US Stocks Rise To 2 1/2 Year Intraday Highs
U.S. stocks rose Friday, setting fresh 2 1/2-year intraday highs as the market continued its uptrend despite another round of tightening in China and continued unrest in the Middle East.
The Dow Jones Industrial Average climbed 53 points, or 0.4%, to 12370, and reached its highest intraday level since June 2008 at 12370.67. Among the measure's top performers, Travelers rose 1.6%, Cisco Systems added 1.5% and Caterpillar gained 1.5%. Limiting the advance, Pfizer fell 1%, Disney slipped 0.8% and American Express shed 0.7%.
The Nasdaq Composite rose 0.3% to 2840. The Standard & Poor's 500 index added 0.3% to 1344, led by the energy sector as crude-oil futures climbed.
"It looks like a continuation of an upward drift in the market," said Phil Dow, director Of equity strategy at RBC Wealth Management. "You've had a pretty good dose of negative news and yet the market just keeps going up," he said, noting that the market's gains have come in the face of turmoil in Egypt and the Middle East.
Friday marks the final session of the U.S. stock market's third-straight week in the black, which is also the DJIA's 11th positive week out of the past 12 weeks.
Still, RBC's Dow said, the upcoming three-day weekend is likely keeping a lid on Friday's climb, especially with a Group of 20 meeting going on in Paris and while the unrest in the Middle East continues.
"A three-day weekend always cautions traders," Dow said. "One less day of liquidity scares people."
At the G-20 meeting, the group of industrial and developing nations appeared headed toward an agreement on setting four indicators as guidelines for measuring global economic imbalances, according to senior G-20 officials.
Also at the meeting, Federal Reserve Chairman Ben Bernanke offered his most pointed rebuttal yet to foreign critics who say the U.S. central bank's easy-money policies are causing inflation and asset bubbles abroad. The rest of the world has an interest in the U.S. recovery that his policies are spurring, Bernanke argued in prepared remarks.
In the Middle East, Bahraini protesters said security services opened fire on demonstrators Friday evening as they marched toward the capital's Pearl roundabout, dramatically escalating the standoff between the country's Sunni Muslim rulers and its Shiite majority population. The country's crown prince, in an emotional TV appearance, appealed for calm and asked protesters to leave the square to begin "dialogue."
The unrest helped lift crude-oil futures above $90 a barrel.
The materials sector, which gets much of its demand from China, fell as China's central bank said it will raise banks' reserve-requirement ratio by half a percentage point, the second increase this year to withdraw excess liquidity from the economy and curb inflation.
But the broader market largely shrugged off the move, given that it was widely expected as the People's Bank of China hasn't been able to withdraw sufficient funds from the market in its open-market operations, and because consumer-price inflation accelerated in January.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, slipped 0.4%. Treasurys declined, lifting the yield on the 10-year note up to 3.62%. Gold futures climbed.
Among stocks in focus, Campbell Soup fell 4.9%, after the company cut its earnings outlook for its current fiscal year amid heated competition for soups, sauces and drinks. The lowered guidance comes after Campbell reported a 7.7% decline in fiscal second-quarter earnings as more promotions again failed to boost soup sales. Revenue missed analysts' expectations.
Red Robin Gourmet Burgers jumped 13%. The casual restaurant chain's fourth-quarter earnings rose 37% to beat its downbeat forecast as higher traffic boosted revenue. Chief Executive Steven Carley said the company is implementing "significant initiatives" to increase same-store sales, reduce expenses, improve restaurant level margins and drive overall corporate profitability.
Tuesday, February 15, 2011
FOREX-Euro bounces from 3-wk low; dollar at 8-wk high vs yen
The euro outperformed the dollar for the first time in four days on Tuesday, bouncing from a three-week low as investors' appetite for risk improved, but gains could be fleeting as technical factors point to losses.
The euro rose above the pivotal level of $1.35 and traded off a 3-week low of $1.3428 in the overnight session, with options expirations noted at $1.3500. The euro faces obstacles from several directions, however, with sovereign debt risk and interest rate differentials working decidedly against the single currency.
In early New York trading the euro EUR= was up 0.3 percent against the dollar at $1.3522 after breaking its 100-day moving average at $1.3541.
Camilla Sutton, chief currency strategist at Scotia Capital in Toronto, said near-term technicals are warning of the potential of further downside for the euro and suggest that a test down to $1.3425 is likely.
The dollar trimmed gains against the yen but remained at an 8-week high after data showed U.S. retail sales rose less than expected in January. For the retail sales report, click on [ID:nN15221247].
Higher Treasury yields have increased the appeal of the dollar versus the yen in recent weeks, with the greenback last up 0.6 percent to 83.79 yen JPY=.
