Stocks Showing A Lack Of Direction In Early Trading
After moving notably lower over the past few sessions, stocks are turning in a lackluster performance in early trading on Wednesday. The major averages have turned mixed but are showing only modest moves.
The major averages are currently on opposite sides of the unchanged line, with the Nasdaq posting a modest loss. While the Nasdaq is down 1.41 points or 0.1 percent at 2,861.58, the Dow is up 76.06 points or 0.6 percent at 12,693.38 and the S&P 500 is up 1.53 points or 0.1 percent at 1,339.84.
The choppy trading on Wall Street comes as traders are digesting a mixed batch of earnings news, with disappointing news from Apple (AAPL) partly offset by upbeat results from blue chips such as Caterpillar (CAT) and Boeing (BA).
After the close of trading on Tuesday, Apple reported third quarter earnings that rose year-over-year but still came in well below analyst estimates. The iPhone and iPad maker also provided disappointing fourth quarter guidance. Shares of Apple are down by 4.4 percent on the news.
Meanwhile, shares of Caterpillar and Boeing are moving to the upside after both companies reported better than expected second quarter earnings and provided upbeat guidance. Caterpillar is up by 2.5 percent, while Boeing is up by 1.8 percent.
Ford's (F) second quarter earnings also came in above expectations, although the auto giant also said it now expects to lose more than $1 billion in Europe this year, double its previous estimate.
On a busy day on the earnings front, traders are also digesting quarterly results from well known companies such as PepsiCo (PEP), Bristol-Myers (BMY), and ConocoPhillips (COP).
While most of the major sectors are showing only modest moves, early strength has emerged among semiconductor stocks. The Philadelphia Semiconductor Index has surged up by 2.6 percent amid strong gains by Altera (ALTR) and Broadcom (BRCM).
Gold stocks have also shown a notable upward move, moving higher along with the price of the precious metal. With gold for August delivery climbing $23.20 to $1,599.40 an ounce, the NYSE Arca Gold Bugs Index is up by 1.6 percent.
On the other hand, health insurance stocks have come under pressure in early trading, dragging the Morgan Stanley Healthcare Payor Index down by 4 percent. WellPoint (WLP) is leading the sector lower after reporting weaker than expected second quarter earnings and cuttings it full year guidance.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.4 percent, while China's Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the U.K.'s FTSE 100 Index has edged up by 0.3 percent, the French CAC 40 Index and the German DAX Index are jumping by 1.1 percent and 1.2 percent, respectively.
In the bond market, treasuries are showing a lack of direction following recent strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.409 percent.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Up At Open Wednesday
Toronto stocks opened higher Wednesday amid marginal buying in commodities, with the S&P/TSX Composite Index edging up 27.99 points or 0.24 percent to 11,494.94.
The Global Gold Index rose nearly 2 percent, with Alamos Gold Inc. and Kirkland Lake Gold gaining nearly 5 percent each. Agnico-Eagle Mines, Goldcorp. and Detour Gold gathered around 2 percent each.
In the oil patch, energy company Suncor Energy Inc. rose over 1 percent despite reporting a lower second quarter net earnings.
Canadian Pacific Railway Ltd. gathered nearly 2 percent even after recording a much lower second quarter net income. CN Rail . edged up 0.40 percent after reporting improved second-quarter net income.
Meanwhile, Energy producer Encana Corp. shed over 1 percent after slipping into the red in second quarter. Base-metals miner Teck Resources Ltd. was down over 2 percent after reporting a plunge in second-quarter profit. Information technology services provider CGI Group, Inc. lost 2 percent after reporting a decline in its third quarter net earnings.
The price of crude oil was extending gains Wednesday morning as traders await cues from the official inventories data, due out later during the session. Analysts expect crude oil inventories to ease 250,000 barrels and gasoline stocks to shed 750,000 barrels last week. Crude for September edged up $0.47 to $88.97 a barrel.
