| Stocks Adding To Yesterday's Steep Losses In Early Trading
Stocks have moved mostly lower in early trading on Wednesday, extending the sharp downward move seen over the course of the previous session. The major averages have dipped into negative territory, although the Dow is posting only a modest loss.
Currently, the major averages are all in the red, but the Dow is down only 3.84 points or less than a tenth of a percent at 13,453.71. The Nasdaq is down 13.08 points or 0.4 percent at 3,104.65 and the S&P 500 is down 4.09 points or 0.3 percent at 1,437.50.
The early weakness on Wall Street reflects lingering concerns about the financial situation in Europe, with the yield on Spain's ten-year bond climbing above 6 percent.
It now seems increasingly likely that Spain will seek a bailout despite widespread public protests against austerity measures for the 2013 budget set to be unveiled on Thursday.
Adding to the concerns about Europe's debt crisis, German newspaper Bild reported that Bundesbank is preparing a lawsuit against the European Central Bank claiming that the central bank is overstepping its mandate in launching the latest round of bond purchases.
While the focus is largely on Europe, trading could be impacted by the release of the Commerce Department's monthly report on new home sales in the U.S., with economists expecting sales to climb to an annual rate of 380,000 in August from 372,000 in July.
However, the impact of the report may be limited due to its backward-looking nature, with many traders looking ahead to future data to determine the effectiveness of the Federal Reserve's recent announcement of another round of quantitative easing.
Philadelphia Fed President Charles Plosser warned Tuesday that the additional stimulus is not likely to do much to benefit growth or employment.
Gold stocks have shown a notable move to the downside in early trading, dragging the NYSE Arca Gold Bugs Index down by 1.9 percent. The weakness among gold stocks come as the price of the precious metal is falling by more than $20 an ounce.
Significant weakness has also emerged among steel stocks, which are extending a recent downward move amid concerns about global demand. Computer hardware, oil service, and networking stocks have also come under pressure, while strength is visible among utilities stocks.
In overseas trading, stock markets across the Asia-Pacific region saw notable weakness during trading on Wednesday. Japan's Nikkei 225 Index plummeted by 2 percent, while Hong Kong's Hang Seng Index ended the day down by 0.8 percent.
The major European markets have also shown substantial moves to the downside on the day. While the U.K.'s FTSE 100 Index has tumbled by 1.4 percent, the German DAX Index and the French CAC 40 Index have plunged by 1.8 percent and 2.2 percent, respectively.
In the bond market, treasuries have shown a strong upward move, extending a recent winning streak. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down 4.8 basis points at 1.634 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | | TSX Dips At Open Wednesday
Toronto stocks moved lower at open Wednesday amid selling across a variety of sectors, with the S&P/TSX Composite Index losing 66.85 points or 0.55 percent to 12,190.33.
Among gold stocks, Royal Gold, Barrick Gold, Agnico-Eagle Mines and Goldcorp. were down nearly 2 percent each.
The Diversified Materials Index lost over 1 percent, with Inmet Mining, First Quantum Minerals and Teck Resources shedding around 1 percent each.
In the oil patch, Vermilion Energy, Pacific Rubiales Energy and Baytex Energy Corp. lost around 2 percent each.
Bombardier Inc. slipped over 1 percent even after it said it secured $158 million worth of orders from Israel Railways for additional 72 double-deck coaches.
Onex Corp. slipped 0.50 percent after announcing that it would acquire KraussMaffei AG, a manufacturer of plastic and rubber processing equipment, for 568 million euros.
Meanwhile, Research In Motion gained over 4 percent.
The price of crude oil was extending losses for a third session Wednesday morning as traders await cues from the official inventories data due out later today. The EIA will come out with its U.S. crude oil inventories report for the weekended September 21. Analysts expect crude oil inventories to jump by 1.5 million barrels and gasoline stocks are seen unchanged. Crude for November shed $1.28 to $90.09 a barrel.
The price of gold was moving lower Wednesday morning as the U.S. dollar was extending gains versus a basket of currencies. Gold for December lost $17.40 to $1,749.00 an ounce.
In corporate news from Canada, Onex Corporation said it would acquire KraussMaffei AG, a manufacturer of plastic and rubber processing equipment, for 568 million euros.
Bombardier Transportation of Bombardier Inc. said it secured $158 million worth of orders from Israel Railways for additional 72 double-deck coaches.
Diversified services provider IBI Group Inc. announced the adoption of a dividend reinvestment plan, which allows eligible shareholders to direct that their cash dividends be reinvested in additional common shares of the company. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | European Markets Firmly In The Red As Debt Worries Intensify
The European markets are firmly in the red in afternoon trading Wednesday, as worries about the effectiveness of stimulus measures killed risk appetite, amid clashes in Spain over austerity measures. Banks and miners are under pressure.
