Bargain Hunting Leads To Initial Strength On Wall Street
Stocks moved higher at the start of trading on Thursday, regaining some ground after moving mostly lower over the past few sessions. The major averages all moved to the upside but have not seen much follow-through on the initial upward move.
The major averages have pulled back off their highs for the young session but currently remain in positive territory. The Dow is up 35.79 points or 0.3 percent at 13,380.76, the Nasdaq is up 19.08 points or 0.6 percent at 3,070.86 and the S&P 500 is up 7.49 points or 0.5 percent at 1,440.05.
The initial strength on Wall Street came as some traders looked to pick up stocks at reduced levels following the recent weakness, which pulled the major averages down to their lowest closing levels in about a month.
Adding to the early buying interest, the Labor Department released a report showing an unexpected drop in weekly jobless claims. The decrease pulled jobless claims down to their lowest level in over four years.
The report said initial jobless claims tumbled to 339,000 from the previous week's revised figure of 369,000. The drop surprised economists, who had expected jobless claims to edge up to 370,000 from the 367,000 originally reported for the previous month.
Jim O'Sullivan, Chief U.S. Economist at High Frequency Economics, said, "The big drop was apparently mostly from one state, likely due in part at least to seasonal adjustment challenges relating to the start of the quarter. Officials did not name the state, but it had to be a major one, and we suspect California." "While the drop is almost certainly exaggerated, the trend in claims looks flat at worst," he added. "If anything, the data are raising the possibility that some new strengthening in the labor market is under way. Claims remain important to watch."
Lingering concerns about the outlook for the global economy have helped to limit the upside for the markets, however, with the Commerce Department releasing a separate report showing a notable drop in U.S. exports.
Nonetheless, biotechnology stocks have shown a strong move to the upside in early trading, driving the NYSE Arca Biotechnology Index up by 1.1 percent. Vertex (VRTX) has helped to lead the sector higher.
Steel, banking, and chemical stocks are also posting notable gains, while most of the major sectors have shown more modest moves to the upside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday following the negative lead from Wall Street. Japan's Nikkei 225 Index fell by 0.6 percent, while China's Shanghai Composite Index ended the day down by 0.8 percent.
Meanwhile, the major European markets are regaining some ground following recent weakness. While the U.K.'s FTSE 100 Index is up by 0.9 percent, the German DAX Index and the French CAC 40 Index are advancing by 1.1 percent and 1.3 percent, respectively.
In the bond market, treasuries have moved moderately lower on the heels of the upbeat jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.1 basis points at 1.722 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Up At Open Thursday
Toronto stocks opened higher Thursday amid buying across a variety of sectors, with the S&P/TSX Composite Index adding 45.86 points or 0.38 percent to 12,258.28.
The Diversified Materials Index rose nearly 2 percent, with Teck Resources and First Quantum Minerals adding about 2 percent each.
In the oil patch, Niko Resources gained close to 4 percent. MEG Energy and Pacific Rubiales Energy gathered nearly 2 percent each
Among gold plays, Detour Gold rose 2 percent and Agnico-Eagle Mines added 1 percent. Sports goods and apparels maker Bauer Performance Sports edged up 0.60 percent after it said that it would buy Inaria International for C$7.0 million in cash.
Meanwhile, construction and industrial services company The Churchill Corp. dived 4 percent after it said it bagged a 3 year maintenance contract worth $120 million.
In the commodities market, the price of crude oil was moving higher Thursday morning as traders await cues from the official inventories data from the EIA, due out later today. Also, tensions between Syria and Turkey, and a steady euro supported prices. Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended October 05. Analysts expect crude oil inventories to jump 1.50 million barrels, while gasoline stocks are seen little changed.
Crude for November gained $1.32 to $92.57 a barrel.
The price of gold was ticking higher Thursday morning as the euro was steady even after the downgrade of Spain's sovereign rating by the rating agency Standard & Poor's. Gold for December added $5.20 to $1,770.30 an ounce.
In corporate news from Canada, Novagold Resources posted a significantly narrower third-quarter net loss of C$21.5 million or C$0.08 per share versus a C$52.1 million or C$0.22 per share loss last year.
