Stocks Seeing Moderate Strength In Mid-Day Trading
With traders reacting positively to a batch of upbeat U.S. economic data, stocks have moved mostly higher during trading on Tuesday. Buying interest has remained somewhat subdued, however, limiting the upside for the markets.
The major averages have pulled back off their best levels of the day in recent trading but remain firmly positive. The Dow is up 36.07 points or 0.3 percent at 13,594.99, the Nasdaq is up 9.92 points or 0.3 percent at 3,170.70 and the S&P 500 is up 3.79 points or 0.3 percent at 1,460.68.
The strength that has emerged on Wall Street is partly due to the release of a report from the Conference Board showing a much bigger than expected improvement by U.S. consumer confidence in the month of September.
The Conference Board said its consumer confidence index jumped to 70.3 in September from a revised 61.3 in August. Economists had expected the index to climb to 64.8 from the 60.6 originally reported for the previous month.
The much bigger than expected increase lifted the consumer confidence index to its highest level since reaching 71.6 in February.
A separate report released by Standard & Poor's before the start of trading showed that home prices in major U.S. metropolitan areas saw a notable annual rate of growth in the month of July.
The S&P/Case-Shiller 20-City Composite Home Price Index rose by 1.2 percent in July compared to the same month a year ago. Economists had been expecting the index to increase by about 1.1 percent year-over-year.
Nonetheless, continued uncertainty about the near-term outlook for the markets has kept some traders on the sidelines, with investors waiting for more substantial catalysts following the recent monetary stimulus announcements.
Among individual stocks, shares of Vail Resorts are turning in a strong performance after the resort operator reported a narrower than expected fourth quarter loss on better than expected revenues. Vail has surged up by 11.2 percent to its best intraday level in almost five years.
Cruise liner operator Carnival (CCL) is also posting a notable gain after reporting third quarter earnings that exceeded analyst estimates. Shares of Carnival are up by 2.7 percent.
On the other hand, shares of Caterpillar have come under pressure after the construction equipment maker cut its guidance for 2015. The company said it now expects earnings of $12 to $18 per share compared to its previous forecast for earnings of $15 to $20 per share.
Sector News
While many of the major sectors continue to show only modest moves, considerable strength has emerged among trucking stocks. Reflecting the strength in the trucking sector, the Dow Jones Trucking Index has surged up by 1.5 percent.
C.H. Robinson has helped to lead the trucking sector higher, jumping by 3.5 percent after reaching an agreement to acquire rival Phoenix International for $635 million in cash and stock.
Gold stocks have also shown a strong move to the upside, rebounding along with the price of the precious metal. With gold for December delivery climbing $9.60 to $1,774.20 an ounce, the NYSE Arca gold Bugs Index is up by 1 percent.
Pharmaceutical, housing, and banking stocks are seeing more moderate strength on the day, while notable weakness has emerged among steel stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index crept up by 0.3 percent, while China's Shanghai Composite index edged down by 0.2 percent.
Meanwhile, the major European markets all moved to the upside over the course of the trading day. While the German DAX Index inched up by 0.2 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index rose by 0.4 percent and 0.5 percent, respectively.
In the bond market, treasuries have shown a lack of direction on the day after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is unchanged on the day at 1.718 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Recovers After 3-day Slump - Canadian Commentary
After falling in the past three sessions, Canadian stocks were moving higher Tuesday morning amid firm commodities and after Canada reported a surprise jump in July retail sales, that came in well above consensus.
However, uncertainty about Spain's desire for an international aid package and renewed concerns over global economic growth capping big gains.
The S&P/TSX Composite Index rose 48.53 points or 0.39 percent to 12,362.07, after losing nearly 125 points or 1 percent in the past three straight sessions.
Among base-metals stocks, Inmet Mining , First Quantum Minerals and Teck Resources were up around 1 percent each.
Mining company Forbes & Manhattan Coal Corp. (FMC.TO) gained 8 percent after it said it would acquire certain assets from Rio Tinto Plc for about C$52.3 million.
In the financial space, TD Bank , Royal Bank and Scotiabank gathered close to 1 percent each.
The price of Crude oil was moving higher on value buying Tuesday morning, after shedding around 7 percent in the past few sessions. Crude for November moved up $0.95 to $92.88 a barrel.
In the oil patch, Coastal Energy moved up 2 percent. Suncor Energy and Niko Resources moved up nearly 1 percent each.
The price of gold moved up even as the U.S. dollar was trading firm ahead of today's macroeconomic data. gold for December gained $10.30 to $1,774.90 an ounce.
Among gold plays, Allied Nevada gold , Barrick gold , Goldcorp. and Agnico-Eagle Mines gathered over 1 percent each.
Meanwhile, smartphone maker Research In Motion slipped nearly 1 percent.
