Stocks Nearly Flat After Initial Downward Move
Stocks moved modestly lower at the start of trading on Wednesday, extending the downward move seen over the course of the previous session. The major averages slipped into negative territory but did not see much follow-through on the initial downward move.
The major averages have subsequently bounced off their lows, climbing back near the unchanged line. The Dow is down 6.35 points or 0.1 percent at 13,197.23, the Nasdaq is down 1.12 points or less than 0.1 percent at 3,066.14 and the S&P 500 is down 0.72 points or 0.1 percent at 1,412.45.
The early weakness was partly due to troubling economic news from overseas, with a report from Japan showing that the country swung to a trade deficit in July.
The report from the Japanese Finance Ministry showed a trade deficit of 517.4 billion yen in July compared to a trade surplus of 60.3 billion yen in June. Japanese exports fell 8.1 percent year-over-year, while imports rose 2.1 percent.
A negative reaction to quarterly results from Dell (DELL) also weighed on the markets, with the PC giant falling by 6.3 percent in early trading.
After the close of trading on Tuesday, Dell reported second quarter adjusted earnings that exceeded analyst estimates but on weaker than expected sales.
The company also lowered its full year earnings outlook and forecast a 2 to 5 percent sequential drop in third quarter revenues.
Nonetheless, selling pressure waned not long after the open, with traders reluctant to make any significant moves ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting later in the afternoon.
Traders are likely to closely scrutinize the minutes, looking for indications regarding to the outlook for further monetary stimulus from the central bank.
Most of the major sectors are showing only modest moves, although notable strength has emerged among housing stocks. Reflecting the strength in the housing sector, the Philadelphia Housing Sector Index has advanced by 1.4 percent.
Among housing stocks, Toll Brothers (TOL) is up by 3.4 percent after the homebuilder reported fiscal third quarter earnings and revenues that exceeded analyst estimates. The company benefited from increased home deliveries and higher selling prices.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index ended the day down by 0.3 percent, while Hong Kong's Hang Seng Index tumbled by 1.1 percent.
The major European markets have also shown notable moves to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 1.2 percent, the German DAX Index and the French CAC 40 Index are both down by 0.9 percent.
In the bond market, treasuries have shown a strong upward move after closing nearly flat in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.8 basis points at 1.757 percent.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Slips At Open Wednesday
Toronto stocks edged down at open Wednesday amid marginal selling across a variety of sectors, with the S&P/TSX Composite Index shedding 30.10 points or 0.25 percent to 12,086.82.
Among base-metals stocks, Teck Resources slipped over 1 percent, while First Quantum Minerals was adding nearly 1 percent.
In the oil patch, Suncor Energy and Cenovus Energy were down around 1 percent each. On the other hand, Baytex Energy Corp. and Nexen Inc. moved up nearly 1 percent each.
Telecommunications company Telus Corp. said that it is putting a new proposal to exchange its non-voting shares into common shares on a one-for-one basis to a democratic vote of all its shareholders. The stock shed 0.50 percent.
Meanwhile, gold stocks were trading firm amid flat bullion prices. Allied Nevada Gold, Detour Gold and Seabridge Gold moved up around 2 percent each.
The price of crude oil was ticking lower Wednesday morning as traders await cues from the official inventories data from the EIA. Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended August 17. Analysts expect crude oil inventories to dip by 2 million barrels and gasoline stocks to shed 1.25 million barrels last week.
Crude for October was down $0.49 to $96.35 a barrel.
The price of gold was firm near its three-month high Wednesday morning amid hopes that the European Central Bank will take steps to reduce borrowing costs for Spain and Italy. Gold for December eased $1.90 to $1,641.00 an ounce.
In corporate news from Canada, telecommunications company Telus Corp. said that it is putting a new proposal to exchange its non-voting shares into common shares on a one-for-one basis to a democratic vote of all its shareholders.
Silver mining company Dolly Varden Silver Corp. said a wholly owned subsidiary of Hecla Mining Co. (HL) would acquire 20 million of it's common shares.
In economic news, Statistics Canada said retail sales declined 0.4% to $38.7 billion in June, more than offsetting the gain in May. Lower sales were reported in 7 of 11 sub-sectors, representing 64% of retail trade. In volume terms, retail sales edged down 0.1%.
Earlier today, data out of Japan revealed a wider-than-expected trade deficit for July, with merchandise deficit widening to 517.382 billion yen in the month compared with forecasts for a shortfall of 270.0 billion yen following the downwardly revised 60.3 billion surplus in June. |
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets In Negative Territory Ahead Of Greece Talks
The European markets are in negative territory in afternoon trading Wednesday, ahead of a crucial meeting between Greece's Prime Minister Antonis Samaras and Eurogroup chief Jean-Claude Juncker.
