Stocks Turning In Lackluster Performance After Initial Drop After moving modestly lower in early trading on Tuesday, stocks have turned in a lackluster performance over the course of the morning. The major averages have climbed well off their lows for the session and are lingering near the unchanged line. While profit taking contributed to the early weakness on Wall Street following the recent strength in the markets, selling pressure remained subdued amid some uncertainty about the near-term outlook for the markets. Traders seemed reluctant to sell stocks and miss out on any further upside. The subsequent recovery was partly due to the release of a report from the National Association of Home Builders showing that homebuilder confidence jumped to a six-year high in September. Most of the major sectors are showing only modest moves in late morning trading, although notable weakness remains visible among airline stocks. The NYSE Arca Airline Index is down by 1.5 percent, with Republic Airways leading the way lower. Oil service, railroad, and trucking stocks are also seeing continued weakness on the day, while considerable strength has emerged among tobacco stocks. The major averages are currently turning in a mixed performance, with the Dow posting a most gain. While the Dow is up 22.84 points or 0.2 percent at 13,575.94, the Nasdaq is down 1.49 points or 0.1 percent at 3,177.18 and the S&P 500 is down 0.78 points or 0.1 percent at 1,460.41.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Flat As Traders Await Fresh Cues - Canadian Commentary 9/18/2012 11:21 AM ET
Canadian stocks were little changed Tuesday morning as euphoria over the Federal Reserve's stimulus package waned and trader shift their focus on fundamentals. Meanwhile, worries over euro zone debt situation resurfaced amid uncertainty about Spain's desire for an international aid package. Analysts opine that the delaying tactics by Spain to opt for financial aid could put upward pressure on yields. The S&P/TSX Composite Index eased 6.85 points to 12,440.01, a day after snapping its four-session winning streak. The Diversified Materials Index was the major loser, shedding nearly 1 percent. Teck Resources lost 3 percent, while Inmet Mining and First Quantum Minerals were slipping around 1 percent each. Coal miner SouthGobi Resources (SGQ.TO) announced Ross Tromans as its chief executive officer and president with immediate effect. The stock dived 12 percent. The price of Crude oil was extending losses Tuesday morning on demand concerns amid reports that Saudi Arabia is pumping at high rates to dampen prices. Yesterday, oil dropped dramatically in the last few minutes of regular trade to end sharply lower amid rumors of oil release from the Strategic Petroleum Reserve after prices galloped following the Federal Reserve announcement of additional quantitative easing measures last week. Crude for October was down $0.14 to $96.48 a barrel. In the oil patch, Crescent Point Energy , Cenovus Energy , Vermilion Energy and Baytex Energy Corp. were down around 1 percent each. Meanwhile, gold stocks were paring early trading losses as the price of bullion steadied. gold for December added $2.60 to $1,773.20 an ounce. Seabridge gold rose over2 percent, while Royal gold and Allied Nevada gold were adding over 1 percent each. Transportation equipment maker Bombardier Transportation (BBD_A.TO, BBD_B.TO) said it signed $367 million contracts with Talgo SA to develop and supply components for 36 very high speed trains for Saudi Arabia. Th stock was trading flat at C$3.840 Electronic equipment maker Dynetek Industries Ltd.(DNK.TO) gained over 2 percent after announcing that it has been fully acquired by Luxfer Holdings Plc through its wholly-owned subsidiary Luxfer Canada Limited. In economic news from the U.S., a report from the National Association of Home Builders showed that the NAHB/Wells Fargo Housing Market Index rose to 40 in September from 37 in August. Economists had been expecting the index to show a more modest increase to a reading of 38. With the much bigger than expected increase, the index rose to its highest level since coming in at 42 in June of 2006.