Spain's capital Madrid witnessed clashes between riot police and thousands of demonstrators outside Parliament. The protesters were attempting to form a human chain around parliament as a sign of protest against the government's handling of the financial crisis.
The development comes amidst preparations by the Spanish government headed by Mariano Rajoy to announce the 2013 budget on Thursday. It is said to include more painful austerity measures aimed at reducing the country's widening budget deficit by more than 60 billion euros by 2014.
The benchmark Spanish 10-year bond yields moved closer to the 6 percent level after Catalan regional government called for a referendum to decide whether it should be vested with more autonomy.
Philadelphia Federal Reserve President Charles Plosser said Tuesday that the Fed's third round of quantitative easing is not likely to do much to benefit growth or employment. He said the move risks the central bank's credibility.
Meanwhile, a report in German newspaper Bild said the Bundesbank was preparing a lawsuit against the European Central Bank, claiming that the central bank is overstepping its mandate in launching the latest round of bond buying program, known as the Outright Monetary Transactions.
In economic news, French consumer confidence dropped slightly in September to 85 from 86 in August, weighed down by households' weak assessment about future economic situation as well as labor market conditions, Insee said. The index was forecast to remain steady at 86.
Germany's Federal Statistical Office is scheduled to release flash inflation data at 8.00 am ET. EU harmonized inflation is expected to slow marginally to 2.1 percent in September from 2.2 percent in August.
The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.93 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 1.09 percent.
The German DAX is declining 1.56 percent and the French CAC 40 is dropping 2.01 percent. The UK's FTSE 100 is losing 1.15 percent and Switzerland's SMI is falling 0.90 percent.
In Frankfurt, Deutsche Bank is declining 3.2 percent and Commerzbank is falling 3 percent. Infineon Technologies is losing 3.1 percent. Jefferies cut the stock to "Underperform" from "Hold." Continental is losing 2.8 percent. Schaeffler Verwaltungs GmbH sold 20.8 million shares of the company on Tuesday.
Morgan Stanley removed Lufthansa from "Best Ideas List.'' The stock is losing 1.1 percent. Volkswagen, BMW and Daimler are declining between 2 percent and 1.5 percent.
In Paris, Credit Agricole, Societe Generale and BNP Paribas are declining between 4.5 percent and 3.2 percent. Grocery retailer Carrefour is declining 4 percent, carmaker Renault is losing 3.7 percent and telecom equipment firm Alcatel Lucent is dropping 3.5 percent.
STMicroelectronics is declining 3.2 percent. S&P Equity cut its rating on the stock.
In London, Among miners, Kazakhmys, Vedanta and Anglo American are losing between 3.1 percent and 3 percent. Russian steelmaker Evraz is falling 3.7 percent. Royal Bank of Scotland is declining 3 percent and Barclays is losing 2.9 percent. Standard Chartered is down 2.6 percent.
ICAP is declining 4.2 percent as the inter-dealer broker expects revenues for the first half to be about 14 percent lower than the previous year.
London Stock Exchange is falling 1.4 percent after stating that trading remained subdued in the 5-month period ended August 31.
Myriad Group is plunging 17.6 percent in Zurich. The software developer launched a rights issue of 10.0 million Swiss francs and reported a wider loss for the first half of the year. |
| Asia Market | | Asian Stocks Extend Declines On Mounting Growth Worries
Asian stock markets fell across the board on Wednesday, as continued tensions between China and Japan, lingering uncertainty over when Spain will seek a bailout and apprehensions about the effectiveness of recent central-bank actions cast a shadow on global growth prospects.
International ratings agency Standard & Poor's Corp. on Tuesday lowered its 2012 and 2013 growth expectations for the euro zone, reflecting concerns that the region is entering a new period of recession. The International Monetary Fund is set to lower its growth estimates for the global economy next month when it updates its projections.
Concerns over Europe's economic situation also weighed on risk appetite as thousands of protesters marched on Madrid's parliament building expressing angst against a new round of harsh austerity measures the government prepares to unveil in its draft budget plan for 2013 on Thursday. Spain, meanwhile, is set to disclose the results of a stress test of 14 Spanish banking groups by Oliver Wyman on Friday, which along with the new structural reforms expected to be unveiled will determine whether the country will ask for a full bailout.
German finance minister Wolfgang Schaueble called on Spain to make a decision on whether it needed a bailout, saying the country needs to regain confidence of the markets.
In Greece, trade unions have called a nationwide general strike today to protest against planned new spending cuts worth nearly 12 billion euros over the next two years that Greece has promised international creditors in an effort to secure its next tranche of aid.
Japanese shares fell to a two-week low, as many stocks went ex-dividend and the yen's continued strength on global growth concerns weighed on export-reliant companies. The Nikkei average fell over 2 percent to end below the 9,000 mark for the first time since Sept. 13, with aviation stocks, electronics makers and transport equipment companies suffering the biggest losses.
