German company said it would raise its dividend for 2010 by 20%, and it expects sales and profit growth in 2011.
Yahoo fell 2.8% after the Internet search company late Tuesday gave a current-quarter revenue forecast that fell short of Wall Street's expectations.
Toyota Motor shares lost 1.9% in New York after the auto maker said it was recalling more than 1.7 million vehicles worldwide to fix problems, including fuel-system defects.
The euro slipped to $1.3675, from $1.3685 late Tuesday, while oil edged up and gold fell. Treasurys slumped broadly, pushing the yield on the benchmark 10-year note to 3.395%.
Tuesday, January 25, 2011
WORLD FOREX: Euro Rises Vs Dollar
The euro gained against the dollar in Asia Tuesday as firm share prices in most Asian markets buoyed risk sentiment, while expectations grew that the European Central Bank may raise interest rates ahead of the U.S. and Japan, benefiting the common currency.
Asian shares gained broadly after a strong performance on Wall Street, with the Australian market bolstered by news of lower-than-expected inflation. Japan's Nikkei Stock Average was up 1.1% while Australia's S&P/ASX 200 was 0.5% higher. Markets in South Korea and Hong Kong also gained.
Also helping the euro are growing expectations the euro-zone may raise key interest rates to combat rising inflation in the coming months, while the U.S. and Japan likely continue on the easing path, dealers said.
"Speculation is growing that the euro-zone will be the first to raise interest rates among major economies, Japan, the U.S. and the euro-zone," said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and Banking.
"Although Europe has a long way to go to get its fiscal mess in order, recent economic data show the economy is expanding. And with bond yields much higher than their U.S. counterparts, the euro is getting plenty of support," said Croy David, senior interest rate strategist at ANZ Bank in Wellington.
The Bank of Japan's policy board decided Tuesday to keep its easy monetary policy unchanged, as stable financial markets and growing optimism toward the economic outlook give it room to gauge the effects of "comprehensive monetary easing" announced in October.
Dealers said no immediate reaction was seen in the foreign exchange market to the Japanese central bank decision.
In Europe, attention will likely focus on the first sale of up to EUR5 billion of bonds by the European Financial Stability Facility, dealers said.
"The sentiment (for the euro) will get another boost if the bond sales attract a great deal of demand," Kenichiro Ikezawa, fund manager at Daiwa SB Investments.
Ikezawa said the euro may rise to 1.3740 later in the global day.
The euro was at $1.3656 as of 0450 GMT from $1.3638 late Monday in New York, according to EBS. The dollar was at Y82.44 from Y82.53, while the euro was at Y112.59 from Y112.55.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.933 from 78.038.
Elsewhere, the Australian dollar fell against the dollar on weaker-than-expected Australian consumer price index data for the fourth quarter. The Australian dollar was at $0.9956 from $0.9987.
The Australian consumer price index rose 0.4% in the fourth quarter of 2010 from the third quarter, and 2.7% from a year earlier, the Australian Bureau of Statistics said Tuesday. Economists on average had expected the CPI to post a gain of 0.7% in the quarter.
Economists said the Reserve Bank of Australia, which targets inflation at 2%-3%, now looks likely to be sidelined until the second half of 2011
The euro gained against the dollar in Asia Tuesday as firm share prices in most Asian markets buoyed risk sentiment, while expectations grew that the European Central Bank may raise interest rates ahead of the U.S. and Japan, benefiting the common currency.
Asian shares gained broadly after a strong performance on Wall Street, with the Australian market bolstered by news of lower-than-expected inflation. Japan's Nikkei Stock Average was up 1.1% while Australia's S&P/ASX 200 was 0.5% higher. Markets in South Korea and Hong Kong also gained.
Also helping the euro are growing expectations the euro-zone may raise key interest rates to combat rising inflation in the coming months, while the U.S. and Japan likely continue on the easing path, dealers said.
"Speculation is growing that the euro-zone will be the first to raise interest rates among major economies, Japan, the U.S. and the euro-zone," said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and Banking.
"Although Europe has a long way to go to get its fiscal mess in order, recent economic data show the economy is expanding. And with bond yields much higher than their U.S. counterparts, the euro is getting plenty of support," said Croy David, senior interest rate strategist at ANZ Bank in Wellington.
The Bank of Japan's policy board decided Tuesday to keep its easy monetary policy unchanged, as stable financial markets and growing optimism toward the economic outlook give it room to gauge the effects of "comprehensive monetary easing" announced in October.
Dealers said no immediate reaction was seen in the foreign exchange market to the Japanese central bank decision.
In Europe, attention will likely focus on the first sale of up to EUR5 billion of bonds by the European Financial Stability Facility, dealers said.
"The sentiment (for the euro) will get another boost if the bond sales attract a great deal of demand," Kenichiro Ikezawa, fund manager at Daiwa SB Investments.
Ikezawa said the euro may rise to 1.3740 later in the global day.
The euro was at $1.3656 as of 0450 GMT from $1.3638 late Monday in New York, according to EBS. The dollar was at Y82.44 from Y82.53, while the euro was at Y112.59 from Y112.55.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.933 from 78.038.
Elsewhere, the Australian dollar fell against the dollar on weaker-than-expected Australian consumer price index data for the fourth quarter. The Australian dollar was at $0.9956 from $0.9987.
The Australian consumer price index rose 0.4% in the fourth quarter of 2010 from the third quarter, and 2.7% from a year earlier, the Australian Bureau of Statistics said Tuesday. Economists on average had expected the CPI to post a gain of 0.7% in the quarter.
Economists said the Reserve Bank of Australia, which targets inflation at 2%-3%, now looks likely to be sidelined until the second half of 2011
U.S. stock index futures down
* U.S. stock index futures pointed to a weaker open on Wall Street on Tuesday, with futures for the S&P 500 SPc1, for the Dow Jones DJc1 and for the Nasdaq 100 NDc1 down 0.1-0.2 percent.
* The U.S. Federal Open Market Committee begins its two-day meeting on interest-rate policy. The Fed, in a statement due around 1915 GMT on Wednesday, was widely expected to acknowledge improving economic conditions marked by signs of life among consumers and factories. [ID:nFEDAHEAD]
* At 1245 GMT ICSC/Goldman Sachs will release chain store sales for the week ended Jan. 22, versus the prior week. In the previous week, sales fell 0.1 percent.
* BlackRock Inc (BLK.N), the world's largest asset manager, is expected to report healthy gains in fourth quarter profit and revenue on Tuesday, aided in no small measure by the global stock market rally. [ID:nN24204446]
* Other major companies to report results on Tuesday include Yahoo (YHOO.O), Johnson & Johnson (JNJ.N), DuPont (DD.N), 3M Company (MMM.N) and Harley-Davidson (HOG.N).
* At 1355 GMT, Redbook releases its Retail Sales Index of department and chain store sales for January versus December. In the prior period, sales were down 0.6 percent.
* Britain is to give News Corp (NWSA.O) a final chance to avoid a prolonged and costly investigation into its proposed $12 billion buyout of BSkyB (BSY.L), in a move that is likely to draw criticism from rivals. [ID:nLDE7040N6]
* At 1400 GMT Standard & Poor's is set to release its S&P Case/Shiller Home Price Index for November. Economists expect a drop of 0.8 percent versus a 1.0 percent fall in the previous month.
* A package of U.S. tax cuts should give a lift to a global economic recovery that had already begun to gain speed late last year, the IMF said as it revised its world growth forecast higher. [ID:nJAT007100]
* At 1500 GMT, the Federal Housing Finance Agency issues Home Price Index for November. In October, the index rose 0.7 percent.
* Also at 1500 GMT the Conference Board releases January consumer confidence. Economists in a Reuters survey expect a reading of 54.3 compared with 52.5 in December.
* Resource-related stock will be in focus, with U.S. oil CLc1 falling for a second straight session as an expected rise in U.S. stocks and a weak technical outlook weighed on prices.
* The FTSEurofirst 300 .FTEU3 index of top European shares was flat in morning trade after gaining earlier in the session, while Japan's Nikkei average .N225 ended 1.2 percent firmer.
* On Monday the Dow Jones industrial average .DJI ended up 108.68 points, or 0.92 percent, at 11,980.52. The Standard & Poor's 500 Index .SPX was up 7.49 points, or 0.58 percent, at 1,290.84. The Nasdaq Composite Index .IXIC was up 28.01 points, or 1.04 percent, at 2,717.55.
* U.S. stock index futures pointed to a weaker open on Wall Street on Tuesday, with futures for the S&P 500 SPc1, for the Dow Jones DJc1 and for the Nasdaq 100 NDc1 down 0.1-0.2 percent.
* The U.S. Federal Open Market Committee begins its two-day meeting on interest-rate policy. The Fed, in a statement due around 1915 GMT on Wednesday, was widely expected to acknowledge improving economic conditions marked by signs of life among consumers and factories. [ID:nFEDAHEAD]
* At 1245 GMT ICSC/Goldman Sachs will release chain store sales for the week ended Jan. 22, versus the prior week. In the previous week, sales fell 0.1 percent.
* BlackRock Inc (BLK.N), the world's largest asset manager, is expected to report healthy gains in fourth quarter profit and revenue on Tuesday, aided in no small measure by the global stock market rally. [ID:nN24204446]
* Other major companies to report results on Tuesday include Yahoo (YHOO.O), Johnson & Johnson (JNJ.N), DuPont (DD.N), 3M Company (MMM.N) and Harley-Davidson (HOG.N).
* At 1355 GMT, Redbook releases its Retail Sales Index of department and chain store sales for January versus December. In the prior period, sales were down 0.6 percent.
* Britain is to give News Corp (NWSA.O) a final chance to avoid a prolonged and costly investigation into its proposed $12 billion buyout of BSkyB (BSY.L), in a move that is likely to draw criticism from rivals. [ID:nLDE7040N6]
* At 1400 GMT Standard & Poor's is set to release its S&P Case/Shiller Home Price Index for November. Economists expect a drop of 0.8 percent versus a 1.0 percent fall in the previous month.
* A package of U.S. tax cuts should give a lift to a global economic recovery that had already begun to gain speed late last year, the IMF said as it revised its world growth forecast higher. [ID:nJAT007100]
* At 1500 GMT, the Federal Housing Finance Agency issues Home Price Index for November. In October, the index rose 0.7 percent.
* Also at 1500 GMT the Conference Board releases January consumer confidence. Economists in a Reuters survey expect a reading of 54.3 compared with 52.5 in December.
* Resource-related stock will be in focus, with U.S. oil CLc1 falling for a second straight session as an expected rise in U.S. stocks and a weak technical outlook weighed on prices.
* The FTSEurofirst 300 .FTEU3 index of top European shares was flat in morning trade after gaining earlier in the session, while Japan's Nikkei average .N225 ended 1.2 percent firmer.
* On Monday the Dow Jones industrial average .DJI ended up 108.68 points, or 0.92 percent, at 11,980.52. The Standard & Poor's 500 Index .SPX was up 7.49 points, or 0.58 percent, at 1,290.84. The Nasdaq Composite Index .IXIC was up 28.01 points, or 1.04 percent, at 2,717.55.
Saturday, January 22, 2011
Euro up against dollar on German economic strength
The 17-nation euro is higher against the dollar, helped by a survey showing business confidence in Germany, Europe's largest economy, continued to rise in January.
The euro bought $1.3540 in morning European trading on Friday, up from $1.3469 the night before in New York.
The British pound is unchanged at $1.5910 while the dollar is down to 82.81 Japanese yen from 83.04 yen the night before in New York.
The euro gained traction after the closely-watched Ifo index showed that confidence among German businesses rose again in January.
The German economy enjoyed strong growth last year due to a rebound in international trade, which boosted the country's high-value exports. Analysts expect Germany to remain Europe's principal engine of growth in 2011 as well.
The 17-nation euro is higher against the dollar, helped by a survey showing business confidence in Germany, Europe's largest economy, continued to rise in January.
The euro bought $1.3540 in morning European trading on Friday, up from $1.3469 the night before in New York.
The British pound is unchanged at $1.5910 while the dollar is down to 82.81 Japanese yen from 83.04 yen the night before in New York.
The euro gained traction after the closely-watched Ifo index showed that confidence among German businesses rose again in January.
The German economy enjoyed strong growth last year due to a rebound in international trade, which boosted the country's high-value exports. Analysts expect Germany to remain Europe's principal engine of growth in 2011 as well.
Friday, January 21, 2011
FOREX-Euro hits 2-month high vs dollar
The euro hit a two-month high above $1.36 on Friday and its break of important technical levels suggested more gains to come now that anxiety about a euro zone debt crisis has started to wane.
The euro has outperformed the dollar in eight of the last 10 sessions, and Friday's breach of $1.3570 took it above the 50 percent retracement of its November-to-January slide. it was last up 0.9 percent at $1.3594 EUR=EBS.
Traders said a solid break of $1.36 would target $1.3626 next week, followed by the 100-week moving average at $1.3640 and then $1.3736, the 61.8 percent retracement of a decline that started when the euro was above $1.42 in November.
"Markets are clearly buying into the view that the European debt crisis is being resolved with modest pain," said Steven Englander, head of G10 FX strategy at Citigroup in New York.
The euro also hit a five-week high around 112.44 yen after a break above a closely watched Japanese technical indicator around 112 yen EURJPY=R, with a close above there seen as bullish. The dollar slipped 0.3 percent to 82.73 yen JPY=.
Recent strong debt auctions in Spain and Portugal and talk that officials were considering letting a European rescue fund purchase government debt from troubled euro zone countries heartened investors, narrowing euro zone credit spreads and boosting European bank shares along with the euro.
NOT A SURE BET
Few investors expect the Federal Reserve, which meets next week, to alter its commitment to loose monetary policy or its plan to buy $600 billion in Treasury debt by mid-2011.
The European Central Bank, by contrast, recently warned of rising euro zone price pressures, sparking speculation that it could lift lending rates before the Fed does. Traders said that could add to euro momentum next week.
UK inflation is also above the Bank of England's target, though policymaker Adam Posen said Friday that did not mean a rate hike was imminent. Sterling was up 0.5 percent at $1.5995 GBP=D4 Friday, though it slipped to 84.96 pence per euro EURGBP=, 0.3 percent weaker on the day
To be sure, after two weeks of nearly uninterrupted gains, the euro may be vulnerable to a correction.
"The situation in Europe is still largely unresolved," said Jason Polit, an analyst at Charles Schwab Private Client in Phoenix. "Some sort of bailout for one or more of the peripheral economies will likely occur eventually and that will put downward pressure the euro."
Investors have worried about debt levels in Spain and Portugal, with the latter often tagged as likely to require a bailout similar to those extended to Greece and Ireland.
However, Spanish government bond yields fell Friday, with the spread over German Bunds narrowing to its tightest since mid-November, and Portuguese bond spreads also narrowed.
Polit, who manages around $235 million in assets for clients, said he was still playing it safe, reducing allocations in emerging markets and focusing more on developed markets with manageable debt levels, such as Germany.
The euro hit a two-month high above $1.36 on Friday and its break of important technical levels suggested more gains to come now that anxiety about a euro zone debt crisis has started to wane.
The euro has outperformed the dollar in eight of the last 10 sessions, and Friday's breach of $1.3570 took it above the 50 percent retracement of its November-to-January slide. it was last up 0.9 percent at $1.3594 EUR=EBS.
