London close: US data provides a late boost
Market Movers
- techMARK 2,143.41 +0.24%
- FTSE 100 5,825.81 +0.28%
- FTSE 250 11,872.73 -0.18%
- US services and labour figures lift stocks
- Mixed economic data in China, UK and Europe
- FTSE 100 finishes up 0.3 per cent
The UK benchmark finished with mild gains on Wednesday afternoon after some better-than-expected data from the US managed to brighten the mood, which was dampened earlier by gloomy figures from China, Europe and the UK.
In the US, ADP non-farm payrolls increased by 162,000 following a revised 189,000 rise in August (previously 201,000). The consensus estimate as for a gain of 140,000. Meanwhile, the ISM non-manufacturing purchasing managers' index (PMI) rose from 53.7 to 55.1 and ahead of the 53.4 forecast.
"The outcome of Friday's jobs numbers is likely to dictate sentiment near-term. Importantly, the decent ADP figure today has presented more downside risk by way of renewed positive expectations should non-farm disappoint," said financial trader David White from Spreadex.
Non-manufacturing PMIs in both China and the UK fell by more than expected in September, while Chinese consumer sentiment dropped to its lowest level since December. Meanwhile, the Markit Eurozone PMI composite output index (which reflects a weighted-average combination of the manufacturing and services sector in the region) hit a four-month low, though it was slightly ahead of estimates.
Spanish Prime Minister Mariano Rajoy yesterday denied claims that his country is looking to request a bailout this weekend. He said that the country had no immediate plans to ask for aid, but analysts such as Craig Erlam from Alpari say that a bailout is a "foregone conclusion".
In other news today, crude futures fell by as much as 3.5% after the US Energy Department revealed that oil production jumped to 6.52m last week, a 15-year high, while fuel consumption fell. FTSE 100: Sainsbury and Tesco head opposite ways
After an earlier fall, retailing giant Sainsbury was higher the afternoon after saying it had outperformed the market in the second quarter, with total sales up 4.4% excluding fuel and like-for-like (LFL) sales up 1.9%.
However, sector peer Tesco was still in the red after its interim results. The supermarket colossus said that pre-tax profits (pre exceptionals and property profits) fell 15%, worse-than-expected according to Seymour Pierce, which labelled them as "disappointing" this morning. The company saw a return to LFL sales growth in the second quarter, although it has had to sacrifice margin to do so.
International Airlines Group (IAG) was flying higher after saying that September traffic figures had been boosted by heavy promotional activity by British Airways during and after the Olympic Games.
Pearson, the education and publishing firm, dropped after revealing that its Chief Executive Officer Marjorie Scardino has decided to call it quits at the end of the year.
Asset manager Schroders was unwanted after UBS cut its rating on the stock from 'neutral' to 'sell'. "We believe that expectations on flows and on capital returns have led the stock to re-rate vs peers while we remain cautious on both points," the broker said.
Capita, the outsourcing group, fell after it said it is aware that the Home Office is pursuing discussions with another supplier with the intention of awarding them a contract to support the new Disclosure and Barring Service (DBS) operations, which are part of the coalition's agreement to review and reform the criminal records system.
Anglo American fell after its platinum division, Amplats, saw wildcat strikes spread to its Union Mine in Limpopo Province, to the northwest of Rustenburg.
Heading the other way was mining group Xstrata after raising its copper mineral resource estimate at the major long-life development El Pachn project in San Juan Province, Argentina, by 20%. UBS upgraded the stock, along with potential merger partner Glencore, from 'neutral' to 'buy' today, saying that the deal is "highly likely to go through".
Meanwhile, Centrica was gaining after Citigroup raised its recommendation to 'buy' and lifted its target from 315p to 360p. Analyst Robert Coates said: "This current valuation in our opinion does not reflect the defensive profile of the stock or the potential upside from deploying the increasing free cash flow."
FTSE 250 movers: FirstGroup plunges after DfT decision
Shares in transport firm FirstGroup took a hammering today after the Department for Transport (DfT) dropped the competition to award it the West Coast franchise. Following a legal challenge from current operator Virgin Rail, the DfT said it had found "significant technical flaws in the way the franchise process was conducted" and was launching a review.
