Stocks Seeing Considerable Weakness In Mid-Day Trading
8/30/2012 12:03 PM ET
Stocks have moved sharply lower over the course of the trading day on Thursday after turning in a lackluster performance over the three previous sessions. Uncertainty about a speech by Federal Reserve Chairman Ben Bernanke is contributing to the weakness on Wall Street.
The major averages have climbed well off their worst levels of the day but remain firmly in negative territory. The Dow is down 98.33 points or 0.8 percent at 13,009.15, the Nasdaq is down 29.17 points or 1 percent at 3,052.02 and the S&P 500 is down 10.38 points or 0.7 percent at 1,400.11.
The weakness on Wall Street comes as traders express caution ahead of Bernanke's speech to the Kansas City Fed's Jackson Hole symposium on Friday, with some traders looking to safe havens ahead of the Fed Chief's remarks.
Many traders expect Bernanke to make comments indicating whether the central bank will engage in another round of quantitative easing.
A research note from Capital Economics said, "Given the unexpectedly strong signal in the minutes of the latest FOMC meeting that QE3 is coming fairly soon, we expect that Fed Chairman Ben Bernanke will reinforce the case for more action in his speech at Jackson Hole."
"Although a few of the non-voting regional Fed Presidents still appear to have reservations, we doubt that the slight uptick in the incoming economic data in the past couple of weeks will have softened Bernanke's resolve," the note added.
Further selling pressure was generated by a report from Bloomberg News indicating that Spanish Prime Minister Mariano Rajoy said his government will delay deciding whether to seek a sovereign bailout until the aid conditions are clear.
Traders are also digesting the latest batch of U.S. economic data, including a report from the Labor Department showing that jobless claims unexpectedly came in unchanged in the week ended August 25th.
The report said initial jobless claims came in at 374,000, unchanged compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported for the previous week.
A separate report from the Commerce Department showed that personal income rose by 0.3 percent in July, matching the increases seen in the two previous months. The increase also came in line with economist estimates.
The report also showed that personal spending increased by 0.4 percent in July after coming in flat in June. The spending growth also matched the expectations of economists.
Sector News
Networking stocks are seeing substantial weakness in mid-day trading, with the NYSE Arca Networking Index down by 3.3 percent. The loss by the index comes after it ended the previous session at its best closing level in over two months.
8/30/2012 12:03 PM ET
Ciena is leading the networking sector lower after reporting a wider than expected third quarter loss and providing disappointing guidance. Shares of Ciena have tumbled by 17.6 percent on the news.
Considerable weakness is also visible among electronic storage stocks, as reflected by the 2.4 percent loss being posted by the NYSE Arca Disk Drive Index. Seagate Technology and Western Digital are turning in two of the sector's worst performances.
Steel stocks have also shown a significant move to the downside, dragging the NYSE Arca Steel Index down by 1.9 percent. Oil service, semiconductor, and telecom stocks are also under pressure amid broad based weakness in the markets.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index dropped by 1 percent, while Hong Kong's Hang Seng Index ended the day down by 1.2 percent.
The major European markets also moved to the downside on the day. While the German DAX Index tumbled by 1.6 percent, the French CAC 40 Index fell by 1 percent, and the U.K.'s FTSE 100 Index slid by 0.4 percent.
In the bond market, treasuries have moved moderately higher amid optimism about further bond purchases by the Fed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.7 basis points at 1.627 percent.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Extends Losses On Fed Anxiety - Canadian Commentary
8/30/2012 11:12 AM ET
Canadian stocks were extending losses for a fourth session Thursday morning as hopes for further quantitative easing from the US diminished amid a recent batch of upbeat economic reports and as commodities struggling to sustain recent gains.
The S&P/TSX Composite Index lost 75.24 points or 0.63 percent to 11,934.55, after shedding just over 70 points or 0.60 percent in the past three sessions.
The Diversified Materials Index was the major loser, dipping nearly 2 percent. Teck Resources was down over 3 percent, while First Quantum Minerals and Inmet Mining were losing around 1 percent each.