Traders said a solid break of $1.36 would target $1.3626 next week, followed by the 100-week moving average at $1.3640 and then $1.3736, the 61.8 percent retracement of a decline that started when the euro was above $1.42 in November.
"Markets are clearly buying into the view that the European debt crisis is being resolved with modest pain," said Steven Englander, head of G10 FX strategy at Citigroup in New York.
The euro also hit a five-week high around 112.44 yen after a break above a closely watched Japanese technical indicator around 112 yen EURJPY=R, with a close above there seen as bullish. The dollar slipped 0.3 percent to 82.73 yen JPY=.
Recent strong debt auctions in Spain and Portugal and talk that officials were considering letting a European rescue fund purchase government debt from troubled euro zone countries heartened investors, narrowing euro zone credit spreads and boosting European bank shares along with the euro.
NOT A SURE BET
Few investors expect the Federal Reserve, which meets next week, to alter its commitment to loose monetary policy or its plan to buy $600 billion in Treasury debt by mid-2011.
The European Central Bank, by contrast, recently warned of rising euro zone price pressures, sparking speculation that it could lift lending rates before the Fed does. Traders said that could add to euro momentum next week.
UK inflation is also above the Bank of England's target, though policymaker Adam Posen said Friday that did not mean a rate hike was imminent. Sterling was up 0.5 percent at $1.5995 GBP=D4 Friday, though it slipped to 84.96 pence per euro EURGBP=, 0.3 percent weaker on the day
To be sure, after two weeks of nearly uninterrupted gains, the euro may be vulnerable to a correction.
"The situation in Europe is still largely unresolved," said Jason Polit, an analyst at Charles Schwab Private Client in Phoenix. "Some sort of bailout for one or more of the peripheral economies will likely occur eventually and that will put downward pressure the euro."
Investors have worried about debt levels in Spain and Portugal, with the latter often tagged as likely to require a bailout similar to those extended to Greece and Ireland.
However, Spanish government bond yields fell Friday, with the spread over German Bunds narrowing to its tightest since mid-November, and Portuguese bond spreads also narrowed.
Polit, who manages around $235 million in assets for clients, said he was still playing it safe, reducing allocations in emerging markets and focusing more on developed markets with manageable debt levels, such as Germany.
Wednesday, January 19, 2011
BEFORE THE BELL: US Stock Futures Slightly Mixed
U.S. stock index futures were trading slightly mixed Wednesday after investors digested strong earnings data from Apple Inc. and awaited results from Goldman Sachs Group Inc.
The Dow Jones Industrial Average rose 5 points to 11816, while the S&P 500 futures fell 0.8 points to 1293.90. Nasdaq 100 futures rose 0.25 point to 2331.
Strategists said investors continue to show a hearty, underlying appetite for risk, which bodes well for equities.
"Overall, any weakness tends to be short-lived," said David Jones, chief market strategist at IG Index, with investors gunning for the 12,000 level on the Dow Jones Industrial Average.
Strategists at Lloyds TSB said in a note: "All in all, the 'risk-on/reflation' trade seems in rude health, across asset classes, and keeps defying our expectation for a correction in [the first quarter]."
After Tuesday's closing bell, Apple Inc. (AAPL) said first-quarter net income jumped to $6 billion, or $6.43 a share from $3.38 billion, or $3.67 a share, for the same period last year. Revenue jumped more than 70% to $26.74 billion on strong holiday sales of the iPhone and iPad.
Apple shares fell by more than 2% in Tuesday's regular session, a day after the company announced that Chief Executive Steve Jobs would be going on another medical leave. Apple shares rose 1% in U.S. premarket trade on Wednesday.
Shares of International Business Machines Corp. (IBM) gained 2.4% in premarket trade. The firm said late Tuesday that its second-quarter net income nearly doubled to $143.7 million, or 62 cents a share. Revenue rose 50% to $383.6 million.
Bank of New York Mellon Corp. (BK) said Wednesday that fourth-quarter profit from continuing operations fell 3.1% to $690 million, or 55 cents a share, including restructuring charges of 4 cents. Analysts surveyed by Factset Research had produced a consensus forecast of 57 cents a share.
Ahead of Wednesday's opening bell, Goldman Sachs Group Inc. (GS) is expected to post fourth-quarter earnings of $3.76 a share, according to a survey of analysts by FactSet Research.
Wells Fargo & Co. (WFC) is also expected to report ahead of the open. The consensus estimate is for earnings of 61 cents a share.
The Wall Street Journal reported that Citigroup Inc.'s (C) chief executive officer, Vikram Pandit, plans to name John Havens as president and chief operating officer as part of a structural overhaul. Havens has led the bank's institutional clients group for the past three years.
The Commerce Department is scheduled to release December housing starts data at 8:30 a.m. EST. The Dow Jones forecast is for a drop of 0.2% to a seasonally-adjusted 554,000. Starts rose 3.9% in November to a 555,000 rate.
European stocks were mostly lower in late morning trade, with losses for ASML Holding NV (ASML.AE, ASML) weighing on the technology sector in the wake of the firm's results.
Most Asian markets advanced Wednesday, cheered by results from Apple and IBM, while a weaker dollar lifted commodity-sector shares.
U.S. stocks ended higher on Tuesday as upbeat manufacturing data boosted the energy and materials sectors, more than offsetting a sub-par earnings report from Citigroup and worries about the health of Apple's CEO Steve Jobs.
The Dow Jones Industrial Average rose 50.55 points to close at 11837.03, while the S&P 500 ended with a gain of 1.78 points at 1295.02. The Nasdaq 100 finished with a 0.2% gain at 2328.79.
The Dow last week posted its seventh consecutive weekly gain, with Tuesday's advance taking the index to its highest level since mid-2008.
The U.S. dollar was weaker versus most major rivals, slipping 0.5% versus the Japanese currency to trade at 82.26 yen. The euro rose 0.6% against the dollar to $1.3476.
Gold futures rose $4.70 to $1,373.10 an ounce. Nymex crude-oil futures gained 56 cents to trade at $91.94 a barrel in electronic trade.
U.S. stock index futures were trading slightly mixed Wednesday after investors digested strong earnings data from Apple Inc. and awaited results from Goldman Sachs Group Inc.
The Dow Jones Industrial Average rose 5 points to 11816, while the S&P 500 futures fell 0.8 points to 1293.90. Nasdaq 100 futures rose 0.25 point to 2331.
Strategists said investors continue to show a hearty, underlying appetite for risk, which bodes well for equities.
"Overall, any weakness tends to be short-lived," said David Jones, chief market strategist at IG Index, with investors gunning for the 12,000 level on the Dow Jones Industrial Average.
Strategists at Lloyds TSB said in a note: "All in all, the 'risk-on/reflation' trade seems in rude health, across asset classes, and keeps defying our expectation for a correction in [the first quarter]."
After Tuesday's closing bell, Apple Inc. (AAPL) said first-quarter net income jumped to $6 billion, or $6.43 a share from $3.38 billion, or $3.67 a share, for the same period last year. Revenue jumped more than 70% to $26.74 billion on strong holiday sales of the iPhone and iPad.
Apple shares fell by more than 2% in Tuesday's regular session, a day after the company announced that Chief Executive Steve Jobs would be going on another medical leave. Apple shares rose 1% in U.S. premarket trade on Wednesday.
Shares of International Business Machines Corp. (IBM) gained 2.4% in premarket trade. The firm said late Tuesday that its second-quarter net income nearly doubled to $143.7 million, or 62 cents a share. Revenue rose 50% to $383.6 million.
Bank of New York Mellon Corp. (BK) said Wednesday that fourth-quarter profit from continuing operations fell 3.1% to $690 million, or 55 cents a share, including restructuring charges of 4 cents. Analysts surveyed by Factset Research had produced a consensus forecast of 57 cents a share.
Ahead of Wednesday's opening bell, Goldman Sachs Group Inc. (GS) is expected to post fourth-quarter earnings of $3.76 a share, according to a survey of analysts by FactSet Research.
Wells Fargo & Co. (WFC) is also expected to report ahead of the open. The consensus estimate is for earnings of 61 cents a share.
The Wall Street Journal reported that Citigroup Inc.'s (C) chief executive officer, Vikram Pandit, plans to name John Havens as president and chief operating officer as part of a structural overhaul. Havens has led the bank's institutional clients group for the past three years.
The Commerce Department is scheduled to release December housing starts data at 8:30 a.m. EST. The Dow Jones forecast is for a drop of 0.2% to a seasonally-adjusted 554,000. Starts rose 3.9% in November to a 555,000 rate.
European stocks were mostly lower in late morning trade, with losses for ASML Holding NV (ASML.AE, ASML) weighing on the technology sector in the wake of the firm's results.
Most Asian markets advanced Wednesday, cheered by results from Apple and IBM, while a weaker dollar lifted commodity-sector shares.
U.S. stocks ended higher on Tuesday as upbeat manufacturing data boosted the energy and materials sectors, more than offsetting a sub-par earnings report from Citigroup and worries about the health of Apple's CEO Steve Jobs.
The Dow Jones Industrial Average rose 50.55 points to close at 11837.03, while the S&P 500 ended with a gain of 1.78 points at 1295.02. The Nasdaq 100 finished with a 0.2% gain at 2328.79.
The Dow last week posted its seventh consecutive weekly gain, with Tuesday's advance taking the index to its highest level since mid-2008.
The U.S. dollar was weaker versus most major rivals, slipping 0.5% versus the Japanese currency to trade at 82.26 yen. The euro rose 0.6% against the dollar to $1.3476.
Gold futures rose $4.70 to $1,373.10 an ounce. Nymex crude-oil futures gained 56 cents to trade at $91.94 a barrel in electronic trade.
Sunday, January 16, 2011
US Stock Futures In Red As Retail Sales Disappoint
U.S. stock futures remained lower Friday morning following a smaller-than-expected gain in U.S. retail sales for December while another round of tightening from China also weighed.
Dow Jones Industrial Average futures were recently down 46 points at 11637, while Standard & Poor's 500 futures fell 6 points to 1276 and Nasdaq Composite futures slipped 4 points to 2299. Prior to the data, Dow futures had been down 48 points, while S&P 500 futures were off 6 points and Nasdaq futures were down 4 points. Changes in U.S. stock futures do not always accurately predict early stock moves after the open.
U.S. retail sales posted a gain of 0.6% in December, the sixth-straight increase, but the rise was smaller than expected as high unemployment weighed on the minds of holiday shoppers. Economists had expected a 0.9% increase.
Separate data showed U.S. consumer prices in December surged to the fastest pace since June 2009, although the rise was driven by strong energy prices, which tend to be volatile. The seasonally adjusted consumer price index last month increased by 0.5% from November, the Labor Department said Friday. For the full 2010, consumer price inflation rose 1.5%.
So-called core inflation, which excludes energy and food prices and is closely watched by the Federal Reserve, rose by only 0.1%. Economists had expected consumer prices to rise by 0.5% and core CPI to gain 0.1%.
Overseas, China's central bank said it will raise banks' reserve-requirement ratio by half a percentage point, following six such increases last year, in the government's latest move to curb inflation. The move sparked worries over how further tightening from China could impact global demand and growth.
However, the euro leapt to 1.3363 as worries about euro-zone debt continued to ease. The German government remains "absolutely convinced" that the size of the rescue fund for troubled euro-zone countries doesn't need to be boosted, government spokesman Steffen Seibert said Friday.
Still, data showed the euro-zone's annual rate of inflation rose above the European Central Bank's medium-term target for the first time in more than two years in December, driven by fuel, food, alcohol and tobacco prices. The figures are likely to fuel concerns that interest rates could rise sooner than expected after ECB President Jean-Claude Trichet warned Thursday that inflation may increase in the short term but should moderate later this year.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.1%. Treasurys were lower, lifting the yield on the 10-year note up to 3.33%. Crude-oil futures slipped while gold futures also fell.
Among companies in focus, J.P. Morgan Chase posted a 47% jump in fourth-quarter profit, beating analysts' expectations as revenue increased and the banking giant sharply reduced its loan-loss reserves. Still, the stock slipped 0.3% in premarket trading.
Intel rose 0.9% premarket. The company's fourth-quarter earnings rose 48%, topping analysts' views, as the chip-making giant's sales and margins rose.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Coinstar Inc. (CSTR), Intel Corp. (INTC) and J.P. Morgan Chase & Co. (JPM).
Coinstar shares fell 27% pre-market to $41.84 after it slashed its financial outlook for the fourth quarter and current year as results were hurt by weak holiday rentals and the delay it has had to put on some new DVD releases. The company, which operates coin-counting stations and redbox DVD-rental kiosks, said it has been relying more on the latter business for growth recently.
Intel reported yet another record quarter--and projected better-than-expected first-quarter revenue and margins--as the semiconductor maker continues to benefit from strong demand from businesses. Shares rose 1.1% to $21.53 in pre-market trading.
J.P. Morgan's fourth-quarter profit jumped 47%, beating analysts' expectations, as revenue increased and it continued to set aside less to cover potential credit losses. But shares slipped 0.6% to $44.17 in pre-market trading.
Toy maker Hasbro Inc. (HAS) projected fourth-quarter revenue slightly below analysts' expectations and predicted "modest" earnings growth for the year. Shares fell 4.8% to $42.51 pre-market.
Sterling Bancshares Inc. (SBIB), which is facing a proxy fight from its largest shareholder, has put itself on the auction block, The Wall Street Journal reported, citing people familiar with the situation. Bids were due late Thursday, and a sale of the company is expected to be announced as early as next week, these people said. Shares gained 5.6% to $7.90 in pre-market trading.
Dendreon Corp. (DNDN) unveiled plans to offer $500 million in notes convertible to cash and shares of stock or a combination thereof. Shares were down 2.2% at $35.80 in pre-market trading on the possibility of share-value dilution. The biotechnology company, which specializes in cancer vaccines, has a market capitalization of about $5.4 billion.
Shares of Cumberland Pharmaceuticals Inc. (CPIX) jumped after the pharmaceutical company disclosed it won Food and Drug Administration approval for a new formula of Acetadote, an injectable treatment for non-acetaminophen acute liver failure. The company's stock surged 18% to $6.70 in pre-market trading.
Local.com Corp. (LOCM) said it plans to offer 4 million shares of its stock in an offering to the public. The company, which operates a network of local search websites, didn't specify at what price it planned to sell the shares. Local.com, the latest company to tap equity markets for cash, has about 17.2 million shares outstanding. Shares fell 8% to $4.52 in pre-market trading.
RBC Capital Markets raised its stock-investment rating on for-profit education company Corinthian Colleges Inc. (COCO) to outperform from underperform after meeting with the company's new chief executive. The firm said it expects Jack Massimino, who previously served as Corinthian's chairman and before that CEO, will leverage his experience in running public companies to develop a rehabilitation plan that stabilizes enrollment and addresses the company's perilous regulatory position. Shares gained 5.9% to $5 in pre-market trading.
Watch List
Alliant Energy Corp. (LNT) boosted its quarterly dividend by 7.6%, a move that will cost the company an extra $3.3 million a quarter.
Alpha Natural Resources Inc. (ANR) raised its 2011 shipment target for the high-margin coal used by steel makers, expecting to benefit from Australian flooding that has disrupted the market.
AOL Inc. (AOL) detailed new content partnership agreements with real-estate search site Move Inc. (MOVE) and two other online companies, as the Internet company continues to add to the original content it offers to attract users.
