Stocks Rally In Reaction To Latest Earnings News
10/16/2012 12:15 PM ET
Stocks have shown a strong upward move over the course of the trading day on Tuesday, adding to the gains posted in the previous session. The markets have benefited from a positive reaction to the latest batch of earnings news.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 120.26 points or 0.9 percent at 13,544.49, the Nasdaq is up 28.80 points or 0.9 percent at 3,092.98 and the S&P 500 is up 12.96 points or 0.9 percent at 1,453.09.
The strength on Wall Street comes on the heels of the release of quarterly results from some big-name companies, including financial giant Goldman Sachs , which reported better than expected third quarter earnings.
Goldman Sachs reported adjusted third quarter earnings of $2.85 per share compared to a year-ago loss of $0.84 per share, while analysts had expected earnings of $2.12 per share. Shares of Goldman Sachs are up by 0.8 percent on the news.
Beverage giant Coca-Cola also reported third quarter earnings that came in slightly above analyst estimates but on weaker than expected revenues.
Johnson & Johnson reported third quarter earnings and sales that exceeded analyst estimates and also raised its full-year guidance.
Traders are also digesting news that health insurer UnitedHealth raised its full-year guidance and that online retailer Amazon is hiring for more than 50,000 seasonal positions this holiday season.
Shares of Citigroup (C) are also in focus after the financial giant announced that Vikram Pandit has stepped down as the company's Chief Executive Officer and as a member of the Board.
Citigroup also said its board has unanimously elected Michael Corbat as CEO and a director of the Board. Corbat previously served as Citigroup's CEO of Europe, Middle East and Africa.
Separate reports showing a rebound by industrial production and a continued increase by homebuilder confidence may also be contributing to the strength on Wall Street.
The Labor Department also released a report showing that consumer prices rose by slightly more than expected in the month of September due to another jump in energy prices.
Sector News
Steel stocks have moved sharply higher over the course of the trading day, driving the NYSE Arca Steel Index up by 2.4 percent. With the gain, the index has risen to its best intraday level in almost a month.
Cliffs Natural Resources and Olympic Steel are turning in two of the steel sector's best performances, surging up by 6.5 percent and 5.8 percent, respectively.
10/16/2012 12:15 PM ET
Oil service stocks are also seeing considerable strength on the day, with the Philadelphia Oil Service Index up by 1.9 percent. The strength in the sector comes in spite of a modest decrease by the price of Crude oil.
Semiconductor, electronic storage, gold, and chemical stocks are also posting notable gains, moving higher along with most of the major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.4 percent, while Hong Kong's Hang Seng ended the day up by 0.3 percent.
The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 1.1 percent, the German DAX Index jumped 1.6 percent and the French CAC 40 Index soared 2.4 percent.
In the bond market, treasuries have come under pressure amid the strength on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, has risen by 5 basis points to 1.713 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | Commodities, Data Lift TSX Tuesday Morning
Canadian stocks were trading higher Tuesday morning amid steady commodities, with better-than-expected U.S. retail sales and inflation data, and easing concerns about a Greek exit from the euro zone bolstering investors' appetite for risk. Furthermore, a key survey from across the Atlantic revealed German investor confidence improved for a second month in October.
Today's data from south of the border also came in encouraging, with US homebuilders confidence rising to a new six-year high and industrial production moving up in the month of September.
The S&P/TSX Composite Index rose 133.44 points or 1.09 percent to 12,363.39.
The Diversified Materials Index rose nearly 2 percent, with First Quantum Minerals (FM.TO), Teck Resources(TCK_B.TO) and Inmet Mining (IMN.TO) gathering around 2 percent each.
The price of crude oil was ticking lower Tuesday morning on supply concerns after the EU imposed new sanctions on Iran. Crude for November delivery edged down $0.06 to $91.79 a barrel.
In the oil patch, Vermilion Energy (VET.TO), Niko Resources (NKO.TO) and Suncor Energy (SU.TO) rose around 2 percent each.
The price of gold was recovering from its one-month low Tuesday morning as the U.S. dollar was struggling versus a basket of currencies amid the release of inflation data. Gold for December added $8.50 to $1,746.10 an ounce
Among gold plays, Royal Gold (RGL.TO), Agnico-Eagle Mines (AEM.TO), Goldcorp. (G.TO) and Barrick Gold (ABX.TO) gathered around 2 percent each.