From the euro zone, Germany's economic sentiment improved in September after easing for four straight months, the Mannheim-based ZEW said. The ZEW Indicator of Economic Sentiment rose 7.3 points to -18.2. However, the negative reading indicates that the financial market experts expect the German economy to lose momentum over the next six months. Meanwhile, a survey report from the Office for National Statistics revealed that house price inflation in the U.K. eased more than expected in July. The ONS house price index rose 2 percent year-on-year in July, slower than 2.3 percent gain in June. This was also weaker than the 2.1 percent rise forecast by economists. |
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Continued To Slide Following Last Week's Rally The European markets added to yesterday's losses on Tuesday, following the strong rally at the end of the previous trading week. Much of the weakness can still be attributed to profit taking, but there were also concerns about the situation in Spain. Shares of banks were under pressure Tuesday, as well as miners, automakers and oil companies. The European Central Bank will assume the role of a banking supervisor only if it is fully equipped, ECB Governing Council member Ewald Nowotny reportedly said Monday. He said it is ambitious to expect the ECB to take on the responsibility of overseeing major banks by mid-2013. European Central Bank Governing Council member Luc Coene said on Monday that the central bank has a number of options to ease policy, including cutting deposit rate below zero and offering more cheap loans to banks. Negative rate on deposits at the ECB is one of the possibilities, reports said citing his remarks during a seminar in London. Coene, who heads the Belgian central bank, said extending the long-term refinancing operations (LTROs) is another option before the ECB to ease monetary policy, if required. Coene also warned that rising bond yields may force Spain to place a bailout request. "If the markets see that Spain is not going to" ask for financial assistance, "it will not be long before spreads will rise again and Spain will be forced to come back" on its decision to request bailout and submit to ECB conditions, Coene said. Spain's borrowing costs declined on Tuesday in the first debt auction since the European Central Bank announced plans to buy peripheral bonds earlier this month. The country is set to face a tougher challenge on Thursday, when it auctions a benchmark 10-year bond and a new three-year bond. Despite the favorable auction results, Spanish bond yields remain high, given the lingering uncertainty as to whether the country would seek a bailout, paving way for the ECB to keep the Spanish yields lower by buying the country's bonds. The euro Stoxx 50 index of Eurozone bluechip stocks declined by 0.84 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, finished up by 0.15 percent. The DAX of Germany fell by 0.76 percent and the CAC 40 of France lost 1.15 percent. The FTSE 100 of the U.K. dropped by 0.18 percent and the SMI of Switzerland decreased by 0.23 percent. In Frankfurt, Deutsche Bank declined by 4.58 percent, after a brokerage downgrade. Commerzbank also finished lower by 3.22 percent. Automakers were weak after data released by the European Automobile Manufacturers' Association showed registrations of new passenger cars in Europe dropped at a faster rate in August. BMW fell by 1.93 percent, Daimler lost 1.08 percent and Volkswagen decreased by 1.81 percent. In Paris, Renault dropped by 4.04 percent and Peugeot declined by 4.32 percent. Societe Generale finished down by 3.72 percent Tuesday. BNP Paribas decreased by 1.64 percent and Credit Agricole lost 3.11 percent. In London, BHP Billiton fell by 1.43 percent. The mining giant said its chief executive officer Marius Kloppers' total pay fell to $9.82 million in fiscal 2012 from $11.63 million in fiscal 2011. Vedanta Resources closed lower by 1.46 percent, Kazakhmys declined by 2.17 percent and Rio Tinto lost 0.70 percent. BT Group lost 0.09 percent, after the communication services provider named Luis Alvarez as chief executive officer of BT Global Services, effective October. Aviva declined by 3.95 percent, after Bank of America downgraded the stock to "Underperform" from "Neutral." Barclays decreased by 1.14 percent and Royal Bank of Scotland fell by 2.48 percent. Lloyds Banking Group dropped by 2.40 percent and HSBC lost 0.93 percent. Shares of Standard Chartered finished lower by 1.92 percent. German economic sentiment improved in September after easing for four straight months, as the European Central Bank's bond purchase plan calmed analysts' fears of a looming break-up of the region, results of a closely watched survey revealed Tuesday. The ZEW Indicator of Economic Sentiment rose by a better-than-expected 7.3 points to -18.2, data from the Mannheim-based Centre for European Economic Research showed. The score was forecast to rise to -20 in September. U.K. inflation slowed marginally in August despite an increase in fuel prices, which may provide room for more monetary policy easing. Nonetheless, inflation remains above the 2 percent target. Annual inflation eased to 2.5 percent in August, in line with expectations, from 2.6 percent in July, data from the Office for National Statistics revealed Tuesday. Homebuilder confidence in the U.S. increased for the fifth consecutive month in September, according to a report released by the National Association of Home Builders on Tuesday, with the index of homebuilder confidence rising to its highest level in over six years. The report showed that the NAHB/Wells Fargo Housing Market Index rose to 40 in September from 37 in August. Economists had been expecting the index to show a more modest increase to a reading of 38. |