M&T Bank Corp.'s (MTB) fourth-quarter profit jumped 49%, topping analysts' estimates as revenue rose and it set aside less to cover credit losses.
Mitel Networks Corp. (MITL) on Thursday named Danaher Corp. (DHR) executive Richard McBee as its chief executive, succeeding the retiring Don Smith. Mitel, which sells Internet-based communications items as well as applications that integrate voice, video and data communication with business programs, said McBee's new role is effective Monday.
Reynolds American Inc. (RAI) said it has agreed to sell its Lane Ltd. roll-your-own and pipe tobacco unit to Denmark's Scandanavian Tobacco Group A/S for $205 million.
Sealy Corp. (ZZ) swung to a fiscal fourth-quarter loss on an income-tax provision expense and a loss from discontinued operations related to the mattress maker's European and Brazilian businesses, although sales and margins grew.
Shuffle Master Inc.'s (SHFL) fiscal fourth-quarter earnings fell 9.1% mostly because of legal-settlement charges. The gambling-products supplier's adjusted results were better than expected.
United Technologies Corp. (UTX) agreed to sell its British manned guarding business to an affiliate of Sweden-based Securitas AB as the manufacturing company moves to focus more on its high-technology security business. Terms weren't disclosed.
U.S. stock futures remained lower Friday morning following a smaller-than-expected gain in U.S. retail sales for December while another round of tightening from China also weighed.
Dow Jones Industrial Average futures were recently down 46 points at 11637, while Standard & Poor's 500 futures fell 6 points to 1276 and Nasdaq Composite futures slipped 4 points to 2299. Prior to the data, Dow futures had been down 48 points, while S&P 500 futures were off 6 points and Nasdaq futures were down 4 points. Changes in U.S. stock futures do not always accurately predict early stock moves after the open.
U.S. retail sales posted a gain of 0.6% in December, the sixth-straight increase, but the rise was smaller than expected as high unemployment weighed on the minds of holiday shoppers. Economists had expected a 0.9% increase.
Separate data showed U.S. consumer prices in December surged to the fastest pace since June 2009, although the rise was driven by strong energy prices, which tend to be volatile. The seasonally adjusted consumer price index last month increased by 0.5% from November, the Labor Department said Friday. For the full 2010, consumer price inflation rose 1.5%.
So-called core inflation, which excludes energy and food prices and is closely watched by the Federal Reserve, rose by only 0.1%. Economists had expected consumer prices to rise by 0.5% and core CPI to gain 0.1%.
Overseas, China's central bank said it will raise banks' reserve-requirement ratio by half a percentage point, following six such increases last year, in the government's latest move to curb inflation. The move sparked worries over how further tightening from China could impact global demand and growth.
However, the euro leapt to 1.3363 as worries about euro-zone debt continued to ease. The German government remains "absolutely convinced" that the size of the rescue fund for troubled euro-zone countries doesn't need to be boosted, government spokesman Steffen Seibert said Friday.
Still, data showed the euro-zone's annual rate of inflation rose above the European Central Bank's medium-term target for the first time in more than two years in December, driven by fuel, food, alcohol and tobacco prices. The figures are likely to fuel concerns that interest rates could rise sooner than expected after ECB President Jean-Claude Trichet warned Thursday that inflation may increase in the short term but should moderate later this year.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.1%. Treasurys were lower, lifting the yield on the 10-year note up to 3.33%. Crude-oil futures slipped while gold futures also fell.
Among companies in focus, J.P. Morgan Chase posted a 47% jump in fourth-quarter profit, beating analysts' expectations as revenue increased and the banking giant sharply reduced its loan-loss reserves. Still, the stock slipped 0.3% in premarket trading.
Intel rose 0.9% premarket. The company's fourth-quarter earnings rose 48%, topping analysts' views, as the chip-making giant's sales and margins rose.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
Among the companies whose shares are expected to actively trade in Friday's session are Coinstar Inc. (CSTR), Intel Corp. (INTC) and J.P. Morgan Chase & Co. (JPM).
Coinstar shares fell 27% pre-market to $41.84 after it slashed its financial outlook for the fourth quarter and current year as results were hurt by weak holiday rentals and the delay it has had to put on some new DVD releases. The company, which operates coin-counting stations and redbox DVD-rental kiosks, said it has been relying more on the latter business for growth recently.
Intel reported yet another record quarter--and projected better-than-expected first-quarter revenue and margins--as the semiconductor maker continues to benefit from strong demand from businesses. Shares rose 1.1% to $21.53 in pre-market trading.
J.P. Morgan's fourth-quarter profit jumped 47%, beating analysts' expectations, as revenue increased and it continued to set aside less to cover potential credit losses. But shares slipped 0.6% to $44.17 in pre-market trading.
Toy maker Hasbro Inc. (HAS) projected fourth-quarter revenue slightly below analysts' expectations and predicted "modest" earnings growth for the year. Shares fell 4.8% to $42.51 pre-market.
Sterling Bancshares Inc. (SBIB), which is facing a proxy fight from its largest shareholder, has put itself on the auction block, The Wall Street Journal reported, citing people familiar with the situation. Bids were due late Thursday, and a sale of the company is expected to be announced as early as next week, these people said. Shares gained 5.6% to $7.90 in pre-market trading.
Dendreon Corp. (DNDN) unveiled plans to offer $500 million in notes convertible to cash and shares of stock or a combination thereof. Shares were down 2.2% at $35.80 in pre-market trading on the possibility of share-value dilution. The biotechnology company, which specializes in cancer vaccines, has a market capitalization of about $5.4 billion.
Shares of Cumberland Pharmaceuticals Inc. (CPIX) jumped after the pharmaceutical company disclosed it won Food and Drug Administration approval for a new formula of Acetadote, an injectable treatment for non-acetaminophen acute liver failure. The company's stock surged 18% to $6.70 in pre-market trading.
Local.com Corp. (LOCM) said it plans to offer 4 million shares of its stock in an offering to the public. The company, which operates a network of local search websites, didn't specify at what price it planned to sell the shares. Local.com, the latest company to tap equity markets for cash, has about 17.2 million shares outstanding. Shares fell 8% to $4.52 in pre-market trading.
RBC Capital Markets raised its stock-investment rating on for-profit education company Corinthian Colleges Inc. (COCO) to outperform from underperform after meeting with the company's new chief executive. The firm said it expects Jack Massimino, who previously served as Corinthian's chairman and before that CEO, will leverage his experience in running public companies to develop a rehabilitation plan that stabilizes enrollment and addresses the company's perilous regulatory position. Shares gained 5.9% to $5 in pre-market trading.
Watch List
Alliant Energy Corp. (LNT) boosted its quarterly dividend by 7.6%, a move that will cost the company an extra $3.3 million a quarter.
Alpha Natural Resources Inc. (ANR) raised its 2011 shipment target for the high-margin coal used by steel makers, expecting to benefit from Australian flooding that has disrupted the market.
AOL Inc. (AOL) detailed new content partnership agreements with real-estate search site Move Inc. (MOVE) and two other online companies, as the Internet company continues to add to the original content it offers to attract users.
M&T Bank Corp.'s (MTB) fourth-quarter profit jumped 49%, topping analysts' estimates as revenue rose and it set aside less to cover credit losses.
Mitel Networks Corp. (MITL) on Thursday named Danaher Corp. (DHR) executive Richard McBee as its chief executive, succeeding the retiring Don Smith. Mitel, which sells Internet-based communications items as well as applications that integrate voice, video and data communication with business programs, said McBee's new role is effective Monday.
Reynolds American Inc. (RAI) said it has agreed to sell its Lane Ltd. roll-your-own and pipe tobacco unit to Denmark's Scandanavian Tobacco Group A/S for $205 million.
Sealy Corp. (ZZ) swung to a fiscal fourth-quarter loss on an income-tax provision expense and a loss from discontinued operations related to the mattress maker's European and Brazilian businesses, although sales and margins grew.
Shuffle Master Inc.'s (SHFL) fiscal fourth-quarter earnings fell 9.1% mostly because of legal-settlement charges. The gambling-products supplier's adjusted results were better than expected.
United Technologies Corp. (UTX) agreed to sell its British manned guarding business to an affiliate of Sweden-based Securitas AB as the manufacturing company moves to focus more on its high-technology security business. Terms weren't disclosed.
Saturday, January 15, 2011
US Stock Markets performed Better then that of Asian and European
European stocks edged lower on Friday session, after China raised banks’ reserve requirement ratio and data showed an unexpected decline in the US consumer sentiment.
The FTSE 100 index gave up -21.81 points or -0.36% to close at 6,002.07. The DAX index added +0.59 points or +0.01% to close at 7,075.70, while the CAC 40 gained +8.45 points or +0.21% to close at 3,983.28.
The Stoxx Europe 600 index fell 0.1% to 283.77 on Friday session, but jumped 1% for the week.
The PSI 20 index slumped 1.3%, as shares of Banco Comercial Portugues moved down 2.4%. Spain’s benchmark index ended higher.
European technology stocks gained. ASML Holding NV advanced 6.4% in Amsterdam and Infineon Technologies AG moved up 1.6% in Frankfurt.
Central bank of China raised the reserve requirements for lenders on Friday for the fourth time in slightly more than two months.
Asian stock markets closed lower on Friday session, as unsatisfactory jobless-claims data from the US, and with Indian and Chinese shares retreating after inflation data triggered fears of an interest rate hike.
The Nikkei 225 index slipped -90.72 points or -0.86% to close at 10,499.04. The Straits Times index declined -9.91 points or -0.30% to close at 3,245.96, whereas the Hang Seng index added +44.25 points or +0.18% to close at 24,283.23.
Shanghai Composite dropped 1.3%, Australia’s S&P/ASX 200 added 0.1%, South Korea’s Kospi also rose 0.9%, while Taiwan’s Taiex closed little changed.
India’s Sensex, ahead in afternoon trading, was then yanked back by a wave of selling; it was down 1.8% late.
Tokyo Electron gained 3.2% and Ibiden rose 1.1% in Tokyo, Samsung Electronics added 1.2% in Seoul and Asustek Computer jumped 2.7% and Taiwan Semiconductor Manufacturing up 0.3%, in Taipei.
The Dow Jones index added +0.47% to 11,787.38. The NASDAQ index gained +0.73% to close at 2,755.30 its highest close since Nov. 6, 2007, while the S&P 500 index also up +0.74% its highest close since August 2008.
The Agriculture product rose at New York, with Corn added 0.97% to $648.75 per bushel and Wheat slipped 1.31% to $773.25 per bushel.
Consumer products price dropped, with Coffee decreased 0.09% to $234.40 a pound, Sugar dropped 0.97% to $30.59 a pound, while the Cotton prices added 0.73% to $142 a pound.
Crude oil price at New York Mercantile advanced 0.15% to $91.54 per barrel on the latest data.
European stocks edged lower on Friday session, after China raised banks’ reserve requirement ratio and data showed an unexpected decline in the US consumer sentiment.
The FTSE 100 index gave up -21.81 points or -0.36% to close at 6,002.07. The DAX index added +0.59 points or +0.01% to close at 7,075.70, while the CAC 40 gained +8.45 points or +0.21% to close at 3,983.28.
The Stoxx Europe 600 index fell 0.1% to 283.77 on Friday session, but jumped 1% for the week.
The PSI 20 index slumped 1.3%, as shares of Banco Comercial Portugues moved down 2.4%. Spain’s benchmark index ended higher.
European technology stocks gained. ASML Holding NV advanced 6.4% in Amsterdam and Infineon Technologies AG moved up 1.6% in Frankfurt.
Central bank of China raised the reserve requirements for lenders on Friday for the fourth time in slightly more than two months.
Asian stock markets closed lower on Friday session, as unsatisfactory jobless-claims data from the US, and with Indian and Chinese shares retreating after inflation data triggered fears of an interest rate hike.
The Nikkei 225 index slipped -90.72 points or -0.86% to close at 10,499.04. The Straits Times index declined -9.91 points or -0.30% to close at 3,245.96, whereas the Hang Seng index added +44.25 points or +0.18% to close at 24,283.23.
Shanghai Composite dropped 1.3%, Australia’s S&P/ASX 200 added 0.1%, South Korea’s Kospi also rose 0.9%, while Taiwan’s Taiex closed little changed.
India’s Sensex, ahead in afternoon trading, was then yanked back by a wave of selling; it was down 1.8% late.
Tokyo Electron gained 3.2% and Ibiden rose 1.1% in Tokyo, Samsung Electronics added 1.2% in Seoul and Asustek Computer jumped 2.7% and Taiwan Semiconductor Manufacturing up 0.3%, in Taipei.
The Dow Jones index added +0.47% to 11,787.38. The NASDAQ index gained +0.73% to close at 2,755.30 its highest close since Nov. 6, 2007, while the S&P 500 index also up +0.74% its highest close since August 2008.
The Agriculture product rose at New York, with Corn added 0.97% to $648.75 per bushel and Wheat slipped 1.31% to $773.25 per bushel.
Consumer products price dropped, with Coffee decreased 0.09% to $234.40 a pound, Sugar dropped 0.97% to $30.59 a pound, while the Cotton prices added 0.73% to $142 a pound.
Crude oil price at New York Mercantile advanced 0.15% to $91.54 per barrel on the latest data.
Gold Slumps to Lowest Settlement Price in Seven Weeks After Euro Rallies
Gold fell in New York to the lowest settlement price in seven weeks on speculation that European Union leaders will stabilize the region’s economy, eroding the appeal of the metal as a haven.
The euro was headed for the biggest weekly gain against the dollar since May 2009. German Chancellor Angela Merkel said this week she would do “whatever is needed to support the euro.” European Central Bank President Jean-Claude Trichet said yesterday he may increase interest rates to control inflation. Gold gained 30 percent last year as the ECB and the International Monetary Fund bailed out Greece and Ireland.
“The marketplace believes the worst is over regarding the crisis of the euro zone,” said Daniel Briesemann, a Frankfurt- based analyst with Commerzbank AG. “Trichet regained some confidence in the ECB’s interest-rate policy, which led to a lower need to be trading gold as a safe haven.”
Gold futures for February delivery fell $26.50, or 1.9 percent, to settle at $1,360.50 an ounce at 1:37 p.m. on the Comex in New York, the lowest closing price since Nov. 22. Earlier, the metal touched $1,354.60, the lowest intraday level since Jan. 7.
This week, gold dropped 0.6 percent, the second straight decline. The price is down 5 percent from the record of $1,432.50 on Dec. 7.
Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, said gold was “toppy” and advised clients to reduce their positions by half. Yesterday, he recommended cutting holdings of gold and silver by a third.
‘Run Its Course’
“Gold has run its course for a while,” Gartman said. Last year, he advocated selling euros to buy gold to hedge against a relatively strong dollar.
Silver futures for March delivery dropped 94.3 cents, or 3.2 percent, to $28.32 an ounce, the lowest settlement price since Dec. 8. The metal dropped 1.2 percent this week after tumbling 7.3 percent last week. The commodity jumped 84 percent in 2010.
Palladium futures for March delivery declined $22.95, or 2.8 percent, to $790.50 an ounce on the New York Mercantile Exchange.
Platinum futures for April delivery slipped $5.20, or 0.3 percent, to $1,816 an ounce.
