Stocks Turning In A Lackluster Performance In Early Trading
Stocks are showing a lack of direction in early trading on Thursday after moving sharply lower over the course of the previous session. The major averages have been bouncing back and forth across the unchanged line.
The major averages have moved to the upside in the past few minutes and are currently posting modest gains. The Dow is up 23.73 points or 0.2 percent at 12,594.68, the Nasdaq is up 0.94 points or less than a tenth of a percent at 2,847.75 and the S&P 500 is up 2.93 points or 0.2 percent at 1,358.42.
The choppy trading on Wall Street comes as traders a batch of U.S. economic data that was largely disappointing but was likely impacted by the disruptions caused by Hurricane Sandy.
A report from the Labor Department said jobless claims jumped to 439,000 in the week ended November 10th, an increase of 78,000 from the previous week's revised figure of 361,000. Economists had expected jobless claims to climb to 376,000 from the 355,000 originally reported for the previous week.
The much bigger than expected increase lifted jobless claims to their highest level since coming in at 464,000 in the week ended April 30, 2010.
However, the data was distorted by the impact of Hurricane Sandy, with several states in the mid-Atlantic and Northeast regions reporting large increases due to the storm.
Separate reports from the New York and Philadelphia Federal Reserves also showed contractions in regional manufacturing activity in the month of November.
A negative reaction to quarterly results from Wal-Mart (WMT) is also weighing on investor sentiment, with the retail giant down by 4 percent. While Wal-Mart reported third quarter earnings that came in above analyst estimates, the company also reported sales that came in below expectations.
While most of the major sectors are showing only modest moves, gold stocks have shown a substantial move to the downside in early trading, extending a recent sell-off in the sector. The NYSE Arca Gold Bugs Index has fallen by 1.7 percent amid a notable decrease by the price of gold.
Biotechnology and housing stocks have also come under considerable selling pressure, while oil service and brokerage stocks are moving notably higher.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday, with Hong Kong's Hang Seng Index tumbling by 1.6 percent. Meanwhile, Japan's Nikkei 225 Index bucked the downtrend and surged up by 1.9 percent.
The major European markets have moved to the downside on the day. While the German DAX Index has fallen by 0.9 percent, the U.K.'s FTSE 100 Index is down by 0.7 percent and the French CAC 40 Index is down by 0.4 percent.
In the bond market, treasuries are seeing modest weakness after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.2 basis points at 1.601 percent. | Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Dives At Open Thursday
Bay Street stocks opened sharply lower Thursday amid selling across a variety of sectors, with the S&P/TSX Composite Index shedding 162.46 points or 1.36 percent to 11,767.34
The Diversified Materials Index lost around 1 percent, with Inmet Mining and Teck Resources losing about 2 percent each. Meanwhile, First Quantum Minerals edged up 0.25 percent.
Among gold plays, Seabridge Gold lost over 3 percent, while Royal Gold was slipping over 1 percent.
Oil and gas industry services provider Poseidon Concepts Corp. dived 50 percent after reporting a much lower net third quarter income of $7.8 million or $0.10 per share compared to $14.30 million or $0.22 per share in the year ago quarter.
Linamar Corp. edged up 0.50 percent after reporting improved third-quarter net earnings
Meanwhile, energy stocks were trading higher with Nexen Inc. adding nearly 3 percent, MEG Energy and Bonavista Energy gaining over 1 percent each.
The price of crude oil was little changed Thursday morning as traders await cues from the official inventories data from the EIA, due out later today. Analysts expect crude oil inventories to jump 1.50 million barrels last week. Crude for December edged up $0.22 to $86.54 a barrel.
The price of gold was moving lower Thursday morning as the US dollar was steady versus a basket of currencies amid inflation data. According to a release from the World Gold Council demand for gold dipped 11 percent year-over-year to 1,084.6 tons, worth $57.60 billion, in the third quarter of 2012 . However on a sequential basis, demand was up 10 percent in third quarter. Gold for December shed $7.70 to $1,722.40 an ounce.
