Stocks Turning In A Mixed Performance In Early Trading
After moving modestly lower at the open, stocks have regained some ground over the course of early trading on Wednesday. The major averages have climbed well off their lows for the young session, with the S&P 500 peeking into positive territory.
The major averages are currently turning in a mixed performance, with the S&P 500 up 1.01 points or 0.1 percent at 1,455.93, while the Dow is down 30.91 points or 0.2 percent at 13,520.87 and the Nasdaq is down 3.58 points or 0.1 percent at 3,097.59.
The choppy trading comes following the release of a mixed batch of earnings news, which seems to be pulling stocks in opposite directions following the rally seen over the course of the two previous sessions.
Bank of America (BAC) is posting a modest gain after the financial giant reported third quarter earnings that showed a notable decrease year-over-year but exceeded analyst estimates for a loss. At the same time, the company reported revenues that fell by more than expected.
Beverage and snack food giant PepsiCo (PEP) is also trading higher after reporting third quarter earnings that exceeded analyst estimates but on weaker than expected revenues.
Meanwhile, shares of Intel (INTC) have come under pressure after the semiconductor giant reported better than expected third quarter results but warned of a difficult environment ahead.
Tech giant IBM (IBM) is also posting a notable loss after reporting third quarter earnings that came in just above analyst estimates on revenues that fell by more than expected.
Most of the major sectors are showing only modest moves, although housing stocks have shown a strong move to the upside following the release of a report from the Commerce Department showing a jump in housing starts.
The report said housing starts jumped 15 percent to an annual rate of 872,000 in September from the revised August estimate of 758,000. Economists had expected starts to climb to 765,000 from the 750,000 originally reported for the previous month.
Building permits, an indicator of future housing demand, also surged up by 11.6 percent to an annual rate of 894,000 in September from the revised August rate of 801,000. The increase in building permits also exceeded expectations.
Reflecting the strength in the housing sector on the heels of the report, the Philadelphia Housing Sector Index has surged up by 3.2 percent.
Biotechnology, banking, and oil stocks are also seeing early strength, while weakness is visible among railroad, software, and electronic storage stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, adding to yesterday's gains. Japan's Nikkei 225 Index surged up by 1.2 percent, while Hong Kong's Hang Seng Index advanced by 1 percent.
The major European markets are also moving to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.5 percent, the French CAC 40 Index and the German DAX Index have edged up by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries have come under pressure on the heels of the upbeat housing data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.4 basis points at 1.764 percent. | Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Flat At Open Wednesday
Toronto stocks were little changed at open Wednesday even as energy plays were moving higher, with the S&P/TSX Composite Index edging up 15.88 points or 0.13 percent to 12,423.58.
In the oil patch, Celtic Exploration skyrocketed 45 percent to C$26.45 after Exxon Mobil Corp. said its Canadian unit has agreed to buy Celtic in exchange of C$24.50 per share and half a share of a newly established company.
Cequence Energy Ltd. gained 15 percent. Tourmaline Oil, Trilogy Energy and Crew Energy were up around 5 percent each.
Meanwhile, Potash Corp. lost 2 percent after warning that full-year 2012 earnings will fall below the low end of the previous range of $2.80-$3.20 per share provided in July 2012, mainly due to lower than forecasted potash sales volumes due to delays in new contracts with buyers in China and India. Analysts expected the company to report earnings of $3.34 per share for the year.
Among gold plays, Kirkland Lake Gold lost 6 percent, while Centerra Gold was losing 5 percent. Barrick Gold and Allied Nevada Gold were down about 1 percent each.
The price of crude oil was ticking higher Wednesday morning as traders await cues from the official inventories data from the EIA. Today during trading hours, the EIA will release its U.S. crude oil inventories report fro the weekended October 12. Analysts expect crude oil inventories to gain 1.5 million barrels and gasoline stocks to shed 0.40 million barrels last week.
Crude for November added $0.29 to $92.38 a barrel.
The price of gold was extending gains Wednesday morning amid weak U.S. dollar, with traders focus turning to developments in the euro zone as the rating agency Moody's Investors Service left its Spanish sovereign rating unchanged at investment grade, but with a 'negative' outlook. Gold for December added $1.60 to $1.747.90 an ounce.
