Upbeat Economic Data Leads To Early Strength On Wall Street
Stocks moved higher at the start of trading on Thursday, benefiting from a positive reaction to a batch of largely upbeat economic data. 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 firmly positive. The Dow is up 66.79 points or 0.5 percent at 13,144.13, the Nasdaq is up 15.82 points or 0.5 percent at 2,997.52 and the S&P 500 is up 8.80 points or 0.6 percent at 1,417.55.
The early strength on Wall Street comes as the latest batch of economic data has offset some of the recent concerns about the global economic outlook.
A report released by the U.K. Office for National Statistics showed that the U.K. economy grew by a better than expected rate of 1 percent in the third quarter, boosted by the London Olympics.
The economic growth in the third quarter came on the heels of contractions in economic activity in each of the three previous quarters.
The U.S. Labor Department also released a report showing a bigger than expected drop by initial jobless claims in the week ended October 20th.
The report showed that initial jobless claims dropped to 369,000 from the previous week's revised figure of 392,000. Economists had been expecting jobless claims to fall to 372,000 from the 388,000 originally reported for the previous week.
Additionally, a report from the Commerce Department showed that durable goods orders rebounded by more than expected in September after falling sharply in August.
The report said durable goods orders jumped by 9.9 percent in September after tumbling by 13.1 percent in August. Economists had been expecting durable goods orders to increase by about 7 percent.
However, many economists have pointed to the report's reading on orders for non-defense capital goods excluding aircraft, which is seen as an indicator of business spending. The report showed that the orders were unchanged in September following a 0.2 percent increase in August.
Gold stocks have shown a strong move to the upside in early trading, driving the NYSE Arca Gold Bugs Index up by 2.7 percent. Agnico-Eagle Mines (AEM) and Goldcorp (GG) are posting notable gains after reporting better than expected quarterly earnings.
Brokerage, railroad, and biotechnology stocks are also seeing early strength, although buying interest has remained somewhat subdued.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 1.1 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.
The major European markets have also moved to the upside over the course of the trading day. While the German DAX Index is up by 0.7 percent, the U.K.'s FTSE 100 Index is up by 0.4 percent and the French CAC 40 Index is up by 0.3 percent.
In the bond market, treasuries have come under considerable pressure on the heels of the upbeat economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.9 basis points at 1.844 percent. | Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Rebounds At Open Thursday
Bay Street stocks rebounded sharply at open Thursday amid buying across a variety of sectors, with the S&P/TSX Composite Index surging 107.73 points or 0.88 percent to 12,302.75.
The Energy Index rose over 1 percent, with Cenovus Energy, Tourmaline Oil and Suncor Energy adding about 2 percent each.
Oil and gas firm Nexen Inc. gained over 1 percent despite reporting a sharp decline in third quarter profit.
In the gold space, Agnico-Eagle Mines soared close to 5 percent after it swung to profit in third-quarter. Goldcorp. gathered nearly 4 percent, while Royal Gold and Barrick Gold were adding over 1 percent each.
Among base metals stocks, Teck Resources, Inmet Mining and First Quantum Minerals were up around 1 percent each.
Meanwhile, energy transportation and services company Mullen Group Ltd. shed 2 percent even after reporting a much improved third-quarter net income.
Potash Corp. slipped 0.25 percent after reporting a lower third quarter net income.
In corporate news from Canada, Potash Corp. reported that its third quarter net income declined to $645 million from $826 million. Earnings per share dropped to $0.74 from $0.94. Analysts were expecting the company to report earnings of C$0.78 per share for the quarter.
Precision Drilling Corp reported net earnings of C$39 million or C$0.14 per share for the three months ended September 30, 2012 compared to net earnings of C$83 million or C$0.29 per share for the third quarter of 2011
Gold miner Agnico-Eagle Mines swung to profit in third-quarter, reporting net income of $106.3 million or $0.62 per share compared to a net loss of $81.6 million or $0.48 per share in the year ago quarter. Excluding special items, net income came in at $131.5 million or $0.77 per share, well above analysts' estimates for $0.42 per share. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Stocks Edge Higher For Second Day
European stocks rose for a second consecutive session after the Federal Reserve said the world's largest economy is improving moderately and companies such as BASF and Hindustan Unilever reported earnings results that exceeded analysts' estimates.
The Euro Stoxx 50 index of Eurozone bluechip stocks and the Stoxx Europe 50 index, which includes some major U.K. companies, are edging up about 0.4 percent each, while around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 are up between 0.2 percent and 0.5 percent.