Meanwhile, metals mining company Lithium Americas Corp. (LAC.TO) lost over 3 percent after reporting first-quarter net loss of $1.2 million or $0.02 per share, compared to $2.1 million or $0.02 per share last year.
Gold miner Petaquilla Minerals (PTQ.TO) slipped 2 percent after it said its rejected the hostile offer by Inmet Mining Corp. (IMN.TO) to acquire all of its outstanding common shares in exchange of 0.0109 Inmet shares and $0.001 in cash; or a amount not more than $0.48 per Petaquilla share.
In economic news, Statistics Canada said non-resident investors acquired $6.9 billion of Canadian securities in August, with focus turning to debt instruments from equity. Meanwhile, Canadian investors reduced their holdings of foreign securities by $1.7 billion, following three straight months of acquisition.
Separately, the agency revealed that manufacturing sales increased 1.5 percent to $49.5 billion in August, the highest sales level since March 2012. The gain largely reflected increases in the petroleum and coal products, and motor vehicle industries. Manufacturers in 11 out of 21 industries reported higher sales, representing over three quarters of total manufacturing.
From the U.S., the Labor Department said its consumer price index rose by 0.6 percent in September, matching the increase seen in August. Economists had been expecting prices to increase by about 0.5 percent. Excluding the jump in energy prices as well as a modest increase in food prices, the core consumer price index edged up by 0.1 percent for the third straight month. The core index had been expected to rise by about 0.2 percent.
Meanwhile, the Federal Reserve released a report showing that U.S. industrial production rose by more than expected in the month of September. The Fed said industrial production increased by 0.4 percent in September after tumbling by a revised 1.4 percent in August. Economists had expected production to edge up by 0.2 percent compared to the 1.2 percent drop originally reported for the previous month.
A report from the National Association of Home Builders showed that the NAHB/Wells Fargo Housing Market Index inched up to 41 in October from 40 in September. The modest increase matched economist estimates.
Elsewhere, euro zone inflation for September was revised down to 2.6 percent from the initial estimate of 2.7 percent, Eurostat said. The inflation rate, thus remained steady compared to August's 2.6 percent.
U.K. annual inflation reached the lowest since November 2009, data from the Office for National Statistics showed. Consumer price inflation fell to 2.2 percent, in line with forecast, from 2.5 percent in August. Nonetheless, it remains above the central bank's 2 percent target.
Meanwhile, German economic sentiment improved more than expected in October, a survey by the Center for European Economic Research (ZEW) showed. The ZEW Indicator of Economic Sentiment increased to -11.5 in October from -18.2 in September. This was forecast to rise to -14.9. This was the second increase of the indicator in a row. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Finished Solidly Higher On Spanish Bailout Hopes
10/16/2012 11:57 AM ET
The European markets rallied higher on Tuesday, after reports that Spain is nearing a bailout request. The continued rise in German investor sentiment also contributed to the positive mood. Banks were among the best performing stocks Tuesday, despite the S&P downgrade of a number of Spanish banks.
The Spanish government is prepared to officially request a bailout, but the plan is being delayed due to external factors including its possible influence on the decision of other euro area countries such as Italy.
Financial Times reported Monday that Spain is waiting for such issues to be resolved. Quoting a senior official with the Spanish economy ministry, the newspaper said the government is making the request just to satisfy the conditions of the European Central Bank to start buying its bonds.
Spain's borrowing costs declined at its bill auction on Tuesday as investors expect the nation to make a formal bailout request without further delay. The treasury raised EUR 4.863 billion from the issue of 12- and 18-month treasury bills. The amount exceeded the target range of EUR 3.5 billion-EUR 4.5 billion.
The yield on 12-month bills fell slightly to 2.823 percent from 2.835 percent at the prior auction in September. The average yield on 18-month bills dipped to 3.022 percent from 3.072 percent.
The Portuguese government on Monday announced another round of austerity measures with tax hikes and spending cuts, while the economy is forecast to enter a third year of recession in 2013.
Presenting the details of the draft 2013 budget, Finance Minister Vitor Gaspar said the average income tax rate would increase to 13.2 percent in 2013 from 9.8 percent this year.
The Ministry proposed to cut the number of income-tax brackets to 5 from 8 and also plans to impose an extraordinary additional surcharge on income of 4 percent. There will also be a special "social solidarity" tax of 2.5 percent on income.