Stagecoach, part owner of the Virgin Rail joint venture with Virgin Group, was in demand after saying it was in discussions with the government regarding the rail franchising review.
BTG, the specialist healthcare company, jumped after reporting it had outperformed in the first half and was boosting its revenue expectations for the full year.
Budget airline easyJet was in demand after a surge in business at the end of the summer and a benign operating environment means it was upping its full-year profit forecasts.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 163.70p +2.96%
ARM Holdings (ARM) 589.00p +2.08%
Centrica (CNA) 334.00p +1.89%
Vedanta Resources (VED) 1,061.00p +1.82%
SSE (SSE) 1,416.00p +1.80%
Carnival (CCL) 2,313.00p +1.80%
Sainsbury (J) (SBRY) 352.50p +1.64%
Hargreaves Lansdown (HL.) 644.50p +1.34%
Eurasian Natural Resources Corp. (ENRC) 316.30p +1.28%
HSBC Holdings (HSBA) 587.70p +1.24%
FTSE 100 - Fallers
Anglo American (AAL) 1,818.00p -3.04%
Tesco (TSCO) 327.95p -2.60%
Weir Group (WEIR) 1,762.00p -2.00%
Capita (CPI) 763.00p -1.61%
Croda International (CRDA) 2,409.00p -1.55%
Tullow Oil (TLW) 1,396.00p -0.99%
Johnson Matthey (JMAT) 2,417.00p -0.98%
Severn Trent (SVT) 1,665.00p -0.95%
IMI (IMI) 940.50p -0.95%
Admiral Group (ADM) 1,054.00p -0.94%
FTSE 250 - Risers
BTG (BTG) 363.20p +9.04%
Dunelm Group (DNLM) 680.00p +3.82%
easyJet (EZJ) 615.00p +3.54%
NMC Health (NMC) 194.70p +3.51%
Home Retail Group (HOME) 92.95p +3.16%
Domino Printing Sciences (DNO) 569.50p +2.98%
Yule Catto & Co (YULC) 172.90p +2.73%
London Stock Exchange Group (LSE) 980.00p +2.46%
TUI Travel (TT.) 241.00p +2.25%
Centamin (DI) (CEY) 96.00p +2.13%
FTSE 250 - Fallers
FirstGroup (FGP) 193.40p -20.74%
Ruspetro (RPO) 101.50p -5.58%
PayPoint (PAY) 741.00p -3.77%
Morgan Crucible Co (MGCR) 271.50p -3.35%
Lonmin (LMI) 537.00p -3.33%
Pace (PIC) 166.80p -2.91%
Inmarsat (ISAT) 570.00p -2.56%
Spirent Communications (SPT) 150.60p -2.40%
Smith (DS) (SMDS) 186.80p -2.35%
Diploma (DPLM) 465.00p -2.31%
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Europe close: US numbers compensate for weak Spanish data
-Eurozone services PMI slightly ahead of forecasts
-Spanish 10 year bonds are up by 6 basis points to 5.81%
-Weak Spanish services PMI reading
FTSE-100: 0.28%
Dax-30: 0.22%
Cac-40: -0.24%
FTSE-Mibtel 30: 0.25%
Ibex 35: -0.51%
Stoxx 600: -0.09%
European equities finished the day in a mixed fashion despite the release of important economic indicators Stateside this afternoon. That as investors hold out for tonight's televised election debate, the first in this US Presidential campaign. Worth noting in that regard, some of the latest polls now point to Obama holding on to a small lead.
Vestas Wind Systems fell after a lacklustre performance on the part of management at a capital markets day for the firm.
Telefonica has announced its intention to float its German unit this October.
Catering services firm Sodexo is climbing after Credit Suisse Group AG raised the company to outperform, from neutral.
From a sector stand-point the best performance on the DJ Stoxx 600 was seen in the following industrial groups: Utilities (0.66%), Food (0.23%) and Travel&Leisure (0.22%). Positive surprise in Eurozone retail sales, but...
The Eurozone services sector purchasing managers' index for the month of September has come in at 46.1 points, versus 46.3 for the month before (Consensus: 46).