Sports goods and apparels maker Bauer Performance Sports said that it would buy Inaria International for C$7.0 million in cash to to enter the large and growing uniform market.
Oil and gas firm NiMin Energy Corp. announced that its common shares will be voluntarily delisted from the TSX after the close of trading on October 22, 2012 and its listing will be transferred to the NEX, a separate board of the TSX Venture Exchange, effective as of market open on October 23, 2012.
Construction and industrial services company The Churchill Corp. said it bagged a 3 year maintenance contract worth $120 million, which included a 2 year option, worth an additional $80 million from an oil sands producer in the Fort McMurray region. Further, the company said it reduced its corporate workforce by 20 percent to save $4 million-$6 million annually and guided full-year 2012 EBITDA in the range of $37 million- $42 million
Precious metal miner Mountain Province Diamonds announced that it has filed a rights offering circular with the TSX and the securities regulators in each of the provinces of Canada to raise gross proceeds of about $47.1 million
Aerospace and defense electronics product maker Firan Technology Group Corp. reported a lower third quarter net earnings of C$155,000 or C$0.01 per share compared to C$332,000 or C$0.02 per share last year.
Engineering company Semcan Inc. announced that Remy Stachowiak, President of the operating division STT Stanco, has left the Company as of October 10, 2012.
In economic news, Statistics Canada said the merchandise imports fell 3.1 percent and exports edged down 0.1 percent in August. As a result, the nation's trade deficit with the world narrowed from $2.5 billion in July to $1.3 billion in August. Separately, the agency said the New Housing Price Index (NHPI) rose 0.2 percent in August, following a 0.1 percent increase in July. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Trading Higher Amid Buoyant Corporate News
The European markets are trading higher in afternoon trading Thursday, as investors shrugged off Spain's downgrade by Standard & Poor's and welcomed some positive corporate news from the region. That said, debt concerns continued to linger in the background, limiting the upside.
Standard & Poor's lowered Spain's long-term credit rating by two notches to "BBB-" from "BBB+" with a negative outlook, citing a deepening recession and growing concerns about the country's ability to deal with the region's debt crisis. The S&P's rating action brings it in line with Moody's Baa3 rating.
Meanwhile, International Monetary Fund Managing Director Christine Lagarde said the struggling euro area member Greece requires two more years to meet its budget targets and should be brought back to its feet.
"This is what we advocated for Portugal, this is what we advocated for Spain, and this is what we are advocating for Greece, where I said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation program that is considered," Lag arde said at a news conference ahead of the IMF-World Bank annual meetings in Tokyo.
The European Central Bank said in its monthly bulletin that the governments should continue to implement necessary measures to reduce fiscal and structural imbalances. The bank said Eurozone countries should proceed further with financial sector restructuring measures.
Italy's borrowing costs for three-year funds increased at a bond auction as Spain's rating downgrade coupled with the uncertainty about that country's bailout request weighed on investor sentiment.
The Treasury sold 3.75 billion euros of its three-year benchmark BTPs. The yield climbed to 2.86 percent from 2.75 percent at the prior auction on September 13.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.55 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.44 percent.
The German DAX is gaining 0.76 percent and the French CAC 40 is rising 0.62 percent. The UK's FTSE 100 is advancing 0.59 percent and Switzerland's SMI is advancing 0.28 percent.
In Frankfurt, Deutsche Bank is gaining 2.3 percent and Commerzbank is rising 1.8 percent. Lanxess and Lufthansa are advancing 2 percent and 1.8 percent, respectively. Suedzucker is up 1.1 percent after reporting higher first-half profit.
HSBC cut Fresenius to "Neutral" from "Overweight." The stock is up 0.5 percent. Siemens is losing 0.6 percent. Deutsche Bank cut the stock to "Hold" from "Buy." Pfeiffer Vacuum is declining close to 6 percent. Deutsche Bank cut the stock to "Sell" from "Hold."
Carl Zeiss is falling 2.4 percent after HSBC reduced its rating on the stock. Qiagen is losing 1.2 percent on a broker downgrade.