In economic news, Statistics Canada said retail sales rose 0.7 percent to $39.0 billion in July, more than offsetting the decline in June, mainly led by higher sales at motor vehicle and parts dealers, and general merchandise stores. Economists expected the retail sales to grew just 0.1 percent in the month of July
From the U.S., the Conference Board released a report on Tuesday showing a much bigger than expected improvement in U.S. consumer confidence in the month of September. The Conference Board said its consumer confidence index jumped to 70.3 in September from a revised 61.3 in August. Economists had expected the index to climb to 64.8 from the 60.6 originally reported for the previous month.
Meanwhile, a report released by Standard & Poor's showed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by 1.2 percent in July compared to the same month a year ago. Economists had been expecting the index to increase by about 1.1 percent year-over-year. S&P also said the 20-City Composite Home Price Index increased by a seasonally adjusted 0.4 percent on a monthly basis in July compared to a 0.9 percent increase in May.
Elsewhere, Germany's consumer confidence is set to remain unchanged in October, survey results from market research group GfK showed. The forward-looking consumer sentiment index came in at 5.9 in October, unchanged from September and matched economists' expectations. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Finished Mostly Higher After Volatile Trading Session
The majority of the European markets closed in positive territory Tuesday. The markets struggled to find direction ahead of the meeting of German Chancellor Angela Merkel and ECB President Mario Draghi in Berlin. The stronger than expected U.S. consumer confidence number and the positive home price index result provided a boost to the European markets in the afternoon.
Rating agency Standard & Poor's cut Eurozone's economic forecasts for this year and next on Tuesday, saying the 17-nation economy is entering a new period of recession.
The firm expects the euro area economy to shrink 0.8 percent this year, which is worse than the 0.7 percent contraction forecast in July. For 2013, S&P sees flat growth in the single currency bloc, compared to 0.3 percent forecast in July.
Germany cannot decouple from Europe and the global economy, Chancellor Angela Merkel said Tuesday. Germany is not an island, but a strong exporting nation, she said at a conference organized by the German Industry Association in Berlin.
She observed that there is a lack of confidence in financial markets about the ability of the governments to repay its debt. It would have been better if the European Court of Justice had been granted powers to monitor the fiscal pact, Merkel noted.
Spanish short-term borrowing costs increased at a debt auction on Tuesday as it remains uncertain if the embattled country would seek a bailout for its economy. The Spanish Treasury raised nearly EUR 4 billion from the sale of its 3 and 6 month bills. The target set for the sale was between EUR 3 billion and EUR 4 billion.
The yield on the three-month paper rose to 1.203 percent from 0.946 percent on August 28. The bid-to-cover ratio, which shows demand, dipped to 3.29 from 3.35. The 6-month treasury bill fetched a yield of 2.213 percent, up from 2.026 percent on August 28.
Italy saw its two-year borrowing costs decline at an auction on Tuesday. The Italian Treasury raised EUR 3.937 billion from the sale of its zero coupon bonds known as CTZ, which was close to the top target of EUR 4 billion set for the sale. The yield on the zero-interest bearing security fell to 2.53 percent from 3.064 percent in the previous sale on August 28.
The euro Stoxx 50 index of eurozone bluechip stocks increased by 0.39 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.29 percent.
The DAX of Germany climbed by 0.16 percent and the CAC 40 of France advanced by 0.47 percent. The FTSE 100 of the U.K. rose by 0.36 percent and the SMI of Switzerland gained 0.25 percent.
9/25/2012 12:01 PM ET
In Frankfurt, Volkswagen declined by 1.71 percent. Daimler fell by 1.82 percent and BMW lost 1.68 percent. Goldman Sachs cut its price targets on the automakers.
Deutsche Telekom decreased by 1.68 percent, after Jefferies reduced its rating on the stock to "Hold" from "Buy."
UBS removed E.ON from its 'Most Preferred List' European utilities. The stock closed up by 0.34 percent. RWE finished higher by 1.33 percent after UBS removed it from 'Least Preferred List' European utilities.
In Paris, Credit Agricole gained 0.07 percent. Goldman Sachs downgraded the stock to "Neutral" from "Buy." BNP Paribas climbed by 1.14 percent and Societe Generale rose by 2.35 percent.
Deutsche Bank cut Schneider Electric to "Hold" from "Buy." The stock finished higher by 0.39 percent.
HSBC initiated STMicroelectronics with a "Neutral" rating. The stock closed lower by 1.61 percent.
In London, BAE Systems declined by 1.94 percent, amid worries about its merger with EADS.
Royal Bank of Scotland fell by 0.55 percent. A Bloomberg report said RBS managers condoned and took part in the manipulation of global interest rates, which suggests that more than four people fired by the bank were involved in wrong doing. Standard Chartered is also lost 1.55 percent.
Cairn Energy has reached an agreement to sell an 8 percent stake in its Indian unit for $910 million. The stock decreased by 0.81 percent.
Diageo climbed by 1.74 percent, after confirming that it is in talks to acquire an interest in United Spirits.
Germany's consumer confidence is set to remain unchanged in October, survey results from market research group GfK showed Tuesday, which slightly eased fears of the economy slipping into a recession. The forward-looking consumer sentiment index came in at 5.9 in October, unchanged from September and matched economists' expectations.