| Asia Market Reports | Asian Markets Trade Weak On Profit Taking Asian stock markets are mostly trading lower on Tuesday with investors choosing to take some profits after recent strong gains. The overnight weak close in the U.S. and European markets and a lack of fresh triggers are also contributing to the subdued trend in the region. The Australian stock market is trading weak with investors indulging in some profit taking after recent gains. Energy, property trusts and industrial stocks are mostly trading weak. Consumer staples and financial stocks are trading mixed, while healthcare stocks are moving higher. The benchmark S&P/ASX 200 index, which drifted down to 4,383,3 around mid morning, is currently trading at 4,393.4, down 9.1 points or 0.2 percent from its previous close. The broader All Ordinaries index is down 7.8 points or 0.2 percent at 4,414, off the day's low of 4,406.1. Top miners BHP Billiton (BHP,) and Rio Tinto (, RIO.L) are trading lower by 0.8 percent and 0.6 percent, respectively. Among bank stocks, ANZ Bank () and Commonwealth Bank of Australia are trading flat. National Australia Bank is up marginally and Westpac () is gaining about 0.7 percent. In the energy sector, Woodside Petroleum, Santos and Caltex Australia are down 1 to 1.4 percent. Oil Search is losing about 2.4 percent, while Origin Energy is bucking the trend and trading marginally higher. Atlas Iron is down more than 5 percent. Toll Holdings is trading lower by 4.6 percent. Fairfax Media, Boart Longyear and Iluka Resources are down 3 to 3.3 percent. Paladin Energy, Monadelphous Group, Incitec Pivot, Whitehaven Coal, Leighton Holdings, Computershare and Beach Energy are also trading sharply lower. Fortescue Metals shares are up more than 17 percent following the company securing a new credit facility of A$4.31 billion. The company said it will use the funds to refinance its looming bank debts. The troubled iron ore miner had been in negotiations with its lenders about potential waivers of its bank facilities, and on Tuesday said the new credit, to be provided by Credit Suisse and JP Morgan, would extend the maturity profile of its debts. Sonic Healthcare is gaining about 2.8 percent. CSL, Duet Group, Cochlear, Bluescope Steel and Arrium are up 1.8 to 2 percent. According to the minutes of the Reserve Bank of Australia's September 4 meeting, the central bank decided to keep the cash rate on hold at 3.5 percent despite concerns about falling iron ore and coal prices as well as the high value of the Australian dollar. However, it said the current inflation outlook, which is expected to remain within the RBA's target range of two to three per cent through to 2013, meant it had room to cut rates again if necessary. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | RBA Minutes: Domestic Economy Growing As Expected Members of the Reserve Bank of Australia's monetary policy committee felt that the Australian economy was growing at trend, minutes from the board's September 5 meeting revealed on Tuesday. The members further noted a Sharp fall in commodity prices, which figures to affect the Australian economy - although the effect of the current monetary policy continues to be successful. "Of particular note this month was the recent Sharp decline in some bulk commodity prices," the minutes said. "At the same time, though, the domestic economy appeared to be growing at around trend pace and there were signs that the effects of earlier reductions in the cash rate were still working their way through the domestic economy." They also agreed that conditions were slowing on other parts of the world - particularly China - although the U.S. economy had shown signs of slight improvement. "Information that became available over the past month pointed to slightly softer conditions in many parts of the global economy," the minutes said. "Ongoing weakness in the advanced economies appeared to be weighing on exports from Asia, although a number of indicators of activity for the U.S. economy were a little more positive over the past month. A month earlier, members had noted that there were some tentative signs that Chinese growth might be stabilizing at a more sustainable pace." At the meeting, the RBA kept its benchmark cash rate unchanged at 3.50 percent for a third consecutive month - calling the current monetary policy stance "appropriate." The decision was in line with forecasts. The RBA reduced the cash rate by 50 basis points in May and by a quarter-point in June, following two back-to-back rate cuts towards the end of 2011. Even after a cumulative 125 basis point reduction in cash rate since November last year, Australia has the highest borrowing costs among the developed economies. "The current assessment of the inflation outlook continued to provide scope to adjust policy in response to any significant deterioration in the outlook for growth," the minutes said. "At this meeting, the Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate." Upon the release of the data, the aussie slipped further against major counterparts, trading near 1.0443 against the U.S. dollar, 1.2546 against the euro, 1.2676 against the kiwi and 82.07 against the yen. |
|
No comments:
Post a Comment