In Paris, Carrefour is gaining 3.8 percent. Luxury group LVMH is gaining 3.2 percent. Credit Agricole and Societe Generale are advancing 2.9 percent and 2.3 percent, respectively. BNP Paribas is moderately higher.
Alcatel Lucent is falling 2.3 percent. EADS is losing 1.4 percent even though several analysts upgraded the stock after the company dropped its merger plan with BAE Systems.
BAE Systems, which also received positive broker recommendations after the decision, is up 2 percent in London.
In the U.K., Burberry is leading the gainers by jumping 10.2 percent. The luxury group said in a trading update that first-half revenues improved despite weakness in China and the U.K.
Croda is gaining 3.6 percent and Petrofac is rising 2.8 percent. WM Morrison Supermarkets is falling 1.5 percent. Credit Suisse reduced its rating on the stock.
WH Smith is dropping 3.5 percent. The retailer reported lower revenues for the year and announced the departure of its Chief Executive Kate Swann after nine years in the role.
| Asia Market | Asian Stocks Fall On Growth, EU Debt Worries
Asian stocks fell across the board on Thursday, as Spain's credit rating downgrade by Standard & Poor's intensified concerns over the future of Europe. With Spain resisting a bailout, EU leaders still remaining divided over a banking union and Greece struggling to fulfill a debt-reduction program, investors fear that the regional debt crisis could worsen.
Global growth worries, apprehensions about earnings growth outlook and the ongoing territorial dispute between Japan and China also kept investor mood cautious. Japan's core machinery orders fell more than expected in August, while Australian unemployment rose to its highest level in more than two years, separate reports released today showed, reinforcing worries about the global economy.
Downgrading Spain's credit rating to 'BBB-' from 'BBB+', just above junk territory, S&P warned that "rising tensions" between the central government and Spain's semi-autonomous regions as well as "increasing social discontent" and the government's "hesitation" to request a bailout from the European Union would continue to put strain on the nation's creditworthiness.
Japanese shares extended losses for a third straight session on concerns over the negative effects of a strong yen and the strained relations between China and Japan over the Diaoyu Islands dispute on the economy and corporate earnings. The Nikkei average lost 0.6 percent, while the broader Topix index slid 0.4 percent.
Among the prominent decliners, automakers like Honda Motor, Nissan Motor and Toyota fell between 0.6 percent and 1.4 percent, metal shares such as Sumitomo Metal Mining lost 1.8 percent and heavyweight Fanuc lost 2.7 percent on a brokerage downgrade. On the positive side, utilities Kansai Electric Power and Kyushu Electric Power jumped about 5 percent each on bargain hunting after recent sell-off.
In economic news, core machine orders in Japan dipped a seasonally adjusted 3.3 percent from the previous month to 717.3 billion yen in August, the Cabinet Office said today - contracting for the first time in three months. The headline figure missed forecasts for a contraction of 2.3 percent following the 4.6 percent increase in July and the 5.6 percent jump in June.
China's Shanghai Composite index fell 0.8 percent on economic worries, while Hong Kong's Hang Seng index rose 0.4 percent, led by mainland banking and infrastructure stocks on hopes of more stimulus measures from Beijing.
Australian shares weakened after the monthly employment report painted a mixture picture of the economy. The country hired more jobs than expected in September, while the unemployment rate increased 0.3 percent to a near two-and-a-half-year high of 5.4 percent in the month, the Australian Bureau of Statistics reported.
A separate survey by the Melbourne Institute survey of consumer inflationary expectations showed that inflation expectations among Australian consumers increased slightly to 2.6 percent in October, remaining within the central bank's target band of 2-3 percent.
Both the benchmark S&P/ASX 200 and the broader All Ordinaries index slipped about 0.2 percent each. Global miners BHP Billiton and Rio Tinto recouped some early losses to close the session down around 0.7 percent each, while smaller rival Fortescue lost 2.3 percent. Gold miner Newcrest ended little changed as gold prices rebounded from four days of losses.
Banks gained ground as investors weighed the prospects of a rate cut in November. ANZ, NAB and Commonwealth rose about 0.2 percent each, while Westpac gained 0.3 percent. Lynas plunged 15 percent after a Malaysian Court delayed the start of production at its controversial rare earth plant near Kuantan. IIuka Resources slumped 6.6 percent after the mineral sands miner reported a 58 percent fall in third-quarter sales revenue.