Samaras is expected to seek at the meeting a two-year extension for the country's fiscal adjustment program. He will also visit French President Francois Hollande and German Chancellor Angela Merkel later this week.
Meanwhile, Samaras told German daily Bild that Greece needs more time to implement the reforms and spending cuts requisitioned by the country's international creditors.
The Euro Stoxx 50 index of eurozone bluechip stocks is falling 0.84 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is losing 0.78 percent.
The German DAX is falling 0.92 percent and the French CAC 40 is losing 0.79 percent. The UK's FTSE 100 is declining 1.12 percent and Switzerland's SMI is losing 0.43 percent.
In Frankfurt, Infineon Technologies and Fresenius Medical Care are declining 1.8 percent each. Daimler, BMW and Volkswagen are moderately lower.
Commerzbank is losing 0.4 percent while Deutsche Bank is gaining 1.4 percent. Commerzbank cut GFK to "Hold" from "Buy." The stock is advancing modestly.
In Paris, Schneider Electric is falling 2.1 percent and Cap Gemini is losing 2 percent.
Societe Generale and Credit Agricole are losing modestly while BNP Paribas is up marginally. Renault is gaining 0.2 percent while Peugeot is notably lower.
UBS cut European food producers to "Underweight." Danone is losing fractionally. Miners are notably lower in London. BHP Billiton is losing 1.7 percent after the mining giant said annual profit was hit by weakness in commodity prices and cost pressure.
Anglo American is declining 2.5 percent. JP Morgan cut the stock to "Underweight," while raising Antofagasta to "Overweight." Antofagasta shares are losing 1.7 percent.
Kingfisher is declining 3.6 percent. Deutsche Bank cut its rating on the stock. GlaxoSmithKline is losing 1.2 percent. The stock was cut to "Underweight" at JPMorgan.
Lloyds Banking is gaining 1.2 percent, while other lenders are in negative territory.
Heineken is falling 2.7 percent in Amsterdam after posting a modest growth in first-half profit. The company increased its expectation for input costs. |
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 | | | | | | | Please click on the images to view our interactive charts | | European Markets In Negative Territory Ahead Of Greece Talks
The European markets are in negative territory in afternoon trading Wednesday, ahead of a crucial meeting between Greece's Prime Minister Antonis Samaras and Eurogroup chief Jean-Claude Juncker.
Samaras is expected to seek at the meeting a two-year extension for the country's fiscal adjustment program. He will also visit French President Francois Hollande and German Chancellor Angela Merkel later this week.
Meanwhile, Samaras told German daily Bild that Greece needs more time to implement the reforms and spending cuts requisitioned by the country's international creditors.
The Euro Stoxx 50 index of eurozone bluechip stocks is falling 0.84 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is losing 0.78 percent.
The German DAX is falling 0.92 percent and the French CAC 40 is losing 0.79 percent. The UK's FTSE 100 is declining 1.12 percent and Switzerland's SMI is losing 0.43 percent.
In Frankfurt, Infineon Technologies and Fresenius Medical Care are declining 1.8 percent each. Daimler, BMW and Volkswagen are moderately lower.
Commerzbank is losing 0.4 percent while Deutsche Bank is gaining 1.4 percent. Commerzbank cut GFK to "Hold" from "Buy." The stock is advancing modestly.
In Paris, Schneider Electric is falling 2.1 percent and Cap Gemini is losing 2 percent.
Societe Generale and Credit Agricole are losing modestly while BNP Paribas is up marginally. Renault is gaining 0.2 percent while Peugeot is notably lower.
UBS cut European food producers to "Underweight." Danone is losing fractionally. Miners are notably lower in London. BHP Billiton is losing 1.7 percent after the mining giant said annual profit was hit by weakness in commodity prices and cost pressure.
Anglo American is declining 2.5 percent. JP Morgan cut the stock to "Underweight," while raising Antofagasta to "Overweight." Antofagasta shares are losing 1.7 percent.
Kingfisher is declining 3.6 percent. Deutsche Bank cut its rating on the stock. GlaxoSmithKline is losing 1.2 percent. The stock was cut to "Underweight" at JPMorgan.
Lloyds Banking is gaining 1.2 percent, while other lenders are in negative territory.
Heineken is falling 2.7 percent in Amsterdam after posting a modest growth in first-half profit. The company increased its expectation for input costs. |
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| Asia Market Reports | Asian Stocks Fall Ahead Of Fed Minutes Release
Asian stocks fell broadly on Wednesday, as weak Japanese data added to evidence that the global economy is slowing. A lack of clarity on the mechanisms for ECB intervention in debt markets also rendered the underlying mood a little bit cautious ahead of a euro-area finance ministers meeting this week to discuss a bailout package for Greece.
