Stocks Staging Recovery Attempt After Seeing Early Weakness
After moving notably lower in early trading, stocks have regained some ground over the course of morning trading on Monday. The major averages have climbed well off their lows for the session but currently remain in negative territory.
The early weakness on Wall Street was partly due to release the release of a report from the Commerce Department showing an unexpected drop in retail sales in the month of June. Sales fell for the third consecutive month, adding to recent concerns about the economic outlook.
Nonetheless, a relatively upbeat report on New York manufacturing activity helped to limit the downside for the markets along with a positive reaction to Citigroup's (C) quarterly results.
While many of the major sectors have bounced off their worst levels since then, significant weakness remains visible among networking stocks. The NYSE Arca Networking Index is down by 1.3 percent after hitting a three-year intraday low.
Trucking stocks also remain under pressure, with the Dow Jones Trucking Index down by 1.3 percent. Steel, defense, and chemical stocks also continue to see weakness, while strength has emerged among airline and biotech stocks.
The major averages have shown a notable move to the upside in the past few minutes, climbing back near the unchanged line. The Dow is down 28.16 points at 12,748.93, the Nasdaq is down 0.37 points at 2,908.10 and the S&P 500 is down 0.20 points at 1,356.58.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Flat Amid Cautious Trade - Canadian Commentary
Canadian stocks were little changed Monday morning with traders awaiting cues from the Federal Reserve Chairman Ben Bernanke's testimony to Congress, this week. Meanwhile, the IMF today slashed its 2013 growth forecast for the global economy. In an update to its twice-yearly World Economic Outlook, the lender cut the world growth forecast for next year to 3.9 percent from 4.1 percent predicted in April. The outlook for this year was left unchanged at 3.5 percent.
The S&P/TSX Composite Index slipped 9.12 points or 0.08 percent to 11,505.41.
The Diversified Materials Index was the major loser, shedding close to 2 percent. Ivanhoe Mines lost nearly 5 percent First Quantum Minerals and Teck Resources slipped around 1 percent each.
The price of Crude oil edged up Monday morning as traders await cues from the Federal Reserve Chairman Ben Bernanke's testimony to Congress, this week. Crude for August was up $0.15 to $87.25 a barrel.
In the oil patch, Petrominerales and Celtic Exploration were down around 3 percent each.
Meanwhile, MEG Energy soared 6 percent after announcing expansion plans. Niko Resources moved up 4 percent.
The price of gold was ticking lower Monday morning amid a steady U.S. dollar. gold for August eased $1.50 to $1,590.50 an ounce.
Among gold plays, Royal gold and Agnico-Eagle Mines lost about 2 percent each. Centerra gold surrendered nearly 4 percent.
BlackBerry maker Research In Motion lost just over 2 percent after it said it would pay $147.2 million in a litigation against Mformation Technologies Inc.
The Canadian government on Sunday approved Swiss commodities trader Glencore International plc's C$6.1 billion acquisition of the nation's biggest grain handler Viterra Inc. (VT.TO). Shares of Viterra eased 0.25 percent.
Meanwhile, real estate company Madison Pacific Properties Inc. (MPC.TO) soared 18 percent.
In economic news, Statistics Canada said non-residents acquired a record $26.1 billion of Canadian securities in May, mainly in the form of government debt securities. Canadian investors made a modest $1.3 billion purchase of foreign securities in the month, following a divestment in April.
From south of the border, U.S. retail sales posted an unexpected and severe drop for June, according to the Commerce Department. Advance estimates for U.S. retail sales for June came in at a seasonally adjusted level of $401.5 billion, a 0.5 percent drop from May levels. Most economists had expected retail sales, which fell 0.2 percent in May, to rebound in June rather than continuing to contract, with the consensus forecast predicting 0.2 percent growth.
Elsewhere, euro zone inflation was 2.4 percent in June, unchanged from the previous month, the latest report from Eurostat showed. The figure matched the preliminary estimate. The rate was the lowest since February 2011. On a monthly basis, the harmonized index of consumer prices fell 0.1 percent.
A separate report from the Eurostat revealed that trade surplus in the region rose more than expected by economists in May. The trade balance was in a surplus of EUR 6.9 billion in May, higher than EUR 3.7 billion in April. Economists expected the surplus to rise to EUR 4 billion. |
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Mostly Lower
The European markets are mostly lower in afternoon trading Monday, after comments made by China's Premier Wen Jiabao over the weekend evoked global reaction. Carmakers were apprehensive on China growth fears. The major Asian markets ended mostly higher as investors averred that Jiabao's remarks might be followed by stimulus measures.
