| Stocks rise as Merkel backs bond-buying
Market Movers
techMARK 2,123.26 +0.16%
FTSE 100 5,847.03 +0.21%
FTSE 250 11,535.58 +0.29% Merkel backs Draghi's pledge to do 'whatever it takes'
Lonmin drops as violence at South African mine escalates
European banks make gains
Banking stocks were pulling the Footsie higher on Friday morning as optimism regarding the Eurozone increased with Angela Merkel backing Mario Draghi's bond-buying proposal.
Merkel, the German Chancellor, has thrown her weight behind the European Central Bank (ECB) President's idea of buying sovereign debt in order to bring down bond yields in peripheral Eurozone nations. She said that Draghi's pledge to do "whatever it takes to preserve the euro" was "completely in line" with the euro-area officials.
However, analyst Craig Erlam from Alpari said that it is worth showing some caution: "She may back the ECB's position, but then want to impose strict austerity measures on any country that requests it. This would make it a very unattractive option to the Spanish and Italian governments. The markets are always very quick to react to comments made by Merkel and it's regularly followed quickly by a reversal once the details of her comments emerge."
Nevertheless, the Eurozone is set to enter a recession in the third quarter and not return to growth until next year, according to a monthly poll conducted by Reuters. The survey results come just after recent data showing that the region registered a 0.2% contraction in the second quarter. A recession is defined as two consecutive quarters of negative growth. Lonmin tanks after police kill dozens of miners Riot police have shot dead dozens of miners at Lonmin's Marikana platinum project in South Africa, as a week of protests over pay have turned the FTSE 250 group's mine into a warzone. In what The Guardian is calling "one of the deadliest days of protest in South Africa since the end of apartheid", more than 30 workers who were on strike at Marikana were gunned down by authorities, according to the South African police ministry.
Barclays, Royal Bank of Scotland and Lloyds were in demand early on as banking stocks across Europe made gains on improving developments in the Eurozone.
Water group Pennon was sinking after saying that trading at its waste management unit Viridor has been significantly below the high level of the first half of the previous fiscal year with recyclate prices remaining under pressure.
Casino and online gaming group Rank advanced after saying that revenues in the 12 months to June 30th rose 3.4%, while pre-tax profits jumped 9.0%.
Premier Oil fell after reporting that it has plugged and abandoned the Chim Sao North West appraisal well in Vietnam after failing to find indications of hydrocarbons. FTSE 100 - Risers
Weir Group (WEIR) 1,784.00p +2.65%
Barclays (BARC) 190.45p +2.28%
Lloyds Banking Group (LLOY) 33.64p +1.99%
ARM Holdings (ARM) 586.50p +1.91%
GKN (GKN) 224.40p +1.68%
Johnson Matthey (JMAT) 2,354.00p +1.51%
Aberdeen Asset Management (ADN) 280.70p +1.41%
Royal Bank of Scotland Group (RBS) 230.30p +1.32%
Admiral Group (ADM) 1,176.00p +1.20%
Standard Life (SL.) 277.00p +1.13%
FTSE 100 - Fallers
Anglo American (AAL) 1,943.50p -1.57%
Pennon Group (PNN) 738.00p -1.53%
Eurasian Natural Resources Corp. (ENRC) 368.30p -1.10%
Diageo (DGE) 1,688.00p -0.71%
AstraZeneca (AZN) 3,005.00p -0.68%
Croda International (CRDA) 2,419.00p -0.62%
BHP Billiton (BLT) 1,953.00p -0.61%
Smith & Nephew (SN.) 667.00p -0.60%
Rio Tinto (RIO) 3,033.50p -0.57%
GlaxoSmithKline (GSK) 1,476.00p -0.57%
FTSE 250 - Risers
Ophir Energy (OPHR) 535.50p +4.79%
Ruspetro (RPO) 150.00p +4.38%
Bumi (BUMI) 367.80p +4.19%
Centamin (DI) (CEY) 72.60p +3.71%
Laird (LRD) 221.00p +2.65%
International Personal Finance (IPF) 307.30p +2.54%
Rank Group (RNK) 128.60p +2.31%
Yule Catto & Co (YULC) 157.10p +2.08%
Ted Baker (TED) 989.50p +2.01%
Brewin Dolphin Holdings (BRW) 153.90p +1.65%
FTSE 250 - Fallers
Lonmin (LMI) 605.00p -6.64%
IP Group (IPO) 126.30p -2.85%
Travis Perkins (TPK) 1,044.00p -1.51%
Millennium & Copthorne Hotels (MLC) 479.90p -1.19%
Hochschild Mining (HOC) 422.40p -1.01%
COLT Group SA (COLT) 122.80p -0.97%
easyJet (EZJ) 541.50p -0.91%
Anite (AIE) 124.00p -0.80%
Premier Oil (PMO) 387.40p -0.79%
SVG Capital (SVI) 269.10p -0.74% | FX round-up |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | | Retail sales boost for sterling
Mixed economic data had the US dollar in retreat against most major currencies on Thursday, while the euro made headway after German Chancellor Angela Merkel said officials in Europe need to get a move on to tackle the region's debt crisis.