The independent Office for Budget Responsibility on Tuesday said it has overestimated the strength of economic growth over the last two years. The OBR said in its forecast evaluation report that spending reduction together with tax increases might have hurt the economy more than initially estimated.
The euro Stoxx 50 index of Eurozone bluechip stocks increased by 2.50 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, advanced 1.33 percent.
The DAX of Germany climbed by 1.58 percent and the CAC 40 of France gained 2.36 percent. The FTSE 100 of the U.K. rose by 1.21 percent and the SMI of Switzerland added 1.04 percent.
10/16/2012 11:57 AM ET
In Frankfurt, Commerzbank gained 4.15 percent and Deutsche Bank finished higher by 4.95 percent.
In Paris, Societe Generale climbed by 4.00 percent. BNP Paribas rose by 4.40 percent and Credit Agricole added 5.53 percent.
LVMH Moët Hennessy Louis Vuitton rose by 3.63 percent. The company said that its total revenue for the first nine months of 2012 rose 22 percent to EUR19.87 billion from EUR16.30 billion in the same period last year.
In London, mining stocks were among the positive performers. Rio Tinto increased by 2.94 percent and BHP Billiton gained 1.40 percent. Kazakhmys rose by 2.97 percent and Antofagasta finished higher by 1.83 percent.
Petropavlovsk gained by 3.16 percent, after the company announced that gold production in the third quarter increased by 39 percent.
Barclays climbed by 3.84 percent and Lloyds Banking Group added 5.96 percent. Royal Bank of Scotland rose by 4.21 percent and HSBC advanced by 1.95 percent.
GKN declined by 3.41 percent, after the company's third quarter results came in lower than in the previous year.
Roche finished with a gain of 0.38 percent in Zurich, after posting higher sales of CHF 11.27 billion for the third quarter.
UBS closed higher by 3.0 percent. Chief Financial Officer Tom Naratil said the Swiss bank fired as many as 550 employees after suffering a $2.3 billion loss from unauthorized trading last year.
Eurozone inflation for September was revised down to 2.6 percent from the initial estimate of 2.7 percent, Eurostat said Tuesday. The inflation rate thus remained steady compared to August's 2.6 percent.
Eurozone exports grew by seasonally adjusted 3.7 percent in August from a month ago, when it fell 2.2 percent, Eurostat reported Tuesday. Likewise, imports rose 2.1 percent, reversing last month's 0.8 percent drop.
The trade surplus totaled EUR 9.9 billion in August, up from EUR 7.2 billion in July. Meanwhile, on an unadjusted basis, the trade surplus fell to EUR 6.6 billion from EUR 14.7 billion in the prior month.
German investor sentiment rose for a second straight month in October, with the risks faced by the economy abating somewhat in the recent weeks, a key survey revealed Tuesday. The ZEW Indicator of Economic Sentiment increased to -11.5 in October from -18.2 in September. This was forecast to rise to -14.9.
U.K. annual inflation reached the lowest since November 2009, as last year's increase in utility prices dropped out of the annual comparison in September. Consumer price inflation fell to 2.2 percent in September, in line with forecast, from 2.5 percent in August, data published by the Office for National Statistics revealed Tuesday.
10/16/2012 11:57 AM ET
Output price inflation in the UK accelerated unexpectedly in September, data released by the Office for National Statistics showed Tuesday. The output price index for home sales of manufactured products rose 2.5 percent year-on-year in September, compared with a rise of 2.3 percent in the previous month. Economists expected the rate of increase to slow to 2.2 percent.
On a monthly basis, the price index rose 0.5 percent. This compares with a rise of 0.5 percent between July and August. Economists had forecast a 0.3 percent rise in the index in September.
Consumer prices in the U.S. rose by slightly more than expected in the month of September, according to a report released by Labor Department on Tuesday, with the price growth largely due to another jump in energy prices.
The Labor Department said its consumer price index rose by 0.6 percent in September, matching the increase seen in August. Economists had been expecting prices to increase by about 0.5 percent.
With utilities output showing a notable rebound, the Federal Reserve released a report on Tuesday showing that U.S. industrial production rose by more than expected in the month of September.
The Fed said industrial production increased by 0.4 percent in September after tumbling by a revised 1.4 percent in August. Economists had expected production to edge up by 0.2 percent compared to the 1.2 percent drop originally reported for the previous month.