This week, palladium gained 4.6 percent this week and platinum rallied 4.5 percent. The metals are used in jewelry and pollution-control devices in vehicles.
Gold fell in New York to the lowest settlement price in seven weeks on speculation that European Union leaders will stabilize the region’s economy, eroding the appeal of the metal as a haven.
The euro was headed for the biggest weekly gain against the dollar since May 2009. German Chancellor Angela Merkel said this week she would do “whatever is needed to support the euro.” European Central Bank President Jean-Claude Trichet said yesterday he may increase interest rates to control inflation. Gold gained 30 percent last year as the ECB and the International Monetary Fund bailed out Greece and Ireland.
“The marketplace believes the worst is over regarding the crisis of the euro zone,” said Daniel Briesemann, a Frankfurt- based analyst with Commerzbank AG. “Trichet regained some confidence in the ECB’s interest-rate policy, which led to a lower need to be trading gold as a safe haven.”
Gold futures for February delivery fell $26.50, or 1.9 percent, to settle at $1,360.50 an ounce at 1:37 p.m. on the Comex in New York, the lowest closing price since Nov. 22. Earlier, the metal touched $1,354.60, the lowest intraday level since Jan. 7.
This week, gold dropped 0.6 percent, the second straight decline. The price is down 5 percent from the record of $1,432.50 on Dec. 7.
Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, said gold was “toppy” and advised clients to reduce their positions by half. Yesterday, he recommended cutting holdings of gold and silver by a third.
‘Run Its Course’
“Gold has run its course for a while,” Gartman said. Last year, he advocated selling euros to buy gold to hedge against a relatively strong dollar.
Silver futures for March delivery dropped 94.3 cents, or 3.2 percent, to $28.32 an ounce, the lowest settlement price since Dec. 8. The metal dropped 1.2 percent this week after tumbling 7.3 percent last week. The commodity jumped 84 percent in 2010.
Palladium futures for March delivery declined $22.95, or 2.8 percent, to $790.50 an ounce on the New York Mercantile Exchange.
Platinum futures for April delivery slipped $5.20, or 0.3 percent, to $1,816 an ounce.
This week, palladium gained 4.6 percent this week and platinum rallied 4.5 percent. The metals are used in jewelry and pollution-control devices in vehicles.
Wednesday, January 12, 2011
U.S. stock index futures fall
U.S. stock index futures pointed to a lower open on Wall Street on Monday, with futures for the S&P 500 SPc1 down 0.52 percent, Dow Jones DJc1 futures down 0.44 percent and Nasdaq 100 NDc1 futures down 0.35 percent at 0905 GMT.
* European stocks were down 0.7 percent in morning trade, led lower by retreating banking shares, hurt by nagging concerns over the euro zone debt crisis.
* Pressure is growing on Portugal from Germany, France and other euro zone countries to seek financial help from the EU and IMF to stop the bloc's debt crisis from spreading, a senior euro zone source said on Sunday. [ID:nLDE7080FG]
* U.S. Chemicals firm DuPont (DD.N) said on Sunday it will buy Danish food ingredients and enzymes firm Danisco (DCO.CO) for $5.8 billion, boosting its position in the fast-growing food sector. [ID:nN09219516]
* French drugmaker Sanofi Aventis SA (SASY.PA) said on Sunday it was in discussions with U.S. bid target Genzyme Corp (GENZ.O) over ways to value a key Genzyme drug, in a sign the two sides are moving closer to a deal.
* British medical equipment firm Smith & Nephew (SN.L) rejected a 7 billion-pounds ($10.9 billion) takeover approach from U.S. rival Johnson & Johnson (JNJ.N) late last year, Sky News said, without citing sources. [ID:nLDE70807T]
* U.S. software firm iGate (IGTE.O), backed by private equity firm Apax Partners, has agreed to buy a majority stake in India's Patni Computer (PTNI.BO) for $862 million, two sources with knowledge of the matter said, marking one of the largest deals in India's technology sector. [ID:nSGE709010]
* Duke Energy Corp (DUK.N) is near $13 billion-plus deal to buy Progress Energy Inc (PGN.N), a move that would create the largest U.S. power company, sources familiar with the matter said. [ID:nN09279191]
* A group of private equity firms including Apollo Global Management [APOLO.UL] is interested in a buyout of food and beverage company Sara Lee Corp (SLE.N), and has made an approach to the company, a source familiar with the situation said on Sunday.
* Oil surged almost $2 on Monday to within 2 cents of $90 a barrel after a leak shut an Alaskan pipeline that carries 12 percent of U.S. crude output.
* China's global trade surplus narrowed in 2010 for the second straight year, giving Beijing grounds to rebuff U.S. pressure for faster currency appreciation ahead of a visit to Washington next week by President Hu Jintao.
* Japanese markets were closed for a public holiday.
* U.S. stocks fell on Friday after a court ruling in a key foreclosures case prompted investors to pull out of bank stocks, adding to weakness after a lackluster jobs report, but despite the day's losses, the S&P 500 and Dow recorded their sixth straight week of advances.
* the Dow Jones industrial average .DJI slipped 22.55 points, or 0.19 percent, to 11,674.76. The Standard & Poor's 500 Index .SPX was off 2.35 points, or 0.18 percent, to 1,271.50. The Nasdaq Composite Index .IXIC declined 6.72 points, or 0.25 percent, to 2,703.17
U.S. stock index futures pointed to a lower open on Wall Street on Monday, with futures for the S&P 500 SPc1 down 0.52 percent, Dow Jones DJc1 futures down 0.44 percent and Nasdaq 100 NDc1 futures down 0.35 percent at 0905 GMT.
* European stocks were down 0.7 percent in morning trade, led lower by retreating banking shares, hurt by nagging concerns over the euro zone debt crisis.
* Pressure is growing on Portugal from Germany, France and other euro zone countries to seek financial help from the EU and IMF to stop the bloc's debt crisis from spreading, a senior euro zone source said on Sunday. [ID:nLDE7080FG]
* U.S. Chemicals firm DuPont (DD.N) said on Sunday it will buy Danish food ingredients and enzymes firm Danisco (DCO.CO) for $5.8 billion, boosting its position in the fast-growing food sector. [ID:nN09219516]
* French drugmaker Sanofi Aventis SA (SASY.PA) said on Sunday it was in discussions with U.S. bid target Genzyme Corp (GENZ.O) over ways to value a key Genzyme drug, in a sign the two sides are moving closer to a deal.
* British medical equipment firm Smith & Nephew (SN.L) rejected a 7 billion-pounds ($10.9 billion) takeover approach from U.S. rival Johnson & Johnson (JNJ.N) late last year, Sky News said, without citing sources. [ID:nLDE70807T]
* U.S. software firm iGate (IGTE.O), backed by private equity firm Apax Partners, has agreed to buy a majority stake in India's Patni Computer (PTNI.BO) for $862 million, two sources with knowledge of the matter said, marking one of the largest deals in India's technology sector. [ID:nSGE709010]
* Duke Energy Corp (DUK.N) is near $13 billion-plus deal to buy Progress Energy Inc (PGN.N), a move that would create the largest U.S. power company, sources familiar with the matter said. [ID:nN09279191]
* A group of private equity firms including Apollo Global Management [APOLO.UL] is interested in a buyout of food and beverage company Sara Lee Corp (SLE.N), and has made an approach to the company, a source familiar with the situation said on Sunday.
* Oil surged almost $2 on Monday to within 2 cents of $90 a barrel after a leak shut an Alaskan pipeline that carries 12 percent of U.S. crude output.
* China's global trade surplus narrowed in 2010 for the second straight year, giving Beijing grounds to rebuff U.S. pressure for faster currency appreciation ahead of a visit to Washington next week by President Hu Jintao.
* Japanese markets were closed for a public holiday.
* U.S. stocks fell on Friday after a court ruling in a key foreclosures case prompted investors to pull out of bank stocks, adding to weakness after a lackluster jobs report, but despite the day's losses, the S&P 500 and Dow recorded their sixth straight week of advances.
* the Dow Jones industrial average .DJI slipped 22.55 points, or 0.19 percent, to 11,674.76. The Standard & Poor's 500 Index .SPX was off 2.35 points, or 0.18 percent, to 1,271.50. The Nasdaq Composite Index .IXIC declined 6.72 points, or 0.25 percent, to 2,703.17
FOREX-Euro up thinly before sales
The euro made thin gains on Wednesday, extending this week's rebound but with limited ability to rise much as caution gripped the market ahead of debt sales by highly indebted euro zone countries.
Portugal is due to tap bond investors on Wednesday while Spain is looking to sell up to 3 billion euros ($3.89 billion) worth on Thursday. Markets are keen to see if they can obtain funding at a sustainable cost or if they will be forced to turn to the European Union and IMF for help.
"If Portugal has to pay over 7 percent it will be inevitable for it to ask for help," said a trader at a Japanese bank.
For now though the common currency is enjoying a reprieve after euro zone sources said the region's finance ministers are likely next week to consider the option of raising the effective lending capacity of the currency bloc's rescue fund as part of efforts to calm jittery markets. [ID:nLDE70A1RM]
This follows Japan's promise to support an upcoming euro zone bond sale and talk the European Central Bank had bought debt to help stabilise markets.
The common currency ticked up 0.1 percent to $1.2983 EUR=, and kept gains from a four-month trough of around $1.2860 hit on Monday.
But it was off the day's high of $1.3017 marked after attempts to take out stop-loss orders said to be lurking above $1.30.
The dollar's weakness against Asian and other emerging economy currencies is indirectly helping the euro, a U.S. bank trader said.
Further resistance is seen at its Dec. 23 low of $1.3055 and the 200-day moving average around $1.3070, and many traders see little chance of the euro rising above those levels in the near term.
BNP Paribas strategists said in a report that they expect the euro's rise to remain limited to $1.3000/40, which would provide renewed selling opportunities with a target for a break below $1.2875 and then $1.2590.
In the options market, however, risk reversal spreads stood at 0.75/1.5 percent in favour of euro puts EUR1MRR=GFI, near the lowest level in two months, meaning euro puts, which give investors protection against falls in the euro, are at their cheapest level in two months relative to euro calls.
An options trader at a Japanese bank said flows related to exotic options such as no-touch options may be behind this.
The immediate focus is on Wednesday's debt sale by Portugal, widely seen as the next euro zone weakling to seek a bailout after Greece and Ireland.
Lisbon, which plans to sell up to 1.25 billion euros ($1.62 billion) in four- and 10-year bonds, will likely need to offer record high premiums to place its debt. [ID:nLDE70A20B]
Recent bond buying by the European Central Bank helped drive down the yield on Portugal's benchmark 10-year bond PT10YT=TWEB to below 7 percent on Tuesday from euro lifetime highs of 7.3 percent last week.
Against the yen, the single European currency was flat at 108.00 yen EURJPY=R, but well off four-month lows around 106.81 set on Monday.
As the euro won a reprieve, the dollar index =USD .DXY, which tracks the performance of the greenback against a basket of major currencies, slipped 0.2 percent to 80.63, off a five-week high around 81.313 set on Monday.
Versus the yen, the dollar slipped a tad to 83.08 yen JPY=, though it held well above this week's low around 82.66, with gains in global stocks weighing on demand for the yen.
Meanwhile, the Australian dollar hit a fresh one-month low around $0.9803 AUD=D4, though option triggers at $0.98 and upbeat Australian housing data helped it limp back to $0.9860.
Mounting worries that massive floods in northeast Australia could hamper growth were taking a toll on the Aussie, knocking it further from a 28-year high around $1.0250 set on Dec. 31.
Warwick McKibbin, a Reserve Bank of Australia board member, was quoted in the Sydney Morning Herald as saying the floods could cut economic growth by up to 1 percentage point.
Estimates by other economists were less grim, though, with many expecting the floods to at most knock 0.5 percentage point off growth.
The euro made thin gains on Wednesday, extending this week's rebound but with limited ability to rise much as caution gripped the market ahead of debt sales by highly indebted euro zone countries.
Portugal is due to tap bond investors on Wednesday while Spain is looking to sell up to 3 billion euros ($3.89 billion) worth on Thursday. Markets are keen to see if they can obtain funding at a sustainable cost or if they will be forced to turn to the European Union and IMF for help.
"If Portugal has to pay over 7 percent it will be inevitable for it to ask for help," said a trader at a Japanese bank.
For now though the common currency is enjoying a reprieve after euro zone sources said the region's finance ministers are likely next week to consider the option of raising the effective lending capacity of the currency bloc's rescue fund as part of efforts to calm jittery markets. [ID:nLDE70A1RM]
This follows Japan's promise to support an upcoming euro zone bond sale and talk the European Central Bank had bought debt to help stabilise markets.
The common currency ticked up 0.1 percent to $1.2983 EUR=, and kept gains from a four-month trough of around $1.2860 hit on Monday.
But it was off the day's high of $1.3017 marked after attempts to take out stop-loss orders said to be lurking above $1.30.
The dollar's weakness against Asian and other emerging economy currencies is indirectly helping the euro, a U.S. bank trader said.
Further resistance is seen at its Dec. 23 low of $1.3055 and the 200-day moving average around $1.3070, and many traders see little chance of the euro rising above those levels in the near term.
BNP Paribas strategists said in a report that they expect the euro's rise to remain limited to $1.3000/40, which would provide renewed selling opportunities with a target for a break below $1.2875 and then $1.2590.
In the options market, however, risk reversal spreads stood at 0.75/1.5 percent in favour of euro puts EUR1MRR=GFI, near the lowest level in two months, meaning euro puts, which give investors protection against falls in the euro, are at their cheapest level in two months relative to euro calls.
An options trader at a Japanese bank said flows related to exotic options such as no-touch options may be behind this.
The immediate focus is on Wednesday's debt sale by Portugal, widely seen as the next euro zone weakling to seek a bailout after Greece and Ireland.
Lisbon, which plans to sell up to 1.25 billion euros ($1.62 billion) in four- and 10-year bonds, will likely need to offer record high premiums to place its debt. [ID:nLDE70A20B]
Recent bond buying by the European Central Bank helped drive down the yield on Portugal's benchmark 10-year bond PT10YT=TWEB to below 7 percent on Tuesday from euro lifetime highs of 7.3 percent last week.
Against the yen, the single European currency was flat at 108.00 yen EURJPY=R, but well off four-month lows around 106.81 set on Monday.
As the euro won a reprieve, the dollar index =USD .DXY, which tracks the performance of the greenback against a basket of major currencies, slipped 0.2 percent to 80.63, off a five-week high around 81.313 set on Monday.
Versus the yen, the dollar slipped a tad to 83.08 yen JPY=, though it held well above this week's low around 82.66, with gains in global stocks weighing on demand for the yen.
Meanwhile, the Australian dollar hit a fresh one-month low around $0.9803 AUD=D4, though option triggers at $0.98 and upbeat Australian housing data helped it limp back to $0.9860.
Mounting worries that massive floods in northeast Australia could hamper growth were taking a toll on the Aussie, knocking it further from a 28-year high around $1.0250 set on Dec. 31.
Warwick McKibbin, a Reserve Bank of Australia board member, was quoted in the Sydney Morning Herald as saying the floods could cut economic growth by up to 1 percentage point.
Estimates by other economists were less grim, though, with many expecting the floods to at most knock 0.5 percentage point off growth.
Yen Recovers From 5-day Low Against Euro And Canadian Dollar
the yen recovered from its early Asian session's 5-day low against the currencies of Europe and Canada.