While housing starts fell 1.1% to an annualised rate of 746,000 in July, pulling back from the figure of 754,000 in June – the highest level since October 2008 - building permits increased by 6.8% in July to a seasonally-adjusted annual rate of 812,000, the highest reading since August 2008. The government says that building permits usually turn into new housing starts within a month.
That sent mixed signals to dollar holders. Meanwhile, the Philadelphia Federal Reserve manufacturing index improved to -7.1 from -12.9 in August but fell short of forecasts of -5.0.
That was not good enough to support the dollar, and the greenback fell back, albeit in light trade. The ICE dollar index, which measures the US currency's value against a trade weighted basket of currencies, eased to 82.392 from 82.649 the day before.
The euro, meanwhile, was buying $1.2356 in New York at the end of the afternoon trading session, up from $1.2289 the day before, as the market drew encouragement from comments from German leader Angela Merkel, who was in Ottawa to meet Canadian Prime Minister Stephen Harper.
Merkel stressed that "time is off the essence" in making progress on sorting out the Eurozone mess, and added that the move towards closer union in Europe is a good thing. She also suggested that the European Commission should have "stronger powers" to influence national budgets of countries in the Eurozone.
In London, sterling received a shot in the arm from retail sales data and the feedback from retailers - admittedly based on only two days of experience - that the Olympics had not had any effect on trade.
Sales volumes rose by 0.3% from June and by 2.8% on an annual basis, according to the latest data from the Office for National Statistics (ONS). The market consensus was looking for a change of -0.1% and 1.4%, respectively.
The previous month's reading was revised higher to a monthly increase of 0.8% and yearly rise of 2.6%, from +0.1% and +1.6%, respectively.
Retail sales excluding petrol were unchanged from June and remained up 3.3% on the year compared to a consensus estimate of -0.2% and +2.0%, respectively.
Sterling climbed to its highest level in more than two weeks against the dollar, advancing to $1.5739, having been trading below $1.57 before the retail sales data was published. UK Event Calendar INTERIM DIVIDEND PAYMENT DATE
Domino Printing Sciences, Imperial Tobacco Group, Sanderson Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Leading Indicators (US) (15:00)
Producer Price Index (GER) (07:00)
U. of Michigan Confidence (Prelim) (US) (15:00)
AGMS
Chagala Group Ltd. GDR (Reg S), Heath (Samuel) & Sons, Triple Plate Junction
UK ECONOMIC ANNOUNCEMENTS
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FINAL DIVIDEND PAYMENT DATE
British Smaller Companies VCT, Castings, Elektron Technology, FirstGroup, Henderson Private Equity Inv Trust, Johnson Matthey, Majestic Wine, SABMiller |
| US Market Report | | Building permits lift for US equities
Market movers
Dow Jones: +85 at 13,250
S&P 500: +10 at 1,416
NASDAQ Composite: +31 at 3,062 Although it was a bit slow to join the party, Wall Street followed global stock markets higher on Thursday, boosted by some strong corporate earnings and better than expected building permits data. Taking it to the house While housing starts fell 1.1% to an annualised rate of 746,000 in July, pulling back from the figure of 754,000 in June – the highest level since October 2008 - building permits increased by 6.8% in July to a seasonally-adjusted annual rate of 812,000, the highest reading since August 2008. The government says that building permits usually turn into new housing starts within a month.