The price of Crude oil moved down Thursday morning as the U.S. dollar was trading mixed ahead of a key central bankers' meeting at the weekend. Crude for October lost $1.35 to $94.14 a barrel.
In the oil patch, Lundin Petroleum and Niko Resources lost around 4 percent each. Paramount Resources (POU.TO) was down about 3 percent.
Financial stocks were mixed. Royal Bank rose over 1 percent after reporting third-quarter net income of C$2.240 billion, up 73 percent from C$1.294 billion the prior year. Excluding certain items, net income from continuing operations was C$1.978 billion or C$1.29 per share. Analysts expected the bank to report earnings of C$1.19 per share for the quarter.
CIBC shed 1 percent despite reporting improved third-quarter net income of C$841 million or C$2.00 per share, compared to C$591 million or C$1.33 per share a year earlier. Adjusted net income was C$835 million, or C$2.06 per share, higher than C$767 million or C$1.93 per share a year ago. Analysts were expecting the bank to report earnings of C$1.96 per share for the quarter.
Separately, CIBC said it would acquire Griffis & Small LLC, a Houston-based energy advisory firm specializing in acquisitions and divestitures in the exploration and production sector. Additionally, CIBC plans to seek Toronto Stock Exchange approval to commence a normal course issuer bid to buy back for cancellation up to 8.1 million shares, representing nearly 2 percent of CIBC's 405.75 million issued and outstanding shares.
TD Bank Group was down nearly 1 percent even after posting third-quarter adjusted net income of C$1.82 billion or C$1.91 per share compared to C$1.64 billion or C$ 1.75 in the comparable quarter last year. Analysts were expecting the bank to report earnings per share of C$1.84 for the quarter.
Scotiabank dived over 2 percent after it said it would buy ING Bank of Canada, or ING DIRECT, from Netherlands-based parent ING Group for C$3.126 billion in cash.
8/30/2012 11:12 AM ET
Ladies' apparel specialty chain Reitmans Canada Ltd. (RET.TO) slipped 0.40 percent after reporting a lower second quarter profit of C$27.7 million or C$0.42 per share compared to C$31.7 million or C$0.48 per share in the same period last year.
The price of gold was extending losses for a third session Thursday morning as hopes for further quantitative stimulus measures from the world's largest economy weakened following the recent batch of encouraging economic data from the U.S. gold for December edged down $6.90 to 1,656.10 an ounce.
Royal gold moved up nearly 1 percent. Goldcorp. and Barrick gold added around 050 percent each, while Kinross gold and Agnico-Eagle Mines shed about 0.50 percent each.
In economic news, Statistics Canada said current account deficit, on a seasonally adjusted basis, expanded $5.9 billion to $16.0 billion in the second quarter, mainly on lower exports and higher imports of goods.
From the U.S., the Labor Department said that initial jobless claims came in at 374,000, unchanged in the week ended August 25, compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported for the previous week.
Elsewhere, euro zone economic sentiment weakened further in August due to strong loss in confidence among consumers, retailers and construction managers. The economic sentiment index dropped to 86.1 from 87.9 in July, European Commission said. The reading was below consensus forecast of 87.5.,
Meanwhile, Germany's unemployment increased by 9,000 in August from July, the Federal Labor Agency reported. The number of unemployed was forecast to rise by 7,000 after increasing 9,000 in July. At the same time, the jobless rate remained unchanged at 6.8 percent. The rate also matched economists' expectations. According to labor force survey, the adjusted jobless rate held steady at 5.5 percent in July.
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Pulled Back On Weak Economic Data
8/30/2012 11:58 AM ET
The European markets declined on Thursday, after several weaker than expected economic reports from around the globe. Japanese retails sales fell more than expected overnight, which was followed up by a decline in Eurozone economic sentiment. German unemployment increased and U.S. weekly jobless claims came in higher than expected.
Investors continued to be cautious Thursday as they watch for any clues regarding further economic stimulus in the United States. The highly anticipated speech by Federal Reserve Chairman Ben Bernanke will take place tomorrow at the Kansas City Federal Reserve Bank's annual symposium in Jackson Hole, Wyoming.