The yen also rebounded against the franc and the pound and remained higher versus the greenback and NZ dollar.
Asian stock markets are trading in positive territory today with investors staying fairly bullish on the back of a firm close on Wall Street overnight and on expectations the global economy will see a sustained recovery. Gains, however, are just modest in most of the markets in the region with a section of investors treading cautiously at higher levels ahead of corporate earnings results.
Japan's benchmark Nikkei 225 index is currently trading at 10,527.75 - up 17.93 points or 0.17% over its previous close.
Japan posted a current account surplus of 926.2 billion yen in November, the Ministry of Finance said today. That was lower than the forecasts for a surplus of 972.5 billion yen after showing a surplus of 1.436 trillion yen in October. The November figure marked a decline of 15.7% on year, again shy of estimates for an 11.8% annual contraction following the 2.9% increase in the previous month.
Japan saw a trade surplus of 259.7 billion yen, below forecasts for a surplus of 297.7 billion yen after posting a surplus of 912.9 billion yen a month earlier.
After a brief slide, the yen advanced against the US dollar in early Asian deals on Wednesday. The yen is now worth 83.10 against the dollar with 82.9 seen as the next upside target level. At yesterday's close, the dollar-yen pair was quoted at 83.27.
The yen that declined to a 5-day low of 108.37 against the euro in early Wednesday Asian session at 9:15 pm ET rebounded thereafter. As of now, the yen is trading near Tuesday's close 108.04 per euro. If the yen gains further, it may likely target the 107.8 level.
After hitting a 5-day low of 84.34 against the Canadian dollar in early Wednesday Asian deals at 6:15 pm ET, the yen bounced back. At present, the loonie-yen pair is trading near yesterday's close of 84.09. The next upside target level for the Japanese currency is seen at 83.4.
The yen also recouped its early Wednesday Asian session's losses against the currencies of U.K. and Switzerland. At present, the yen is worth 130.30 against the pound and 85.30 against the franc, compared to early lows of 130.36 and 85.71, respectively. If the yen rises further, it may target 85.0 against the franc and 129.6 against the pound. The yen closed yesterday's trading at 85.54 against the franc and 129.92 against the pound.
During Asian deals on Wednesday, the yen rose slightly against the New Zealand dollar. Currently, the yen is worth 63.11 against the kiwi, compared to yesterday's close of 63.24. If the yen strengthens further, it may likely target the 62.9 level
The yen climbed to 81.75 against the Australian dollar in early Wednesday Asian deals at 5:50 pm ET. Although the yen eased thereafter as Aussie recovered on upbeat domestic home loans data, the pair reversed direction shortly. The yen is now worth 81.87 against the aussie. The aussie-yen pair closed yesterday's trading at 82.03.
Housing finance commitments for owner-occupied housing rose 2.5% month-on-month in November to a little over 50,500, the Australian Bureau of Statistics said. Economists had forecast a 1% drop after the 2.2% rise in October.
In the upcoming European session, trade balance reports from U.K. and France and industrial production reports from Italy and Eurozone - all for the month of November are expected.
Canada's new housing price index for November, U.S. import and export prices indexes for December and the Federal Reserve's Beige Book are scheduled for release in the New York session.
the yen recovered from its early Asian session's 5-day low against the currencies of Europe and Canada.
The yen also rebounded against the franc and the pound and remained higher versus the greenback and NZ dollar.
Asian stock markets are trading in positive territory today with investors staying fairly bullish on the back of a firm close on Wall Street overnight and on expectations the global economy will see a sustained recovery. Gains, however, are just modest in most of the markets in the region with a section of investors treading cautiously at higher levels ahead of corporate earnings results.
Japan's benchmark Nikkei 225 index is currently trading at 10,527.75 - up 17.93 points or 0.17% over its previous close.
Japan posted a current account surplus of 926.2 billion yen in November, the Ministry of Finance said today. That was lower than the forecasts for a surplus of 972.5 billion yen after showing a surplus of 1.436 trillion yen in October. The November figure marked a decline of 15.7% on year, again shy of estimates for an 11.8% annual contraction following the 2.9% increase in the previous month.
Japan saw a trade surplus of 259.7 billion yen, below forecasts for a surplus of 297.7 billion yen after posting a surplus of 912.9 billion yen a month earlier.
After a brief slide, the yen advanced against the US dollar in early Asian deals on Wednesday. The yen is now worth 83.10 against the dollar with 82.9 seen as the next upside target level. At yesterday's close, the dollar-yen pair was quoted at 83.27.
The yen that declined to a 5-day low of 108.37 against the euro in early Wednesday Asian session at 9:15 pm ET rebounded thereafter. As of now, the yen is trading near Tuesday's close 108.04 per euro. If the yen gains further, it may likely target the 107.8 level.
After hitting a 5-day low of 84.34 against the Canadian dollar in early Wednesday Asian deals at 6:15 pm ET, the yen bounced back. At present, the loonie-yen pair is trading near yesterday's close of 84.09. The next upside target level for the Japanese currency is seen at 83.4.
The yen also recouped its early Wednesday Asian session's losses against the currencies of U.K. and Switzerland. At present, the yen is worth 130.30 against the pound and 85.30 against the franc, compared to early lows of 130.36 and 85.71, respectively. If the yen rises further, it may target 85.0 against the franc and 129.6 against the pound. The yen closed yesterday's trading at 85.54 against the franc and 129.92 against the pound.
During Asian deals on Wednesday, the yen rose slightly against the New Zealand dollar. Currently, the yen is worth 63.11 against the kiwi, compared to yesterday's close of 63.24. If the yen strengthens further, it may likely target the 62.9 level
The yen climbed to 81.75 against the Australian dollar in early Wednesday Asian deals at 5:50 pm ET. Although the yen eased thereafter as Aussie recovered on upbeat domestic home loans data, the pair reversed direction shortly. The yen is now worth 81.87 against the aussie. The aussie-yen pair closed yesterday's trading at 82.03.
Housing finance commitments for owner-occupied housing rose 2.5% month-on-month in November to a little over 50,500, the Australian Bureau of Statistics said. Economists had forecast a 1% drop after the 2.2% rise in October.
In the upcoming European session, trade balance reports from U.K. and France and industrial production reports from Italy and Eurozone - all for the month of November are expected.
Canada's new housing price index for November, U.S. import and export prices indexes for December and the Federal Reserve's Beige Book are scheduled for release in the New York session.
Tuesday, January 11, 2011
London Stock Exchange tight-lipped over November crash
The London Stock Exchange has completed its investigation into the cause of the downtime at its Turquoise trading platform, which crashed for two hours in November, but has been scant with the details.
The exchange has also announced the revised timeline for migrating its main market to its MillenniumIT trading system. It will now migrate on 14 February (see below).
"The Exchange can confirm that its internal investigation into last November's trading disruption on Turquoise has now concluded. The investigation found the incident was the result of human error and the incident has now been closed," said a statement.
Turquoise, hailed as the fastest in the world, went down for two hours on 2 November 2010. Speculation has been rife and varied since the crash.
The stock exchange has not changed its stance from day one. "Investigations [into the] trading disruption on London Stock Exchange's pan-European MTF, Turquoise, have revealed that human error was to blame for the disruption that began at 08.23am this morning," it announced immediately after the crash. "The issue was swiftly isolated, and normal trading resumed at 10.30am. Preliminary investigations indicate that this human error may have occurred in suspicious circumstances."
However, the exchange has not subsequently provided any further elaboration apart from the removal of the "suspicious circumstances" claim, which had created confusion in the market.
Turquoise switched to the London Stock Exchange's MillenniumIT trading system in October last year. Because the main London Stock Exchange is close to switching to the new platform from the existing .Net-based Tradelect, the downtime inevitable fuelled speculation. The London Stock Exchange delayed the migration of the main trading venue to MillenniumIT, which originally had been planned for December 2010.
"In light of this incident, coupled with necessary network upgrades to address ultra low latency and high flow inherent in the new platform, the Group has regrettably been forced to postpone its Main Market LSE technology migration for SETS," the exchange stated. "The company now plans to move its primary trading platform to MillenniumIT as early as possible [in 2011]."
Days after the incident Computer Weekly revealed that the two-hour downtime was caused by a contractor mistakenly making a small network change in the live environment rather than the test environment. The London Stock Exchange declined to comment and has subsequently remained silent over the details of the incident, apart from today's confirmation of human error.
One source said that the sector had "mentally moved on" since the incident, but added that he believed the exchange had badly managed the flow of information.
Competitors are using the incident as a "stick to beat" the London Stock Exchange with, said Ovum analyst Rik Turner. "It gives competitors bragging rights at a time when the London Stock Exchange is trying to rebuild its reputation. It was bad enough when Tradelect was creaking without new problems."
Turner said the exchange needed to come to the market and clarify what had happened. "If it is in the business of raising credibility, it needs to say something about the problem," he said. The London Stock Exchange's stated aim is to become one of the top global trading venues."
An IT source in the trading sector said he was not surprised the stock exchange had said nothing. He said that firms in the trading sector usually said only enough to reassure people and avoided saying too much when there were technology problems. "Most problems are very small and saying too much can confuse things," he explained.
He added that the London Stock Exchange silence could suggest that a supplier was at fault. "If it was the supplier at fault and the exchange reported this, it could impact the contract with the supplier."
An IT head at a stockbroker firm, who wished to remain anonymous, said he agreed that too much information could confuse matters. "At the end of the day it is a service provider and will play its cards close to its chest."
When technology is so critical in a particular industry the management of information following technology problems is almost as important as avoiding problems in the first place. Uncertainty in the trading sector can damage reputations and allow competitors to make up ground. Whether all the details of problems should be given to customers or the gory details kept in-house is a debate worth having.
The London Stock Exchange has completed its investigation into the cause of the downtime at its Turquoise trading platform, which crashed for two hours in November, but has been scant with the details.
The exchange has also announced the revised timeline for migrating its main market to its MillenniumIT trading system. It will now migrate on 14 February (see below).
"The Exchange can confirm that its internal investigation into last November's trading disruption on Turquoise has now concluded. The investigation found the incident was the result of human error and the incident has now been closed," said a statement.
Turquoise, hailed as the fastest in the world, went down for two hours on 2 November 2010. Speculation has been rife and varied since the crash.
The stock exchange has not changed its stance from day one. "Investigations [into the] trading disruption on London Stock Exchange's pan-European MTF, Turquoise, have revealed that human error was to blame for the disruption that began at 08.23am this morning," it announced immediately after the crash. "The issue was swiftly isolated, and normal trading resumed at 10.30am. Preliminary investigations indicate that this human error may have occurred in suspicious circumstances."
However, the exchange has not subsequently provided any further elaboration apart from the removal of the "suspicious circumstances" claim, which had created confusion in the market.
Turquoise switched to the London Stock Exchange's MillenniumIT trading system in October last year. Because the main London Stock Exchange is close to switching to the new platform from the existing .Net-based Tradelect, the downtime inevitable fuelled speculation. The London Stock Exchange delayed the migration of the main trading venue to MillenniumIT, which originally had been planned for December 2010.
"In light of this incident, coupled with necessary network upgrades to address ultra low latency and high flow inherent in the new platform, the Group has regrettably been forced to postpone its Main Market LSE technology migration for SETS," the exchange stated. "The company now plans to move its primary trading platform to MillenniumIT as early as possible [in 2011]."
Days after the incident Computer Weekly revealed that the two-hour downtime was caused by a contractor mistakenly making a small network change in the live environment rather than the test environment. The London Stock Exchange declined to comment and has subsequently remained silent over the details of the incident, apart from today's confirmation of human error.
One source said that the sector had "mentally moved on" since the incident, but added that he believed the exchange had badly managed the flow of information.
Competitors are using the incident as a "stick to beat" the London Stock Exchange with, said Ovum analyst Rik Turner. "It gives competitors bragging rights at a time when the London Stock Exchange is trying to rebuild its reputation. It was bad enough when Tradelect was creaking without new problems."
Turner said the exchange needed to come to the market and clarify what had happened. "If it is in the business of raising credibility, it needs to say something about the problem," he said. The London Stock Exchange's stated aim is to become one of the top global trading venues."
An IT source in the trading sector said he was not surprised the stock exchange had said nothing. He said that firms in the trading sector usually said only enough to reassure people and avoided saying too much when there were technology problems. "Most problems are very small and saying too much can confuse things," he explained.
He added that the London Stock Exchange silence could suggest that a supplier was at fault. "If it was the supplier at fault and the exchange reported this, it could impact the contract with the supplier."
An IT head at a stockbroker firm, who wished to remain anonymous, said he agreed that too much information could confuse matters. "At the end of the day it is a service provider and will play its cards close to its chest."
When technology is so critical in a particular industry the management of information following technology problems is almost as important as avoiding problems in the first place. Uncertainty in the trading sector can damage reputations and allow competitors to make up ground. Whether all the details of problems should be given to customers or the gory details kept in-house is a debate worth having.
FOREX-Euro up versus dollar but Portugal debt sale eyed
The euro rallied on Tuesday on speculation euro zone officials could raise the effective lending capacity of the bloc's rescue fund and on talk of increased Portuguese bond buying by the European Central Bank.
The euro climbed closer to $1.30 as the New York session wound down but analysts cautioned it could easily resume its downward trend given nervousness over a heavy schedule of debt issuance by southern European countries this week.
A critical test for the euro will come on Wednesday when Portugal is scheduled to sell up to 1.25 billion euros of bonds in an auction that will signal whether the indebted country will be able to afford to raise funds in the debt market or be forced to take a bailout.
"Given that there are a lot of issues still unsettled with the European debt crisis, which is likely to continue for many months, there's always going to be pressure on the euro," said Ihab Salib, senior portfolio manager and head of international fixed-income at Federated Investors in Pittsburgh.
Federated Investors manages about $341.3 billion in assets. Salib oversees more than $3 billion.
The euro last traded up 0.2 percent at $1.2980 EUR=EBS, having risen as high as $1.2994 on trading platform EBS.
Euro resistance is at its 200-day moving average of $1.3072 while support is around $1.2794, the 61.8 percent Fibonacci retracement of a June-to-November rally.
Traders still expect the euro to retest its four-month low around $1.2875 set on Monday, with a break likely opening the door to a drop towards $1.2645 and $1.2590 in the coming weeks.
Finance ministers are likely to consider next week the option of raising the effective lending capacity of the euro zone rescue fund as part of efforts to calm sovereign debt markets. For details see [ID:nLDE70A1RM].
Market talk of increased Portuguese bond buying by the European Central Bank added to the euro's luster in the New York session.
The euro earlier also found support after Japan said it will purchase euro zone bonds to bolster confidence in the European Financial Stability Facility but in a volatile session momentum faded after Tokyo said it would use existing euro reserves to pay for the debt.
Tokyo's pledge came after China assured Spain it would invest in the indebted euro zone state's bonds -- an assurance whose impact also proved fleeting.
The support (from Japan) looks set to come from existing euro reserves, so it will not form an increase in the allocation of the euro," said Mary Nicola, currency strategist at BNP Paribas in New York. "In fact, if it's a reallocation away from the peripheral bond markets to the EFSF bonds, then it could prove to be euro negative."