BASF is gaining 2.1 percent in Frankfurt after the German chemical giant reported a decline in profit for the third quarter, hurt by increased taxes, while sales advanced 8 percent, beating estimates. The company also confirmed its forecast for record sales and operating profit this year.
Adidas is adding 1.2 percent after winning a legal battle with bitter athletic-shoe rival Nike over patent infringement.
Shares of Unilever are rallying 3 percent in London after the consumer goods maker posted a 5.9 per cent increase in underlying sales in the third quarter, beating analyst forecasts. Credit Suisse is climbing 2.7 percent in Zurich as the Swiss banking giant unveiled plans to cut costs further after posting a 63 percent fall in third-quarter profit.
Dassault Systèmes is gaining 2.5 percent after the company posted higher IFRS net earnings attributable to equity holders of the parent of 82.6 million euros versus 76.4 million euros a year ago.
Shares of Novartis are edging down modestly after posting worse-than-expected third quarter sales. France Telecom is declining 2.8 percent in Paris after the company reported third-quarter revenues of 10.76 billion euros, lower than 11.15 billion euros in the corresponding period last year on a comparable basis.
Royal Dutch Shell Plc is losing 1.1 percent after it announced an agreement with Hess Corp to acquire its interests in the Beryl area fields and the Scottish Area Gas Evacuation System for $525 million.
In economic news, the U.K. economy expanded in the third quarter, ending three straight quarters of contraction, preliminary estimate from the Office for National Statistics showed. Gross domestic product grew by a more-than expected 1 percent sequentially in the third quarter following a 0.4 percent fall in the second quarter and 0.3 percent drop in the first quarter.
Elsewhere, Asian stock markets turned in a mixed performance, with Japanese stocks gaining sharply on BOJ easing speculation, while Chinese shares succumbed to selling pressure on concerns over weaker earnings growth. |
| Asia Market | Asian Stocks Mixed Amid Earnings Worries
Asian stocks swung between gains and losses on Thursday, with Japanese stocks gaining on BOJ easing speculation, while Chinese shares succumbed to selling pressure on concerns over weaker earnings growth. Amid a lack of fresh incentives and with earnings still in focus, signs of improvement in China's factory output and the U.S. housing market helped limit losses across the Asia-Pacific region.
In news out of Europe, the Eurozone finance ministers will approve a new loan of between EUR 16 billion to EUR 20 billion for Greece at a crucial Euro Group meeting on November 12, the German newspaper Handelsblatt reported, citing sources.
Japanese shares rose sharply to a one-month high on continued expectations that the Bank of Japan would further ease its monetary policy next week. Speculation is rife that the Bank of Japan would expand its asset-purchase program by some Y10 trillion at its October 30 policy board meeting.
The benchmark Nikkei average rose 1.1 percent to 9,055, its highest closing level since September 25. Export-linked stocks such as Honda Motor and Canon rose 1-2 percent supported by another bout of yen weakness, while heavyweight Fast Retailing advanced 2.6 percent. After the market close, Canon posted lower third-quarter net income attributable to the company of 50.14 billion yen or $642.81 million versus last year's 77.86 billion yen.
KDDI soared 5.5 percent after the mobile-phone company and Sumitomo Corporation launched a takeover bid for domestic cable operator, Jupiter Telecommunications. Nintendo rose 3.2 percent, reversing early losses after the maker of video-game machines cut its fiscal year profit forecast, citing lower demand for its handheld players and a strong yen.
Shin-Etsu Chemical added 1.3 percent on a brokerage upgrade, while shares of Sharp tumbled 4.2 percent on a Nikkei report that it suffered a group net loss of around 400 billion yen in the first six months of its fiscal year.
China's Shanghai Composite index fell 0.7 percent on growth concerns after data released earlier this week showed China's economic growth slowed to a seventh straight quarter. However, Hong Kong's Hang Seng index rose 0.2 percent, extending its winning streak into a 10th straight session.
Australian shares rebounded from early losses to end marginally higher, led by defensive sectors like telecoms and healthcare. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index edged up about 0.1 percent each. Shares of ANZ fell 0.9 percent after the bank posted full-year profit that missed estimates. Westpac eased marginally, while Commonwealth and NAB rose about 0.4 percent each.
In the mining sector, BHP Billiton and Rio Tinto rose less than half a percent each, boosted by gains in iron ore prices. Gold miner Newcrest lost 1.8 percent after the price of gold fell below $1,700 an ounce for the first time since September in the wake of the Federal Reserve's policy statement. St Barbara tumbled 10.9 percent after reporting disappointing production results. Wesfarmers eased marginally after reporting a modest rise in sales across all its retail outlets in the first three months of the new financial year.