Oil and gas giant Exxon Mobil Corp. said its Canadian unit has agreed to buy Celtic Exploration Ltd. in exchange of C$24.50 per share and half a share of a newly established company which will hold assets not included in the agreement with ExxonMobil Canada. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Shares Slightly Higher On Spain Optimism
European stocks held steady near three-week highs on Wednesday after Moody's Investors Service left its Spanish sovereign rating unchanged at investment grade and German Chancellor Angela Merkel underlined her support for Greece to remain in the Eurozone, saying EU leaders were working to avert "uncontrolled developments in the Eurozone."
Asian markets ended mostly higher following better-than-expected earnings from U.S. bellwethers, while the U.S. stock index futures point to a mixed start in the wake of lackluster earnings reports from IBM and Intel late yesterday. Commodities are slightly subdued despite a broadly firmer euro on Spain bailout optimism.
The Euro Stoxx 50 index of Eurozone bluechip stocks is currently up 0.6 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.3 percent, while around Europe, the German DAX, France's CAC 40 and the U.K.'s FTSE 100 are up between 0.3 percent and 0.4 percent. Switzerland's SMI is edging down marginally.
In stock specific action, Spanish banks like Santander and Bankia are among the prominent gainers. Finnish ship and power plant engine maker Wartsila is climbing 8.4 percent after raising its full-year outlook.
On the losing side, shares of Zurich Insurance Group AG are tumbling 4.2 percent in Zurich after the Swiss insurance holding company said it would write-off about $550 million following a review of its General Insurance business in Germany.
Dutch semiconductor equipment maker ASML Holding NV is losing 2.6 percent as it signed a definitive agreement to acquire Cymer, Inc. in a cash-and-stock transaction valued at 1.95 billion euros or $2.55 billion, to speed up the development of Extreme Ultraviolet semiconductor lithography technology.
Credit Agricole SA is declining 1.7 percent in Paris after the French lender signed a contract to sell the entire share capital of its Greek unit Emporiki to Alpha Bank SA for a token price of one euro.
TeliaSonera AB is declining 1.5 percent in Stockholm as the Swedish telecommunications firm reported a decline in third-quarter profit and revenues on lower results from mobility and broadband services, despite increased subscriptions. |
| Asia Market | Asian Stocks Rise On US Earnings, Spain Optimism
Asian stocks posted solid gains on Wednesday following better-than-expected earnings from U.S. bellwethers and growing speculation that debt-laden Spain is nearing a bailout deal. Concerns over Greece's possible exit from the Eurozone eased further after German Chancellor Angela Merkel underlined her support for the nation to remain in the Eurozone, saying EU leaders were working to avert "uncontrolled developments in the Eurozone."
Bargain hunting in battered exporters lifted Japanese shares higher for a third consecutive session. The benchmark Nikkei average rose 1.2 percent to close above the 8,800 mark for the first time since October 5, while the broader Topix index added a percent. Euro-sensitive shares such as Canon and Sony rose 1-2 percent after the yen eased to a one-month low against the euro, helped by news that Germany would support a precautionary credit line for Spain from the EU's new rescue fund.
Softbank soared 5.6 percent, extending gains for the second straight session following its announcement earlier this week that it is buying a 70 percent stake in U.S. wireless carrier Sprint Nextel Corp.
Heavyweights Fanuc and Fast Retailing rose about 2 percent each, Hitatch and Panasonic extended their recent gains and realty firm Mitsui Fudosan gained 1.8 percent on hopes of policy action at the next Bank of Japan policy board meeting. Chip-related Tokyo Electron and Advantest fell 0.3 percent and 2.2 percent, respectively after Intel issued a weak outlook for fourth-quarter revenue and margins.
China's Shanghai Composite rose 0.3 percent, with caution ahead of GDP data tomorrow limiting further upside. Hong Kong's Hang Seng index added a percent, helped by Moody's decision to keep Spanish rating unchanged. A two-day summit of European Union leaders is scheduled in Brussels, Belgium tomorrow night, with discussion focusing on strengthening the Economic and Monetary Union.