AUCTIONS IN FOCUS
Portugal's prime minister and finance minister said on Tuesday Portugal has no plans to seek a bailout, and the government was doing everything possible to avoid doing so. [ID:nLDE70A0V5]
Italy and Spain are due to tap the bond market on Thursday, in auctions that will be watched for any sign of contagion.
Analysts said the euro could see a relief rally once the three bond auctions were out of the way, though if borrowing costs stayed high any gains would be temporary.
The dollar rose 0.6 percent to 83.22 yen JPY=EBS as recent optimism about the U.S. economy helped lift bond yields.
The Swiss franc extended the prior day's sell-off amid growing concern about the impact of the record-strong franc on the domestic economy. The dollar hit a one-month high of 0.9784 Swiss franc on EBS CHF=EBS.
The euro rallied on Tuesday on speculation euro zone officials could raise the effective lending capacity of the bloc's rescue fund and on talk of increased Portuguese bond buying by the European Central Bank.
The euro climbed closer to $1.30 as the New York session wound down but analysts cautioned it could easily resume its downward trend given nervousness over a heavy schedule of debt issuance by southern European countries this week.
A critical test for the euro will come on Wednesday when Portugal is scheduled to sell up to 1.25 billion euros of bonds in an auction that will signal whether the indebted country will be able to afford to raise funds in the debt market or be forced to take a bailout.
"Given that there are a lot of issues still unsettled with the European debt crisis, which is likely to continue for many months, there's always going to be pressure on the euro," said Ihab Salib, senior portfolio manager and head of international fixed-income at Federated Investors in Pittsburgh.
Federated Investors manages about $341.3 billion in assets. Salib oversees more than $3 billion.
The euro last traded up 0.2 percent at $1.2980 EUR=EBS, having risen as high as $1.2994 on trading platform EBS.
Euro resistance is at its 200-day moving average of $1.3072 while support is around $1.2794, the 61.8 percent Fibonacci retracement of a June-to-November rally.
Traders still expect the euro to retest its four-month low around $1.2875 set on Monday, with a break likely opening the door to a drop towards $1.2645 and $1.2590 in the coming weeks.
Finance ministers are likely to consider next week the option of raising the effective lending capacity of the euro zone rescue fund as part of efforts to calm sovereign debt markets. For details see [ID:nLDE70A1RM].
Market talk of increased Portuguese bond buying by the European Central Bank added to the euro's luster in the New York session.
The euro earlier also found support after Japan said it will purchase euro zone bonds to bolster confidence in the European Financial Stability Facility but in a volatile session momentum faded after Tokyo said it would use existing euro reserves to pay for the debt.
Tokyo's pledge came after China assured Spain it would invest in the indebted euro zone state's bonds -- an assurance whose impact also proved fleeting.
The support (from Japan) looks set to come from existing euro reserves, so it will not form an increase in the allocation of the euro," said Mary Nicola, currency strategist at BNP Paribas in New York. "In fact, if it's a reallocation away from the peripheral bond markets to the EFSF bonds, then it could prove to be euro negative."
AUCTIONS IN FOCUS
Portugal's prime minister and finance minister said on Tuesday Portugal has no plans to seek a bailout, and the government was doing everything possible to avoid doing so. [ID:nLDE70A0V5]
Italy and Spain are due to tap the bond market on Thursday, in auctions that will be watched for any sign of contagion.
Analysts said the euro could see a relief rally once the three bond auctions were out of the way, though if borrowing costs stayed high any gains would be temporary.
The dollar rose 0.6 percent to 83.22 yen JPY=EBS as recent optimism about the U.S. economy helped lift bond yields.
The Swiss franc extended the prior day's sell-off amid growing concern about the impact of the record-strong franc on the domestic economy. The dollar hit a one-month high of 0.9784 Swiss franc on EBS CHF=EBS.
Sunday, January 9, 2011
BEFORE THE BELL: US Stock Futures Mixed
U.S. stock futures were trading slightly mixed Friday as investors awaited a crucial December payrolls report that is expected to show a sharp rise in the number of jobs created.
Futures on the Dow Jones Industrial Average rose 6 points to 11652. The S&P 500 futures were off 0.1 point to 1270.10 and the Nasdaq 100 futures were down 4 points at 2272.25.
U.S. markets also weakened slightly on Thursday, with the Dow Jones Industrial Average dropping nearly 26 points to record its first fall of 2011, as retail and telecommunications shares lagged.
All eyes Friday will be on the December nonfarm payrolls figures and the latest reading on U.S. unemployment.
Expectations for the payrolls data--due at 8:30 a.m., EST--have increased in the last few days, in part because of a record-breaking increase in private-sector jobs reported by payroll firm Automatic Data Processing Inc. (ADP) on Wednesday.
Economists polled by MarketWatch on average expect that 175,000 nonfarm jobs were created in December, up from an earlier prediction of 143,000 and well ahead of the 39,000 rise in November. The unemployment rate is expected to hold steady at 9.8%.
"Unemployment is one of the major sticking factors for a global recovery and certainly for a U.S. recovery," said Manoj Ladwa, senior trader at ETX Capital.
Stock markets have already priced in a strong number and any reading much below the consensus forecast could see futures fall off sharply, Ladwa said.
On the other hand, a very strong figure could raise fears that the Federal Reserve's policy of pumping money into the economy may be drawing to an end, which would limit any upside for stocks from the data Ladwa said.
He added that the Fed is highly unlikely to make any decision based on just one month of strong figures.
The dollar remained in a fairly tight range ahead of the data. The greenback rose 0.3% against the yen to Y83.543, while the euro fell 0.3% to $1.2979 after falling sharply over the last couple of days.
On the corporate front, shares in Borders Group Inc. (BGP) will be in focus after The Wall Street Journal reported that the company is in talks with advisers about restructuring its debt-heavy balance sheet.
Liz Claiborne Inc. (LIZ) slumped 20% in premarket trading after the company said late Thursday that its fourth-quarter results will miss previous targets, in part because of bad weather in Europe.
Tobacco group Philip Morris International Inc. (PM) may be another faller after it was downgraded to hold from buy at Citigroup due to weakening pricing and volume trends across the industry.
European markets were mostly lower Friday, with the U.K.'s FTSE 100 index dropping 0.3% to 6002.63, while in Japan the Nikkei 225 Average closed up 0.1%.
U.S. stock futures were trading slightly mixed Friday as investors awaited a crucial December payrolls report that is expected to show a sharp rise in the number of jobs created.
Futures on the Dow Jones Industrial Average rose 6 points to 11652. The S&P 500 futures were off 0.1 point to 1270.10 and the Nasdaq 100 futures were down 4 points at 2272.25.
U.S. markets also weakened slightly on Thursday, with the Dow Jones Industrial Average dropping nearly 26 points to record its first fall of 2011, as retail and telecommunications shares lagged.
All eyes Friday will be on the December nonfarm payrolls figures and the latest reading on U.S. unemployment.
Expectations for the payrolls data--due at 8:30 a.m., EST--have increased in the last few days, in part because of a record-breaking increase in private-sector jobs reported by payroll firm Automatic Data Processing Inc. (ADP) on Wednesday.
Economists polled by MarketWatch on average expect that 175,000 nonfarm jobs were created in December, up from an earlier prediction of 143,000 and well ahead of the 39,000 rise in November. The unemployment rate is expected to hold steady at 9.8%.
"Unemployment is one of the major sticking factors for a global recovery and certainly for a U.S. recovery," said Manoj Ladwa, senior trader at ETX Capital.
Stock markets have already priced in a strong number and any reading much below the consensus forecast could see futures fall off sharply, Ladwa said.
On the other hand, a very strong figure could raise fears that the Federal Reserve's policy of pumping money into the economy may be drawing to an end, which would limit any upside for stocks from the data Ladwa said.
He added that the Fed is highly unlikely to make any decision based on just one month of strong figures.
The dollar remained in a fairly tight range ahead of the data. The greenback rose 0.3% against the yen to Y83.543, while the euro fell 0.3% to $1.2979 after falling sharply over the last couple of days.
On the corporate front, shares in Borders Group Inc. (BGP) will be in focus after The Wall Street Journal reported that the company is in talks with advisers about restructuring its debt-heavy balance sheet.
Liz Claiborne Inc. (LIZ) slumped 20% in premarket trading after the company said late Thursday that its fourth-quarter results will miss previous targets, in part because of bad weather in Europe.
Tobacco group Philip Morris International Inc. (PM) may be another faller after it was downgraded to hold from buy at Citigroup due to weakening pricing and volume trends across the industry.
European markets were mostly lower Friday, with the U.K.'s FTSE 100 index dropping 0.3% to 6002.63, while in Japan the Nikkei 225 Average closed up 0.1%.
Friday, January 7, 2011
FOREX-Dollar climbs to four-month high vs euro
The dollar rose to a fresh four-month high against the euro on Friday in volatile trade after a report showed fewer U.S. jobs than expected were created in December.
Non-farm payrolls increased 103,000, the Labor Department said on Friday, below economists' expectations for 175,000. The unemployment rate unexpectedly fell to 9.4 percent. For more details, click [ID:nLLA7CE7A1].
The euro last traded at $1.2955 EUR=EBS on electronic trading platform EBS, after falling to a fresh four-month low of $1.2935. The euro rose into positive territory against the dollar after the report but then relinquished those gains.
The dollar was last at 83.35 yen JPY=EBS, compared with 83.66 yen prior to the data
The dollar rose to a fresh four-month high against the euro on Friday in volatile trade after a report showed fewer U.S. jobs than expected were created in December.
Non-farm payrolls increased 103,000, the Labor Department said on Friday, below economists' expectations for 175,000. The unemployment rate unexpectedly fell to 9.4 percent. For more details, click [ID:nLLA7CE7A1].
The euro last traded at $1.2955 EUR=EBS on electronic trading platform EBS, after falling to a fresh four-month low of $1.2935. The euro rose into positive territory against the dollar after the report but then relinquished those gains.
The dollar was last at 83.35 yen JPY=EBS, compared with 83.66 yen prior to the data
WORLD FOREX: Euro Hits 4-Month Low Vs Dollar
The euro sank to a four-month low against the dollar Friday in Asia as lingering debt concerns prompted investors to cut their holdings of the currency ahead of next week, when some European nations will issue new sovereign bonds.
During early Asian trading, the single currency fell to $1.2965, its lowest level since Sept. 15. The execution of automated stop-loss orders around $1.2980 fueled selling by Asian sovereign investors, dealers in Tokyo said.
Spanish and Portuguese bond auctions planned for next week prompted investor to take a bearish stance on the euro.
"With European bond auctions coming up, you would certainly feel a bit unconformable holding a lot of euros," said Hideki Amikura, a senior dealer at Nomura Trust and Banking.
While the euro's long-term trend remains downward, investors warned of the euro's upside risk for the rest of the global day Friday.
That's because there is a strong feeling in the market that upcoming U.S. non-farm payrolls data will turn out to be rosy. If the results do not provide a big positive surprise, that would disappoint investors and the greenback will likely face sharp declines as a result.
"The current dollar levels are a product of investors' deep-seated belief that the jobs data will be much better than the market consensus," said Shinichi Hayashi, a senior dealer at Shinkin Central Bank.
A Dow Jones poll of economists predicts a 150,000 job increase in the report for December after adding 39,000 payrolls in the previous month. The data are due at 1330GMT.
The euro was at $1.2986 from $1.3009 in New York Thursday and Y108.40 from Y108.40.
The dollar was at Y83.46 from Y83.36. Shinkin's Hayashi said it may fall to Y82.00 if the data disappoints.
Looking ahead to next week, the greenback may fall further against the yen, possibly below Y82.00, said Barclays Capital's chief Japan strategist Masafumi Yamamoto.
U.S. share prices will be a major factor to look out for, he said. The Dow Jones Industrial Averange ended down 0.22% Thursday, and it may weigh on the U.S. currency if the index falls more sharply.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.950 from 80.825.
The euro sank to a four-month low against the dollar Friday in Asia as lingering debt concerns prompted investors to cut their holdings of the currency ahead of next week, when some European nations will issue new sovereign bonds.
During early Asian trading, the single currency fell to $1.2965, its lowest level since Sept. 15. The execution of automated stop-loss orders around $1.2980 fueled selling by Asian sovereign investors, dealers in Tokyo said.
Spanish and Portuguese bond auctions planned for next week prompted investor to take a bearish stance on the euro.
"With European bond auctions coming up, you would certainly feel a bit unconformable holding a lot of euros," said Hideki Amikura, a senior dealer at Nomura Trust and Banking.
While the euro's long-term trend remains downward, investors warned of the euro's upside risk for the rest of the global day Friday.
That's because there is a strong feeling in the market that upcoming U.S. non-farm payrolls data will turn out to be rosy. If the results do not provide a big positive surprise, that would disappoint investors and the greenback will likely face sharp declines as a result.
"The current dollar levels are a product of investors' deep-seated belief that the jobs data will be much better than the market consensus," said Shinichi Hayashi, a senior dealer at Shinkin Central Bank.
A Dow Jones poll of economists predicts a 150,000 job increase in the report for December after adding 39,000 payrolls in the previous month. The data are due at 1330GMT.
The euro was at $1.2986 from $1.3009 in New York Thursday and Y108.40 from Y108.40.
The dollar was at Y83.46 from Y83.36. Shinkin's Hayashi said it may fall to Y82.00 if the data disappoints.
Looking ahead to next week, the greenback may fall further against the yen, possibly below Y82.00, said Barclays Capital's chief Japan strategist Masafumi Yamamoto.
U.S. share prices will be a major factor to look out for, he said. The Dow Jones Industrial Averange ended down 0.22% Thursday, and it may weigh on the U.S. currency if the index falls more sharply.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.950 from 80.825.
Thursday, January 6, 2011
BEFORE THE BELL: US Stock Futures Up Before Jobless
U.S. stock futures edged higher on Thursday, tracking gains in European and Japanese equities, as investors awaited data on weekly jobless claims and sales reports from retailers.
Futures on the Dow Jones Industrial Average gained 34 points to 11698 and S&P 500 index futures rose 4 points to 1275.80. Nasdaq 100 futures advanced 7.75 points to 2277.50.
A report on weekly jobless claims is due at 8:30 a.m., EST, which will give more clues on the state of the U.S. labor market ahead of Friday's closely watched report on nonfarm payrolls.
Data on Wednesday showed a sharp rise in U.S. private-sector employment for December, boosting sentiment on Wall Street. The blue-chip Dow index closed up 0.3%.
"Both today and tomorrow will center around nonfarm payrolls, especially after the incredible beat delivered by the ADP employment report," said Mads Koefoed, market strategist at Saxo Bank.
Private-sector employment surged by a record 297,000 in December, Automatic Data Processing Inc.'s (ADP) report showed on Wednesday. The number was well above market expectations.
"People are revising their estimates [for nonfarm payrolls] up and that is what is fueling the stock market at the moment," Koefoed said. "What we've seen over the last couple of months has been very solid data from the U.S. from all parts of the economy except the labor markets.
"It seems that now this remaining stubborn sector is improving and that will really fuel sentiment that the U.S. economy is in a robust recovery," he said.
U.S. retailers, such as Wal-Mart Stores Inc. (WMT) and Macy's Inc. (M), are scheduled to report December same-store sales on Thursday.
Discounter Costco Wholesale Corp. (COST) said its same-store sales rose 6% in December, while those at home-furnishings retailer Pier 1 Imports Inc. (PIR) increased 10.3%.