Italy had a successful auction on Thursday as it sold its five- and 10-year debt at lower yields as investors remained hopeful that the European Central Bank may resume its bond-buying to help lower the borrowing costs of troubled euro area countries.
The Italian Treasury raised a total EUR 7.29 billion from today's auction, close to the maximum target set for the sale. The latest auction follows two successful sales yesterday and the day before, which raked in proceeds totaling nearly EUR 13 billion.
Today the agency sold EUR 4 billion of the new benchmark bond due November 2022, matching the top end of its target range. The yield on the 10-year debt dropped to 5.82 percent from 5.96 percent paid on July 30 for a security of similar maturity. The country also placed EUR 2.5 billion of its June 2017 bond to yield 4.73 percent, which was far less than the 5.29 percent paid in the previous sale on July 30.
The euro Stoxx 50 index of eurozone bluechip stocks declined by 1.03 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.62 percent.
The DAX of Germany dropped by 1.45 percent and the CAC 40 of France fell by 1.02 percent. The FTSE 100 of the U.K. decreased by 0.33 percent and the SMI of Switzerland finished down by 0.68 percent.
In Frankfurt, automakers were under pressure. Daimler fell by 5.43 percent, BMW lost 4.90 percent and Volkswagen declined by 4.04 percent.
In Paris, Renault dropped by 3.68 percent and Peugeot decreased by 3.82 percent.
Carrefour surged by 7.37 percent, after its loss for the first-half narrowed significantly.
Vivendi climbed by 3.11 percent. The media and telecom group reported a lower profit for the second quarter, but confirmed its full year forecast.
Pernod-Ricard fell by 2.01 percent. The company reported its best growth since 2007/08, and also announced some appointments, including that of Danièle Ricard as Chairman of the Board of Directors.
8/30/2012 11:58 AM ET
In London, miners finished notably lower. Anglo American lost 3.44 percent and Antofagasta declined by 2.58 percent. BHP Billiton dropped by 3.26 percent and Rio Tinto finished down by 2.09 percent. Vedanta Resources fell by 2.38 percent and Eurasian Natural Resources lost 2.70 percent.
Barclays decreased by 1.53 percent. The lender named Antony Jenkins as its new chief executive, effective immediately.
WPP dropped by 1.56 percent, after it announced first-half results. The company also lowered its revenue forecast for 2012.
Shares of Admiral Group declined by 2.38 percent, following the company's report for the first half of the year.
Eurozone economic sentiment deteriorated further in August reflecting the Sharp weaknesses in confidence among consumers, retailers and construction managers due to concerns over recession and the lingering sovereign debt crisis.
The economic sentiment index dropped to 86.1 from 87.9 in July, European Commission's monthly survey revealed Thursday. The reading was the lowest since late 2009 and below the expected level of 87.5.
German unemployment increased for the fifth month in August as firms shed jobs fearing a recession in the 17-nation currency bloc. The Federal Labor Agency on Thursday said the number of unemployed increased by adjusted 9,000 from July to 2.9 million. It was forecast to increase by 7,000, following July's monthly rise of 9,000.
However, the jobless rate remained unchanged at a seasonally adjusted 6.8 percent in August as economists expected.
Spain's harmonized inflation accelerated more than expected on higher fuel costs in August, flash estimate from the statistical office Ine showed Thursday. Inflation, as measured by the harmonized index of consumer prices or HICP, rose to 2.7 percent in August from 2.2 percent a month ago. The rate was forecast to rise to 2.3 percent.
Initial claims for U.S. unemployment benefits unexpectedly came in unchanged in the week ended August 25th, according to a report released by the Labor Department on Thursday.
The report showed that initial jobless claims came in at 374,000, unchanged compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported for the previous week.
Personal income and spending in the U.S. both increased in the month of July, according to a report released by the Commerce Department on Thursday, with the increases both coming in line with economist estimates.
