ECB News, Jobs Data Drives Stocks Higher At The Open Stocks moved sharply higher at the start of trading on Thursday, as traders reacted positively to the latest news out of the European Central Bank along with a batch of upbeat U.S. employment data. The major averages jumped into positive territory after ending the previous session mixed.
The major averages have not seen much follow-through on their initial upward move but remain firmly positive. The Dow is up 149.48 points or 1.2 percent at 13,196.96, the Nasdaq is up 32.34 points or 1.1 percent at 3,101.61 and the S&P 500 is up 15.40 points or 1.1 percent at 1,418.84.
The initial strength on Wall Street came on the heels of ECB President Mario Draghi's remarks at a press conference following the central bank's monetary policy meeting.
The Labor Department released a separate report showing a bigger than expected drop in first-time claims for unemployment benefits in the week ended September 1st.
The release of the upbeat jobs data has generated some optimism about the outlook for the Labor Department's monthly jobs report, which includes government jobs. The report is expected to show an increase of about 125,000 jobs in August.
Most of the major sectors have moved to the upside in early trading, reflecting broad based buying interest on Wall Street.
Semiconductor stocks are turning in some of the market's best performances, driving the Philadelphia Semiconductor Index up by 1.8 percent. Banking, steel, networking, and software stocks are also posting notable gains.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday. While Japan's Nikkei 225 Index closed only just above the unchanged line, Hong Kong's Hang Seng Index rose by 0.3 percent and China's Shanghai Composite Index advanced by 0.7 percent.
The major European markets have also shown notable moves to the upside on the day. The U.K.'s FTSE 100 Index is up by 1.2 percent, the German DAX Index is up by 1.8 percent and the French CAC 40 is up by 2.4 percent.
In the bond market, treasuries have moved notably lower amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.7 basis points at 1.651 percent.
| Canadian Market Report |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Jumps At Open Thursday
Bay Street opened higher Thursday as commodities moved up after the ECB agreed new bond buying program. The S&P/TSX Composite Index gained 84.32 points or 0.70 percent to 12,074.46.
The Diversified Materials Index gathered nearly 2 percent, with First Quantum Minerals adding about 3 percent. Teck Resources and Inmet Mining rose close to 2 percent each.
In the oil patch, Canadian Natural Resources, Cenovus Energy , Suncor Energy and Baytex Energy Corp. were up around 2 percent each.
Among gold plays, Detour Gold rose close to 3 percent, while Goldcorp. was adding nearly 2 percent.
Meanwhile, Gold miner AuRico Gold Inc. was extending losses for a second session, dipping close to 2 percent after it yesterday cut its 2012 production outlook.
Enbridge Inc. slipped nearly 1 percent after announcing plans to invest up to $600 million to expand Enbridge Gas Distribution's natural gas distribution system.
Crude oil futures are adding $0.73 to $96.09 a barrel after rising $0.06 to $95.36 a barrel on Wednesday.
The weekly inventory report released by the American Petroleum Institute late Wednesday showed that crude oil inventories rose by 5.5 million barrels in the week ended September 1st.
An ounce of gold is currently fetching $1,706.70 an ounce, up $2.70 from the previous session’s close of $1,694 an ounce. On Wednesday, the precious metal slid $2.
Among currencies, the U.S. dollar is trading at 78.86 yen compared to the 78.39 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2591 compared to yesterday’s $1.2601.
| European Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Rise Ahead Of ECB Decision
The European markets are moderate to notably higher in afternoon trading Thursday, ahead of the all-important decision from the European Central Bank. Resource stocks and banks are seeing momentum. The Asian markets rose, the U.S. index futures are higher and Spanish borrowing costs fell, with all eyes on ECB president Mario Draghi.
Draghi is expected to announce measures to battle the sovereign debt crisis that has plagued the euro area, which could include buying bonds of peripheral governments. He told European lawmakers in a closed-door meeting on Monday that the central bank is not averse to buying government bonds of up to three-year maturities on the secondary market.
The ECB is likely to cut its record low benchmark interest rate, known as the refi, to 0.50 percent from 0.75 percent. The bank will announce its rate decision at 7.45 am ET.
The Bank of England policymakers maintained the size of quantitative easing at 375 billion pounds and the record low interest rate unchanged at 0.50 percent, as expected by economists.
The U.K. government said it would relax the planning rules for building extensions on houses and business premises as part of a new package to be unveiled today, reports said. Under the planned package, an attempt to rebuild the economy, homeowners will be temporarily allowed to build extensions and carry out major renovations without seeking a planning approval.
Spain's Treasury sold 3.5 billion euros from the auction of securities, matching the upper end of the target range of 2.5 billion euros to 3.5 billion euros. It sold 682 million euros of securities maturing on April 2014, at an average yield of 2.798 percent. The cost declined from 4.706 percent at the previous auction in June.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 1.17 percent, while the Stoxx Europe 50 index, which includes some major U.K. Companies, is rising 0.75 percent.
