Stocks Nearly Flat As All Eyes Are On The Fed
With traders reluctant to make any significant moves ahead of the announcement of the Federal Reserve's latest monetary policy decision, stocks are showing a lack of direction in early trading on Thursday. The major averages remain stuck near the unchanged line after opening roughly flat.
Currently, the major averages remain nearly flat, showing moves off less than a tenth of a percent. The S&P 500 is down 0.30 points at 1,436.26, while the Dow is up 1.58 points at 13,334.93 and the Nasdaq is up 1.17 points at 3,115.48.
The choppy trading on Wall Street comes as traders are largely staying on the sidelines ahead of the release of the Fed's monetary policy statement at about 12:30 pm ET.
Many analysts expect the central bank to announce another round of quantitative easing as part of an effort to stimulate the sluggish economy, although others have predicted that the Fed will only extend its pledge to keep interest rates at exceptionally low levels.
A lack of additional stimulus could lead to a sell-off on Wall Street, as stimulus hopes have helped to push the markets higher in recent weeks.
Following the announcement, the Fed will unveil its latest economic forecasts at 2 pm ET, and Fed Chairman Ben Bernanke will hold a press briefing beginning at about 2:15 pm ET.
As a result of the focus on the Fed, traders have largely shrugged off a report from the Labor Department showing a bigger than expected increase in weekly jobless claims.
Labor Department officials noted that the increase in jobless claims was partly due to the impact of Hurricane Isaac, as major storms can often delay unemployment filings.
A separate report from the Labor Department showed that a substantial rebound in energy prices contributed to a bigger than expected increase in producer prices in the month of August.
While most of the major sectors are showing only modest moves in early trading, housing stocks are giving back some ground after moving sharply higher on Wednesday. The Philadelphia Housing Sector Index is down by 1.1 percent, pulling back off yesterday's four-year closing high.
Steel, oil service, and brokerage stocks are also seeing early weakness, while some strength is visible among telecom stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index rose by 0.4 percent, Hong Kong's Hang Seng Index edged down by 0.1 percent.
The major European markets have also turned mixed on the day. The U.K.'s FTSE 100 Index has inched up by 0.1 percent, while the German DAX Index has fallen by 0.6 percent and the French CAC 40 Index has tumbled by 1.3 percent.
In the bond market, treasuries have moved to the upside amid optimism about the possibility of further quantitative easing. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4 basis points at 1.725 percent.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Slips At Open Thursday
Bay Street stocks moved down at open Thursday as traders were cautious ahead of the outcome of the two-day Federal Reserve meeting, with the S&P/TSX Composite Index shedding 35.31 points or 0.29 percent to 12,197.31.
The Diversified Materials Index slipped nearly 1 percent, with Teck Resources losing nearly 3 percent. First Quantum Minerals and Inmet Mining were down marginally.
Among gold stocks, Kirkland Lake Gold lost over 7 percent. Alamos Gold Inc. and Seabridge Gold were down over 2 percent each.
In the oil patch, MEG Energy and Celtic Exploration were down around 2 percent each. Meanwhile, integrated tourist operator Transat A.T. Inc. soared over 15 percent after it swung to profit in third-quarter.
The price of gold was firm near its seven-month high Thursday morning amid speculation the Federal Reserve will opt for further monetary easing measures to help lift the sagging U.S. economy. Gold for December eased $0.20 to $1,733.50 an ounce.
In corporate news from Canada, integrated tourist operator Transat A.T. Inc. swung to profit in third-quarter, reporting net income of C$9.4 million or C$0.25 per share compared to a loss of C$2.8 million or C$0.07 per share last year.
Diversified natural resources company Altius Minerals Corp. reported a wider first quarter net loss of C$2.9 million or C$0.10 per share, compared to net loss of C$1.6 million or C$0.06 per share last year.
Empire Co. Ltd. posted improved first quarter net earnings of C$108.9 million or C$1.60 per share versus C$89.2 million or C$1.31 per share last year. The company declared a quarterly dividend of 24 cents per share.
In economic news Statistics Canada said the New Housing Price Index (NHPI) rose 0.1 percent in July, following a 0.2 percent increase in June. On a year-over-year basis, the NHPI rose 2.3 percent in the 12 months to July, following a similar year-over-year increase the previous month. The main contributor to the advance was the combined metropolitan regions of Toronto and Oshawa.
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Mixed Ahead Of Fed Announcement
The European markets are mixed in afternoon trading Thursday, ahead of the conclusion of the Federal Open Market Committee meeting in the U.S. There is talk that the Fed may give clues on another round of quantitative easing, while some analysts believe it is not possible as the Operation Twist is yet to complete its course.
