11/2/2012 12:12 PM ET
After moving sharply higher over the course of the previous session, stocks have given back some ground during trading on Friday. While the monthly employment report showed stronger than expected job growth, traders seemed reluctant to continue buying stocks after yesterday's rally.
The major averages have moved roughly sideways in recent trading, stuck in negative territory. The Dow is down 38.87 points or 0.3 percent at 13,193.75, the Nasdaq is down 9.27 points or 0.3 percent at 3,010.79 and the S&P 500 is down 2.14 points or 0.2 percent at 1,425.45.
The pullback by stocks comes despite the release of a report from the Labor Department showing that the U.S. economy added more jobs than anticipated in the month of October.
The report said non-farm payroll employment increased by 171,000 jobs in October following an upwardly revised increase of 148,000 jobs in September.
Economists had expected employment to increase by about 125,000 jobs compared to the increase of 114,000 jobs originally reported for the previous month.
Despite the continued job growth, the unemployment rate edged up to 7.9 percent in October from 7.8 percent in September due to an increase by the size of the workforce. The modest increase by the unemployment rate matched economist estimates.
James Knightley, senior economist at ING, said, "Over the past week we have seen GDP, the ISM report, construction activity, confidence and the employment report point to a strengthening U.S. economy."
"With the unemployment rate trending downwards and the economy adding jobs this is boosting incomes and the feeling of job security," he added.
While the report helped to push stocks higher at the start of trading, buying interest waned not long after the open.
Even though the job growth surpassed expectations, concerns about the global economic outlook continued to weigh on investor sentiment.
Some traders also felt that the upbeat data was priced into the markets with yesterday's rally and looked to do some profit taking rather than pushing stocks even higher.
Sector News
Gold stocks have shown a substantial move to the downside, moving lower along with the price of the precious metal. With gold for December delivery tumbling $32.90 to $1,682.60 an ounce, the NYSE Arca Gold Bugs Index is down by 3.5 percent.
Considerable weakness has also emerged among networking stocks, as reflected by the 2.4 percent loss being posted by the NYSE Arca Networking Index. Alcatel-Lucent (ALU) has helped to lead the sector lower, falling by 10.8 after reporting disappointing third quarter results.
Steel, computer hardware, and airline stocks have also come under pressure on the day, while strength remains visible among commercial real estate stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday, benefiting from the overnight rally on Wall Street. Japan's Nikkei 225 Index advanced by 1.2 percent, while Hong Kong's Hang Seng Index ended the day up by 1.3 percent.
Meanwhile, the major European markets have turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index has dipped below the unchanged, the German DAX Index and the French CAC 40 Index remain up by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries are seeing modest weakness but have climbed well off their worst levels of the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.3 basis points at 1.738 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | 11/2/2012 11:07 AM ET
After moving higher in the past straight six sessions, Canadian stocks were lingering in the red Friday morning as commodities faltered and jobs data from both sides of the border came in mixed. While Canadian jobs growth stalled in October following two consecutive months of increases, employment in the U.S. increased by more than economists had anticipated.
Also, trades preferred to cash in on recent gains as the main index surged to a six-week high in the previous session.
The S&P/TSX Composite Index lost 67.19 points or 0.54 percent to 12,432.57, after gaining over 300 points or nearly 2.5 percent in the past six straight sessions.
The price of crude oil oil was leveling off from its two-week high Friday morning as traders speculate that demand for crude will be lower than anticipated in the aftermath of Hurricane Sandy. Crude for December shed $1.63 to $85.46 a barrel.
In the oil patch, Crescent Point Energy (CPG.TO) and Niko Resources (NKO.TO) were down around to 4 percent each.
Penn West Petroleum (PWT.TO) lost about 5 percent after slipping into the red in third quarter, reporting a net loss of C$67 million or C$0.14 per share compared to a net income of C$138 million or C$0.29 per share last year. The company declared a dividend of C$0.27 per share for the quarter.
The price of gold moving lower Friday morning as the US dollar was trading firm versus a basket of currencies amid the release of non-farm payroll data. Gold for December lost $30.50 to $1,685.00 an ounce.
Among gold plays, Agnico-Eagle Mines (AEM.TO) and New Gold (NGD.TO) dived around 5 percent each.
Goldcorp. (G.TO), Barrick Gold (ABX.TO) and Allied Nevada Gold (ANV.TO) were down around 2 percent each.
Pharmaceutical company Valeant Pharmaceuticals International, Inc. (VRX.TO) eased about 0.50 percent after reporting net income of $7.65 million or $0.02 per share for the third quarter, sharply lower than $40.86 million or $0.13 per share in the prior-year quarter. Excluding items, adjusted income for the quarter was $357.5 million or $1.15 cash earnings per share, compared to $211.91 million or $0.66 cash earnings per share in the year-ago quarter.