"Loose monetary policy in Japan and a slow drift higher in the expectation for the Fed has put significant upward pressure on the U.S.-Japan 2-year spread," Sutton said, which in turn is pressuring dollar-yen higher. "We expect that USDJPY will continue to drift higher in the near-term and accordingly are in favor of short-term, long-USDJPY positions."
U.S. Treasury prices fell early on Tuesday and two-year note yields rose to their highest levels since May.
"Overall the euro is very vulnerable, and any rebound is likely to be unsustainable," said Ian Stannard, currency strategist at BNP Paribas. "There are concerns about the banking system, and yield differentials (between the euro zone and the U.S.) are heading lower, so all the ingredients are there for the euro to come under more pressure."
Peripheral euro-zone yield spreads have been widening in the past week on uncertainty over a rescue package for the region, and there was little sign the recent unease had been tempered by an agreement from European finance ministers on Monday.
Finance ministers agreed on Monday that a permanent rescue mechanism be set up from 2013 would total 500 billion euros, but there was no agreement over how to beef up its existing rescue fund. [ID:nLDE71D0JU]
The euro showed little reaction to German analyst and investor sentiment rising slightly in February amid confidence in Germany's economic recovery, according to a survey by the ZEW economic think tank on Tuesday. [ID:nLDE71E1HR]
Yield differentials were less favorable for the euro, with two-year German bonds yielding 0.54 percentage points more than U.S. Treasuries, the narrowest yield spread in nearly a month and sharply below a two-year high of 0.82 percentage points hit in January.
Scotia Capital's Sutton said while bond yield spreads between euro-zone periphery debt and Germany are still being pressured higher, 2-year spreads appear to be topping out.
"This will be positive for the euro," she said. "In the medium term we expect the euro to retrace recent losses and believe that by year-end the euro will have sustainably retraced all of its late 2010 losses."
Sterling rallied 0.7 percent after data showed for the thirteenth consecutive month the United Kingdom's inflation rate is above the upper target of the Bank of England. This fueled speculation that interest rates will rise in the near term as the Bank of England seeks to contain price pressures.
Wednesday's Bank of England's inflation report is expected to be hawkish and revise up near-term inflation projections, which could boost expectations that interest rates will rise soon and help the pound retain broad gains made this year.
The euro outperformed the dollar for the first time in four days on Tuesday, bouncing from a three-week low as investors' appetite for risk improved, but gains could be fleeting as technical factors point to losses.
The euro rose above the pivotal level of $1.35 and traded off a 3-week low of $1.3428 in the overnight session, with options expirations noted at $1.3500. The euro faces obstacles from several directions, however, with sovereign debt risk and interest rate differentials working decidedly against the single currency.
In early New York trading the euro EUR= was up 0.3 percent against the dollar at $1.3522 after breaking its 100-day moving average at $1.3541.
Camilla Sutton, chief currency strategist at Scotia Capital in Toronto, said near-term technicals are warning of the potential of further downside for the euro and suggest that a test down to $1.3425 is likely.
The dollar trimmed gains against the yen but remained at an 8-week high after data showed U.S. retail sales rose less than expected in January. For the retail sales report, click on [ID:nN15221247].
Higher Treasury yields have increased the appeal of the dollar versus the yen in recent weeks, with the greenback last up 0.6 percent to 83.79 yen JPY=.
"Loose monetary policy in Japan and a slow drift higher in the expectation for the Fed has put significant upward pressure on the U.S.-Japan 2-year spread," Sutton said, which in turn is pressuring dollar-yen higher. "We expect that USDJPY will continue to drift higher in the near-term and accordingly are in favor of short-term, long-USDJPY positions."
U.S. Treasury prices fell early on Tuesday and two-year note yields rose to their highest levels since May.
"Overall the euro is very vulnerable, and any rebound is likely to be unsustainable," said Ian Stannard, currency strategist at BNP Paribas. "There are concerns about the banking system, and yield differentials (between the euro zone and the U.S.) are heading lower, so all the ingredients are there for the euro to come under more pressure."
Peripheral euro-zone yield spreads have been widening in the past week on uncertainty over a rescue package for the region, and there was little sign the recent unease had been tempered by an agreement from European finance ministers on Monday.
Finance ministers agreed on Monday that a permanent rescue mechanism be set up from 2013 would total 500 billion euros, but there was no agreement over how to beef up its existing rescue fund. [ID:nLDE71D0JU]
The euro showed little reaction to German analyst and investor sentiment rising slightly in February amid confidence in Germany's economic recovery, according to a survey by the ZEW economic think tank on Tuesday. [ID:nLDE71E1HR]
Yield differentials were less favorable for the euro, with two-year German bonds yielding 0.54 percentage points more than U.S. Treasuries, the narrowest yield spread in nearly a month and sharply below a two-year high of 0.82 percentage points hit in January.