The report showed that personal income rose by 0.3 percent in July, matching the increases seen in the two previous months. The increase also came in line with estimates. The Commerce Department also said personal spending increased by 0.4 percent in July after coming in roughly flat in June. The spending growth also matched the expectations of economists. |
| Asia Market Reports | Asian Markets Trade Weak
8/29/2012 11:30 PM ET
Asian markets are mostly trading notably lower on Thursday with a weak lead from the U.S. and European markets triggering a sell-off in key stocks. The mood is a bit bearish in the region amid waning hopes of a fresh round of stimulus from the U.S. Federal Reserve following some upbeat economic data. A lack of positive triggers from the region is also contributing to the weakness.
The Australian market is trading notably lower with investors pressing heavy sales in the mining space following a significant fall in iron ore prices.
Apart from several key stocks in the mining space, some front line energy stocks too are trading sharply lower. Consumer discretionary, industrial and information technology stocks are the other prominent losers. Financial and healthcare stocks are trading mixed.
The benchmark S&P/ASX 200 index, which declined to 4,302.5, is currently trading at 4,312, down 44.4 points or 1 percent from its previous close. The broader All Ordinaries index is down 45.5 points or 1 percent at 4,336.
Among top miners, BHP Billiton (BHP, BBL) is down 2.5 percent, Rio Tinto (RIO, RIO.L) is losing more than 3.5 percent, Fortescue Metals is trading lower by 3 percent and Newcrest Mining is losing about 4.5 percent.
In the energy sector, Santos is down 3 percent and Caltex Australia is trading lower by over 1.5 percent, while Oil Search, Origin Energy and Woodside Petroleum are down 0.3 to 0.6 percent.
Boart Longyear is down almost 33 percent after the company provided a negative outlook for the year. The company reported a 32 percent jump in net profit at A$95.11 million for the first half, but revised down its outlook for full-year revenue to A$1.94 billion.
ALS Ltd. shares are down nearly 8 percent. Lynas Corp., Arrium, Sims Metal Management and Atlas Iron are down 5 to 6.5 percent.
Bluescope Steel, Tatts Group, Boral, Iluka Resources, Aurora Oil & Gas, Monadelphous Group, Leighton Holdings, Oz Minerals, Beach Energy and SP Ausnetare trading lower by 3 to 4.5 percent.
Lend Lease is trading higher by over 2 percent after it forecast higher earnings after unveiling a near two percent rise in net profit for its 2012-13 financial year. Lend Lease posted a net profit of A$501.4 million for the year to June 30, up from A$492.8 million in the previous year.
On the economic front, new private capital expenditure rose a seasonally adjusted 3.4 percent in real terms, in the June quarter, the Australian Bureau of Statistics said on Thursday.
According to another report from the bureau, Australian residential building approvals fell 17.3 percent to 11,306 units in July, as compared to an upwardly revised 13,662 units in June, seasonally adjusted. In the year to July, building approvals were down 10.6 percent, the data showed.
8/29/2012 11:30 PM ET
The Japanese market opened on a weak note with investors indulging in some heavy selling amid speculation the U.S. Federal Reserve may not announce another round of stimulus. A report revealing a bigger-than-expected drop in Japanese retail sales also contributed to the weakness in the market.
The benchmark Nikkei 225 index, which drifted down to around 8,990, was down 67.1 points or 0.7 percent at 9,002.7 at the end of the morning session.
Insurance, electric power, financial, automobile, steel and non-ferrous metals stocks were mostly trading weak. Land transport, real estate and chemicals stocks exhibited a mixed trend.
Nippon Paper Group, MS&AD Insurance Group Holdings, JFE Holdings, Sumitomo Metal Industries, Hino Motors, Nippon Steel Corp and Nipon Yusen KK lost 3 to 4 percent.
Japan Steel Works, Pacific Metals and Aozora Bank drifted down nearly 3 percent. Alps Electric, Nippon Light Metal, Mitsui Mining & Smelting, Nomura Holdings, Komatsu and Sumitomo Metal Mining lost 2 to 2.6 percent.
