U.S. Stock-Index Futures Retreat on Europe Debt
U.S. stock-index futures fell as banks declined amid mounting concern about Europe’s debt crisis, while tensions between North and South Korea escalated.
Goldman Sachs Inc. and JPMorgan Chase & Co. fell more than 1 percent in Germany. Alcoa Inc. dropped 2 percent as base metals declined in London. Del Monte Foods Co. rallied 2.3 percent after a KKR & Co.-led group agreed to acquire the company in a $4 billion transaction. Wal-Mart Inc. rose as Black Friday, the biggest shopping day of the year, gets underway.
Futures on the Standard & Poor’s 500 Index expiring in December dropped 1 percent to 1,184.2 at 11:47 a.m. in London, indicating benchmark indexes may fall as markets reopen for half a day following the Thanksgiving holiday. Dow Jones Industrial Average futures lost 0.8 percent to 11,061 and Nasdaq-100 Index futures dropped 1 percent to 2,137.
“We are going to be saddled with European debt concerns for a while and it seems to be an issue that markets are completely obsessed with,” said London-based Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd., which oversees about $33 billion. “In addition to which, the two Koreas have everyone on alert. If the market chooses to focus on the negatives, then there is no shortage of things to focus on.”
The S&P 500 has fallen 2.2 percent since reaching a two- year high of 1,225.85 on Nov. 5 amid concern the sovereign-debt crisis will spread to southern Europe and speculation China will raise interest rates to tame inflation. Stocks extended losses on Nov. 23 after North Korea shelled a South Korean island.
Spain, Portugal
The cost of insuring Portuguese and Spanish government debt against default climbed to record levels based on closing prices, according to data provider CMA. Portugal today faces a final vote in parliament on its 2011 spending plan, which includes measures to pare the deficit.
The Financial Times Deutschland reported that euro-area policy makers are pushing Portugal to tap a 750 billion-euro ($993 billion) bailout fund. Portuguese Finance Minister Fernando Teixeira dos Santos said European Union governments can’t impose a bailout on his country even as speculation mounts that Portugal will eventually have to ask for one.
Shares of Goldman Sachs fell 1.5 percent to $157.91 in Germany, JPMorgan Chase & Co. lost 1.3 percent to $37.68 and Bank of America Corp. slid 1.2 percent to $11.15.
Alcoa lost 2.7 percent to $12.95 in German trading as base metals declined in London. North Korea is “ready to give a shower of dreadful fire and blow up the bulwark of the enemies,” according to a statement from state news agency KCNA. “Escalated confrontation would lead to a war.”
The dollar hit a seven-week high against the yen on concerns the conflict in the Korean peninsula could worsen, raising the demand for relatively safe assets.
Curb Speculation
Separately, the Shanghai Futures Exchange, where the world’s top three metals contracts are traded, said yesterday it will increase margins and daily price-move limits in the latest move by China to curb speculation and cool inflation. Chinese stocks fell for the first time in three days as the Shanghai Securities News said the government may cut the target for new lending next year.
Del Monte rallied 3.2 percent to $18.57 in Germany after the company yesterday said KKR, Vestar Capital Partners and Centerview Partners will pay $19 a share in cash for the maker of canned fruit and pet foods. That would be 21 percent higher than the closing price on Nov. 18, the day before takeover talks were reported. The buyers will assume about $1.3 billion in net debt.
Wal-Mart rose 0.3 percent to $54.17 in Germany as Black Friday a bellwether for the entire holiday season, gets underway. Shares of Home Depot Inc., Saks Inc. and Macy’s Inc. were yet to trade in Europe.
Analysts’ estimates for holiday sales vary from little changed to increases of as much as 4.5 percent. The retail federation predicts a gain of 2.3 percent to $447.1 billion after an uptick of 0.4 percent last year and a 3.9 percent drop in 2008.
Friday, November 26, 2010
Japanese Stocks Rise as Europe's Debt Concerns Ease, Oil Climbs
Japanese stocks rose for a second day after Deutsche Bundesbank President Axel Weber said a rescue fund for the euro area has sufficient capital to calm financial markets and as oil and metal prices increased.