Scotia Capital's Sutton said while bond yield spreads between euro-zone periphery debt and Germany are still being pressured higher, 2-year spreads appear to be topping out.
"This will be positive for the euro," she said. "In the medium term we expect the euro to retrace recent losses and believe that by year-end the euro will have sustainably retraced all of its late 2010 losses."
Sterling rallied 0.7 percent after data showed for the thirteenth consecutive month the United Kingdom's inflation rate is above the upper target of the Bank of England. This fueled speculation that interest rates will rise in the near term as the Bank of England seeks to contain price pressures.
Wednesday's Bank of England's inflation report is expected to be hawkish and revise up near-term inflation projections, which could boost expectations that interest rates will rise soon and help the pound retain broad gains made this year.
US STOCKS-Wall St stocks slip; weakness in energy, tech
U.S. stocks slid on Tuesday as energy shares pulled back, creating a breather in the market's recent rally.
Volume was lighter than average, totaling about 3.5 billion shares around midday. Volume on Monday was the lowest so far this year.
Energy stocks have been among the market's leaders in the recent rally, with the S&P energy index up 45 percent since the start of September, while the benchmark S&P 500 is up 26 percent.
On the day, Exxon Mobil (XOM.N) was down 2.2 percent to $83.06, while the S&P energy index .GSPE was down 1.1 percent, as oil prices slumped.
Technology, too, has outperformed the broader market in that period, with the S&P tech index .GSPT up 33 percent.
Shares of JDS Uniphase Corp (JDSU.O) dropped 7.5 percent to $25.81 after Bernstein cut its rating on the stock to "market-perform" from "outperform."
An index of semiconductors .SOX was down 0.8 percent.
"It's getting a little sloppy after the huge run we've had," said Robert Francello, head of equity trading for Apex Capital in San Francisco.
But he said the market could still end higher. "No matter what we throw at it, there seems to be a bid for the market."
Shares of NYSE Euronext (NYX.N) fell 3.3 percent at $38.14 after it agreed to be acquired by Deutsche Boerse (DB1Gn.DE) to create the world's largest exchange operator. The deal dodges key questions that could threaten its completion.
U.S. stocks slid on Tuesday as energy shares pulled back, creating a breather in the market's recent rally.
Volume was lighter than average, totaling about 3.5 billion shares around midday. Volume on Monday was the lowest so far this year.
Energy stocks have been among the market's leaders in the recent rally, with the S&P energy index up 45 percent since the start of September, while the benchmark S&P 500 is up 26 percent.
On the day, Exxon Mobil (XOM.N) was down 2.2 percent to $83.06, while the S&P energy index .GSPE was down 1.1 percent, as oil prices slumped.
Technology, too, has outperformed the broader market in that period, with the S&P tech index .GSPT up 33 percent.
Shares of JDS Uniphase Corp (JDSU.O) dropped 7.5 percent to $25.81 after Bernstein cut its rating on the stock to "market-perform" from "outperform."
An index of semiconductors .SOX was down 0.8 percent.
"It's getting a little sloppy after the huge run we've had," said Robert Francello, head of equity trading for Apex Capital in San Francisco.
But he said the market could still end higher. "No matter what we throw at it, there seems to be a bid for the market."
Shares of NYSE Euronext (NYX.N) fell 3.3 percent at $38.14 after it agreed to be acquired by Deutsche Boerse (DB1Gn.DE) to create the world's largest exchange operator. The deal dodges key questions that could threaten its completion.
Friday, February 11, 2011
FOREX-Euro falls as debt nerves return, dollar gains
The euro fell on Friday following a new bout of market jitters over the euro zone's sovereign debt problems, while the dollar struck a one-month high against the yen after data underscored recovery in the U.S. jobs market.
U.S. Treasury yields have spiked this month, shoring up the dollar while improving data has supported the view that economic recovery in the United States is on more durable ground.
Data on Thursday showed new applications for unemployment benefits dropped to a 2-1/2 year low last week, consistent with other indicators suggesting a strengthening labour market.
"The focus is on interest rates and the U.S. has lagged behind most especially the euro zone," said Paul Robson, currency strategist at RBS Global Banking.
"The improvement in the labour market bodes well for the dollar while for the euro, there is a risk of disappointment as peripheral debt problems return."
The dollar index .DXY, which measures the greenback's performance against a basket of currencies, was up 0.5 percent at 78.640. The dollar touched its highest level in a month at 83.60 yen JPY= to trade up 0.3 percent on the day.
Traders highlighted a chunky dollar/yen expiry for Friday's New York cut at 84.00 yen, with more sizeable interest at the same level also reported to come on Monday.
The dollar also benefited from safe-haven flows after Egypt's President Hosni Mubarak refused to step down as had been expected, keeping alive the risk of a possible showdown between protestors and the military and more political chaos in the Middle East
The euro fell on Friday following a new bout of market jitters over the euro zone's sovereign debt problems, while the dollar struck a one-month high against the yen after data underscored recovery in the U.S. jobs market.