House builder Pulte and DIY retailer Home Depot moved higher on the housing data.
Initial jobless claims rose by 2,000 to 366,000 last week, slightly ahead of consensus expectations of 365,000. However, the four-week moving average fell by 5,000 and “now stands only 1,000 above the post-crisis low recording during the week of March 31st,” said analyst Michael Gapen from Barclays.
The Philadelphia Federal Reserve manufacturing index improved to -7.1 from -12.9 in August but fell short of forecasts of -5.0. Cisco inferno Network equipment maker Cisco Systems was the top performing blue-chip after reporting better-than-expected quarterly earnings and hiking its dividend payout by 75% after yesterday’s closing bell. "It was an unusually strong quarter, especially in Asia-Pacific," said Chief Executive John Chambers. "The US saw some positive trends. Europe was a bit challenged.”
Sector peers F5 Networks and Broadcom rose in sympathy with Cisco.
Social media giant Facebook fell to new lows after the ‘lock-up’ of 271m shares expired following its May initial public offering. Early investors in Facebook are now free to cash in on their shares, though they will receive considerably less than they would have got had they been able to sell them on the day they were publicly floated.
Computer games maker Electronic Arts is contemplating putting up the "For sale" sign, with private equity groups such as KKR and Providence Equity Partners said to be sniffing around, according to the New York Post.
Scientific testing equipment maker Agilent Technologies was friendless after cutting full-year earnings guidance, blaming slackening economic growth and delays in orders from customers. Wal-Mart seared Retailing giant Wal-Mart may have hit earnings forecasts in its second quarter but shares sank after the company marginally missed revenue estimates. The group also raised and narrowed its target range for full-year earnings but this also came up short of the consensus forecast.
Asda, the UK arm of Wal-Mart, the world's biggest supermarket chain, saw its sales growth slow in the second quarter. Like-for-like (LFL) sales were up 0.7% in the 13 weeks to June 30th, versus LFL sales growth of 2.2% in the previous quarter.
Rival retailer Sears received a better reception for its second quarter figures, which revealed that losses were narrower than in the corresponding quarter of last year as the company's controversial price-cutting campaign looks to be paying off. Second quarter losses of $132m, or $1.25 a share, were an improvement on the loss of $146m ($1.37 a share) in the same quarter of 2011. Like-for-like sales were down 2.9% year-on-year. Other markets The ICE dollar index, which measures the US currency's value against a trade weighted basket of currencies, eased to 82.392 from 82.649 the day before, as the euro and sterling both had good days. A weaker dollar makes oil cheaper, however, and that was a factor in the rise in the price West Texas sweet light crude. West Texas intermediate for September delivery rose $1.27 to $95.60 a barrel on the New York Mercantile Exchange. S&P 500 - Risers Cisco Systems Inc. (CSCO) $19.02 +9.63% Sears Holdings Corp. (SHLD) $60.29 +6.52% PulteGroup Inc. (PHM) $13.60 +6.42% Coventry Health Care Inc. (CVH) $34.71 +6.08% Electronic Arts Inc. (EA) $13.81 +5.50% GameStop Corp. (GME) $17.98 +5.45% Best Buy Co. Inc. (BBY) $20.41 +5.42% F5 Networks Inc. (FFIV) $104.05 +4.79% Red Hat Inc. (RHT) $58.24 +4.52% Masco Corp. (MAS) $13.78 +4.47% S&P 500 - Fallers Agilent Technologies Inc. (A) $37.15 -8.23% Perrigo Company (PRGO) $108.93 -6.58% Sprint Nextel Corporation (S) $5.15 -4.45% St Jude Medical Inc. (STJ) $36.87 -4.38% Wal-Mart Stores Inc. (WMT) $72.15 -3.09% Waters Corp. (WAT) $76.17 -2.76% Tyson Foods Inc. (TSN) $15.26 -2.62% Metropcs Communications Inc. (PCS) $9.54 -2.55% Dow Jones I.A - Risers Cisco Systems Inc. (CSCO) $19.02 +9.63% Home Depot Inc. (HD) $56.31 +2.38% Microsoft Corp. (MSFT) $30.78 +1.92% Dow Jones I.A - Fallers Wal-Mart Stores Inc. (WMT) $72.15 -3.09% McDonald's Corp. (MCD) $87.46 -0.40% Merck & Co. Inc. (MRK) $43.94 -0.27%