The German DAX is adding 1.25 percent and the French CAC 40 is gaining 0.89 percent. The UK's FTSE 100 is advancing 0.55 percent and Switzerland's SMI is rising 0.54 percent.
In Frankfurt, ThyssenKrupp is gaining 2.5 percent. Outside the DAX, Salzgitter is jumping 4.3 percent. Deutsche Bank is advancing 2.4 percent and Commerzbank is gaining 1.4 percent. BMW, Volkswagen and Daimler are rising between 2.4 percent and 1.2 percent.
Lanxess is gaining 1.7 percent even after JPMorgan reduced its rating on the stock. Deutsche Boerse is falling 1.2 percent and Fresenius Medical Care is losing 0.9 percent. Infineon is down 0.2 percent. Exane BNP cut the stock to "Neutral" from "Outperform."
In Paris, Lafarge is gaining 3.3 percent. Michelin is advancing 3.2 percent. Credit Agricole is climbing 2.5 percent while BNP Paribas and Societe Generale are gaining 1.5 percent and 1.3 percent, respectively. Peugeot is gaining 2.5 percent while Renault is advancing 2.1 percent.
GDF Suez is declining 1.8 percent. Alstom and Loreal are down 0.8 percent each. UBS cut Alstom to "Neutral" from "Buy" while Loreal was downgraded at Morgan Stanley.
In London, miners are notably higher. Antofagasta is climbing 4 percent. Eurasian Natural Resources and Vedanta are rising 2.8 percent each. Randgold Resources is advancing 4.3 percent. Lonmin is rising 5.3 percent on reports of a peace deal with unions.
Lloyds Banking is up 1.3 percent and Royal Bank of Scotland is rising 1 percent. Barclays is gaining 1.1 percent even after Credit Suisse downgraded the stock.
Whitbread shares are climbing 5.4 percent. The company issued a trading update. WM Morrison Supermarkets is advancing 2.9 percent after reporting first-half results.
International Consolidated Airlines is up 1.9 percent. The firm said its wholly-owned subsidiary, British Airways, and Australia's Qantas Airways Ltd. have agreed to terminate their joint business from March 31, 2013.
May Gurney Integrated Services is plunging 43.6 percent. The firm said it faced some serious operational issues within two long-term MaGos contracts and the planned run-down of its Facility Services division. The company expects to significantly under-perform its original expectations for the current year.
ABB is gaining 3.5 percent in Zurich. UBS raised the stock to "Buy" from "Neutral." Deutsche Bank and Societe Generale reduced their ratings on Nokia. The stock is falling 4.2 percent in Helsinki. ASML is losing 0.7 percent in Amsterdam. Societe Generale cut the stock to "Hold" from "Buy." |
| Asia Market Reports | Asian Stocks Rise On ECB Optimism
Asian stocks rose broadly on Thursday, with shares paring losses in late trading, as investors waited for the European Central Bank's bond-buying announcement to support financially struggling European countries. There were some leaked reports that said ECB President Mario Draghi will announce unlimited purchases of bonds of maturity up to three years from European sovereigns to stem the heightening risk of contagion.
The bond-buying program may not offer a longer-term solution to the bloc's debt crisis, but would result in lower borrowing costs for Spain and Italy, the third and fourth largest euro zone economies, that are on the verge of collapse if denied help by the ECB.
Spanish and Italian government bond yields have fallen significantly since Draghi said on August 2 that the ECB was working on bond- buying program aimed at lowering the region's borrowing costs. The euro held the previous session's gains on expectations the ECB will unveil measures to help ease Europe's debt crisis.
Tokyo stocks ended a lackluster session little changed, as investor adopted a cautious approach ahead of the ECB meeting. After swinging between gains and losses, the Nikkei average ended up 0.75 points or 0.01 percent, while the broader Topix index rose 0.13 percent. Toyota Motor rose 1.6 percent, helped by a slightly stronger euro, while Sony fell 0.4 percent to hit a fresh 32-year low.
Shares of Sharp Corp tumbled 4.3 percent on heavy volume amid reports the company has offered almost all of its domestic offices and factories as debt collateral in order to stay in business. All Nippon Airways jumped 3.6 percent as short sellers covered positions before rival JAL announces the closing of its IPO order books Friday.
China's Shanghai Composite index rose 0.7 percent, with railway builder and train manufacturers pacing the gainers, after the government rolled out a series of plans to speed up infrastructure spending. Hong Kong's Hang Seng index rose 0.3 percent.
Australian stocks rose notably despite a flat lead from Wall Street. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 0.8 percent each, as renewed hopes that the ECB will unveil measures to help contain the debt crisis outweighed mixed unemployment data.