U.S. Treasury yields have spiked this month, shoring up the dollar while improving data has supported the view that economic recovery in the United States is on more durable ground.
Data on Thursday showed new applications for unemployment benefits dropped to a 2-1/2 year low last week, consistent with other indicators suggesting a strengthening labour market.
"The focus is on interest rates and the U.S. has lagged behind most especially the euro zone," said Paul Robson, currency strategist at RBS Global Banking.
"The improvement in the labour market bodes well for the dollar while for the euro, there is a risk of disappointment as peripheral debt problems return."
The dollar index .DXY, which measures the greenback's performance against a basket of currencies, was up 0.5 percent at 78.640. The dollar touched its highest level in a month at 83.60 yen JPY= to trade up 0.3 percent on the day.
Traders highlighted a chunky dollar/yen expiry for Friday's New York cut at 84.00 yen, with more sizeable interest at the same level also reported to come on Monday.
The dollar also benefited from safe-haven flows after Egypt's President Hosni Mubarak refused to step down as had been expected, keeping alive the risk of a possible showdown between protestors and the military and more political chaos in the Middle East
Japanese shares open lower
Japanese shares opened slightly lower Thursday as investors took profits ahead of a long weekend, analysts said.
The Nikkei index at the Tokyo Stock Exchange lost 0.33 per cent or 35.15 points to 10,582.68 shortly after the opening bell.
The headline index should receive support from a weaker yen, especially against the euro, with the European unit trading at 113.10 yen in early trade compared with 112.43 yen late Wednesday in Tokyo.
The dollar was at 82.43 yen, also slightly firming from 82.35 in New York Wednesday. Against the dollar, the euro eased slightly to $1.3718 from $1.3727 in New York late Wednesday.
But major shares may come under pressure as investors lock in profits before a three-day weekend from Friday to observe the national foundation day, Kenichi Hirano, operating officer at Tachibana Securities , told Dow Jones Newswires.
Hirano expected the Nikkei to move in the range of 10,575-10,675, against Wednesday's close of 10,617.83.
He also pointed to possible fluctuations related to the settlement for monthly options contracts as well as the start of the new "J-GATE" next generation derivatives trading system on the Osaka Securities Exchange Monday.
Before the market opened, the government said Japan's core private-sector machinery orders edged up 1.7 per cent in December from the previous month, the first rise in four months but far short of the expected 5.3-per cent rise.
Overnight, US stocks closed mixed in listless trading, with the Dow Jones Industrial Average rising 6.74 points or 0.06 per cent to 12,239.89.
The broader S&P 500 index fell 3.69 points or 0.28 per cent to 1,320.88, while the tech-rich Nasdaq Composite index dropped 7.98 points or 0.29 per cent to 2,789.07.
Japanese shares opened slightly lower Thursday as investors took profits ahead of a long weekend, analysts said.
The Nikkei index at the Tokyo Stock Exchange lost 0.33 per cent or 35.15 points to 10,582.68 shortly after the opening bell.
The headline index should receive support from a weaker yen, especially against the euro, with the European unit trading at 113.10 yen in early trade compared with 112.43 yen late Wednesday in Tokyo.
The dollar was at 82.43 yen, also slightly firming from 82.35 in New York Wednesday. Against the dollar, the euro eased slightly to $1.3718 from $1.3727 in New York late Wednesday.
But major shares may come under pressure as investors lock in profits before a three-day weekend from Friday to observe the national foundation day, Kenichi Hirano, operating officer at Tachibana Securities , told Dow Jones Newswires.
Hirano expected the Nikkei to move in the range of 10,575-10,675, against Wednesday's close of 10,617.83.
He also pointed to possible fluctuations related to the settlement for monthly options contracts as well as the start of the new "J-GATE" next generation derivatives trading system on the Osaka Securities Exchange Monday.
Before the market opened, the government said Japan's core private-sector machinery orders edged up 1.7 per cent in December from the previous month, the first rise in four months but far short of the expected 5.3-per cent rise.
Overnight, US stocks closed mixed in listless trading, with the Dow Jones Industrial Average rising 6.74 points or 0.06 per cent to 12,239.89.
The broader S&P 500 index fell 3.69 points or 0.28 per cent to 1,320.88, while the tech-rich Nasdaq Composite index dropped 7.98 points or 0.29 per cent to 2,789.07.
US Stocks Decline Modestly
U.S. stocks declined modestly Friday as a widening U.S. trade gap and continuing uncertainty over the fate of Egypt's regime prompted investors to retreat to safer assets.