In corporate news from Canada, automotive products company Linamar Corp. reported improved third-quarter net earnings of C$33.7 million or C$0.52 per share compared to C$21.5 million or C$0.33 per share in the same quarter last year. Adjusted net earnings were C$33.7 million or C$0.52 per share, up from C$25.1 million or C$0.39 per share. Analysts expected the company to report earnings of C$0.50 per share for the quarter.
Audio entertainment and broadcasting company Canadian Satellite Radio Holdings Inc. reported fourth-quarter profit of C$6.12 million, up from C$3.5 million a year ago.
Automotive products maker Wescast Industries Inc. reported that its third-quarter net loss widened to C$3.96 million or C$0.30 per share, from C$0.7 million or C$0.05 per share in the same quarter last year.
In economic news Statistics Canada said manufacturing sales advanced 0.4 percent to $49.8 billion in September, mainly on higher production in the aerospace product and parts industry and increased sales of primary metals. Excluding the aerospace industry, total manufacturing sales decreased 0.7 percent. The increases were partly offset by a decline in the motor vehicle assembly industry. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Fall On Economic Worries
The European markets are in negative territory on Thursday, as weak economic growth in the region and worries about the U.S. fiscal cliff dampened investor sentiment. Asian markets ended broadly lower, after the leadership transition in China.
The euro area entered a recession in the third quarter, flash estimates published by Eurostat revealed. Gross domestic product slid 0.1 percent from a quarter ago, when it dropped 0.2 percent. The rate of decline matched economists' expectations.
The German gross domestic product grew 0.2 percent quarter-on-quarter in the third quarter, the Federal Statistical Office said Thursday. Nonetheless, this was weaker than the 0.3 percent expansion in the second quarter. Economists had forecast 0.1 percent GDP growth.
The French GDP also expanded 0.2 percent sequentially in the third quarter, according to figures published by statistical office Insee. However, the GDP estimate for the second quarter was revised down to show a 0.1 percent contraction in the economy instead of a stagnation reported previously.
Moody's Investors Service on Wednesday said it would revisit the U.K.'s AAA government debt rating and the current 'negative' outlook next year in the face of gloomier economic prospects and rising risks from euro area crisis.
Obama once again called for a balanced approach to dealing with the U.S. budget deficit. "But what I'm not going to do is to extend Bush tax cuts for the wealthiest 2 percent that we can't afford and, according to economists, will have the least positive impact on our economy," he said.
The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.19 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.46 percent.
The German DAX is dropping 0.5 percent and the French CAC 40 is losing 0.1 percent. The UK's FTSE 100 is falling 0.3 percent and Switzerland's SMI is declining 0.8 percent.
In Frankfurt, Infineon Technologies is falling 2.2 percent. K+S is losing 2.1 percent. Bayer is falling 1.6 percent, and Basf is sliding around 1 percent. RWE is retreating 1.3 percent. S&P Equity cut the stock to "Hold" from "Buy."
Deutsche bank is advancing 1.1 percent while Commerzbank is in negative territory. Kepler raised EON to "Hold" from "Reduce." The stock is moderately higher.
Merck lifted its revenue and adjusted EBITDA outlook for 2012, after reporting about 12 percent growth in total revenues in the third quarter. Meanwhile, the company posted a lower profit for the period, impacted by one-time costs, including impairments. The shares are flat.
In Paris, Alcatel Lucent is declining 2.4 percent and STMicroelectronics is falling 1.2 percent. Sanofi, EADS, PPR, Unibail Rodamco and Essilor International are notably lower. EDF is down 0.3 percent. HSBC reduced its rating on the stock to "Neutral" from "Overweight.''.
Credit Agricole is up 0.7 percent while BNP Paribas and Societe Generale are modestly higher. Vivendi is gaining 2.3 percent and Bouygues is advancing 1.7 percent.
In London, John Wood Group is dropping 5.5 percent. Insurer Resolution is falling 3.6 percent. International Consolidated Airlines is retreating 2.7 percent.
Antofagasta reported a 16 percent increase in revenue for nine months. The stock is falling 2.1 percent. Kazakhmys and Xstrata are notably higher.
Lloyds Banking is declining 1.7 percent. Royal Bank of Scotland is advancing 1.6 percent and Barclays is gaining 1.1 percent.