The monthly bulletin released by the European Central Bank said Euro area policymakers should act effectively to contain renewed intensification of financial market tensions as it has the potential to disrupt the balance of risks for both growth and inflation.
Meanwhile, IHS Global Insight Chief UK and European Economist Howard Archer said the marginal increase in Eurozone's industrial production in July does not dilute concerns over the health of the sector or reduce belief that the bloc is headed for further GDP contraction in the third quarter. Elsewhere, Dutch Prime Minister Mark Rutte has claimed victory for his free-market and pro-European VVD Party in Wednesday's parliamentary elections. The election was widely seen as a referendum on the Netherlands' continued commitment to the 27-member European Union amid the ongoing sovereign debt crisis.
The Euro Stoxx 50 index of eurozone bluechip stocks is falling 0.45 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is losing 0.09 percent.
The German DAX is losing 0.34 percent and the French CAC 40 is falling 0.62 percent. The UK's FTSE 100 is edging up 0.05 percent and Switzerland's SMI is gaining 0.21 percent.
In Frankfurt, Deutsche Boerse is losing 1.3 percent. Commerzbank is falling 1.1 percent and Deutsche Bank is moderately lower. Volkswagen, Daimler and BMW are in negative territory.
Beiersdorf is marginally higher after HSBC cut its rating on the stock. Outside the main index, Nemetschek is gaining 3.2 percent after Berenberg initiated the stock with a "Buy" rating. Autodealer Leoni is advancing 1.2 percent. Goldman Sachs raised the stock to "Buy" from "Neutral."
In Paris, EADS is declining 8.5 percent. The plane maker confirmed it is in talks for a possible merger with BAE Systems to create an industry giant that would surpass rival Boeing Co. in terms of sales. Citigroup cut the stock to "Neutral" from "Buy." BAE Systems is losing 6.2 percent in London.
Vinci is losing 2.7 percent and Bouygues is falling 1.8 percent.
Societe Generale, Credit Agricole and BNP Paribas are declining between 2.2 percent and 1.4 percent. Peugeot is losing 1.5 percent while Renault is fractionally higher.
Bucking the trend, Alcatel Lucent is gaining 1.7 percent. Total is gaining 0.5 percent. Citigroup raised its rating on the stock.
In London, Next is losing 5.8 percent after issuing a cautious outlook amid disappointing sales in an unusual August and early September. Marks & Spencer and Kingfisher are notably lower.
Home Retail is falling 4.6 percent. The retailer said sales at its subsidiary store Argos edged up in the second quarter, while sales at Homebase were hurt by poor weather conditions.
Miners are trading in the red. Antofagasta and Anglo American are moderately down while Rio Tinto is losing 1.9 percent. ARM Holdings is gaining around 1 percent after Apple introduced iPhone 5.
Premier Farnell is surging 11 percent after the electronic components distributor said it continues to expect growth to return in the second half of the year. Dewhurst is climbing 10 percent. The firm sees annual pre-tax profit significantly ahead of market view. |
| Asia Market Reports | Asian Stocks Cautious Ahead Of FOMC Meeting
Asian stocks ended mixed on Thursday as positive sentiment in the wake of a crucial German court ruling on the Eurozone bailout fund gave way to caution ahead of Fed decision.
It is widely expected that Fed Chairman Ben Bernanke will announce a third round of asset purchases and extend the central bank's low-rate guidance into 2015 as the FOMC meeting draws to a close tonight. In an Aug. 31 speech in Jackson Hole, Wyoming, Bernanke defended the extraordinary steps the Fed has taken to date, saying two rounds of QE between 2008 and 2011 had created 2 million jobs and accelerated U.S. economic growth.
In news out of Europe, voters in the Netherlands overwhelmingly backed two pro-European centrist parties committed to debt-busting austerity, dispelling concerns that radical eurosceptics might gain sway in a core euro zone country.
Japanese stocks rose modestly on speculative buying due to pre-settlement trading. The Nikkei average rose 0.4 percent, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 0.3 percent.
Companies that have business ties with Apple gained ground after the U.S. technology giant unveiled its next generation iPhone at a special event in San Francisco on Wednesday. TDK climbed 3.7 percent and Foster Electric soared 5.6 percent, while Softbank, a provider of Apple's iPhone in Japan, shed 0.6 percent.
Itochu added 0.8 percent on saying it was in talks to buy U.S. fruit giant Dole Food Co.'s packaged-food and Asian fruit and vegetable businesses, reportedly for about $1.7 billion. Shipping lines Nippon Yusen and Mitsui O.S.K. jumped 4-7 percent, as the shares looked oversold amid recent concerns about a slowdown in the Chinese economy.