Toyota Motor Corp., the world's biggest carmaker, advanced 0.8 percent. Honda Motor Co., Japan's No. 2 carmaker, climbed 1.1 percent. Mitsubishi Corp., the nation's largest commodities trader, gained 0.4 percent. Sumitomo Chemical Co. jumped 3.1 percent after announcing a plan to build a rubber plant.
"Concerns about financial issues in Europe eased and there's expectation for excess liquidity," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.
The Nikkei 225 Stock Average rose 0.4 percent to 10,118.49 as of 9:42 a.m. in Tokyo, set for the highest close since June 21. The broader Topix index increased 0.4 percent to 872.97, with about five stocks gaining for every two that fell. For the week, the Nikkei has advanced 1 percent, while the Topix is up 0.4 percent.
The Nikkei 225 jumped 9.5 percent this month to yesterday. Stocks in the Japanese benchmark are valued at 17.8 times estimated earnings on average, compared with 14.1 times for the Standard &Poor's 500 Index and 12 times for the Stoxx Europe 600 Index.
The benchmark Stoxx 600 rose 0.5 percent yesterday after Weber, who is also a European Central Bank Governing Council member, said there's no alternative to the European currency union.
Yen Weakens
Toyota gained 0.8 percent to 3,330 yen and Honda increased 1.1 percent to 3,120 yen. The carmakers were the biggest support for the Topix's gain. TDK Corp., the world's biggest maker of magnetic heads for disk drives, jumped 2.2 percent to 5,660 yen.
The yen depreciated to 83.73 against the dollar, compared with 83.49 at the close of stock trading in Tokyo yesterday. Against the euro, Japan's currency weakened to 111.75 from 111.25. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Mitsubishi gained 0.4 percent to 2,137 yen and Mitsui & Co., which counts commodities as its largest source of profit, rose 0.4 percent to 1,340 yen.
The London Metal Exchange Index of prices for six industrial metals including copper and aluminum advanced 1.4 percent yesterday. Crude oil for January delivery gained as much as 0.8 percent yesterday in electronic trading in New York to $84.53 a barrel, the highest price since Nov. 16.
Sumitomo Chemical climbed 3.1 percent to 371 yen, the most in the Nikkei 225. The company said on its Web site it will build a plant in Singapore to produce solution styrene-butadiene rubber, aiming to start commercial operation in the fourth quarter of 2013.
Japan Airport Terminal Co., the operator of buildings at Tokyo's Haneda Airport, advanced 1.9 percent to 1,317 yen after the company had its rating raised to "outperform" from "neutral" at Mitsubishi UFJ Morgan Stanley Securities Co.
Japanese stocks rose for a second day after Deutsche Bundesbank President Axel Weber said a rescue fund for the euro area has sufficient capital to calm financial markets and as oil and metal prices increased.
Toyota Motor Corp., the world's biggest carmaker, advanced 0.8 percent. Honda Motor Co., Japan's No. 2 carmaker, climbed 1.1 percent. Mitsubishi Corp., the nation's largest commodities trader, gained 0.4 percent. Sumitomo Chemical Co. jumped 3.1 percent after announcing a plan to build a rubber plant.
"Concerns about financial issues in Europe eased and there's expectation for excess liquidity," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.
The Nikkei 225 Stock Average rose 0.4 percent to 10,118.49 as of 9:42 a.m. in Tokyo, set for the highest close since June 21. The broader Topix index increased 0.4 percent to 872.97, with about five stocks gaining for every two that fell. For the week, the Nikkei has advanced 1 percent, while the Topix is up 0.4 percent.
The Nikkei 225 jumped 9.5 percent this month to yesterday. Stocks in the Japanese benchmark are valued at 17.8 times estimated earnings on average, compared with 14.1 times for the Standard &Poor's 500 Index and 12 times for the Stoxx Europe 600 Index.
The benchmark Stoxx 600 rose 0.5 percent yesterday after Weber, who is also a European Central Bank Governing Council member, said there's no alternative to the European currency union.