Dutch supermarket chain Koninklijke Ahold NV reported lower profit for the third quarter, weighed down by a hefty charge related to its Swedish unit. The company also remained cautious in its outlook. The stock is down 0.8 percent in Amsterdam.
SBM Offshore is declining 9.2 percent in Amsterdam after updating its full year turnover forecast. Zurich Insurance is declining 3.3 percent after reporting a plunge in quarterly profit. Gategroup also is falling 4.7 percent in Zurich.
Hennes and Mauritz is declining 3.6 percent in Stockholm. The Swedish apparel retailer said its total sales in October, including Value Added Tax, in local currencies increased 4 percent from last year, while sales in comparable units were down 5 percent. |
| Asia Market | Asian Stocks Fall On US Budget Worries
Asian stocks fell broadly on Thursday, weighed down by looming U.S. fiscal crisis and renewed uncertainty over Europe. Investors are worried about the threat to the U.S. economy and the potential ramifications for global growth unless the White House and Congress reach a budget deal.
President Barack Obama will begin budget negotiations with congressional leaders Friday, with a plan to raise $1.6 trillion in additional tax revenue from the wealthy as he seeks a balanced approach to deal with the budget deficit. Obama reiterated during his first press conference since securing his re-election on Wednesday that higher taxes on wealthier Americans should be part of an agreement to address the looming fiscal cliff.
Japanese shares rallied on a weaker yen, bolstered by expectations of aggressive monetary easing by the Bank of Japan after Japan's embattled prime minister moved to dissolve parliament and called a snap election next month. The Nikkei average climbed 1.9 percent to 8,830, marking the sharpest percentage gain for the benchmark index since October 18, while the broader Topix index jumped 2.1 percent. Expectations for a change of government as well as central-bank easing sent the yen lower, lifting export-related stocks like Canon and Toyota up about 5 percent each.
General contractor Obayashi and steel maker JFE Holdings soared 6-7 percent on expectations the main opposition Liberal Democratic Party will usher in more expansive spending policies if it returns to power. Mitsui Fudosan, Japan's biggest developer by sales, advanced 4.2 percent and brokerage Nomura Holdings soared 5.6 percent on hopes of BOJ easing. Power generator Kansai Electric Power jumped 8.1 percent on hopes for eased restrictions on nuclear energy.
In earnings news, Dai-ichi Life Insurance soared 7.2 percent after reporting a sharp jump in its April-September profit, while online game operator Gree ended down 3.6 percent after reporting a profit drop due to an increase in spending. Sony shares plunged 8.9 percent on equity dilution worries after the firm said it would raise 150 billion yen in convertible bonds for strategic investment and the repayment of loans.
China's Shanghai Composite index fell 1.2 percent to a seven-week low after two prominent reformers, Li Yuanchao, the head of the Party's Organization Department, and Wang Yang, the Party chief of Guangdong province, failed to make it to the powerful Politburo's Standing Committee. Coal miners and metal producers led the declines on demand concerns amid speculation that Beijing may not push ahead with more aggressive political and economic reforms in the coming years. Hong Kong's Hang Seng index lost 1.6 percent following steep losses on Wall Street overnight.
Australian shares fell to a two-month low, dragged down by miners and banks on concerns about possible tax hikes and spending cuts in the U.S. and violence in the Middle East after Israel launched a major offensive against Palestinian militants in Gaza. Investors fear that the global economy will slip back into recession if Congress fails to agree on overall deficit reduction package by the end of the year. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index fell about 0.9 percent each.
Global miners BHP Billiton and Rio Tinto fell about 1.2 percent each, while smaller rival Fortescue lost a percent and gold miner Newcrest tumbled 4.5 percent. Among the major banks, NAB edged down marginally, while ANZ, Commonwealth and Westpac fell between 0.6 percent and 0.9 percent. Qantas Airways jumped over 4 percent after announcing it would spend up to A$100 million on a share buyback and repay $650 million in debt ahead of schedule.
Myer Holdings soared 6.5 percent to a six-month high after the nation's largest department store chain posted a slight increase in total sales during the first quarter. Asciano rallied 3.6 percent as the rail freight and ports operator said it was on track to deliver on its ambitious financial targets.