The price of gold was moving higher as the euro spiked after reports quoted European Central Bank council member Ewald Nowotny as saying that there are arguments in favor of giving Europe's rescue fund a banking license. Gold for August gained $25.70 to $1,601.90 an ounce.
In corporate news from Canada, integrated energy company Suncor Energy Inc. reported that its second quarter net earnings declined to C$333 million or C$0.21 per common share from C$562 million or C$0.36 per common share in the previous year quarter. For the full year, the company revised its total production outlook to 540,000- 580,000 boe/d from previously expected range of 530,000 - 580,000 boe/d.
Energy producer Encana Corp. slipped into the red in second quarter, reporting net loss of $1.48 billion, compared to last year's profit of $383 million. Operating earnings, which excluded items, declined to $198 million or $0.27 per share from last year's $352 million or $0.48 per share. Analysts were expecting the company to report earnings of $0.19 per share.
Colombia focused oil Ecopetrol S.A. reported second-quarter unconsolidated net income of COL$3.68 billion or COL$89.39 per share, compared to COL$3.41 billion or COL$84.36 per share last year.
Information technology services provider CGI Group, Inc. reported net earnings of C$87.2 million or C$0.33 per share for the third quarter, a decline from C$123.2 million or C$0.45 per share earned a year ago.
Canadian Pacific Railway Ltd. reported a much lower second quarter net income at C$103 million or C$0.60 per share compared to C$128 million or C$0.75 per share recorded a year ago. Analysts were expecting the company to report earnings of $0.83 per share.
CN Rail reported improved second-quarter net income of C$631 million or C$1.44 per share compared to C$538 million or C$1.18 per share in the same quarter last year. Adjusted net income for the quarter rose to $659 million, or $1.50 per share from $578 million or $1.26 per share in the prior year quarter. Analysts were expecting the company to report earnings of C$1.48 per share.
Food and drug retailer Loblaw Companies posted lower second-quarter net earnings of C$159 million or C$0.56 per share, versus C$197 million or C$0.69 per share a year before. Analysts were expecting the company to report earnings of $0.62 per share.
Base-metals miner Teck Resources Ltd. reported a plunge in second-quarter profit to C$268 million or C$0.46 per share, from C$756 million or C$1.28 per share last year. Excluding the effect of certain transactions, adjusted profit totaled C$312 million, or C$0.53 per share, significantly lower than C$663 million or C$1.12 per share in 2011.
Egypt focused gold miner Centamin Plc said it has temporarily halted operations at its Sukari Gold Mine in Egypt due to illegal labor unrest from a small percentage of the Sukari workforce.
Financial services company Accord Financial Corp. reported a decline in second quarter profit at C$1.24 million or C$0.15 per share compared to C$1.39 million or C$0.16 per share last year.
Telecommunications company Bell Aliant Inc. reported a lower second quarter profit of C$79 million or C$0.35 per share compared to C$83 million or C$0.36 per share in the same period last year. |
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Stocks Higher Despite Weak Data
European stocks edged higher on Wednesday, as bargain hunting on hopes of further stimulus measures from the Federal Reserve offset weak German business confidence and U.K. GDP data. Also, sentiment improved a little bit after European Central Bank council member Ewald Nowotny said that there are arguments in favor of giving Europe's rescue fund a banking license.
The Euro Stoxx 50 index of eurozone bluechip stocks is gaining 0.73 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is up marginally. Around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 are up between 0.1 percent and 0.7 percent.
Daimler is rallying 4.2 percent after the luxury carmaker kept its full-year earnings guidance intact, despite reporting a sharp drop in second-quarter profits. Rival Volkswagen is up almost 2 percent.
Qiagen is climbing 4 percent in Frankfurt after the company lifted its outlook for net sales and adjusted earnings growth in 2012.
Rolls-Royce Holdings Plc is down 1.7 percent in London. The engine maker said it received orders worth over £70 million from several customers to supply large thrusters for offshore drilling vessels.