The broader Topix index also lost 2 percent, weighed down by domestic political uncertainty after the main opposition party chose former prime minister and security hawk Shinzo Abe as its new leader, strengthening calls for a hard line against China. The ruling party is expected to suffer a serious setback in general elections expected this year due to the upcoming tax hikes.
Toyota and Nissan fell about 3 percent each amid reports that they are scaling back production in China after the foreign ministers of China and Japan held stern talks on a bitter territorial dispute but made no breakthrough. China-related Komatsu and Hitachi Construction Machinery also fell over a percent each.
Sony tumbled 4.5 percent after Standard & Poor's Ratings Services downgraded its long-term credit ratings on the company by one notch, citing a slow recovery in the company's mainstay consumer electronics business. Exporter Canon plunged 4.5 percent, Honda Motor slumped 4.2 percent and Panasonic dropped 2.5 percent.
China's Shanghai Composite index fell 1.2 percent to its lowest level since early 2009 as caution crept in ahead of the upcoming extended "Golden Week" holiday staring September 30. Hong Kong's Hang Seng index ended down 0.8 percent, dragged down by retailers after fashion retailer Esprit Holdings reported weaker-than-expected annual results.
Australian shares fell modestly on worries about Spain's fiscal strains ahead of Thursday's budget. The benchmark S&P/ASX 200 and the broader All Ordinaries index fell about 0.3 percent each, with gains in defensive stocks limiting further downside. Mining stocks extended their recent losses on pessimism about global growth prospects in light of the continuing downturn in China. BHP Billiton fell 1.3 percent, Rio Tinto lost 2 percent and gold miner Newcrest edged down 0.3 percent.
Banks also drifted lower, a day after the Reserve Bank of Australia said the domestic financial system was well placed to cope with any shocks from abroad. Westpac edged down marginally, ANZ slipped 0.2 percent and NAB retreated 0.6 percent, while Commonwealth added 0.1 percent. Nexus Energy ended on a flat note after Seven West Media chief executive and former Woodside boss Don Voelte joined its board as non-executive chairman.
Seoul shares hit a two-week low on growth worries following hawkish comments from Federal Reserve Bank of Philadelphia President Charles Plosser. The benchmark Kospi average fell 0.6 percent, dragged down by builders amid reports which indicated that Kukdong Engineering & Construction may go bankrupt due to ongoing problems with liquidity.
New Zealand shares fell from a 4 1/2-year high, in line with broad-based losses across Asia. The benchmark NZX-50 index slid 16 points 0.4 percent to 3,809, with Fletcher Building and SkyCity Entertainment Group pacing the decliners on going ex-dividend. Shares of the nation's largest construction company fell 3 percent, while those of SkyCity tumbled 3.6 percent. Among other prominent decliners, stock exchange operator NZX, carpet maker Cavalier and resins maker Nuplex lost 2-4 percent.
Children's clothing retailer Pumpkin Patch ended unchanged ahead of its annual results tomorrow, heavyweight Telecom edged up 0.2 percent and online auction site Trade Me rose half a percent. New Zealand Oil & Gas gained 0. 6 percent after the company confirmed it would drill the Taranaki oil and gas prospect, Kakapo.
Elsewhere, India's benchmark Sensex was down 0.4 percent, Indonesia's Jakarta Composite index fell 1.1 percent, Singapore's Straits Times was losing 0.7 percent and the Taiwan Weighted average retreated 0.8 percent, while Malaysia's KLSE Composite was up marginally. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | | Crude Slips Near $90
The price of crude oil was extending losses for a third session Wednesday morning as traders await cues from the official inventories data due out later today.
Light Sweet Crude Oil (WTI) futures for November delivery shed $0.68 to $90.69 a barrel. Yesterday, oil extended losses to settle near a 2-month low as the dollar rebounded to trade higher after comments from Philadelphia Federal Reserve President Charles Plosser dampened investor sentiments. Plosser indicated the Fed may have to raise short-term interest rates before mid-2015 and believes the current round of quantitative easing would not do much for the economy.
Tuesday after the market hours, the API said U.S. crude oil inventories rose 335,000 barrels and gasoline stocks added 112,000 barrels in the weekended September 21.
This morning, the U.S. dollar was steady near a 2-week high versus the euro and trading higher against sterling. The buck was moving higher versus the Swiss franc, while continued to tick lower against the yen.
In economic news, euro zone leading index recorded its first increase in six months, rising 0.6 percent month-on-month in August to 105.3, the Conference Board said.
Traders will look to the new home sales report for August from the Commerce Department, due out at 10 a.m. ET. The consensus estimate calls for new homes sales of 380,000 compared to 372,000 in July.
Today during trading hours, the EIA will come out with its U.S. crude oil inventories report for the weekended September 21. Analysts expect crude oil inventories to jump by 1.5 million barrels and gasoline stocks are seen unchanged. |
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