Stocks Turning In A Lackluster Performance In Early Trading
Stocks have shown a lack of direction over the course of early trading on Wednesday, as traders seem reluctant to make any significant moves. The major averages are lingering near the unchanged line after ending each of the two previous sessions mixed.
The major averages are currently turning in another mixed performance, with the Nasdaq clinging to a modest gain. While the Nasdaq is up 1.68 points or 0.1 percent at 3,121.72, the Dow is down 23.72 points or 0.2 percent at 13,458.64 and the S&P 500 is down 1.57 points or 0.1 percent at 1,444.18.
The choppy trading on Wall Street comes as traders appear to be staying on the sidelines ahead of Friday's monthly jobs report from the Labor Department.
While payroll processor Automatic Data Processing, Inc. (ADP) released a report showing stronger than expected private sector job growth in the month of September, the impact has been limited as recent ADP data has not matched up with the more closely watched government data.
ADP said private sector employment increased by 162,000 jobs in September compared to economist estimates for an increase of about 140,000.
At the same time, the job growth in previous months was revised lower, with the July growth reduced by 17,000 to an increase of 156,000 jobs and the August growth lowered by 12,000 to an increase of 189,000 jobs.
Peter Boockvar, managing director at Miller Tabak, said, "In terms of the market response, ADP has lost its month to month relationship to the government payroll figure and thus makes today's market move possibly completely different from this Friday."
Friday morning, the Labor Department is scheduled to release its monthly employment report, which includes both public and private sector jobs.
Most of the major sectors are showing only modest moves in early trading, although weakness has emerged among oil service stocks. The Philadelphia Oil Service Index is down by 1.4 percent, with the weakness in the sector coming amid a Sharp drop by the price of Crude oil.
Steel, natural gas, and gold stocks have also moved to the downside, while notable strength is visible among housing stocks.
In overseas trading, stock markets across the Asia-Pacific region turned yet another mixed performance on Wednesday. While Japan's Nikkei 225 Index fell by 0.5 percent, Hong Kong's Hang Seng Index edged up by 0.2 percent.
The major European markets have also turned mixed on the day. The French CAC 40 Index is down by 0.3 percent, while the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.1 percent.
In the bond market, treasuries have moved modestly lower after ending the previous session slightly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, has edged up by 1 basis point to 1.625 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Flat Amid Mixed Cues - Canadian Commentary
Canadian stocks were struggling to move higher Wednesday morning amid anxiety over Spain's bailout plan after Spanish Prime Minister Mariano Rajoy played down expectations of an immediate bailout for his debt-ridden nation. Furthermore, weak manufacturing data out of Europe kept a check on gains, even as upbeat macroeconomic data out of U.S supported trader sentiment.
Payroll processor ADP reported that private sector employment in the U.S. rose by more than expected and the ISM revealed that activity in the U.S. service sector expanded for the 33rd consecutive month in September.
The S&P/TSX Composite Index eased 7.90 points or 0.06 percent to 12,383.33, after adding about 75 points or 0.60 percent in the past two sessions.
Among base-metals stocks, First Quantum Minerals gained about 2 percent and Teck Resources gathered close to 1 percent.
Today's data from the EIA revealed that U.S. crud oil inventories unexpectedly edged down 0.50 million barrels, while gasoline stocks moved up 0.10 million barrels in the weekended September 28. Analysts expected Crude oil inventories to move up 1.5 million barrels and gasoline stocks to remain flat last week. Crude for November lost $2.84 to $89.05 a barrel.
In the oil patch, Niko Resources surged 6 percent. Canadian Natural Resources entered into a long term gas processing agreement with a North American infrastructure company, primarily to reduce CO2 emissions at Horizon. The stock shed nearly 2 percent.
MEG Energy (MEG,TO), Bonavista Energy and Cenovus Energy were down around 2 percent each.
Gold stocks were trading marginally higher as the price of gold was steady near its seven-month high Wednesday morning as the U.S. dollar was little changed versus a basket of currencies amid private sector employment report from the ADP. gold for December gained $5.00 to $1,780.60 an ounce.
Goldcorp. , Agnico-Eagle Mines and Detour Gold edged up around 0.50 percent each.