ARM Holdings is up over 6 percent after its second-quarter profit beat expectations. Shares of ArcelorMittal are up 2 percent even as the steel giant reported a sharp drop in profit for the second quarter, as revenues were hurt by lower steel shipment volumes.
British American Tobacco Plc is moving down 0.7 percent after it reported a slight increase in first-half net profit amid stagnant volumes.
In economic releases, Germany's business confidence declined more than expected in July, the latest survey results from Ifo Institute showed. The Ifo business climate index fell to 103.3 in July from a revised 105.2 in June.
Separately, the preliminary estimate from the Office for National Statistics showed that the U.K. economy contracted at a faster than expected pace in the second quarter. The gross domestic product was down 0.7 percent sequentially, marking the biggest fall since the first quarter of 2009.
The decline follows a 0.3 percent fall in the first quarter and 0.4 percent decrease in the fourth quarter of 2011. Economists expected a decline of 0.2 percent. GDP dropped 0.8 percent from the same period of last year, bigger than the 0.3 percent fall expected by economists.
Elsewhere, Asian markets ended broadly lower, as rising Spanish borrowing costs and growing fears that Greece may need further restructuring curbed appetite for risk. Tech shares bore the brunt of the selling after Apple's quarterly sales and profit growth missed estimates.
Commodities such as crude and copper are edging higher, in line with a rebounding euro, while the Dow futures are up 36 points ahead of some key economic data due this week, including new home sales today and reports on weekly jobless claims, durable-goods orders and pending-home sales due out tomorrow. |
| Asia Market Reports | Asian Stocks Drop On Eurozone Debt Worries
Asian stocks fell broadly on Wednesday, as worsening European debt crisis and lingering worries over slowing Chinese growth kept investors on the edge. With Spanish borrowing costs hitting a fresh historic high yesterday, Spanish and German finance ministers sought to contain Spanish bailout fears, saying that high borrowing costs do not reflect the country's economic strengths.
Officials representing the so-called "troika" of Greek creditors - the IMF, European Central Bank and European Commission - are in Athens to assess how far the debt-stricken nation has strayed from bailout terms. In this backdrop, reports quoted EU officials as saying that Greece may need further debt restructuring to meet its obligations.
Tokyo stocks fell for the fourth straight session, with the Nikkei average sliding to a seven-week closing low, as Apple's disappointing earnings report dragged down iPhone component manufacturers such as Toshiba and Sharp, which fell 7.3 percent and 10 percent, respectively.
Shares of Ibiden plunged 6.5 percent, while other tech shares like Nikon and Tokyo Electron lost 4-6 percent. However, Softbank soared 4 percent on a brokerage upgrade. The Nikkei index fell 1.44 percent, while the broader Topix index finished 1.56 percent lower.
In economic news, trade data released just before the market open revealed that Japan posted a merchandise trade surplus of 61.7 billion yen in June, bouncing into the black for just the second time in nine months as exports to Europe and China contracted.
China's Shanghai Composite index slid half a percent and Hong Kong's Hang Seng index edged down 0.14 percent as reports that Greece may need up to 50 billion euros in additional aid fanned concerns of contagion spreading from the euro-area's financial turmoil.
Australian shares recouped early losses, as benign inflation data domestically and continuing hopes that the Federal Reserve may announce new steps to boost U.S. growth spurred bargain hunting at lower levels. The benchmark S&P/ASX 200 fell more than a percent in early trading before paring losses to end down 0.23 percent at 4,124.
Big miner BHP Billiton edged down 0.3 percent after first-hand accounts of a Corporate Confidence Index suggested that investor confidence in Chief Executive Kloppers' leadership has declined steadily throughout his five-year tenure. Rio Tinto fell 1.5 percent, but smaller rival Fortescue rose 1.7 percent. Atlas Iron tumbled 3.7 percent after releasing its shipments data for the June quarter.