Chris Williamson, Chief Economist at Markit said: "The final Eurozone PMI came in slightly higher than the flash estimate but still signalled one of the steepest monthly downturns seen over the past three years. It seems inevitable that the region will have fallen back into recession in the third quarter."
The Irish unemployment rate for the month of September has remained unchanged at 14.8%, although the previous month's reading has been revised up by a tenth of a percentage point.
Eurozone retail sales rose by 0.1% month-on-month in August (Consensus: -0.1%). The previous month's reading was revised up to show a gain of 0.1% on month versus a preliminary estimate of -0.2%.
Worth pointing out, the extremely weak reading for today's Spanish services sector PMI, which came in at 40.2 (Consensus: 42), after a reading of 44 for August.
Oil futures fall
The euro/dollar is now down by 0.10% to the 1.2906 dollar mark.
Front month Brent crude futures are off by 2.273 dollars to the 109.09 dollar level on the ICE at the moment.| US Market Report | US mid-morning: Positive data surprises buoy stocks
-Positive data surprises
-Sharp fall in crude futures
-Krugman: US and EU nowhere close to ending financial crisis
-Mortgage refinancings rise by 16.6 per cent
-HP plummets after warning
Dow Jones Industrial: 0.26%
Nasdaq Comp.: 0.61%
S&P 500: 0.50%
US equities are moving forward following the release of better than expected macroeconomic data this morning and despite a sharp fall in crude futures which is weighing down on the most heavily capitalized equity sector of them all energy.
That ahead of tomorrow's meetings of the Bank of England (BoE) and the European Central Bank (ECB), not to mention this next Friday's monthly employment report Stateside and tonight's televised Presidential debate, the first of the season. Hewlett Packard guides lower
On the corporate front, consumer electronics retailer Best Buy is seeing buying interest on reports that buy-out firms, as well as its founder, are sniffing about. Private equity snipers are also said to be putting grocery chain Supervalu in their sites, with a view to breaking it up.
Hewlett Packard is leading fallers on the Dow Jones after guiding for earnings per share this year of between 3.40 and 3.60 dollars, versus the 4.18 expected by the analyst consensus.
Sticking with the retail sector, Family Dollar Stores banged out fiscal fourth quarter earnings per share of 69 cents on the back of 11% year-on-year sales growth.
Monsanto is down after providing lower than expected full-year earnings per share guidance.
Mortgage refinancings make a come-back?
Payrolls processing firm ADP's September report indicated the private sector added 162,000 names to its payrolls, following a revised 189,000 increase in August (down from a preliminary reading of 201,000). Market pundits had been expecting September's rise to be of around 140,000.
Of note, gains were led by small company hiring (+81,000).
The ISM non-manufacturing sector index for September has printed at 55.1, following a reading of 53.7 for August (Consensus: 53.4). 50.0 is the cut-off point between expansion and contraction.
The new orders sub-index rose to 57.7 from 53.7 previously.
Not to be dismissed, mortgage refinancings increased at a 16.6% clip last week. Sharp fall in West Texas crude futures
Front month West Texas crude futures are down by 2.99 dollars after the US Energy Department said crude output rose 11,000 barrels a day to 6.52m last week, the most since December 1996.