French business confidence remained unchanged in September, but was markedly below its long-term average, a report from the statistical office Insee showed Tuesday. The headline synthetic index was at 90 in September, unchanged from August. Economists expected the reading to edge down to 89.
Home prices in major U.S. metropolitan areas showed a notable annual rate of growth in the month of July, according to a report released by Standard & Poor's on Tuesday.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by 1.2 percent in July compared to the same month a year ago. Economists had been expecting the index to increase by about 1.1 percent year-over-year.
With consumers considerably more optimistic about the short-term outlook, the Conference Board released a report on Tuesday showing a much bigger than expected improvement in U.S. consumer confidence in the month of September.
The Conference Board said its consumer confidence index jumped to 70.3 in September from a revised 61.3 in August. Economists had expected the index to climb to 64.8 from the 60.6 originally reported for the previous month. |
| Asia Market | Asian Markets Mostly Subdued Amid Cautious Trades
Asian stock markets are mostly trading subdued on Tuesday with investors treading cautiously amid a lack of positive triggers. A flat close on Wall Street overnight amid lingering concerns about the near term economic outlook is also contributing to the lackluster movements in the region.
In the Australian market, mining, consumer staples and energy stocks are mostly trading lower. Financial, telecommunications and information technology stocks are finding modest support, while industrial stocks are trading mixed.
The benchmark S&P/ASX 200 index is down 9.4 points or 0.2 percent at 4,376.1. The broader All Ordinaries index is trading at 4,398.5, down 10.7 points or 0.2 percent from its previous close.
Arrium Limited shares are down 6.8 percent. Whitehaven Coal, Sims Metal Management, Atlas Iron, Fairfax Media and Paladin Energy are trading lower by 3 to 4 percent.
Oz Minerals, Aurora Oil & Gas, Lymas Corporation, Challenger, Myer Holdings and Seven West Media are all down 2 to 3 percent.
Perseus Mining, Iluka Resources, James Hardie Industries and Rio Tinto (, RIO.L) are also trading sharply lower.
Bluescope Steel is up nearly 4 percent. ResMed Inc. () and WorleyParsons are trading higher by 2 percent and 1.8 percent, respectively.
Leighton Holdings Limited shares are up marginally. According to reports, Fortescue Metals will pay Leighton A$1.44 billion to oversee mining at its Firetail iron ore deposit in the Pilbara. Leighton Contractors will manage the mine for five years under the newly-signed contract, operating the open cut mining fleet and handling plants as well as associated infrastructure.
The Japanese market opened lower with a stronger yen prompting investors to indulge in some selling. However, with investors picking up stocks at lower levels, the market climbed into positive territory and was trading modestly higher when the morning session ended.
The benchmark Nikkei 225 index, which tumbled to around 9,023 in early trades but rose to 9,112.5 subsequently, was up 26 points or 0.3 percent at 9,095.3 at the end of the morning session.
Suzuki Motor, Hitachi Zosen Corp., Tokyu Land, Mitsui Chemicals, Teijin, Panasonic Corp. (), Olympus Corp., Credit Saison and Maruha Nichiro Holdings were up 2 to 4 at the break.
Shinsei Bank, Mitsubishi Heavy Industries, Mitsui Mining & Smelting, Chiyoda Corp., Fast Retailing, Resona Holdings, Sumitomo Chemical, Sumitomo Realty, Casio Computer, Daikin Industries and Fuji Electric also posted strong gains.
Meanwhile, Oki Electric Industry, Yokohama Rubber, Mitsubishi Electric Corp., Chubu Electric Power, Kansai Electric Power, Komatsu, Nippon Light Metal, Japan Tobacco and Asahi Glass were trading in negative territory, losing 1 to 4 percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Germany Cannot Decouple From Europe, Says Merkel
Germany cannot decouple from Europe and the global economy, Chancellor Angela Merkel said Tuesday.
Germany is not an island, but a strong exporting nation, she said at a conference organized by the German Industry Association in Berlin.
She observed that there is a lack of confidence in financial markets about the ability of the governments to repay its debt. It would have been better if the European Court of Justice had been granted powers to monitor the fiscal pact, Merkel noted.
She said the member countries should do more to reduce their unit labor cost, instead of demanding Germany to raise its cost so as to lower imbalances in the euro area.
Merkel held up the proposals for creating a banking union for the bloc. She also called for stronger bank supervision.
The European Commission early this month proposed to give sweeping powers to the European Central Bank to overview of some 6,000 banks across Europe. The commission expects to set up the single supervisory mechanism in place by January 1, 2013.
Merkel and French President Francois Hollande meeting over the last weekend highlighted the disagreement on the schedule to establish banking union. Hollande said it is helpful to establish supervision "the earlier the better", while Merkel prefer to see the process moving step by step.
Merkel is holding a meeting with European Central Bank President Mario Draghi in Berlin today. |
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