The Dow Jones Industrial Average slipped 7 points, or 0.1%, to 12222. Leading the measure's declines, Kraft Foods dropped 1.9% after its fourth-quarter sales jumped 30% as the food company raised prices and sold more of its products, but higher costs for inputs and integrating its Cadbury acquisition squeezed profits.
Keeping its losses in check, J.P. Morgan rose 1.9%.
The Nasdaq Composite edged down 0.1% to 2787. The Standard & Poor's 500-stock index rose less than one point to 1322, as financials gained, but energy stocks declined.
Home builders weakened after the Obama administration unveiled a proposal Friday for winding down mortgage giants Fannie Mae and Freddie Mac. The steps are likely to mean higher borrowing costs and more limited access to home loans for consumers. Homebuilding company Lennar fell 1.5%, while D.R. Horton lost 1.2%.
Shuttering Fannie and Freddie may dent overall levels of home ownership, noted Lee Partridge, chief investment officer at Salient Partners. However, "in the long run, the demise of Freddie Mac and Fannie Mae would be good for the rest of the financial community," as other firms regain pricing power, he said.
Mortgage insurers surged on the government proposal's suggestion to shrink the size of the Federal Housing Administration, a government-run competitor to the private mortgage insurance industry. Shares of Genworth Financial jumped 4.6%, MGIC Investment surged 11% and PMI Group climbed 7.1%.
Meanwhile, investors registered some anxiety over the intensifying turbulence in Egypt after President Hosni Mubarak shocked protestors late Thursday with a difficult-to-interpret pledge to hand power to his vice president while staying on during the transition to a new governing structure. Egypt's powerful armed forces fell in behind Mubarak as protesters gathered for an 18th day of massive demonstrations.
The jitters over Egypt boosted the dollar, capturing support from its status as a safe retreat. The euro weakened, trading recently at $1.3556, down from $1.3594 late Thursday in New York. Demand for U.S. Treasurys rose, pushing yield on the 10-year note down to 3.61%.
However, crude-oil prices edged down, suggesting that the market may not be worried that the unrest in Egypt could threaten operations at the Suez Canal.
Among stocks in focus, Nokia sank, with U.S.-listed shares dropping 13% after the handset maker said it will adopt Windows Phone as its main smartphone platform, as part of a broad strategic partnership with Microsoft. Nokia offered no guidance for next year or new products, and said 2011 and 2012 are likely to be transition years. Analysts were also concerned that Nokia didn't cut its guidance for research and development costs as a result of the alliance with Microsoft, which most analysts had expected. Meanwhile, shares of Microsoft fell 1%.
Ford Motor rose 1.6% after saying it will cut its debt load by another $3 billion.
In Friday's economic data, the U.S. trade gap widened in December, with the full-year trade gap registering its biggest percentage increase in 10 years on the back of a record shortfall in trade with China, the Commerce Department said. The U.S. deficit in international trade of goods and services increased 5.9% to $40.58 billion from a slightly revised $38.32 billion the month before, topping economists' estimates for a $40.5 billion shortfall.
Separately, the Reuters/University of Michigan consumer sentiment reading for February edged up to 75.1, slightly better than the 75.0 expected by economists.
U.S. stocks declined modestly Friday as a widening U.S. trade gap and continuing uncertainty over the fate of Egypt's regime prompted investors to retreat to safer assets.
The Dow Jones Industrial Average slipped 7 points, or 0.1%, to 12222. Leading the measure's declines, Kraft Foods dropped 1.9% after its fourth-quarter sales jumped 30% as the food company raised prices and sold more of its products, but higher costs for inputs and integrating its Cadbury acquisition squeezed profits.
Keeping its losses in check, J.P. Morgan rose 1.9%.
The Nasdaq Composite edged down 0.1% to 2787. The Standard & Poor's 500-stock index rose less than one point to 1322, as financials gained, but energy stocks declined.
Home builders weakened after the Obama administration unveiled a proposal Friday for winding down mortgage giants Fannie Mae and Freddie Mac. The steps are likely to mean higher borrowing costs and more limited access to home loans for consumers. Homebuilding company Lennar fell 1.5%, while D.R. Horton lost 1.2%.
Shuttering Fannie and Freddie may dent overall levels of home ownership, noted Lee Partridge, chief investment officer at Salient Partners. However, "in the long run, the demise of Freddie Mac and Fannie Mae would be good for the rest of the financial community," as other firms regain pricing power, he said.
Mortgage insurers surged on the government proposal's suggestion to shrink the size of the Federal Housing Administration, a government-run competitor to the private mortgage insurance industry. Shares of Genworth Financial jumped 4.6%, MGIC Investment surged 11% and PMI Group climbed 7.1%.
Meanwhile, investors registered some anxiety over the intensifying turbulence in Egypt after President Hosni Mubarak shocked protestors late Thursday with a difficult-to-interpret pledge to hand power to his vice president while staying on during the transition to a new governing structure. Egypt's powerful armed forces fell in behind Mubarak as protesters gathered for an 18th day of massive demonstrations.