Tokyo stocks eased slightly in thin trading, as investors moved to the sidelines ahead of the release of the FOMC minutes from the August 1st meeting due later in the day and the meeting of European leaders over the weekend.
The Nikkei average dropped 0.3 percent, with cyclicals and export-oriented electronics and precision instrument makers coming under pressure on growing concerns about the global economy after data released by the Finance Ministry showed Japan posted its largest-ever trade deficit in July. The broader Topix index also ended 0.3 percent lower.
Japan posted a wider-than-expected trade deficit for July, with merchandise deficit widening to 517.382 billion yen in the month compared with forecasts for a shortfall of 270.0 billion yen following the downwardly revised 60.3 billion surplus in June.
TDK, Tokyo Electron and Panasonic all dropped about 3 percent each. Nintendo slipped 0.6 percent and Kyocera fell 1.2 percent after the U.S. International Trade Commission said it had launched a patent probe into certain wireless consumer electronics devices and components from U.S. and foreign companies.
China's Shanghai Composite index shed half a percent on concerns over slowing growth both domestically and abroad, while Hong Kong's Hang Seng index lost over a percent, dragged down by resource and tech stocks.
Australian shares ended an indecisive session modestly lower, as earnings from BHP Billiton failed to inspire investors. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index fell about 0.2 percent each. Shares of BHP Billiton edged down 0.3 percent as the miner reported a 35 percent slump in full-year net profit and said it would investigate a new and cheaper design for its planned Olympic Dam open-pit expansion. Rio Tinto slid 0.6 percent, while smaller rival Fortescue rose 2.5 percent.
Banks ended mostly lower as investors shifted their money out of the sector following recent gains. Commonwealth fell 0.8 percent and NAB eased 0.4 percent, but ANZ and Westpac ended marginally higher. Oil & gas producer Woodside Petroleum retreated 3.1 percent despite reporting a 4.5 percent rise in underlying half-year profit, while Santos tumbled 3.4 percent.
Seoul shares fell for a fourth straight session, as traders looked ahead to major events in Europe and the United States in the coming weeks. The benchmark Kospi average slipped 0.4 percent. Economy-sensitive shipbuilders led the declines, while SK Chemicals rose 1.3 percent after reporting a 43 percent jump in second-quarter profit. Korea Zinc rallied 2.5 percent as gold prices hovered near a 3-1/2 month high hit in the previous session.
New Zealand shares lost ground after Fletcher Building, the nation's largest construction firm, reported disappointing earnings results, with full-year profit tumbling 35 percent, weighed down by lower revenue from the struggling Australian and New Zealand markets. Fletcher shares plunged 5.1 percent, dragging the benchmark NZX-50 index down about 0.8 percent.
Online auction site Trade Me fell 2.5 percent despite posting forecast-beating results, while national carrier Air New Zealand and rubber goods and milking equipment manufacturer Skellerup fell about 2 percent each.
Heavyweight Telecom lost 1.1 percent ahead of its results on Friday. PGG Wrightson rallied 9.4 percent after the rural services firm returned to profit in the 2012 financial year on the back of improved performance at its rural supplies and livestock divisions.
Elsewhere, India's benchmark Sensex is marginally higher and Malaysia's KLSE Composite rose 0.2 percent, while the Taiwan Weighted average and Singapore's Straits Times index fell by 0.1 percent and 0.4 percent, respectively. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Eases Ahead Of Official Inventories Report
The price of crude oil was ticking lower Wednesday morning as traders await cues from the official inventories data from the EIA, due out later today.
Light Sweet Crude Oil (WTI) futures for October delivery, the most actively traded contract, eased $0.42 to $96.42 a barrel. Yesterday, oil extended gains to settle at a fresh three-month high amid speculation that the European Central Bank is stepping up efforts with further policy measures to tackle the euro zone debt crisis.
Tuesday after the market hours, the API said U.S. crude oil inventories were down 6 million barrels and 869,000 barrels rise in gasoline inventories in the weekended August 17.
This morning, the U.S. dollar was lingering near a two-month low versus the euro and the Swiss franc, while slipping back near a three-month low against sterling. The buck was hovering around a 5-week high versus the yen.
Earlier today, data out of Japan revealed a wider-than-expected trade deficit for July, with merchandise deficit widening to 517.382 billion yen in the month compared with forecasts for a shortfall of 270.0 billion yen following the downwardly revised 60.3 billion surplus in June.
Traders will look to the report on existing home sales for July for the National Association of Realtors, due out at 10 am ET. Economists estimate existing home sales of 4.50 million for the month compared to a 4.37 million-unit rate for June.
The Federal Reserve is due to release the minutes of its July 31st-August 1st meeting at 2 pm ET.
Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended August 17. Analysts expect crude oil inventories to dip by 2 million barrels and gasoline stocks to shed 1.25 million barrels last week. |
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