On the earnings front, Monsanto Co. (MON), the giant supplier of agricultural products for farmers, will release quarterly results. It's expected to report a fiscal first-quarter profit of 1 cent a share.
U.S.-listed shares of oil giant BP PLC (BP, BP.LN) gained nearly 2% in premarket trading, as investors appeared to shrug off news that a U.S. presidential commission concluded that the Gulf of Mexico oil spill, the worst in the nation's history, resulted from "a failure of management" at BP, Halliburton Co. (HAL) and Transocean Ltd. (RIG). Shares of Transocean gained 1% in premarket trading.
In other premarket trading, shares of ARM Holdings PLC (ARMH) rallied nearly 10% after software giant Microsoft Corp. (MSFT) announced that the next version of Windows will support ARM-based systems.
Asian stocks ended mixed overnight. Japan's Nikkei Stock Average rallied 1.4%, while China's Shanghai Composite dropped 0.5%.
In Europe, equities traded higher, with the Stoxx Europe 600 index rising 0.8% in intraday trading.
In the currency markets, the euro fell 0.4% to $1.3120. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, gained 0.1% to 80.339.
Gold futures were little changed at $1,374 an ounce, while oil futures dropped 29 cents to $90.01 a barrel.
U.S. stock futures edged higher on Thursday, tracking gains in European and Japanese equities, as investors awaited data on weekly jobless claims and sales reports from retailers.
Futures on the Dow Jones Industrial Average gained 34 points to 11698 and S&P 500 index futures rose 4 points to 1275.80. Nasdaq 100 futures advanced 7.75 points to 2277.50.
A report on weekly jobless claims is due at 8:30 a.m., EST, which will give more clues on the state of the U.S. labor market ahead of Friday's closely watched report on nonfarm payrolls.
Data on Wednesday showed a sharp rise in U.S. private-sector employment for December, boosting sentiment on Wall Street. The blue-chip Dow index closed up 0.3%.
"Both today and tomorrow will center around nonfarm payrolls, especially after the incredible beat delivered by the ADP employment report," said Mads Koefoed, market strategist at Saxo Bank.
Private-sector employment surged by a record 297,000 in December, Automatic Data Processing Inc.'s (ADP) report showed on Wednesday. The number was well above market expectations.
"People are revising their estimates [for nonfarm payrolls] up and that is what is fueling the stock market at the moment," Koefoed said. "What we've seen over the last couple of months has been very solid data from the U.S. from all parts of the economy except the labor markets.
"It seems that now this remaining stubborn sector is improving and that will really fuel sentiment that the U.S. economy is in a robust recovery," he said.
U.S. retailers, such as Wal-Mart Stores Inc. (WMT) and Macy's Inc. (M), are scheduled to report December same-store sales on Thursday.
Discounter Costco Wholesale Corp. (COST) said its same-store sales rose 6% in December, while those at home-furnishings retailer Pier 1 Imports Inc. (PIR) increased 10.3%.
On the earnings front, Monsanto Co. (MON), the giant supplier of agricultural products for farmers, will release quarterly results. It's expected to report a fiscal first-quarter profit of 1 cent a share.
U.S.-listed shares of oil giant BP PLC (BP, BP.LN) gained nearly 2% in premarket trading, as investors appeared to shrug off news that a U.S. presidential commission concluded that the Gulf of Mexico oil spill, the worst in the nation's history, resulted from "a failure of management" at BP, Halliburton Co. (HAL) and Transocean Ltd. (RIG). Shares of Transocean gained 1% in premarket trading.
In other premarket trading, shares of ARM Holdings PLC (ARMH) rallied nearly 10% after software giant Microsoft Corp. (MSFT) announced that the next version of Windows will support ARM-based systems.
Asian stocks ended mixed overnight. Japan's Nikkei Stock Average rallied 1.4%, while China's Shanghai Composite dropped 0.5%.
In Europe, equities traded higher, with the Stoxx Europe 600 index rising 0.8% in intraday trading.
In the currency markets, the euro fell 0.4% to $1.3120. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, gained 0.1% to 80.339.
Gold futures were little changed at $1,374 an ounce, while oil futures dropped 29 cents to $90.01 a barrel.
Sunday, January 2, 2011
Yen Mixed Against Majors
During early Asian deals on Monday, the first trading day of the year 2011, the Japanese yen showed mixed trading against other major currencies.
While the yen eased from near an 8-week high against the US dollar, it fell to a 5-day low against the Canadian dollar. On the other hand, the yen rose to a 4-day high against the euro and it almost showed choppy trading against the currencies of Australia, New Zealand, U.K. and Switzerland.
The stock markets in Australia, New Zealand, Japan, China and Thailand are closed today for a public holiday.
Among other Asian markets, Hong Kong's Hang Seng climbed 1.3% thus far, South Korea's Kospi advanced 0.7% and Taiwan's main index gained 0.4%.
The Japanese yen that surged up to near an 8-week high of 80.94 against the U.S. dollar in early Monday Asian deals at 5:50 pm ET eased thereafter. The yen is currently worth 81.35 per dollar, compared to last week's close of 81.52. On the downside, 81.9 is seen as the next target level for the yen.
During early Asian deals on Monday, the yen rose to a 4-day high of 107.94 against the euro. The next upside target level for the yen is seen at 107.6. At last week's close, the pair was quoted at 108.33.
The yen fell to a 5-day low of 81.94 against the Canadian dollar in early Asian deals on Monday. If the yen weakens further, it may likely target the 82.5 level. The loonie-yen pair closed last week's trading at 81.53.
In early Asian session on Monday, the yen showed choppy trading against the currencies of Australia, New Zealand, U.K. and Switzerland. As of now, the yen is worth 126.37 against the pound, 86.96 against the franc, 82.85 against the aussie and 63.0 against the kiwi.
Looking ahead, final manufacturing PMI reports for December from the major European economies are expected in the upcoming European session.
Across the Atlantic, the U.S. ISM manufacturing index for December and construction spending for November are slated for release in the New York morning.
During early Asian deals on Monday, the first trading day of the year 2011, the Japanese yen showed mixed trading against other major currencies.
While the yen eased from near an 8-week high against the US dollar, it fell to a 5-day low against the Canadian dollar. On the other hand, the yen rose to a 4-day high against the euro and it almost showed choppy trading against the currencies of Australia, New Zealand, U.K. and Switzerland.
The stock markets in Australia, New Zealand, Japan, China and Thailand are closed today for a public holiday.
Among other Asian markets, Hong Kong's Hang Seng climbed 1.3% thus far, South Korea's Kospi advanced 0.7% and Taiwan's main index gained 0.4%.
The Japanese yen that surged up to near an 8-week high of 80.94 against the U.S. dollar in early Monday Asian deals at 5:50 pm ET eased thereafter. The yen is currently worth 81.35 per dollar, compared to last week's close of 81.52. On the downside, 81.9 is seen as the next target level for the yen.
During early Asian deals on Monday, the yen rose to a 4-day high of 107.94 against the euro. The next upside target level for the yen is seen at 107.6. At last week's close, the pair was quoted at 108.33.
The yen fell to a 5-day low of 81.94 against the Canadian dollar in early Asian deals on Monday. If the yen weakens further, it may likely target the 82.5 level. The loonie-yen pair closed last week's trading at 81.53.
In early Asian session on Monday, the yen showed choppy trading against the currencies of Australia, New Zealand, U.K. and Switzerland. As of now, the yen is worth 126.37 against the pound, 86.96 against the franc, 82.85 against the aussie and 63.0 against the kiwi.
Looking ahead, final manufacturing PMI reports for December from the major European economies are expected in the upcoming European session.
Across the Atlantic, the U.S. ISM manufacturing index for December and construction spending for November are slated for release in the New York morning.
Dollar Gains Most Against the Euro Since 2005
The dollar had its biggest gain against the euro in five years as concern about Europe’s debt crisis spurred demand for alternative investments while the Federal Reserve embarked on a plan to buy U.S. debt.
The U.S. currency weakened against 12 of its 16 major counterparts as record-low interest rates sent investors searching for higher-yielding assets. The yen was the best performer against the greenback in 2010 even as the Japanese government took steps to weaken it. Currencies linked to commodities surged against the dollar as raw material prices hit records. U.S. employers added 140,000 jobs in December, a report may show next week.
“The euro-dollar relationship can be described as ‘who is worse off, Europe or the U.S.?’,” said Firas Askari, head currency trader in Toronto at Bank of Montreal. “To what extent is European contagion rampant? And to what extent have we seen the bottom of the bottom of the U.S. economy? At the end of the day, the U.S. economy is a real and strong economy.”
The Dollar Index, which IntercontinentalExchange Inc. uses to track the dollar, finished the year at 79.028, up 1.5 percent.
It rose in each of the first five months of the year as Europe’s escalating debt crisis boosted demand for U.S. assets. It declined from a high for the year in June before the Fed said it would increase asset purchases to boost growth and investors speculated the extra liquidity would debase the currency.
Fed Action
The dollar had a yearly gain along with global stocks, commodities and bonds, marking the first year since 2005 all posted annual increases. The Fed said Nov. 3 it planned to buy $600 billion of Treasuries through June to bolster the U.S. economy and address an unemployment rate at almost a 26-year high.
The 16-nation currency, which will add Estonia to its ranks today, was the worst-performing major currency against the dollar in 2010, sliding 6.5 percent, finishing the year at $1.3384. Economists surveyed by Bloomberg forecast the shared currency slipping to $1.31 by the end of 2011. The second-worst performer was the pound, which had 3.5 percent loss.
“Currency-market investors can only focus on one thing at a time,” said Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co. “We had the crisis in Greece, which had really protracted euro selling, then everyone shifted focus to the Fed with major dollar selling and in the last couple months the focus was back on Ireland and the euro-zone periphery and everyone became negative on the euro.”
Swiss Refuge
The Swiss franc also benefited from haven demand amid the European debt crisis, reaching records against the dollar, euro and pound. The franc gained 10.7 percent against the dollar and ended the year at 93.52 centimes.
The biggest winner against the greenback in 2010 was the yen, soaring 14.7 percent. The median estimate by 36 economists sees the Japanese currency reaching 90 in the fourth quarter of next year. It finished the year trading at 81.12 per dollar.
Japan’s Ministry of Finance confirmed the nation’s central bank purchased $25.1 billion and sold yen Sept. 15 to weaken the Japanese currency to curb gains that threatened an export-led recovery. The yen initially tumbled from almost a 15-year high against the dollar in the first Japanese intervention since 2004 before strengthening to 80.22 per dollar on Nov. 1, the high for the year.
Yen Factors
“One of the great ironies of 2010 was the fact that while the Japanese economy was one of the weaker performers in the G- 10 universe, its currency was one of the strongest,” Boris Schlossberg, director of research at online currency trader GFT Forex in New York, wrote to clients. “The appreciation in the yen wasn’t driven by Japanese fundamentals, but rather by risk- aversion flows in Europe and compression of yields with the U.S.”
Countries including Brazil to Taiwan took measures last year to devalue currencies and loosen monetary policy to safeguard export-led growth. Brazilian Finance Guido Mantega, fighting what he has described as a “currency war, raised taxes on foreign inflows twice to stem a rally in the currency, which gained 5 percent in 2010.
The Australian dollar was the second-best performer against the greenback, climbing 14 percent. It touched the strongest level against the U.S. currency since it became free-floating in 1983.
Raw Materials
Commodity prices, including gold and copper, reached records last year, bolstering the Canadian dollar to a 5.5 percent gain against the greenback and New Zealand’s dollar to a 7.9 percent advance. The Thomson Reuters/Jefferies CRB index of 19 raw materials gained 17.5 percent.
Asian currencies recorded their best annual performance since 1998, as the region’s fastest pace of economic growth in the world and widening interest-rate premiums attracted capital from overseas. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-active currencies excluding the yen, climbed 5.3 percent in 2010.
China’s yuan strengthened beyond 6.6 per dollar on Dec. 31 for the first time in 17 years. The Chinese government ended a two-year peg to the dollar in June that had limited the currency’s appreciation.
The dollar’s share of global foreign-exchange reserves fell to the lowest in at least 11 years in the third quarter as central banks increased holdings of non-traditional currencies, International Monetary Fund data showed Dec. 30.
The share of “other currencies,” which excludes reserve holdings of U.S. dollars, euros, British pounds, Japanese yen and Swiss francs, rose to 4 percent from 3.7 percent in the previous quarter, the most in at least 11 years.
U.S. employers added jobs in December and the unemployment rate declined to 9.7 percent from 9.8 percent November, the first drop in six months, according to a median forecasts of a survey of 55 economists by Bloomberg News. The Labor Department report is scheduled for Jan. 7.
The dollar had its biggest gain against the euro in five years as concern about Europe’s debt crisis spurred demand for alternative investments while the Federal Reserve embarked on a plan to buy U.S. debt.
The U.S. currency weakened against 12 of its 16 major counterparts as record-low interest rates sent investors searching for higher-yielding assets. The yen was the best performer against the greenback in 2010 even as the Japanese government took steps to weaken it. Currencies linked to commodities surged against the dollar as raw material prices hit records. U.S. employers added 140,000 jobs in December, a report may show next week.
“The euro-dollar relationship can be described as ‘who is worse off, Europe or the U.S.?’,” said Firas Askari, head currency trader in Toronto at Bank of Montreal. “To what extent is European contagion rampant? And to what extent have we seen the bottom of the bottom of the U.S. economy? At the end of the day, the U.S. economy is a real and strong economy.”
The Dollar Index, which IntercontinentalExchange Inc. uses to track the dollar, finished the year at 79.028, up 1.5 percent.
It rose in each of the first five months of the year as Europe’s escalating debt crisis boosted demand for U.S. assets. It declined from a high for the year in June before the Fed said it would increase asset purchases to boost growth and investors speculated the extra liquidity would debase the currency.
Fed Action
The dollar had a yearly gain along with global stocks, commodities and bonds, marking the first year since 2005 all posted annual increases. The Fed said Nov. 3 it planned to buy $600 billion of Treasuries through June to bolster the U.S. economy and address an unemployment rate at almost a 26-year high.
The 16-nation currency, which will add Estonia to its ranks today, was the worst-performing major currency against the dollar in 2010, sliding 6.5 percent, finishing the year at $1.3384. Economists surveyed by Bloomberg forecast the shared currency slipping to $1.31 by the end of 2011. The second-worst performer was the pound, which had 3.5 percent loss.
“Currency-market investors can only focus on one thing at a time,” said Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co. “We had the crisis in Greece, which had really protracted euro selling, then everyone shifted focus to the Fed with major dollar selling and in the last couple months the focus was back on Ireland and the euro-zone periphery and everyone became negative on the euro.”
Swiss Refuge
The Swiss franc also benefited from haven demand amid the European debt crisis, reaching records against the dollar, euro and pound. The franc gained 10.7 percent against the dollar and ended the year at 93.52 centimes.
The biggest winner against the greenback in 2010 was the yen, soaring 14.7 percent. The median estimate by 36 economists sees the Japanese currency reaching 90 in the fourth quarter of next year. It finished the year trading at 81.12 per dollar.
Japan’s Ministry of Finance confirmed the nation’s central bank purchased $25.1 billion and sold yen Sept. 15 to weaken the Japanese currency to curb gains that threatened an export-led recovery. The yen initially tumbled from almost a 15-year high against the dollar in the first Japanese intervention since 2004 before strengthening to 80.22 per dollar on Nov. 1, the high for the year.