Seoul shares snapped four days of losses, helped by gains in large-cap shares on the back of favorable corporate earnings. The benchmark Kospi average rose 0.6 percent. Hyundai Motor jumped 3.9 percent after the nation's largest carmaker reported a 13 percent increase in its third-quarter net profit, in line with expectations. Shares of its affiliates Kia Motors and Hyundai Mobis rallied 5.8 percent and 2.7 percent, respectively, while Samsung Electronics gained 1.7 percent ahead of its third-quarter results tomorrow.
New Zealand shares eased slightly, tracking mixed global cues. The benchmark NZX-50 index slipped 0.3 percent, with Australia & New Zealand Banking Group pacing the decliners with a 2.4 percent loss. Gold miner OceanaGold plummeted 7.8 percent after announcing the second round of drilling results from the Birthday Reef at Blackwater.
Shares of Fletcher Building, the nation's largest construction company, slid 1.9 percent following the Reserve Bank's decision to keep interest rates unchanged. "For now it remains appropriate for the official cash rate to be held at 2.5 percent," the newly installed Governor Graeme Wheeler said after his first policy meeting since taking up the post last month. Guinness Peat Group advanced 1.8 percent after providing an update on its asset sales, while Freightways closed up 1.4 percent on posting solid results for the first three months of the new financial year.
Elsewhere, India's benchmark Sensex was moving up marginally, Indonesia's Jakarta Composite index edged up 0.1 percent, Malaysia's KLSE Composite gained 0.2 percent and Singapore's Straits Times index was up 0.4 percent, while the Taiwan Weighted average lost 0.7 percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Steady On Recovery Hopes
The price of crude oil was moving higher Thursday morning amid recovery hopes after reports revealed that the U.K economy rebounded from recession in the third quarter, recording its strongest quarterly GDP growth in five years.
Light Sweet Crude Oil (WTI) futures for December delivery, gained $0.55 to $86.28 a barrel. Yesterday, oil extended losses for a fifth straight session to dip to a fresh 3-month low on demand growth concerns after an Energy Information Administration weekly oil report showed U.S. crude oil stockpiles to have increased more than expected last week. Investors also weighed some soft global economic data with Europe in focus
Wednesday during trading hours, the EIA said that U.S. crude oil inventories unexpectedly jumped 5.90 million barrels and gasoline stocks added 1.40 million barrels in the weekended October 19. Analysts expected crude oil inventories to gain 1.7 million barrels, while gasoline stocks were seen shedding 1 million barrels last week.
The price of gold was rebounding from its seven-week low Thursday morning on bargain hunting and on weak U.S. dollar following the FOMC outcome.
As expected, the Federal Reserve made no change to its highly accommodative monetary policy at the conclusion of its two-day meet on Wednesday. The central bank will continue to purchase $40 billion of mortgage-backed securities per month, and gave no indication of any extension to their quantitative easing program before year's end.
Gold for December delivery, the most actively traded contract, gained $13.90 to $1,715.50 an ounce. Yesterday, gold extended losses for a second session to settle at a fresh 7-week low on global cues as investors weighed some soft data out of Europe and China, while awaiting the outcome of the Federal Reserve's two-day FOMC policy meet which concludes later in the day. Gold prices also reacted to comments from the European Central Bank chief on its bond buying program.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,336.90 tons.
This morning, the U.S. dollar slipped from a two-week high versus the euro and moved back to a weekly low against sterling. The buck was ticking lower versus the Swiss franc, while advancing to a four-month high against the yen.
In economic news from the euro zone, the U.K. economy expanded in the third quarter, ending three straight quarters of contraction, preliminary estimate from the Office for National Statistics showed. Gross domestic product grew by a more-than expected 1 percent sequentially in the third quarter. It follows a 0.4 percent fall in the second quarter and 0.3 percent drop in the first quarter.
Traders will look to the weekly jobless claims data from the U.S. Labor Department due out at 8.30 a.m ET. The consensus estimates call for a decline in claims to 372,000 from 388,000 in the previous week.
Simultaneously, the Commerce Department will to release its durable goods orders report for September. Economists expect durable goods orders growth of 7 percent compared to a 13.2 percent plunge in August. Orders, excluding transportation, are expected to have risen 1 percent, reversing some of the 1.6 percent drop last month.
Additionally, the National Association of Realtors is scheduled to release its pending home sales index for September. The index is expected to have risen by 2.5 percent in September following a decline by about the same magnitude last month. |
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