Jiabao warned that the country's economic recovery is yet to gain momentum and the economic strains may continue for some more time, the official Xinhua news agency reported Sunday. Economic recovery is not yet stable and economic hardships may continue for a period of time, he said during an inspection tour in southwest Sichuan province over the weekend.
The euro Stoxx 50 index of eurozone bluechip stocks is falling 0.32 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.06 percent.
The German DAX is down 0.04 percent, the UK's FTSE 100 is losing 0.07 percent the French CAC 40 is falling 0.26 percent. However, Switzerland's SMI is gaining 0.20 percent.
In Frankfurt, Adidas is declining 1.5 percent. Commerzbank is losing 1 percent and Deutsche Bank is down 0.6 percent.
BMW, Volkswagen and Daimler are in negative territory.
SolarWorld is declining 7.8 percent. The stock was cut to "Sell" from "Hold" at Commerzbank.
Infineon Technologies is advancing 3.1 percent and Lufthansa is rising 1.3 percent.
Metro is gaining 2 percent after UBS raised the stock to "Neutral" from "Sell."
Basf is marginally higher. Nomura raised the stock to "Buy" from "Neutral."
In Paris, BNP Paribas and Credit Agricole are moderately lower while Societe Generale is flat.
Carrefour is up 0.3 percent. Berenberg raised the stock to "Buy" from "Sell."
In London, Smiths Group announced the disposal of its minority stake in Cross Match Technologies Inc. for up to $77 million. The stock is up around 2 percent.
G4S is declining 9 percent after the security firm regretted its inability to deliver the promised security staff for the London Olympics. The company would record up to 50 million pounds charge in the current year, related to this contract.
Software firm Sage Group said its trading performance since April 1 remains broadly in-line with its expectations, despite a "toughening" economic environment. The firm remains cautious on the outlook for Europe. The stock is losing over 3 percent.
Rio Tinto and Anglo American are falling over 1 percent in response to growth fears in China.
Barclays is losing 2.9 percent amid more scrutiny into the Libor manipulation scandal.
National Grid is declining 2.3 percent. Noting that Ofgem has published high level details of its initial proposals, the firm said there are several vital areas where Ofgem's proposals differ substantially from National Grid's comprehensive business plan submissions for transmission and gas distribution.
In Stockholm, apparel retailer Hennes & Mauritz is falling over 1 percent after it said total sales in June, including value added tax, increased 13 percent in local currencies, with a 3 percent rise in comparable units sales.
Shares of Skandinaviska Enskilda Banken AB or SEB are surging over 7 percent after the bank reported higher profit before credit losses in its second quarter.
PostNL is losing 4.7 percent in Amsterdam while Delta Lloyd is climbing 1.7 percent.
Clariant is gaining 1.7 percent in Zurich. Nomura upgraded the stock.
In economic news, inflation in Eurozone was 2.4 percent in June, unchanged from the previous month, the latest report from Eurostat showed. The figure matched the preliminary estimate.
Meanwhile, Eurozone's trade surplus rose more than expected by economists in May. The trade balance was in a surplus of 6.9 billion euros in May, higher than 3.7 billion euros in April. Economists expected the surplus to rise to 4 billion euros.
Across Asia/Pacific, major markets ended mostly higher. Australia's All Ordinaries gained 0.60 percent and Hong Kong's Hang Seng rose 0.15 percent. However, China's Shanghai Composite index bucked the uptrend and retreated 1.7 percent after Jiabao's comments.
In the U.S., futures point to a lower open on Wall Street. In the previous session, the major averages saw continued strength going into the close, ending the day firmly in positive territory. The Dow jumped 1.6 percent, the Nasdaq surged up 1.5 percent and the S&P 500 soared 1.7 percent.
In the commodity space, Crude for August delivery is falling $0.36 to $86.74 per barrel and August gold is losing $8.1 to $1583.9 a troy ounce. |
| Asia Market Reports | Asian Stocks Mixed Amid China Concerns
Asian stocks turned in a mixed performance on Monday, as positive sentiment following strong earnings from JPMorgan Chase & Co and Wells Fargo & Co tempered concerns about an impending Chinese economic slowdown. With several U.S. companies reporting results this week and Spain's bond auctions due on Tuesday and Thursday, investors await fresh directional cues from Fed Chairman Ben Bernanke's congressional testimony on July 17 and 18.
A slew of key U.S. corporate second-quarter earnings announcements are due this week, with Citigroup reporting results before the open of Wall Street later today, while Coca-Cola, Goldman Sachs Group, Intel, Johnson & Johnson and Yahoo Inc. are scheduled to announce their quarterly results tomorrow.
Commodities such as copper and Crude edged lower and the euro eased against the dollar after German Chancellor Angela Merkel said the question of liability for future aid to troubled banks in Europe has not yet been decided.