International gold miner Barrick gold Corp. inched up 0.15 percent after it said it does not recommend or endorse an unsolicited mini-tender offer made by TRC Capital Corp. to purchase up to 2.50 million Barrick common shares, or approximately 0.24 percent of its outstanding common shares, at C$39.05 per share Shares of Barrick .
Meanwhile, media holding company Quebecor Inc. (QBR_A.TO, QBR_B.TO) slipped over 1 percent after it said it would, along with its majority owned unit Quebecor Media Inc., buy back a part of Quebecor Media stake owned by Caisse de depot et placement du Quebec for C$1.5 billion.
Information solutions provider MacDonald Dettwiler (MDA.TO) eased 0.25 percent after announcing that it received a follow-on contract for $9.8 million to map soil characterization and terrain globally.
In economic news from the U.S., the Automatic Data Processing, Inc. (ADP) said private sector employment increased by 162,000 jobs in September compared to economist estimates for an increase of about 140,000. At the same time, ADP said the job growth in the previous months was revised lower, with the July growth reduced by 17,000 to an increase of 156,000 jobs and the August growth lowered by 12,000 to an increase of 189,000 jobs.
A report released by the Institute for Supply Management revealed that its non-manufacturing index climbed to 55.1 in September from 53.7 in August, with a reading above 50 indicating an increase in activity in the service sector. The increase surprised economists, who had expected the index to edge down to 53.5.
Elsewhere, euro zone's private sector contracted at a slower pace than estimated earlier in September, a detailed result of a survey by Markit Economics showed. The composite output index, that measures performance of both manufacturing and service sectors, fell to a four-month low of 46.1 in September from 46.3 in August. This was slightly above the flash estimate of 45.9.
Germany's services sector contracted in September, according to final data from Markit Economics. The Services Business Activity Index came in at 49.7 in September, up from 48.3 in August, survey data revealed.
Meanwhile, data from Eurostat showed that euro zone retail sales rose unexpectedly in August. Retail sales were up 0.1 percent on a monthly basis, the same rate of growth as seen in June and July. Economists had forecast a 0.1 percent drop for August. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Mixed Amid Spanish Concerns
The European markets are trading mixed on Wednesday, as investors remained weary about the delay in the bailout request from Spain. The Asian markets ended mixed after data showed that China's service sector performance declined in September, suggesting a more moderate expansion of operating conditions in the sector.
Germany's services sector contracted in September, final data from Markit Economics showed. The Services Business Activity Index came in at 49.7 in September, up from 48.3 in August. However, the reading was below the flash estimate of 50.6.
Meanwhile, data from Eurostat showed that Eurozone retail sales rose unexpectedly in August. Retail sales were up 0.1 percent on a monthly basis, the same rate of growth as seen in June and July. Economists had forecast a 0.1 percent drop for August.
Separately, Eurozone's private sector contracted at a slower pace than estimated earlier in September.
The euro Stoxx 50 index of eurozone bluechip stocks is losing 0.09 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.03 percent.
The German DAX is up 0.05 percent and the UK's FTSE 100 is advancing 0.12 percent. The French CAC 40 is falling 0.26 percent and Switzerland's SMI is losing 0.15 percent.
In Frankfurt, Deutsche Bank is gaining 2.5 percent. Commerzbank is advancing 0.5 percent after Berenberg initiated the stock with a "Sell" rating.
RWE is climbing 1.6 percent and ThyssenKrupp is rising 1.5 percent.
Among carmakers, BMW is adding 1.4 percent. Daimler is moderately up while Volkswagen is losing 1.4 percent.
In Paris, Vallourec is declining 1.2 percent. Essilor International is losing 1 percent.
Sanofi is falling 0.7 percent. The drugmaker and U.S.-based peer Bristol-Myers Squibb Co. have restructured their long-term alliance, following the loss of exclusivity for blood thinner Plavix and hypertension drug Avapro/Avalide in many major markets.
Alcatel Lucent is gaining 1.6 percent. Schneider Electric and Unibail-Rodamco are notably higher.
Lenders Credit Agricole, BNP Paribas and Societe Generale are moderately higher.
In London, International Consolidated Airlines and chipmaker ARM Holdings are adding 1.6 percent each.
Glencore, Vedanta and Xstrata are notably higher.