China's Shanghai Composite index fell 0.8 percent on concerns the economic slowdown may deepen after the official Xinhua News Agency said massive stimulus measures would hurt the nation's long-term growth. Hong Kong's Hang Seng index edged down 0.1 percent, snapping a five-day winning streak.
Australian shares retreated in thin trading, dragged down by miners after the recent recovery in iron ore prices stalled yesterday. Banks also fell across the board ahead of Fed decision on stimulus. ANZ slipped 0.3 percent, Commonwealth slid 0.1 percent, NAB lost half a percent and Westpac declined 0.7 percent. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index fell about half a percent each.
BHP Billiton and Rio Tinto reversed early gains to end down 0.2 percent and 0.1 percent, respectively, after former treasurer Peter Costello defended the Queensland government's decision to raise royalties on coal, saying the government had little option but to increase taxes to cut the fiscal deficit.
Shares of Fortescue Metals plunged almost 14 percent following reports that the miner had sought a 12-month waiver from its lenders on all its debt covenants. Gold miner Newcrest edged down 0.2 percent as it suspended production at its Cadia Valley underground gold and copper mine in central western NSW due to an equipment failure.
In economic news, inflation expectations among Australian consumers remained unchanged in September, and remain within the Reserve Bank of Australia's target band of 2-3 percent, a survey by Melbourne Institute showed.
Seoul shares swung between gains and losses before ending on a flat note. The Bank of Korea's unexpected move to hold its benchmark interest rates steady had little impact on investor sentiment. The benchmark Kospi average rose 0.66 points or 0.03 percent to 1,951 in heavy-volume trading amid the expiration of option contracts.
Heavyweight Samsung Electronics gained half a percent and LG Electronics closed up 2.5 percent as Apple's launch of its latest iPhone 5 failed to offer major surprises. Shares of LG Display and SK Hynix, Apple's component suppliers, retreated about 2 percent each.
New Zealand shares fell from a four-year high as uncertainty surrounding tonight's FOMC decision prompted investors to stay on the sidelines after recent steep gains on expectations of central bank moves. Domestically, Reserve Bank Governor Alan Bollard held the official cash rate at 2.5 percent at his final review of monetary policy, citing the weak outlook for the country's trading partners and a high kiwi dollar which continues to undermine the export sector. The benchmark NX-50 index edged down 0.1 percent.
Insurer Tower fell 2.7 percent after Chairman Bill Falconer, whose current term expires in February, decided to step down now to enable a new chairman implement changes from a strategic review. Gold miner OceanaGold led the declines on the exchange, tumbling 3.4 percent, while dual-lists banks ANZ and Westpac fell less than a percent each. Fisher & Paykel Appliances extended its recent gains, adding 1.3 percent, after Chinese appliance maker Haier Group offered to buy the remaining stake that it already doesn't own in the whiteware manufacturer.
Elsewhere, India's Sensex, Singapore's Straits Times and Indonesia's Jakarta Composite indexes were down marginally, while Malaysia's KLSE Composite rose 0.9 percent and the Taiwan Weighted average edged up 0.1 percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Steady Above $97
The price of crude oil was moving higher Thursday morning as traders await cues from the two-day policy meeting by the U.S. Federal Reserve.
Light Sweet Crude Oil (WTI) futures for October delivery, edged up $0.17 to $97.18 a barrel. Yesterday, oil ended lower for the first time in six days after the Energy Information Administration weekly oil report showed an unexpected increase in inventories for the week ended September 07. Investors also anxiously awaited cues from the Federal Reserve meeting that got under way earlier today, with expectations high on further quantitative easing measures forthcoming.
Wednesday during trading hours, a report from the EIA revealed that U.S. crude oil inventories unexpectedly moved up by 2.00 million barrels, while gasoline stocks shed 1.20 million barrels in the weekended September 07. Analysts were expecting crude oil inventories to shed by 2.90 million barrels and gasoline stock to ease1.70 million barrels last week.
This morning, the U.S. dollar was lingering around its four-month low versus the euro and sterling. The buck was extending its seven-month low against the yen, while ticking higher against the Swiss franc.
In economic news from the euro zone, the Swiss National Bank decided to leave the minimum exchange rate unchanged at CHF 1.20 per euro as expected by economists. The central bank also retained the target range for the three-month Libor rate at 0.0-0.25 percent.
Traders will look to the weekly jobless claims data from the U.S. Labor Department, due out at 8.30 a.m ET. Economists expect claims to increase to 370,000 from 365,000 in the previous week.
Separately, the department is scheduled to release its report on the producer price index for August. Economists expect the headline index for August to have risen by 1.4 percent, while core consumer prices may have risen by a more modest 0.2 percent. In July, producer prices and core producer prices climbed by 0.3 percent and 0.4 percent, respectively. |
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