10 year US Treasuries are now falling by 3/32 dollars, with yields at 1.63%.S&P 500 - Risers
Netflix Inc. (NFLX) $61.33 +8.63%
Lennar Corp. Class A (LEN) $37.50 +7.17%
PulteGroup Inc. (PHM) $16.55 +6.36%
D. R. Horton Inc. (DHI) $21.98 +6.13%
Sprint Nextel Corporation (S) $5.09 +3.98%
Masco Corp. (MAS) $15.96 +3.84%
Family Dollar Stores Inc. (FDO) $68.42 +3.66%
Best Buy Co. Inc. (BBY) $17.58 +3.59%
Crown Castle International (CCI) $66.62 +3.14%
Salesforce.Com Inc. (CRM) $157.54 +3.01%
S&P 500 - Fallers
Metropcs Communications Inc. (PCS) $12.50 -7.90%
Hewlett-Packard Co. (HPQ) $15.85 -7.48%
Helmerich & Payne Inc. (HP) $45.74 -3.07%
Advanced Micro Devices Inc. (AMD) $3.17 -3.06%
First Solar Inc. (FSLR) $22.26 -2.71%
Newfield Exploration Co (NFX) $30.40 -2.56%
Chesapeake Energy Corp. (CHK) $19.04 -2.56%
Phillips 66 Common Stock (PSX) $45.24 -2.55%
Baker Hughes Inc. (BHI) $43.96 -2.51%
Nabors Industries Ltd. (NBR) $13.66 -2.50%
Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.10 +1.90%
Walt Disney Co. (DIS) $52.59 +1.84%
Home Depot Inc. (HD) $61.30 +1.61%
AT&T Inc. (T) $38.24 +1.14%
Cisco Systems Inc. (CSCO) $19.08 +1.11%
Wal-Mart Stores Inc. (WMT) $74.57 +1.11%
Procter & Gamble Co. (PG) $69.47 +0.99%
Microsoft Corp. (MSFT) $29.93 +0.90%
Pfizer Inc. (PFE) $25.33 +0.84%
Merck & Co. Inc. (MRK) $45.83 +0.79%
Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $15.85 -7.48%
Chevron Corp. (CVX) $116.91 -0.89%
Caterpillar Inc. (CAT) $85.08 -0.46%
Alcoa Inc. (AA) $8.82 -0.34%
Exxon Mobil Corp. (XOM) $91.62 -0.11%
McDonald's Corp. (MCD) $90.85 -0.09%
Intel Corp. (INTC) $22.83 -0.04%
Nasdaq 100 - Risers
Netflix Inc. (NFLX) $61.33 +8.63%
Sirius Satellite Radio Inc. (SIRI) $2.69 +2.67%
Expedia Inc. (EXPE) $57.85 +2.09%
CH Robinson Worldwide Inc (CHRW) $59.73 +1.93%
Express Scripts Holding Co (ESRX) $64.98 +1.84%
Intuit Inc. (INTU) $60.86 +1.69%
Virgin Media Inc. (VMED) $30.42 +1.67%
Sears Holdings Corp. (SHLD) $56.32 +1.66%
Yahoo! Inc. (YHOO) $16.20 +1.63%
Gilead Sciences Inc. (GILD) $70.26 +1.57%
Nasdaq 100 - Fallers
NetApp Inc. (NTAP) $31.69 -2.34%
Research in Motion Ltd. (RIMM) $8.12 -1.81%
Apollo Group Inc. (APOL) $28.50 -1.77%
Green Mountain Coffee Roasters Inc. (GMCR) $23.59 -1.67%
Fossil Inc. (FOSL) $85.35 -1.41%
Dell Inc. (DELL) $9.79 -1.11%
Randgold Resources Ltd. Ads (GOLD) $123.10 -0.86%
Altera Corp. (ALTR) $33.71 -0.85%
Seagate Technology Plc (STX) $30.06 -0.74%
Baidu Inc. (BIDU) $111.51 -0.73% |
| Broker Tips | Broker tips: Tesco, Schroders, FirstGroup
Seymour Pierce has retained its 'reduce' rating for supermarket giant Tesco after the group's first-half profits came in well below expectations.
Tesco this morning reported a 15% drop in first-half profit before tax (pre exceptionals and property profits) to 1,497m, under Seymour Pierce's 1,603m forecast. Trading profits fell in the UK, Asia and in Europe, while US losses were worse than expected.
"The market was prepared for a decline in profits but this is a disappointing statement even in that context we believe," said analyst Kate Calvert.
UBS has cut its recommendation for asset manager Schroders from 'neutral' to 'sell', saying that expectations are too high.
"We downgrade Schroders to 'sell' as we believe that expectations on flows and on capital returns have led the stock to re-rate vs peers while we remain cautious on both points," the broker said.
Jefferies has reiterated its 'hold' recommendation for transport firm FirstGroup after the government's decision to cancel the West Coast franchise competition, adding that it will have an adverse impact on sector peers Go-Ahead and National Express.
Delays in the franchising process are small negatives for Go-Ahead and National Express, the broker said, as they are shortlisted in the other live franchise contests: the Great Western, Essex Thameside and Thameslink franchises' timetables will likely be delayed as a result of the governmental reviews. |
| | | | | |
|
No comments:
Post a Comment