Homebuilder confidence in the U.S. edged slightly higher in October, according to a report released by the National Association of Home Builders on Tuesday, with the increase lifting homebuilder confidence to a new six-year high.
The report showed that the NAHB/Wells Fargo Housing Market Index inched up to 41 in October from 40 in September. The modest increase matched economist estimates. |
| Asia Market | Asian Markets Trade Higher On Wall Street Cues
10/15/2012 11:42 PM ET
Asian stock markets are trading firm on Tuesday with the overnight surge on Wall Street on the back of an upbeat retail sales report buoying up sentiment to a significant extent. Though some of the markets are trading off their earlier highs, the mood remains fairly upbeat.
The Australian market started off on a high note with investors indulging in some brisk buying at several counters, but pared a substantial portion of its gains past noon with the mood turning slightly cautious at higher levels.
Financial, consumer staples, healthcare, industrial and information technology stocks are mostly up with strong gains. Energy, mining and property trusts stocks are trading mixed.
The benchmark S&P/ASX 200 index, which advanced to around 4,517, is currently trading at 4,496, up 12.6 points or 0.3 percent from its previous close. The broader All Ordinaries index is up 12.5 points or 0.3 percent at 4,518, nearly 20 points off the day's high of 4,537.9.
Among bank stocks, ANZ Bank, Commonwealth Bank of Australia and Westpac are up 0.2 to 0.6 percent, while National Australia Bank is trading higher by 1.5 percent. Bendigo & Adelaide Bank and Bank of Queensland are also trading firm.
Top miners BHP Billiton (BHP, BBL) and Rio Tinto (RIO) are trading lower by 1 percent and 1.4 percent, respectively.
Lend Lease Group shares are up nearly 5 percent following an announcement from the company that discrepancies in its construction company Abigroup's accounts were a one-off item and will not affect its financial results.
Perseus Mining announced that sales for the September quarter were 4.7 percent down on the previous quarter, due to a 2.7 percent drop in gold prices.
Fortescue Metals, Leighton Holdings, Bluescope Steel, ALS, Aristocrat Leisure and QBE Insurance Group are up 2 to 2.6 percent. Fairfax Media, Alumina , AMP, Aurora Oil & Gas, CFS Retail Property Trust and Cochlear are also trading notably higher.
Meanwhile, Regis Resources, Oil Search, Boart Longyear and Lynas Corporation are trading lower, losing 1.4 to 3.2 percent.
According to data released by the Australian Bureau of Statistics, personal finance loans declined by 3.3 percent to A$7.220 billion in August from a downwardly revised A$7.469 billion in July.
Total commercial loans in August fell 5.2 percent to A$27.591 billion, seasonally-adjusted, from A$29.098 billion in July. Lease finance was down 5.1 percent from the previous month to A$528 million, while housing finance for owner occupiers rose 1.3 percent to A$13.647 billion.
10/15/2012 11:42 PM ET
The Japanese stock market is trading firm, with upbeat U.S. retail sales data and the yen's decline against the U.S. dollar triggering some strong buying at several front line counters.
Steel, non-ferrous metals, financial, communications, precision instruments, pulp & paper and automobile stocks are mostly trading higher. Pharmaceuticals, oil, foods and electric power stocks are trading mixed.
The benchmark Nikkei 225 index, which rose to around 8,675, was up 80.9 points or 0.9 percent at 8,658.8 at the end of the morning session.
Softbank Corp. shares moved up by over 10 percent. The company had announced on Monday that it will buy a 70 percent stake in U.S. mobile carrier Sprint Nextel Corp. for about $20 billion, in the biggest-ever overseas acquisition by a Japanese firm.
UBE Industries, Citizen Holdings, Tosoh, Kobe Steel, Credit Saison, Kuraray, Konami Corp., UNY Co. and Shinsei Bank gained 3 to 4.8 percent.
Credit Saison, Sumitomo Heavy Industries, Mitsubishi Chemical Holdings, Asahi Glass, Mitsubishi Electric, Ebara Corp., Yahoo Japan, Trend Micro, Sumitomo Mitsui Trust Holdings, Dai-ichi Life Insurance and Mizuho Financial Group were among the other big gainers.
Among the losers in the index, Kirin Holdings, Unitia, Sharp Corp., Dowa Holdings, Chubu Electric Power, Nippon Sheet Glass, JX Holdings and Nippon Light Metal drifted down by 1.4 to 3.2 percent.