The jitters over Egypt boosted the dollar, capturing support from its status as a safe retreat. The euro weakened, trading recently at $1.3556, down from $1.3594 late Thursday in New York. Demand for U.S. Treasurys rose, pushing yield on the 10-year note down to 3.61%.
However, crude-oil prices edged down, suggesting that the market may not be worried that the unrest in Egypt could threaten operations at the Suez Canal.
Among stocks in focus, Nokia sank, with U.S.-listed shares dropping 13% after the handset maker said it will adopt Windows Phone as its main smartphone platform, as part of a broad strategic partnership with Microsoft. Nokia offered no guidance for next year or new products, and said 2011 and 2012 are likely to be transition years. Analysts were also concerned that Nokia didn't cut its guidance for research and development costs as a result of the alliance with Microsoft, which most analysts had expected. Meanwhile, shares of Microsoft fell 1%.
Ford Motor rose 1.6% after saying it will cut its debt load by another $3 billion.
In Friday's economic data, the U.S. trade gap widened in December, with the full-year trade gap registering its biggest percentage increase in 10 years on the back of a record shortfall in trade with China, the Commerce Department said. The U.S. deficit in international trade of goods and services increased 5.9% to $40.58 billion from a slightly revised $38.32 billion the month before, topping economists' estimates for a $40.5 billion shortfall.
Separately, the Reuters/University of Michigan consumer sentiment reading for February edged up to 75.1, slightly better than the 75.0 expected by economists.
Thursday, February 3, 2011
US Stocks Pare Losses As Retail Stocks Rise
U.S. stocks pared early Thursday losses as investors eyed encouraging earnings and stronger January sales among retailers, against a backdrop of continued unrest in Egypt.
The Dow Jones Industrial Average was off 6 points, or 0.1%, to 12036 recently. Leading the Dow's decliners, Merck fell 2.7% after swinging to a fourth-quarter loss. While earnings and revenue topped Wall Street's expectations, the drug maker's forecast for full-year adjusted earnings fell below analysts' predictions.
The Nasdaq Composite edged up 1 point to 2750. The Standard & Poor's 500-stock index shed 0.1% to 1303, though consumer discretionary stocks kept the losses in check.
Among retail's gainers, AutoNation's fourth-quarter profit climbed 9.1%, topping analysts' estimates, as the automotive retail dealer reported higher sales of both new and used vehicles. Shares rose 7.8%.
Limited Brands rose 6.3%, after posting a 24% jump in same-store sales for January and raising its guidance for its quarter, which closes at the end of this month.
"The backdrop is, the U.S. economy is still in an improving state, and the majority of the economic data supports that, whether we're talking about retail sales or the GDP report," Jason Pride, director of investment strategy at Glenmede Investment and Wealth Management said.
The market's early mood was subdued as clashes between protesters and supporters of the Egyptian regime spilled over into violence, prompting the military to fire bursts of warning shots and reposition tanks to keep the two sides apart.
However, oil prices edged down in recent trading.
Labor data were a bright spot on Thursday, encouraging optimism for Friday's monthly report. The number of U.S. workers filing new claims for unemployment benefits fell 42,000 to 415,000 in the week ended Jan. 29, the Labor Department said in its weekly report. Economists had expected a drop of 31,000 to 423,000.
Boosted by the data, the U.S. dollar strengthened against both the yen and the euro. The U.S. Dollar Index, which tracks the U.S. currency against a basket of others, rose 0.9%. The euro slumped more than 1% after European Central Bank President Jean-Claude Trichet's comments at a press conference disappointed those hoping an interest-rate rise could come soon. The euro was trading recently at $1.3629, down from $1.3810 late Wednesday in New York.
In the U.S., retailers strengthened as reports from last month showed shoppers largely shrugged off bad weather to help January same-store sales top expectations. Among retailers whose sales last month surpassed analysts' forecasts, Zumiez rose 1.3%, Macy's added 0.5% and Costco, which has more stores in areas that saw fewer winter storms, gained 3%.
TJX, parent of off-price chains T.J. Maxx and Marshalls, also reported January same-store sales that topped analysts' views and said it expects fourth-quarter earnings to beat the forecast it raised last month. Shares rose 3.5%.
BJ's Wholesale Club's January same-store sales climbed 2.7%, or 0.3% excluding the impact of gasoline sales. The warehouse-club retailer also said it will consider options, including a potential sale of the company, sending share surging 13%.
Among companies reporting earnings, cereal maker Kellogg added 2.2% after its fourth-quarter earnings rose 7.4% as the food manufacturer benefited from some lower expenses, though revenue and margins weakened.