Yen Weakens
Toyota gained 0.8 percent to 3,330 yen and Honda increased 1.1 percent to 3,120 yen. The carmakers were the biggest support for the Topix's gain. TDK Corp., the world's biggest maker of magnetic heads for disk drives, jumped 2.2 percent to 5,660 yen.
The yen depreciated to 83.73 against the dollar, compared with 83.49 at the close of stock trading in Tokyo yesterday. Against the euro, Japan's currency weakened to 111.75 from 111.25. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Mitsubishi gained 0.4 percent to 2,137 yen and Mitsui & Co., which counts commodities as its largest source of profit, rose 0.4 percent to 1,340 yen.
The London Metal Exchange Index of prices for six industrial metals including copper and aluminum advanced 1.4 percent yesterday. Crude oil for January delivery gained as much as 0.8 percent yesterday in electronic trading in New York to $84.53 a barrel, the highest price since Nov. 16.
Sumitomo Chemical climbed 3.1 percent to 371 yen, the most in the Nikkei 225. The company said on its Web site it will build a plant in Singapore to produce solution styrene-butadiene rubber, aiming to start commercial operation in the fourth quarter of 2013.
Japan Airport Terminal Co., the operator of buildings at Tokyo's Haneda Airport, advanced 1.9 percent to 1,317 yen after the company had its rating raised to "outperform" from "neutral" at Mitsubishi UFJ Morgan Stanley Securities Co.
Thursday, November 25, 2010
US Stock Market Rallied Ahead Of Thanksgiving
The US equities and bonds markets bounced back yesterday following the release of several encouraging economic reports. The rally in the markets occurred a day after a sell-off occurred due to the recent military conflict between North and South Korea. Traders initially found confidence when Germany’s business climate, as measured in the German Ifo business climate index, unexpectedly improved with the index rising to to 109.3 from 107.7. The index was initially seen to weaken to 107.6. Of course, this surprise came amid the current drama in Ireland which I will talk about in my next article so watch out for that!
Later, the buying gained more momentum when the latest initial jobless claims, which is the number of people who are applying for unemployment benefits from the state for the first time, in the US registered a much lower figure of 407,000 than the market’s 434,000 forecast. The previous week’s count was at 441,000. The market actually more weight on the improvement in the jobless claims versus the country’s durable goods orders which fell by 3.3% in October.
Earlier in the week, data showed that the US economy grew by 2.5% against the 2.0% estimate during the third quarter due to higher consumption which can partially attributed to the gains in employee wages. Given these, its apparent the US economy is slowly picking up speed.
To the end of the day, the Dow jumped by 1.31% while the broader S&P 500 soared by 1.93%. The Nasdaq, similarly, gained by 1.43% while the yield on the 10-year bond in the US closed higher by 0.1520 points to 2.9140%.
The US equities and bonds markets bounced back yesterday following the release of several encouraging economic reports. The rally in the markets occurred a day after a sell-off occurred due to the recent military conflict between North and South Korea. Traders initially found confidence when Germany’s business climate, as measured in the German Ifo business climate index, unexpectedly improved with the index rising to to 109.3 from 107.7. The index was initially seen to weaken to 107.6. Of course, this surprise came amid the current drama in Ireland which I will talk about in my next article so watch out for that!
Later, the buying gained more momentum when the latest initial jobless claims, which is the number of people who are applying for unemployment benefits from the state for the first time, in the US registered a much lower figure of 407,000 than the market’s 434,000 forecast. The previous week’s count was at 441,000. The market actually more weight on the improvement in the jobless claims versus the country’s durable goods orders which fell by 3.3% in October.
Earlier in the week, data showed that the US economy grew by 2.5% against the 2.0% estimate during the third quarter due to higher consumption which can partially attributed to the gains in employee wages. Given these, its apparent the US economy is slowly picking up speed.
To the end of the day, the Dow jumped by 1.31% while the broader S&P 500 soared by 1.93%. The Nasdaq, similarly, gained by 1.43% while the yield on the 10-year bond in the US closed higher by 0.1520 points to 2.9140%.
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