In the currency market, the U.S. dollar traded in the upper 78 yen range in early deals in Tokyo. The yen is currently trading at 78.76 to the dollar.
Among other markets in the Asia-Pacific region, New Zealand, Singapore, South Korea and Taiwan are trading notably higher. Hong Kong, Malaysia and Indonesia are up with modest gains, while Shanghai is up marginally.
On Wall Street, stocks moved mostly higher on Monday with traders reacting positively to an upbeat retail sales report. Citigroup's better-than-expected results too aided sentiment to an extent.
The major averages ended the session near their best levels of the day. While the Dow ended up 95.4 points or 0.7 percent at 13,424.2, the Nasdaq rose 20.1 points or 0.7 percent to 3,064.2 and the S&P 500 climbed 11.5 points or 0.8 percent to 1,440.1.
Major European markets too closed higher on Monday. While the U.K.'s FTSE 100 index edged up by 0.2 percent, the German DAX and the French CAC 40 Index gained 0.4 percent and 0.9 percent, respectively.
U.S. Crude oil pared much of the losses but still ended a penny lower on Monday, after overcoming demand growth concerns linked to the tension between Turkey and Syria.
10/15/2012 11:42 PM ET
Oil prices pared losses after some encouraging macroeconomic data from the U.S. and China lifted global equity markets, with the dollar coming off the session's high over the Middle East imbroglio.
Crude for November delivery shed $0.01 to close at $91.85 a barrel on the New York Mercantile Exchange. |
| Forex Market | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | 10/16/2012 10:28 AM ET
With utilities output showing a notable rebound, the Federal Reserve released a report on Tuesday showing that U.S. industrial production rose by more than expected in the month of September.
The Fed said industrial production increased by 0.4 percent in September after tumbling by a revised 1.4 percent in August. Economists had expected production to edge up by 0.2 percent compared to the 1.2 percent drop originally reported for the previous month.
The rebound by industrial production was partly due to a 1.5 percent jump in utilities output in September, which came after a 4.3 percent drop in August.
A resumption of activity at idled facilities along the Gulf of Mexico also contributed to the rebound in industrial production, the Fed said.
The report said manufacturing output edged up by 0.2 percent in September after falling by 0.9 percent in August, while mining output rose by 0.9 percent following a 1.6 percent drop in the previous month.
Robert Kavcic, an economist with BMO Capital Markets, said, "A bounce-back in industrial production in September provides a decent handoff to the fourth quarter, but more broadly, the U.S. factory sector has geared down this year."
said capacity utilization climbed to 78.3 percent in September from a revised 78.0 percent in August, coming in line with economist estimates.
Capacity utilization in the manufacturing sector was unchanged at 76.8 percent, while capacity utilization in the mining and utilities sectors rose to 89.1 percent and 74.8 percent, respectively.
10/16/2012 10:40 AM ET
Homebuilder confidence in the U.S. edged slightly higher in October, according to a report released by the National Association of Home Builders on Tuesday, with the increase lifting homebuilder confidence to a new six-year high.
The report showed that the NAHB/Wells Fargo Housing Market Index inched up to 41 in October from 40 in September. The modest increase matched economist estimates.
With the increase, the index rose for the sixth consecutive month, reaching its highest level since coming in at 42 in June of 2006.
NAHB Chairman Barry Rutenberg said, "Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year."
"The concern is that, even though demand for new homes is rising, overly tight credit conditions are still constraining new building and new purchases at a time when that kind of economic activity and the job growth it generates are greatly needed," he added.
The modest increase by the housing market index came as the component measuring traffic of prospective buyers jumped to 35 in October from 30 in September, reaching its highest level since April of 2006.
Meanwhile, the components measuring current sales conditions and sales prospects for the next six months were both unchanged from the previous month at 42 and 51, respectively.
The housing market index for the Western region climbed to 49 in October from 44 in September, while the indexes for the South and the Northeast both rose by three points to 42 and 34, respectively.
On the other hand, the housing market index for the Midwest dropped to 41 in October from 45 in September, offsetting the gain seen in the previous month.
Wednesday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of September.
Economists expect housing starts to climb to an annual rate of 765,000 in September from 750,000 in August, while building permits are expected to rise to 810,000 from 803,000. |
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