Showa Shell KK, Toho Zinc, Chubu Electric Power, Mitsumi Electric, NEC Corp, Resona Holdings and Kobe Steel also declined sharply.
Meanwhile, Nippon Sheet Glass, Daikin Industries, Furukawa Electric, Softbank Corp, Mitsubishi Paper Mills, Asahi Group Holdings, Japan Tobacco and Nippon Express moved higher and recorded notable gains.
According to the data released by the Ministry of Economy, Trade and Industry, retail sales in Japan were down a seasonally adjusted 1.5 percent in July at 11.70 trillion yen. That missed forecasts for a fall of 0.5 percent following the 1.2 percent contraction in June.
On a yearly basis, retail sales were down 0.8 percent - missing forecasts for a decline of 0.1 percent after adding 0.2 percent in the previous month. Sales from large retailers were down 4.4 percent on year, short of forecasts for a decline of 3.2 percent after easing 2.6 percent a month earlier.
In the currency market, the U.S. dollar traded in the upper 78 yen range in early deals in Tokyo. The yen is currently trading at 78.70 to the dollar.
Among other markets in the Asia-Pacific region, Hong Kong, Indonesia, Singapore and South Korea are trading notably lower. Malaysia and Taiwan are down marginally, while Shanghai and New Zealand are up slightly.
On Wall Street, stocks ended flat on Wednesday, showing a lack of direction and extended the lackluster performance seen in the two previous sessions. The choppy trading came despite the release of a batch of relatively upbeat economic data.
The major averages eventually ended the session slightly higher. The Dow inched up 4.5 points or less than a tenth of a percent to 13,107.5, the Nasdaq rose 4.1 points or 0.1 percent to 3,081.2 and the S&P 500 edged up 1.2 points or 0.1 percent to 1,410.5.
8/29/2012 11:30 PM ET
Major European markets turned in a mixed performance on Wednesday. The German DAX index ended up by 0.1 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 index ended lower by 0.5 percent and 0.6 percent, respectively.
U.S. oil futures drifted lower on expectations that damage from Hurricane Isaac to oil production in the U.S. Gulf Coast will be limited. A surged in Crude oil stockpile too contributed to the decline. Light sweet Crude for October delivery ended down 1.4 percent at $95.01 a barrel on the New York Mercantile Exchange. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Eurozone Economic Confidence Weakens In August
8/30/2012 8:38 AM ET
Eurozone economic sentiment deteriorated further in August reflecting the Sharp weaknesses in confidence among consumers, retailers and construction managers due to concerns over recession and the lingering sovereign debt crisis.
The economic sentiment index dropped to 86.1 from 87.9 in July, European Commission's monthly survey revealed Thursday. The reading was the lowest since late 2009 and below the expected level of 87.5.
Today's figures are a further wake-up call to Eurozone policymakers to speed up their efforts in resolving the crisis, said ING Bank NV's economist Martin van Vliet.
Led by deterioration in managers' production expectations and their assessment of the current level of overall order books, industrial confidence slid to -15.3 from -15.1 a month ago.
In the construction sector, confidence declined to -33.1 from -28.5 in July. The retailers' confidence index fell to -17.3 from -15 a month ago.
Amid higher unemployment fears and worsened consumer expectations about the future general economic situation, consumer confidence weakened to -24.6 from -21.5. Confidence in services fell for a fifth month with the index sliding to -10.8 from -8.5 a month ago.
A separate survey from the European Commission showed that the business confidence rose by 0.06 points to -1.21 in August and better than the forecast of -1.3 points.
The slight increase was largely due to an improvement in managers' assessment of past production, export order books and the adequacy of stocks of finished products. By contrast, managers' production expectations and their assessment of overall order books deteriorated in August.
The 17-nation euro area shrank 0.2 percent in the second quarter. Given the current sluggish economic environment, it is most likely that the region slid into recession in the third quarter.
With countries reluctant to meaningfully slow the pace of fiscal tightening, more unconventional monetary stimulus and a much weaker euro are likely to be needed to put the economy back on a path of sustained growth, said ING Bank economist. |
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