J Sainsbury is moderately up. The company posted increases in sales and like-for-like sales for the second quarter, with strong growth in Non-Food category.
Tesco reported a drop in profit for the first half of the year, amid lukewarm sales growth in tough conditions. The stock is losing 1.3 percent.
Schroders is losing 1.5 percent. UBS cut its rating on the stock.
Lamprell expects full-year loss to be 'significantly greater' than its prior expectations. The stock is plummeting 32 percent.
Firstgroup is plunging 18 percent, following an announcement from the Department for Transport that it has discovered significant technical flaws in the way franchise process for the InterCity West Coast was conducted and have canceled the competition for this franchise.
Across Asia/Pacific, major markets ended mixed. Australia's All Ordinaries and Hong Kong's Hang Seng advanced around 0.2 percent each, while Japan's Nikkei 225 lost 0.5 percent.
In the U.S., futures point to a mixed open on Wall Street. The major averages ended the previous session mixed for the second straight day. While the Nasdaq and the S&P 500 managed to finish the day in positive territory, the Dow posted a slim loss.
In the commodity space, Crude for November delivery is falling $0.73 to $91.16 per barrel while December gold is adding $3.7 to $1779.3 a troy ounce. |
| Asia Market | Asian Stocks Mixed On Spain Worries
Asian stocks fell broadly in thin holiday trading on Wednesday, as lingering uncertainty over Spain's bailout and concerns regarding the slowdown in China kept investor mood cautious ahead of Friday's U.S. jobs report.
The Asian Development Bank today slashed its growth forecast for developing Asia, citing gloomier global prospects and weak domestic demand in the region's largest economies. In its Asian Development Outlook 2012 update, the bank cut the region's growth forecast for this year sharply to 6.1 percent from the 6.9 percent estimated in April, but noted that most of the developing Asia economies have room to counteract shocks emanating from the unresolved euro area sovereign debt crisis or a Sharp fiscal contraction in the U.S.
Japanese shares fell for a fourth consecutive session, dragged down by tech shares as traders awaited U.S. employment data and Moody's rating decision on Spain after Prime Minister Mariano Rajoy dismissed speculation that the country is getting close to requesting a euro-zone bailout. The Nikkei average slid half a percent in thin trading.
Tokyo Electron and Advantest fell 3-5 percent on rising concerns over global growth prospects. Pharmaceutical maker Daiichi Sankyo slumped 5.4 percent on news that the company and U.S. drug firm ArQule Inc. will discontinue a late-stage study of their experimental drug to treat lung cancer. Nissan Motor ended down 2.1 percent after shares of its Chinese partner Dongfeng Motor Group fell in Hong Kong amid concerns that movements to boycott Japanese vehicles may gain momentum in China.
Toyota Motor added 0.4 percent after the company led major automakers with the biggest gain in September U.S. sales. Heavyweight Fast Retailing rallied 3.7 percent on a Nikkei report that the retailer is on track to generate record earnings in annual group sales. Japan Petroleum Exploration climbed 5.3 percent on a report the firm has succeeded in trial extraction of shale oil in northern Japan.
Hong Kong's Hang Seng Index edged up 0.2 percent, with weakness in oil majors following gloomy Chinese data capping further upside. The Purchasing Managers Index of China's non-manufacturing sector, a key economic indicator, fell to 53.7 in September from 56.3 in August, with a reading below 50 indicating contraction of the sector, a survey by the China Federation of Logistics and Purchasing showed today. The mainland Chinese market was shut for the Golden Week holidays running from September 30 to October 7. The South Korean share market was also closed for a holiday.
Australian shares pared some early gains after hitting a 14-month high early in the session following the Reserve Bank of Australia's rate decision on Tuesday afternoon. The benchmark S&P/ASX 200 rose 0.13 percent, while the broader All Ordinaries index gained 0.15 percent. Miners gave up early gains going into the close after official figures showed Australia's trade deficit widened in August, with merchandise trade deficit widening to A$2.027 billion in the month compared to an upwardly revised deficit of A$1.530 billion in July.
BHP Billiton eased 0.3 percent and Rio Tinto lost half a percent. Smaller rival Fortescue Metals Group shed 0.6 percent after Standard and Poor's Ratings Services said the company was the most vulnerable iron ore miner in the world to falling commodities prices.