Seoul shares extended declines for a fourth consecutive session, weighed down by concerns about China's slowing growth and lingering issues in the Eurozone. The Kospi average fell 0.8 percent to a one-month low, as options expired and the Bank of Korea cut interest rates and slashed economic growth forecasts for this year and next in a bid to bolster growth, hit by falling exports and weak domestic demand. Index heavyweights Samsung Electronics and Hyundai Motors fell around 2 percent each, while shares of state-owned utility Korea Electric Power rose a percent.
New Zealand shares fell slightly in quiet trading taking cues from weak global markets. The benchmark NZX-50 index slipped 0.1 percent. Steel & Tube fell 1.8 percent, extending the previous session's loss, after Australian company Arrium sold its 50.3 percent shareholding in the company at a 15 percent discount to Tuesday's closing price.
Logistics firm Mainfreight, insurer Tower, clothing retailer Hallenstein Glassons, rural services firm PGG Wrightson and courier & data management company Freightways fell 2-4 percent, while shares of New Zealand Oil & Gas gained 1.8 percent after the company bought a small stake in a deepwater exploration permit. Gold miner OceanaGold climbed 4.4 percent, Fletcher Building, the nation's largest construction company, rose 1.1 percent and carpet maker Cavalier added 1.6 percent.
Elsewhere, Malaysia's KLSE Composite edged down 0.2 percent and the Taiwan Weighted average lost 1.9 percent, while India's benchmark Sensex was up 0.9 percent, Indonesia's Jakarta Composite index rose 0.1 percent and Singapore's Straits Times index was up marginally. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Up Ahead Of Inventories Data
The price of crude oil was moving higher Thursday morning as traders await cues from the official inventories data from the EIA, due out later today. Also, tensions between Syria and Turkey, and a steady euro supported prices.
Light Sweet Crude Oil (WTI) futures for November delivery, gained $0.79 to $92.04 a barrel. Yesterday, oil settled lower as investors weighed demand growth concerns and supply concerns from the tension build-up between Turkey and Syria in the Middle East.
Wednesday after the market hours, the API said U.S. crude oil inventories rose 1.65 million barrels and gasoline stocks added 2.5 million barrels in the weekended October 05.
The price of gold was ticking higher Thursday morning as the euro was steady even after the downgrade of Spain's sovereign rating by the rating agency Standard & Poor's
Earlier today, Standard & Poor's Ratings Services downgraded its sovereign ratings on Spain by two notches to the lowest investment grade, citing the mounting risks to public finances from rising economic and political pressures.
Gold for December delivery, the most actively traded contract, added $7.60 to $1,772.70 an ounce. Yesterday, gold ended flat amid euro zone worries and global economic growth concerns with the International Monetary Fund warning on the world economy. The uncertainty over Spain continued with the beleaguered nation still refusing to seek financial aid.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at a record high of 1,340.52 tons.
This morning, the U.S. dollar was hovering near its two-week high versus the euro and easing from a monthly high against sterling. The buck was trading flat versus the Swiss franc and the yen.
In economic news from the euro zone, Germany's EU harmonized inflation weakened in September as estimated earlier, final data released by the Federal Statistical Office showed. The harmonized index of consumer prices (HICP) decelerated to 2.1 percent in September from 2.2 percent in August, in line with the preliminary estimates.
Earlier today, Standard & Poor's Ratings Services downgraded its sovereign ratings on Spain by two notches to the lowest investment grade, highlighting the mounting risks to public finances from rising economic and political pressures.
Traders will look to the weekly jobless claims data from the U.S. Labor Department due out at 8.30 a.m. ET. Economists expect claims to increase to 370,000 from 367,000 in the previous week..
Simultaneously, the the Commerce Department will release its trade gap data for August at 8:30 a.m. ET. Economists estimate that the trade gap widened to $44 billion in the month from $42 billion in July
Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended October 05. Analysts expect crude oil inventories to jump 1.50 million barrels, while gasoline stocks are seen little changed. |
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