Yen Factors
“One of the great ironies of 2010 was the fact that while the Japanese economy was one of the weaker performers in the G- 10 universe, its currency was one of the strongest,” Boris Schlossberg, director of research at online currency trader GFT Forex in New York, wrote to clients. “The appreciation in the yen wasn’t driven by Japanese fundamentals, but rather by risk- aversion flows in Europe and compression of yields with the U.S.”
Countries including Brazil to Taiwan took measures last year to devalue currencies and loosen monetary policy to safeguard export-led growth. Brazilian Finance Guido Mantega, fighting what he has described as a “currency war, raised taxes on foreign inflows twice to stem a rally in the currency, which gained 5 percent in 2010.
The Australian dollar was the second-best performer against the greenback, climbing 14 percent. It touched the strongest level against the U.S. currency since it became free-floating in 1983.
Raw Materials
Commodity prices, including gold and copper, reached records last year, bolstering the Canadian dollar to a 5.5 percent gain against the greenback and New Zealand’s dollar to a 7.9 percent advance. The Thomson Reuters/Jefferies CRB index of 19 raw materials gained 17.5 percent.
Asian currencies recorded their best annual performance since 1998, as the region’s fastest pace of economic growth in the world and widening interest-rate premiums attracted capital from overseas. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-active currencies excluding the yen, climbed 5.3 percent in 2010.
China’s yuan strengthened beyond 6.6 per dollar on Dec. 31 for the first time in 17 years. The Chinese government ended a two-year peg to the dollar in June that had limited the currency’s appreciation.
The dollar’s share of global foreign-exchange reserves fell to the lowest in at least 11 years in the third quarter as central banks increased holdings of non-traditional currencies, International Monetary Fund data showed Dec. 30.
The share of “other currencies,” which excludes reserve holdings of U.S. dollars, euros, British pounds, Japanese yen and Swiss francs, rose to 4 percent from 3.7 percent in the previous quarter, the most in at least 11 years.
U.S. employers added jobs in December and the unemployment rate declined to 9.7 percent from 9.8 percent November, the first drop in six months, according to a median forecasts of a survey of 55 economists by Bloomberg News. The Labor Department report is scheduled for Jan. 7.
Forex reserves slips below external debt after 7 yrs
After a gap of seven years, India's foreign exchange reserve slipped below its total external debt during the quarter ended September 2010.
At the end of September quarter, India's external debt was USD 295.85 billion, exceeding the country's forex reserve by about USD 3 billion, says a finance ministry report.
India was one of the few economies, besides China , Russia , Malaysia and Thailand, which has been maintaining more forex reserves than its total external debt.
However, with spurt in external debt, especially in the quarter ended September 2010, the country's forex reserves fell below external debt, a position that it had maintained since 2003-04.
Driven by USD 22.94 billion increase during July- September 2010, the steepest rise in any quarter since March 2008, India's external debt soared to USD 295.85 billion. According to the finance ministry report, the country's forex reserves worked out to be 99 per cent of its debts at the end of September.
A decade after undergoing the worst forex crisis, India's foreign exchange reserves had for the first time exceeded the external debt in 2003-04. After remaining more than 100 per cent the ratio of forex reserve to total debt had been 138 per cent for the financial year 2008-09.
Quoting a World Bank report, the finance ministry said that India was the fifth most indebted country in 2008 in terms of stock of external debt.
The increase in India's external debt at end of September 2010 over March was mainly on account of higher commercial borrowings and short term debt, which together accounted for over 70 per cent of the total increase.
In the first half of the fiscal (April-September), the external commercial borrowings (ECB) rose by USD 10 billion to USD 82 billion. Also short term debt increased by USD 13 billion in the first half to USD 66 billion at the end of September.
"Strong domestic demand along with rising interest rate differentials led to higher net inflows of commercial borrowings," the ministry said.
After a gap of seven years, India's foreign exchange reserve slipped below its total external debt during the quarter ended September 2010.
At the end of September quarter, India's external debt was USD 295.85 billion, exceeding the country's forex reserve by about USD 3 billion, says a finance ministry report.
India was one of the few economies, besides China , Russia , Malaysia and Thailand, which has been maintaining more forex reserves than its total external debt.
However, with spurt in external debt, especially in the quarter ended September 2010, the country's forex reserves fell below external debt, a position that it had maintained since 2003-04.
Driven by USD 22.94 billion increase during July- September 2010, the steepest rise in any quarter since March 2008, India's external debt soared to USD 295.85 billion. According to the finance ministry report, the country's forex reserves worked out to be 99 per cent of its debts at the end of September.
A decade after undergoing the worst forex crisis, India's foreign exchange reserves had for the first time exceeded the external debt in 2003-04. After remaining more than 100 per cent the ratio of forex reserve to total debt had been 138 per cent for the financial year 2008-09.
Quoting a World Bank report, the finance ministry said that India was the fifth most indebted country in 2008 in terms of stock of external debt.
The increase in India's external debt at end of September 2010 over March was mainly on account of higher commercial borrowings and short term debt, which together accounted for over 70 per cent of the total increase.
In the first half of the fiscal (April-September), the external commercial borrowings (ECB) rose by USD 10 billion to USD 82 billion. Also short term debt increased by USD 13 billion in the first half to USD 66 billion at the end of September.
"Strong domestic demand along with rising interest rate differentials led to higher net inflows of commercial borrowings," the ministry said.
Saturday, January 1, 2011
Bank lending up 1.7% in November
BANK lending rose at a healthy pace in November, easing earlier fears of a sharp slowdown in lending activity, as both business loans and consumer housing loans continued to expand.
Total Sing-dollar loans grew 1.7 per cent over the month to $318.5 billion - the 12th consecutive month of growth - Monetary Authority of Singapore estimates released yesterday show. Over the year to end-November, total bank lending was up 14.5 per cent - the fastest year-on-year expansion since January 2009.
Click here to find out more!
Analysts had earlier expected the annual pace of loans growth to slow to below 10 per cent by the end of the year, as economic activity cooled. But recent data shows that economic growth remained surprisingly strong even in November.
Data released on Christmas Eve showed that Singapore's manufacturing output expanded 1.1 per cent in November from a month earlier, after seasonal adjustments - surprising economists who had expected output to shrink.
Loans to businesses, which make up over half of all Singapore-dollar bank lending here, rose by 1.7 per cent, or $2.9 billion, over the month to $168.9 billion. That's faster than the 0.8 per cent growth in October, though the data isn't seasonally adjusted, and the monthly changes are volatile.
Over the year to Nov 30, business loans were up 11.4 per cent - the fastest year-on-year growth in 21 months.
The growth in business loans in November was led by a surge in general commerce loans, which rose by 5.1 per cent, or $1.5 billion, over the month to $30 billion.
Loans to three other major industry sectors - building and construction; financial institutions, including fund management companies and real estate investment trusts; and transport, storage and communication - also rose over the month.
Loans to building and construction firms - the biggest chunk of business loans - expanded 2.3 per cent to $52.7 billion, while loans to financial institutions grew 2.7 per cent to $36.8 billion. Lending to transport, storage and communication firms rose 2.2 per cent, to $9.2 billion.
But loans to manufacturing firms - another big segment - fell 3.8 per cent to $10.8 billion. Loans to business services firms also fell, by 5.1 per cent to $4.6 billion.
Over the month, consumer loans grew by 1.6 per cent, or $2.4 billion, to $149.7 billion - slightly slower than the 1.8 per cent growth in October. Compared with a year earlier, loans to consumers were up 18.2 per cent.
Housing loans remained the biggest driver of the growth in consumer loans, though there are signs of slowing growth. Housing loans rose 1.7 per cent over the month - and 22.1 per cent over the year - to $110.9 billion at end-November. The annual pace of growth has been slowing since August, when it reached 23.4 per cent.
Analysts have said that government measures to cool the property market, announced on Aug 30, won't have a big impact on the aggregate bank lending data until much later, since loans for new-home purchases tend to be drawn down only when properties are completed
BANK lending rose at a healthy pace in November, easing earlier fears of a sharp slowdown in lending activity, as both business loans and consumer housing loans continued to expand.
Total Sing-dollar loans grew 1.7 per cent over the month to $318.5 billion - the 12th consecutive month of growth - Monetary Authority of Singapore estimates released yesterday show. Over the year to end-November, total bank lending was up 14.5 per cent - the fastest year-on-year expansion since January 2009.
Click here to find out more!
Analysts had earlier expected the annual pace of loans growth to slow to below 10 per cent by the end of the year, as economic activity cooled. But recent data shows that economic growth remained surprisingly strong even in November.
Data released on Christmas Eve showed that Singapore's manufacturing output expanded 1.1 per cent in November from a month earlier, after seasonal adjustments - surprising economists who had expected output to shrink.
Loans to businesses, which make up over half of all Singapore-dollar bank lending here, rose by 1.7 per cent, or $2.9 billion, over the month to $168.9 billion. That's faster than the 0.8 per cent growth in October, though the data isn't seasonally adjusted, and the monthly changes are volatile.
Over the year to Nov 30, business loans were up 11.4 per cent - the fastest year-on-year growth in 21 months.
The growth in business loans in November was led by a surge in general commerce loans, which rose by 5.1 per cent, or $1.5 billion, over the month to $30 billion.
Loans to three other major industry sectors - building and construction; financial institutions, including fund management companies and real estate investment trusts; and transport, storage and communication - also rose over the month.
Loans to building and construction firms - the biggest chunk of business loans - expanded 2.3 per cent to $52.7 billion, while loans to financial institutions grew 2.7 per cent to $36.8 billion. Lending to transport, storage and communication firms rose 2.2 per cent, to $9.2 billion.
But loans to manufacturing firms - another big segment - fell 3.8 per cent to $10.8 billion. Loans to business services firms also fell, by 5.1 per cent to $4.6 billion.
Over the month, consumer loans grew by 1.6 per cent, or $2.4 billion, to $149.7 billion - slightly slower than the 1.8 per cent growth in October. Compared with a year earlier, loans to consumers were up 18.2 per cent.
Housing loans remained the biggest driver of the growth in consumer loans, though there are signs of slowing growth. Housing loans rose 1.7 per cent over the month - and 22.1 per cent over the year - to $110.9 billion at end-November. The annual pace of growth has been slowing since August, when it reached 23.4 per cent.
Analysts have said that government measures to cool the property market, announced on Aug 30, won't have a big impact on the aggregate bank lending data until much later, since loans for new-home purchases tend to be drawn down only when properties are completed
Canadian stocks exit year on a high note
C anadian stocks closed the doors on 2010 with an optimistic slam as the country's top benchmark exchange marked double-digit gains on growing demand for commodities and materials in a stronger economy.
The S&P/TSX composite index gained 14.5 per cent during 2010 to end what analyst called a V-shaped year of ups and downs and ups again, closing on Friday at 13,443.22.
In mid-November the Toronto Stock Exchange's benchmark breached the 13,000 threshold, a normal level before the global financial crisis hit in 2008, climbing up from a low of 11,902.50 in July as markets regained confidence in the economy.
"Stocks finally woke up to the fact that earnings in 2010 were phenomenal," Barry Schwartz, with Baskin Financial Service said. "In fact, S&P cumulative earnings are on pace to grow 40 per cent, according to analysts."
Schwartz attributed major cost-cutting, including trimming staff, throughout corporations as pulling up profits as the world regained its appetite to build for the future.
"We had the best of both worlds here in Canada," said Schwartz. "We had not only growing earnings, we had a huge demand for commodities and for gold."
The precious metal, traditionally considered a safe haven in uncertain times, rose 29 per cent this year. Gold broke records all year and ended 2010 at $1,415.85 an ounce, the 10th annual gain.
The Canadian dollar exited the year slightly above par to the U.S. greenback, at $1.002 US. The loonie rose by 10 per cent this year to average 97.11 cents US.
Meanwhile, oil futures surged Friday to the highest year-end prices since 2007 as investors flocked to commodities and away from a weaker U.S. dollar.
Crude oil climbed $1.54 US per barrel, to settle at $91.38 US on the New York Mercantile Exchange. Futures advanced 15 per cent in 2010 as the global economic recovery gained momentum, stoking demand for raw materials.
In Canada, energy indexes under-performed the TSX, rising nine per cent in 2010 against a massive 37 per cent heave of relief the year prior as oil prices picked up.
Analysts recognize 2009 as an anomaly as energy demand resuscitated and grew -- 2010 still saw more winners than losers.
"The number of companies that gained over the year outnumbered the decliners by a three-to-one margin," said Dan Grager, with Peters & Co. investment brokers. "But the ones that didn't perform well comprise the biggest weight on the index, the Suncors and Encanas of the world."
Oilsands giant Suncor Energy, the largest player by per cent weight on the capped index, gained three per cent, while natural gas-weighted Encana Corp. fell 12 per cent.
Natural gas futures on Friday were down 21 per cent from their January opening price of $5.57 US.
C anadian stocks closed the doors on 2010 with an optimistic slam as the country's top benchmark exchange marked double-digit gains on growing demand for commodities and materials in a stronger economy.
The S&P/TSX composite index gained 14.5 per cent during 2010 to end what analyst called a V-shaped year of ups and downs and ups again, closing on Friday at 13,443.22.
In mid-November the Toronto Stock Exchange's benchmark breached the 13,000 threshold, a normal level before the global financial crisis hit in 2008, climbing up from a low of 11,902.50 in July as markets regained confidence in the economy.
"Stocks finally woke up to the fact that earnings in 2010 were phenomenal," Barry Schwartz, with Baskin Financial Service said. "In fact, S&P cumulative earnings are on pace to grow 40 per cent, according to analysts."
Schwartz attributed major cost-cutting, including trimming staff, throughout corporations as pulling up profits as the world regained its appetite to build for the future.
"We had the best of both worlds here in Canada," said Schwartz. "We had not only growing earnings, we had a huge demand for commodities and for gold."
The precious metal, traditionally considered a safe haven in uncertain times, rose 29 per cent this year. Gold broke records all year and ended 2010 at $1,415.85 an ounce, the 10th annual gain.
The Canadian dollar exited the year slightly above par to the U.S. greenback, at $1.002 US. The loonie rose by 10 per cent this year to average 97.11 cents US.
Meanwhile, oil futures surged Friday to the highest year-end prices since 2007 as investors flocked to commodities and away from a weaker U.S. dollar.
Crude oil climbed $1.54 US per barrel, to settle at $91.38 US on the New York Mercantile Exchange. Futures advanced 15 per cent in 2010 as the global economic recovery gained momentum, stoking demand for raw materials.
In Canada, energy indexes under-performed the TSX, rising nine per cent in 2010 against a massive 37 per cent heave of relief the year prior as oil prices picked up.
Analysts recognize 2009 as an anomaly as energy demand resuscitated and grew -- 2010 still saw more winners than losers.
"The number of companies that gained over the year outnumbered the decliners by a three-to-one margin," said Dan Grager, with Peters & Co. investment brokers. "But the ones that didn't perform well comprise the biggest weight on the index, the Suncors and Encanas of the world."
Oilsands giant Suncor Energy, the largest player by per cent weight on the capped index, gained three per cent, while natural gas-weighted Encana Corp. fell 12 per cent.
Natural gas futures on Friday were down 21 per cent from their January opening price of $5.57 US.
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