Banks ended mostly higher after yesterday's interest rate cut by the central bank. Westpac ended flat, ANZ rose 0.2 percent and NAB added half a percent, but Commonwealth slipped marginally. APN News & Media tumbled 3.5 percent after the company said it has "nothing to announce at this stage" on the sale of its New Zealand assets.
In economic news, an index measuring the performance of the service sector in Australia came in with a score of 41.9 in September, the Australian Industry Group said - down from 42.4 in August, with a lower reading indicating a faster pace of contraction.
New Zealand shares rose to a fresh four-and-a-half-year high as the prospects of continued low returns on popular savings vehicles encouraged investors to search for better returns. The benchmark NZX-50 index rose half a percent to 3889.60, its highest level since January 10, 2008.
Resins and chemicals maker Nuplex Industries, which offers an attractive dividend yield of 7.4 percent, climbed 5.5 percent, Fletcher Building, the nation's largest construction company, rose 2.5 percent and Warehouse Group, New Zealand's largest listed retailer, added 2.4 percent, while Vector fell 1.4 percent and Auckland International Airport lost 3 percent on going ex-dividend.
Stock exchange operator rose 0.9 percent after data showed the value of trading in NZX debt and equity markets rose 15 percent to $NZ2.6 billion in September from a year earlier.
Elsewhere, key benchmark indexes in Indonesia, Malaysia and Singapore eased marginally and the Taiwan Weighted average shed 0.4 percent, while India's benchmark Sensex was up 0.1 percent, extending a recent rally on continued hopes for further policy reforms in the coming months.
Commodities like copper and oil were subdued and the euro weakened against most of its major counterparts as investors awaited today's ADP employment report from the U.S. which will give investors a heads up on what to expect from Friday's non-farm payrolls report.
U.S. stocks turned in a lackluster performance overnight on renewed uncertainty about the timing of a Spanish bailout after Spanish Prime Minister Mariano Rajoy denied a Reuters report that the nation could request a euro-zone bailout as early as next weekend. The Dow edged down 0.2 percent, while the tech-heavy Nasdaq inched up 0.2 percent and the S&P 500 crept up 0.1 percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Bank Of England Unlikely To Boost QE
The U.K. central bank is set to stick to the current level of quantitative easing and leave its interest rate unchanged at historic low as policymakers are likely to take note of the improvement in the economy.
The Monetary Policy Committee of the Bank of England headed by Governor Mervyn King is widely expected to retain its quantitative easing programme unchanged at GBP 375 billion. The announcement is due on Thursday at 7.00 am ET.
The extension of asset purchases, which was last initiated in July, will continue until early November. Moreover, lending to households has started to show positive signs due to the Funding for Lending Scheme introduced in August.
The bank is likely to expand stimulus next month once they complete the ongoing GBP 50 billion increase.
According to the latest Credit Conditions Survey of the bank, lenders predicted a significant growth in secured credit availability over the fourth quarter citing strength from the Funding for Lending Scheme.
The nine-member committee is also expected to maintain the current 0.50 percent interest rate. The rate stands at the lowest level since the bank was established in 1694. The previous change in the rate was in early 2009. A rate cut would help borrowers, but it will impact income of savers.
IHS Global Insight's Chief U.K. economist Howard Archer said he is sceptical that the BoE will take interest rates down to 0.25 percent given ongoing serious doubts within the MPC that such a move would have a net overall beneficial impact.
Inflation eased to 2.5 percent in August, but continues to remain sticky above the 2 percent target. But, policymakers are more concerned about the risks from slowdown in economic activity.
Official data showed that the British economy contracted 0.4 percent in the second quarter, following a 0.3 percent fall in the first quarter and 0.4 percent drop in the fourth quarter of 2011.
Many economists said the economy is set to have exited a recession in the third quarter. The official ONS assessment that the U.K. was in technical recession for three consecutive quarters is too gloomy, the British Chambers of Commerce said. The lobby expects a return to positive GDP growth in the third quarter.
"It is clear that the economy has been stagnant for too long, and urgent measures are needed to enable businesses to drive a sustainable recovery," the BCC said. |
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