Australia's unemployment rate unexpectedly declined to a seasonally adjusted 5.1 percent in August from 5.2 percent in July. Meanwhile the economy lost 8,800 jobs - well below forecasts for an increase of 5,000 jobs following the addition of 14,000 jobs in the previous month, according to data released by the Australian Bureau of Statistics.
Miners ended mixed, with BHP Billiton up 0.9 percent and Rio Tinto gaining 1.7 percent, while Fortescue Metals tumbled 4.8 percent, extending recent losses after announcing plans to cut jobs and delay expansion plans in response to falling iron ore prices. In the financial sector, ANZ, Commonwealth and NAB rose between 0.2 percent and 0.6 percent, but Westpac eased 0.2 percent.
Billabong shares climbed 7.5 percent on reports the surfwear company has received its second takeover offer in six weeks, matching an earlier offer from private equity group TPG. Lynas Corporation soared over 41 percent after the company received a temporary operating license for its controversial rare earths plant in Malaysia.
South Korea's Kospi average ended 0.4 percent higher, rebounding from a one-month low hit in the previous session as investors pinned hopes on the possible ECB policy action. Heavyweight Samsung Electronics rose 0.6 percent after the technology giant said sales of its latest smartphone, the Galaxy S3, topped the 20 million mark in just 100 days since its debut in May 2012. Shares of mobile carrier KT Corp jumped 3.2 percent on reports of steadily rising customers for next-generation long-term evolution phones.
In economic news, South Korea's gross domestic product grew 0.3 percent in the second quarter of 2012 compared to the previous three months, the Bank of Korea said in a final report. That was down from July's preliminary reading that called for a 0.4 percent increase following the 0.9 percent gain in the first quarter.
New Zealand shares rose on optimism about ECB action. The benchmark NZX-50 index rose 0.7 percent, with Air New Zealand pacing the gainers with a 3.2 percent rally after the national carrier last week posted forecast-beating annual profit. Infrastructure investment firm rose 2.4 percent and airport operator Auckland International Airport added 1.2 percent.
Outdoor clothing retailer Kathmandu Holdings led the decliners on the exchange, falling 4.3 percent as investors took some profits off the table following recent gains. Gold miner OceanaGold, carpet maker Cavalier and rural services firm PGG Wrightson fell 3-4 percent.
Elsewhere, India's benchmark Sensex was last trading up 0.4 percent and Indonesia's Jakarta Composite index rose 0.7 percent, while Malaysia's KLSE Composite slid 1.4 percent, Singapore's Straits Times index edged down 0.2 percent and the Taiwan Weighted average ended down 0.6 percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Up On ECB Expectations
The price of crude oil was moving higher Thursday morning amid speculation that the ECB will announce buying of bonds of maturity up to 3 years to provide relief to troubled euro nations.
Light Sweet Crude Oil (WTI) futures for October delivery, gained $1.09 to $96.45 a barrel. Yesterday oil ended higher after some encouraging revised productivity data from the U.S., even as traders continued to weigh the outcome of the European Central Bank policy meeting Thursday, anticipating further quantitative easing measures.
Wednesday after the market hours, the API said U.S. crude oil inventories were down by 7.20 million barrels and gasoline stocks dipped 2.3 million barrels in the weekended August 31.
This morning, the U.S. dollar was lingering around its two-month low versus the euro and near a four-month low against sterling. The buck was moving up to a weekly high versus the yen, while trading flat against the Swiss franc.
In economic news, the euro zone economy contracted as estimated earlier in the second quarter, data released by statistical office Eurostat showed. Gross domestic products decreased a seasonally adjusted 0.2 percent sequentially in the second quarter, in line with the preliminary estimates. The economy contracted in the second quarter after stagnating in the first quarter.
Elsewhere, Germany's factory orders grew by a more than expected 0.5 percent in July from June, data from the Federal Ministry of Economy and Technology showed. Economists had forecast a 0.3 percent growth after declining 1.6 percent in June. Domestic demand rose 1 percent and foreign orders edged up 0.1 percent.
The Bank of England held its interest rates at record low of 0.50 percent and maintained quantitative easing at GBP 375 billion.
The European Central Bank is likely to cut its record low benchmark interest rate, known as the refi, to 0.50 percent from 0.75 percent. The bank will announce its rate decision at 7.45 a.m ET.
Traders will look to the private sector employment report from the ADP, due out at 8.15 a.m. ET. The consensus expectations are for an addition of 149,000 jobs by the sector in August following an addition of 163,000 jobs in July.
The U.S. Labor Department will release its weekly jobless claims data at 8.30 a.m ET. Economists expect the claims to decline to 370,000 from 374,000 in the previous week.
Today during trading hours, the EIA will come out with its U.S. crude oil inventories report for the weekended August 31. Analysts expect crude oil inventories to dip by 5 million barrels and gasoline stocks to shed 3.50 million barrels last week. |
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