Australian shares hit a 15-month high, led by miners as commodities rose on Spain bailout optimism. Both the benchmark S&P/ASX 200 and the All Ordinaries index rose about 0.8 percent each. BHP Billiton rose 1.2 percent after maintaining its guidance for a 5 percent increase in iron ore output this year. Rio Tinto advanced 1.7 percent, smaller rival Fortescue jumped 5.7 percent and gold miner Newcrest ended up 1.1 percent. Banks also performed well, with ANZ, NAB and Westpac gaining about 0.7 percent each, while Commonwealth edged down 0.2 percent.
Shares of media giant News Corp rose 1.1 percent after a majority of shareholders rejected a proposal to split the roles of chairman and chief executive, both currently held by Rupert Murdoch. Shares of Ten Network Holdings slumped 7.5 percent after Outdoor Media Operations terminated its deal with the company to buy its outdoor advertising business Eye Corp. Fairfax Media tumbled 5.1 percent.
In economic news, a leading indicator of Australia's economic activity rose at a faster pace than its long-term trend in August, for the first time in a year, a survey by Westpac and the Melbourne Institute revealed Wednesday. The annualized growth rate in the Westpac-Melbourne Institute leading index, which indicates the likely pace of economic activity three to nine months into the future, reached 3 percent in August, rising above its long term trend of 2.7 percent.
Seoul shares rose notably, buoyed by signs of a recovery in U.S. economic activity. The benchmark Kospi average rose 0.7 percent, led by economy-sensitive shipping firms. Hyundai Merchant Marine Company and Hanjin Shipping rallied 3-4 percent.
New Zealand shares rose, helped by gains in high-yielding dividend stocks. The benchmark NZX-50 index rose 0.6 percent. Heavyweight Telecom rose 1.5 percent, its spin-off of network operator Chorus advanced 2 percent, fast-food company Restaurant Brands rallied 2.5 percent and SkyCity Entertainment Group added 2.1 percent ahead of its annual general meeting on Thursday.
Shares of utility Contact Energy eased 0.8 percent after chairman Grant King hinted at the possibility of a capital return. Fletcher Building, the nation's largest construction company, fell 2.3 percent.
Elsewhere, Malaysia's KLSE Composite rose 0.4 percent and Singapore's Straits Times was moving up 0.2 percent, while key benchmark indexes in India, Indonesia and Taiwan were slightly subdued. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Edges Up Ahead Of Inventories Data
The price of crude oil was ticking higher Wednesday morning as traders await cues from the official inventories data from the EIA. Reports showed the Spanish government is inching closer to officially request a European bailout also lifted trader sentiment to some extent.
Light Sweet Crude Oil (WTI) futures for November delivery, added $0.09 to $92.18 a barrel. Yesterday, oil settled higher tracking rising equity markets and a weak dollar, with reports indicating a bailout request from Spain a near possibility, and some upbeat data out of Europe and the U.S. Investors also await the outcome of the crucial European heads of state summit later this week, with Greece and Spain in focus.
Gold for December delivery, the most actively traded contract, added $5.50 to $1,751.80 an ounce. Yesterday, gold snapped its two-session losing streak to end higher as the dollar dropped against a basket of major currencies while the euro jumped on news that Spain may request for aid from the European Union's bailout fund. Investors also weighed some upbeat data out of Europe, while awaiting the outcome of the European heads of state summit this week, where a decision on Greece is expected.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,333.89 tons.
Tuesday after the market hours, the API said U.S. crude oil supplies rose 3.70 million barrels, while gasoline stocks eased 1.2 million barrels in the weekended October 12.
This morning, the U.S. dollar continued to level off from its two-week high versus the euro and from a monthly high against sterling. The buck was ticking lower versus the yen and the Swiss franc.
In economic news, unemployment rate in the U.K. declined unexpectedly between June and August, the latest figures from the Office for National Statistics revealed. The jobless rate fell to 7.9 percent in the June-August period from 8.1 percent during March-May. Economists expected the rate to remain unchanged from the previous period.
Bank of England policymakers unanimously decided to maintain quantitative easing at GBP 375 billion and the interest rate unchanged at 0.50 percent, the minutes of the meeting showed today.
Traders will look to the Commerce Department's report on housing starts and building permits, due out at 8.30 a.m. ET. Economists expect housing starts to edge up to 770,000 in September from the previous 750,000 and building permits to gain to 810,000 from 803,000.
Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended October 12. Analysts expect crude oil inventories to gain 1.5 million barrels and gasoline stocks to shed 0.40 million barrels last week. |
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