In other economic data, the Institute for Supply Management's index of non-manufacturing activity rose to 59.4 in January, topping forecasts for a 57.0 reading. Meanwhile, the Commerce Department said U.S. factory-goods orders unexpectedly rose in December, climbing 0.2%, surprising analysts who had expected a 0.5% decline.
Separately, nonfarm business productivity rose at a 2.6% annual rate in the fourth quarter, surpassing analysts' expectations for a 2.1% increase. The report also showed that unit labor costs--a key gauge of where prices are heading--fell at a 0.6% annual rate last quarter, surprising analysts who had forecast a 0.1% gain.
U.S. stocks pared early Thursday losses as investors eyed encouraging earnings and stronger January sales among retailers, against a backdrop of continued unrest in Egypt.
The Dow Jones Industrial Average was off 6 points, or 0.1%, to 12036 recently. Leading the Dow's decliners, Merck fell 2.7% after swinging to a fourth-quarter loss. While earnings and revenue topped Wall Street's expectations, the drug maker's forecast for full-year adjusted earnings fell below analysts' predictions.
The Nasdaq Composite edged up 1 point to 2750. The Standard & Poor's 500-stock index shed 0.1% to 1303, though consumer discretionary stocks kept the losses in check.
Among retail's gainers, AutoNation's fourth-quarter profit climbed 9.1%, topping analysts' estimates, as the automotive retail dealer reported higher sales of both new and used vehicles. Shares rose 7.8%.
Limited Brands rose 6.3%, after posting a 24% jump in same-store sales for January and raising its guidance for its quarter, which closes at the end of this month.
"The backdrop is, the U.S. economy is still in an improving state, and the majority of the economic data supports that, whether we're talking about retail sales or the GDP report," Jason Pride, director of investment strategy at Glenmede Investment and Wealth Management said.
The market's early mood was subdued as clashes between protesters and supporters of the Egyptian regime spilled over into violence, prompting the military to fire bursts of warning shots and reposition tanks to keep the two sides apart.
However, oil prices edged down in recent trading.
Labor data were a bright spot on Thursday, encouraging optimism for Friday's monthly report. The number of U.S. workers filing new claims for unemployment benefits fell 42,000 to 415,000 in the week ended Jan. 29, the Labor Department said in its weekly report. Economists had expected a drop of 31,000 to 423,000.
Boosted by the data, the U.S. dollar strengthened against both the yen and the euro. The U.S. Dollar Index, which tracks the U.S. currency against a basket of others, rose 0.9%. The euro slumped more than 1% after European Central Bank President Jean-Claude Trichet's comments at a press conference disappointed those hoping an interest-rate rise could come soon. The euro was trading recently at $1.3629, down from $1.3810 late Wednesday in New York.
In the U.S., retailers strengthened as reports from last month showed shoppers largely shrugged off bad weather to help January same-store sales top expectations. Among retailers whose sales last month surpassed analysts' forecasts, Zumiez rose 1.3%, Macy's added 0.5% and Costco, which has more stores in areas that saw fewer winter storms, gained 3%.
TJX, parent of off-price chains T.J. Maxx and Marshalls, also reported January same-store sales that topped analysts' views and said it expects fourth-quarter earnings to beat the forecast it raised last month. Shares rose 3.5%.
BJ's Wholesale Club's January same-store sales climbed 2.7%, or 0.3% excluding the impact of gasoline sales. The warehouse-club retailer also said it will consider options, including a potential sale of the company, sending share surging 13%.
Among companies reporting earnings, cereal maker Kellogg added 2.2% after its fourth-quarter earnings rose 7.4% as the food manufacturer benefited from some lower expenses, though revenue and margins weakened.
In other economic data, the Institute for Supply Management's index of non-manufacturing activity rose to 59.4 in January, topping forecasts for a 57.0 reading. Meanwhile, the Commerce Department said U.S. factory-goods orders unexpectedly rose in December, climbing 0.2%, surprising analysts who had expected a 0.5% decline.
Separately, nonfarm business productivity rose at a 2.6% annual rate in the fourth quarter, surpassing analysts' expectations for a 2.1% increase. The report also showed that unit labor costs--a key gauge of where prices are heading--fell at a 0.6% annual rate last quarter, surprising analysts who had forecast a 0.1% gain.
Wednesday, February 2, 2011
US Stock Futures Slightly Lower After ADP Jobs Data
U.S. stock futures were slightly lower after private-sector employment data beat consensus expectations, as investors awaited another raft of corporate earnings.
Dow Jones Industrial Average futures edged down two points at 11971 recently, while Standard & Poor's 500 futures were off one point at 1301 and Nasdaq 100 futures were slipped three points to 2319. Prior to the data, Dow futures had been up five points, while S&P 500 futures slipped half a point and Nasdaq futures were off two points. Changes in stock futures do not always accurately predict early stock moves after the open.