China's Shanghai Composite index tumbled 1.7 percent to end at a more than three-year low on growth concerns after Chinese Premier Wen Jiabao warned that the country's economic rebound was not yet stable and economic hardship may persist for a while.
However, spurring speculation of more stimulus measures, Wen said that the government would "fine tune" policy in the second half to support growth, according to the official Xinhua News Agency. Hong Kong's Hang Seng index rose a modest 0.2 percent, with mainland oil stocks pacing the gainers.
Australian shares rose notably despite caution ahead of Bernanke's semi-annual testimony before the U.S. lawmakers on the state of the economy on Tuesday and Wednesday. Paring some early gains, both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended the session up about 0.6 percent each.
Miners BHP Billiton and Rio Tinto ended up 1 percent and 0.8 percent, respectively, while smaller rival Fortescue climbed 2.4 percent and gold miner Newcrest added 1.7 percent. Among the big banks, ANZ, Commonwealth and Westpac rose about half a percent each, but NAB eased 0.4 percent.
The Australian dollar held on to its gains made on Friday as investors looked ahead to the release of the minutes of the Reserve Bank of Australia's June 3 board meeting due out tomorrow for clues on whether the central bank will cut its cash rate next month.
Seoul shares rose modestly, with the benchmark Kospi average rising 0.3 percent, as investors looked for direction from U.S. and domestic corporate earnings. Battered petrochemical shares such as LG Chem and SK Chemicals rose 2-4 percent, while heavyweights Samsung Electronics and Hyundai Motor rose about a percent each, extending Friday's gains.
Shipbuilder Hyundai Heavy Industries tumbled 2.9 percent, extending its losing streak for a seventh consecutive session on concerns that its second-quarter operating profit may miss estimates.
New Zealand shares extended declines from a two-month high, as investors fretted about a weak earnings season. Telecom, the biggest company on the exchange, tumbled 3.1 percent, Chorus, Telecom's demerged infrastructure arm, retreated 3.7 percent and Fletcher Building, the nation's largest construction company, lost 1.7 percent.
Among the prominent gainers, insurer Tower and carpet maker Cavalier rose about 3 percent each. gold miner OceanaGold added 1.3 percent after providing a progress report on its Didipio gold and copper project in the Philippines. The benchmark NZX-50 index slid 0.8 percent.
Elsewhere, the Japanese market was closed for a public holiday. India's benchmark Sensex was last trading down 0.2 percent in volatile trading after government data showed the nation's headline inflation slowed to its lowest level in five months in June. However, at 7.25 percent, the inflation is still way above the Reserve Bank of India's 6 percent target.
Indonesia's Jakarta Composite index was up 0.7 percent and Malaysia's KLSE Composite rose 0.6 percent, while Singapore's Straits Times was down marginally and the Taiwan Weighted average eased 0.2 percent.
On Wall Street, stocks rose sharply on Friday, with economic data from China as well as JPMorgan's strong quarterly results underpinning sentiment. Traders largely shrugged off a report from Thomson Reuters and the University of Michigan that showed an unexpected decline in consumer sentiment to the lowest level this year in July. The Dow rallied 1.6 percent, the tech-heavy Nasdaq gained 1.5 percent and the S&P 500 added 1.7 percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Eurozone Trade Surplus Surges On Higher Shipments, Weak Imports
Eurozone trade surplus surged notably in May on rising exports and weak imports to exceed expectations, a report from Eurostat showed Monday.
Due to an increase in exports and the continuing fall in imports, the trade surplus grew to EUR 6.9 billion from EUR 3.7 billion in April. Economists had expected the surplus to rise to EUR 4 billion.
A year ago, the balance of trade in goods was in a deficit of EUR 1.2 billion. In seasonally adjusted terms, the trade surplus was EUR 6.3 billion, bigger than April's EUR 4.5 billion surplus and consensus forecast of EUR 5 billion.
IHS Global Insight's economist Howard Archer said the trade surplus masks generally worrying trends. The improved surplus primarily occurred due to a fall in imports and the slight growth in exports does little to dilute concern that weakened global growth is hitting foreign demand for Eurozone goods.
On a seasonally adjusted monthly basis, Eurozone exports rose 0.3 percent, reversing April's 1.4 percent drop. Meanwhile, the downward trend in imports continues in May, which was down 0.9 percent.
Non-seasonally adjusted data showed that annual export growth remained steady at 6 percent, while imports remained flat in May.
The extra-EU27 trade in goods balance was a EUR 3.8 billion deficit, compared with EUR 14.5 billion shortfall in May.
In a separate communique, the statistical office confirmed 2.4 percent inflation in June, which was the lowest since February 2011. |
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