Seoul shares fell sharply to a three-month low on investor anxiety over U.S. budget negotiations and European fiscal woes. The benchmark Kospi average lost 1.2 percent amid persisting selling by foreign funds for a sixth consecutive session. Large-cap stocks retreated, with Samsung Electronics and Hyundai Motor falling about 2 percent each, while telecom stocks KT and SK Telecom posted modest gains on defensive buying.
New Zealand shares edged lower, tracking weak overseas cues after overnight data showed U.S. retail sales dropped for the first time in three months. The benchmark NZX-50 index slipped 0.1 percent. Gold miner OceanaGold tumbled 4.4 percent, industrial chemicals and resins maker Nuplex lost 2.1 percent and utility Contact Energy fell 1.5 percent.
Kiwi Income Property Trust retreated 1.7 percent after it reported a 16 percent decline in pre-tax operating earnings for the first half. Xero slumped 4.7 percent on fund raising reports. Diligent Board Member Services rallied 2.8 percent and Ryman Healthcare rose 1.2 percent after posting better than expected earnings results, jeweler Michael Hill added 1.6 percent and Fletcher Building, the nation's largest construction company, advanced 1.2 percent.
Elsewhere, India's benchmark Sensex was down 0.9 percent, Singapore's Straits Times index was losing 1.1 percent and the Taiwan Weighted average edged down 0.2 percent, while Indonesia's Jakarta Composite index was up 0.4 percent.
On Wall Street, stocks fell sharply overnight, extending a recent downtrend since last week's elections, as investors fretted about U.S. budget negotiations, widespread protests against austerity measures in Europe and a flare-up of violence in the Middle East. Further denting sentiment, data showed that U.S. retail sales fell in October for the first time in three months following an upwardly revised 1.3 percent increase in September.
The Dow and the tech-heavy Nasdaq fell 1.5 percent and 1.3 percent, respectively, to end at their lowest closing levels in over four months, while the S&P 500 lost 1.4 percent to hit a three-month low. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Flat Ahead Of Official Inventories Data
The price of crude oil was little changed Thursday morning as traders await cues from the official inventories data from the EIA, due out later today.
Light Sweet Crude Oil (WTI) futures for December delivery, edged up $0.02 to $86.34 a barrel. Yesterday, oil settled higher amid supply concerns with trouble brewing in the Middle East after an Israeli airstrike killed the military chief of Hamas in Gaza. Hamas has since vowed to avenge the death, while Israel indicated continued focus on similar targets.
Wednesday after the market hours, the API said US crude oil inventories rose 1.35 million barrels, while gasoline stocks shed 103,000 barrels in the weekended November 09.
This morning, the U.S. dollar was leveling off from its 2-month high versus the euro and the Swiss franc, while steady around 2-month high against sterling. The buck advanced to a fresh 7-month high versus the yen.
In economic news, the euro area entered a recession in the third quarter, flash estimates published by Eurostat revealed. Gross domestic product slid 0.1 percent from a quarter ago, when it dropped 0.2 percent. The rate of decline matched economists' expectations.
A separate release by Eurostat revealed inflation in the euro area weakened in October as estimated earlier. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2.5 percent year-on-year in October, in line with the preliminary estimates. In September, the rate of inflation was 2.6 percent.
Meanwhile, the German economy expanded for the third straight quarter and at a faster than expected pace, preliminary data from the Federal Statistical Office showed. The gross domestic product gained 0.2 percent sequentially in the third quarter, but slightly slower than the 0.3 percent rise in the second quarter. Economists had forecast a 0.1 percent expansion.
Traders will look to the October inflation data from the U.S. Labor Department, due out at 8.30 a.m ET. Economists expect the headline index to have risen by 0.1 percent and the core reading by 0.2 percent.
Separately, the Department is due to release its jobless claims report for the week ended November 10. Economists expect claims to increase to 376,000 from 355,000 in the previous week.
Additionally, the results of the New York Federal Reserve's empire state manufacturing survey is slated to be released at 8:30 am ET. The headline general business conditions index for November is expected to come in at -5 compared to -6.2 in October.
Today during trading hours, the EIA will release its US crude oil inventories data for the weekended November 09. Analysts expect crude oil inventories to jump 1.50 million barrels last week. |
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