The market was watching private-sector employment, which increased by 187,000 from December to January, according to the latest report from Automatic Data Processing. While January marked the 12th consecutive month of private-sector employment growth, ADP lowered December's gains, to 247,000 new jobs from a previous estimate of 297,000.
Investors will also be awaiting initial jobless claims data on Thursday ahead of Friday's closely-watched official monthly jobs number.
Wednesday's move came a day after the Dow Jones Industrial Average posted its strongest one-day gain in two months, rising 148.23 points, or 1.3%, to 12040.16. That marked the blue-chip index's first close above the key 12,000 level since June 19, 2008, while the S&P 500 finished above 1300.
In pre-market trading Wednesday, shares of Electronic Arts rose 9.8% after the video game publisher said late Tuesday that its third-quarter fiscal loss widened as sales fell, but announced a better-than-expected forecast for the current quarter and a share buyback plan worth $600 million.
Mattel rose 2.3% in pre-market trading after the toy maker reported improved sales across its major divisions and increased its dividend by 11%, raising the quarterly payout to 23 cents a share.
Hershey was up 3.4% in pre-market trading after fourth-quarter earnings rose 6.9% as the candy maker posted sharply lower restructuring charges, while sales and margins both improved.
Investors were also watching for earnings from Marathon Oil and Allergan before the opening bell, as well as News Corp., which owns the publisher of The Wall Street Journal, and Visa after the market close.
In Europe, stocks rose, with the biggest gains seen in London where mining company shares gained. Shares of Spain's second-largest bank Banco Bilbao Vizcaya Argentaria S.A., or BBVA, fell 0.8% in the wake of fourth-quarter results, while the country's IBEX 35 index rose 1.5%.
Shares of Roche Holding AG fell 2% in Swiss trading after the drugmaker said restructuring charges and slowing U.S. and European sales hit 2010 earnings.
Crude-oil futures slipped, as investors kept a close eye on developments in Egypt, where President Hosni Mubarak said he would not run in upcoming presidential elections after his term expires later this year.
Gold slipped, while copper was little changed at $4.54 a pound, after closing at their highest level ever on Tuesday.
U.S. stock futures were slightly lower after private-sector employment data beat consensus expectations, as investors awaited another raft of corporate earnings.
Dow Jones Industrial Average futures edged down two points at 11971 recently, while Standard & Poor's 500 futures were off one point at 1301 and Nasdaq 100 futures were slipped three points to 2319. Prior to the data, Dow futures had been up five points, while S&P 500 futures slipped half a point and Nasdaq futures were off two points. Changes in stock futures do not always accurately predict early stock moves after the open.
The market was watching private-sector employment, which increased by 187,000 from December to January, according to the latest report from Automatic Data Processing. While January marked the 12th consecutive month of private-sector employment growth, ADP lowered December's gains, to 247,000 new jobs from a previous estimate of 297,000.
Investors will also be awaiting initial jobless claims data on Thursday ahead of Friday's closely-watched official monthly jobs number.
Wednesday's move came a day after the Dow Jones Industrial Average posted its strongest one-day gain in two months, rising 148.23 points, or 1.3%, to 12040.16. That marked the blue-chip index's first close above the key 12,000 level since June 19, 2008, while the S&P 500 finished above 1300.
In pre-market trading Wednesday, shares of Electronic Arts rose 9.8% after the video game publisher said late Tuesday that its third-quarter fiscal loss widened as sales fell, but announced a better-than-expected forecast for the current quarter and a share buyback plan worth $600 million.
Mattel rose 2.3% in pre-market trading after the toy maker reported improved sales across its major divisions and increased its dividend by 11%, raising the quarterly payout to 23 cents a share.
Hershey was up 3.4% in pre-market trading after fourth-quarter earnings rose 6.9% as the candy maker posted sharply lower restructuring charges, while sales and margins both improved.
Investors were also watching for earnings from Marathon Oil and Allergan before the opening bell, as well as News Corp., which owns the publisher of The Wall Street Journal, and Visa after the market close.
In Europe, stocks rose, with the biggest gains seen in London where mining company shares gained. Shares of Spain's second-largest bank Banco Bilbao Vizcaya Argentaria S.A., or BBVA, fell 0.8% in the wake of fourth-quarter results, while the country's IBEX 35 index rose 1.5%.
Shares of Roche Holding AG fell 2% in Swiss trading after the drugmaker said restructuring charges and slowing U.S. and European sales hit 2010 earnings.
Crude-oil futures slipped, as investors kept a close eye on developments in Egypt, where President Hosni Mubarak said he would not run in upcoming presidential elections after his term expires later this year.
Gold slipped, while copper was little changed at $4.54 a pound, after closing at their highest level ever on Tuesday.
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