In the financial sector, ANZ slid half a percent and Westpac declined 0.8 percent, while Commonwealth and NAB rose 0.2 percent and 0.7 percent, respectively. Macquarie Group fell 1.8 percent despite forecasting an improved result for the 2013 financial year.
Seoul shares fell to a seven-month low after Bank of Korea Governor Kim Choong-soo said that the economy will likely grow at a slower pace than thought due to worsening global economic conditions. South Korean consumer confidence dropped to a five-month low in July, while inflation expectations eased to the lowest level in 19 months, as the economic outlook became bleaker due to the eurozone debt crisis and China's slowing growth, according to the central bank. The benchmark Kospi index ended down 25 points or 1.37 percent at 1,769.
Shares of LG Electronics fell 2.1 percent after the company said its mobile phone business swung to a loss in the second quarter. Samsung Electronics slid a percent and LG Display plunged 4.8 percent after Apple's latest quarterly results missed expectations.
New Zealand shares edged down marginally, joining a global slide on persisting concerns over the situation in Greece and Spain. The benchmark NZX edged down about 2 points or 0.05 percent to 3,459, extending declines for a second day. Among the prominent decliners, Xero, the cloud accounting platform provider, slumped 5.5 percent ahead of its annual shareholder meeting on Thursday, while gold miner Oceanagold slid 0.8 percent before its half-year results due tomorrow.
Australian food ingredients manufacturer Goodman Fielder lost 3.2 percent, SkyCity Entertainment, the casino and hotel operator, fell 2 percent and Fletcher Building, the nation's largest construction company, eased 0.7 percent. Healthcare group Wakefield Health soared 19 percent after major shareholders Royston Hospital Trust Board and Medusa launched a partial takeover offer for the company at $6 a share.
Elsewhere, India's benchmark Sensex was last trading 0.4 percent, Singapore's Straits Times index slipped 0.3 percent and the Taiwan Weighted average ended down 0.4 percent, while Indonesia's Jakarta Composite index and Malaysia's KLSE Composite were up about 0.2 percent each. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Edges Up Ahead Of Inventories Report
The price of crude oil was extending gains Wednesday morning as traders await cues from the official inventories data, due out later during the session.
Light Sweet Crude Oil (WTI) futures for September delivery, edged up $0.27 to $88.77 a barrel. Yesterday, oil settled marginally higher as demand concerns eased with data out of China showing a minor recovery in the nation's manufacturing sector. Nevertheless, investor concerns over the euro zone sovereign debt crisis remained and continued to be a drag on prices.
Tuesday after the trading hours, the API said U.S. crude oil inventories rose 1.30 million barrels and gasoline stocks moved up 2.3 million barrels in the weekended July 20
This morning, the U.S. dollar was leveling off from its 2-year high versus the euro, while moving up near a two-week high against sterling. The buck was lingering near a two-month low versus the yen and trading flat against the Swiss franc.
In economic news, Germany's business confidence declined more than expected in July, reports said citing the latest survey results from Ifo Institute. The Ifo business climate index fell to 103.3 in July from a revised 105.2 in June. Economists expected the index to fall to 104.5.
Meanwhile, the U.K. economy contracted at a faster than expected pace in the second quarter, the preliminary estimate from the Office for National Statistics showed The gross domestic product was down 0.7 percent sequentially, marking the biggest fall since the first quarter of 2009. The decline follows a 0.3 percent fall in the first quarter and 0.4 percent decrease in the fourth quarter of 2011. Economists expected a decline of 0.2 percent.
Traders will look to the report on new home sales from the U.S. Commerce Department, due out shortly after the markets open. The consensus estimate calls for new homes sales of 370,000 after sales rose 7.6 percent to 369,000 in May.
Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended July 20. Analysts expect crude oil inventories to ease 250,000 barrels and gasoline stocks to shed 750,000 barrels last week. |
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