| Friday newspaper round-up | | Eurozone, Gold, Asda... Finland is preparing for the break-up of the eurozone, the country’s foreign minister warned today. The Nordic state is battening down the hatches for a full-blown currency crisis as tensions in the eurozone mount and has said it will not tolerate further bail-out creep or fiscal union by stealth. “We have to face openly the possibility of a euro-break up,” said Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party, one of six that make up the country’s coalition government. “It is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared,” he told The Daily Telegraph. [ The Telegraph] Global demand for gold is seeing a significant slowdown as top consumers in India and China pare purchases amid weak economic growth, abruptly halting a consumption boom that started five years ago with the onset of the financial crisis. The consumption slowdown is driving prices downward, denting the profitability of gold miners such as Barrick Gold of Canada and New York-listed Newmont, and hurting top hedge funds managers such as John Paulson and George Soros. The World Gold Council, a lobby group for the gold miners, on Thursday said demand for the yellow metal fell to 990 tonnes during the second quarter, the lowest since the first quarter of 2010 and down 7 per cent from last year. [ The Financial Times] Britain’s second-biggest supermarket group has launched a withering attack on rivals for propping up sales with “unsustainable” voucher promotions. Asda said that supermarkets were resorting to “gimmicks” in an attempt to confuse shoppers and were chasing short-term sales. The retailer, owned by Wal-Mart, reported a slowdown in underlying sales growth in the second quarter but posted improved first-half profits. Rob McWilliam, the finance director, said that its rivals were using “gimmicks to disguise a weak price position”. Last month Tesco offered discounts of up to 50p a litre on petrol to shoppers who bought certain items — a practice that Mr McWilliam referred to as “basket bingo”. He said: “That’s not in customers’ long-term interests and it’s certainly not sustainable. Where’s it going to end?” [ The Times] Facebook shares plumbed new depths last night, as some of the investors who had backed the social network in its early days cashed out more of their holdings. Almost three months after the company's disastrous debut on the public markets, 271 million additional shares became eligible for sale yesterday, and a wave of selling pushed the stock down to almost half the float price. The early investors who sold some of their stake in May had been prevented from selling any more for 90 days, but the huge volume of trading after the Nasdaq market opened yesterday suggested that at least some were taking the first available opportunity to get out. [ The Independent] British car production is still revving ahead of the rest of the economy after official figures showed an increase in output for the 13th month in a row. Almost 120,000 cars were built in the UK in July, which is up 22% on the same period last year, according to the Society for Motor Manufacturers and Traders (SMMT). The figures came in the same week that one of the industry's great export successes, Jaguar Land Rover, moved to a 24-hour operation in order to keep up with soaring demand from Asia. The latest SMMT total means that year-to-date production is running at 875,998, an increase of 15%. [ The Guardian] The family that owns Lego has spent millions of pounds on a stake in ISS, the Danish cleaning company that G4S tried and failed to buy for £5.2 billion last year. Kirkbi, the investment vehicle of the billionaire Kirk Kristiansen family, and the Ontario Teachers’ Pension Plan will pay 3.72 billion Danish kroner (£392 million) to acquire 26 per cent of the business. [ The Times] |
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