Business data provider Thomson Reuters Corp. (TRI.TO) posted higher third-quarter earnings of $462 million compared with last year's $369 million, with quarterly earnings per share improving to $0.56 from $0.44 a year ago. However, adjusted earnings from continuing operations were $445 million lower than $453 million in the previous year, while corresponding adjusted earnings remained flat at $0.54 per share. Analysts expected the company to report earnings of $0.48 per share for the quarter. The stock slipped 1.5 percent.
Printing papers and pulp products company Resolute Forest Products (RFP.TO) swung to profit in third quarter, reporting net income of $31 million or $0.32 per share compared with a loss of $44 million or $0.46 per share in the 2011 third quarter. However excluding $24 million of special items, quarterly net income was $7 million or $0.07 per share, down significantly from $50 million, or $0.50 per share last year. Analysts were expecting the company to report earnings of $0.23 per share for the quarter. The stock dived 4 percent.
Meanwhile, base-metals miner Inmet Mining (IMN.TO) rose over 5 percent after reporting improved third quarter net income of $116.23 million or $1.67 per share compared to $97.99 million or $1.41 per share last year. Analysts were expecting the company to earn C$1.04 per share for the quarter.
Engineering and construction company SNC-Lavalin Group (SNC.TO) gained over 5 percent after reiterating its 2012 net income guidance in a range of C$325 million - C$340 million. The company reported a lower third-quarter net income at C$114.9 million or C$0.76 per share compared to C$124.5 million or C$0.82 per share last year.
In economic news, Statistics Canada said the nation added 1,800 jobs in October, missing economists expectations for 5000 job creations. The unemployment rate remained at 7.4 percent. On an yearly basis, employment increased 1.3 percent or 229,000, all in full-time work.
From the U.S., the Labor Department said non-farm payroll employment increased by 171,000 jobs in October following an upwardly revised increase of 148,000 jobs in September. Economists had expected employment to increase by about 125,000 jobs compared to the increase of 114,000 jobs originally reported for the previous month. Despite the continued job growth, the unemployment rate edged up to 7.9 percent in October from 7.8 percent in September due to an increase by the size of the workforce. The modest increase by the unemployment rate matched economist estimates.
Separately, the Commerce Department said factory orders increased by 4.8 percent in September after tumbling by a revised 5.1 percent in August. Economists had expected orders to increase by about 4.9 percent compared to the 5.2 percent drop originally reported for the previous month
Elsewhere, activity in euro zone's manufacturing sector decreased for the fifteenth consecutive month in October, though at a marginally slower rate than estimated earlier, as domestic market conditions remained subdued and trade flows deteriorated further, final data released by Markit Economics showed. The seasonally adjusted purchasing managers' index decreased to 45.4 in October from 46.1 in September. The latest reading was slightly higher than 45.3 seen in the preliminary estimates.
Meanwhile, Germany's manufacturing sector contraction in October was less severe than expected earlier, but activity dropped for the eighth consecutive month, final survey data released by Markit Economics revealed. The Markit/BME Germany Purchasing Managers' Index fell to 46 from 47.4 in September. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | 11/2/2012 1:20 PM ET
The Swiss stock market finished Friday's session with a gain and closed above the 6,700 point mark. The market got off to a rather sluggish start, but rose steadily following the release of the better than expected U.S. jobs report for October. However, profit taking set in during late trading.
The U.S. jobs report showed better than expected jobs growth and the figures from the prior month were revised upward. The data sparked gains among financial stocks, as well as economically sensitive stocks and luxury goods.
The Swiss Market Index climbed by 0.62 percent Friday and finished at 6,701.37. The SMI ended the week with an increase of 1.5 percent. The Swiss Leader Index gained 0.68 percent Friday and the Swiss Performance Index added 0.61 percent.
Luxury goods companies Richemont and Swatch extended their gains from the previous session. Richemont climbed by 2.9 percent and Swatch increased by 2.8 percent. Sulzer was also among the biggest gainers, with an increase of 2.1 percent, after the company held an "Investor Day."
Among the defensive heavyweights, Novartis rose by 1.1 percent and Roche climbed by 0.7 percent. Nestle lagged behind, with a gain of 0.1 percent. Among the cyclical stocks, Kuehne + Nagel increased by 1.5 percent and SGS added 1.5 percent. Sika and Sonova both rose by 1.5 percent and Adecco advanced by 1.1 percent.
11/2/2012 12:55 PM ET
The majority of the European markets ended Friday's session in the green, following the better than expected U.S. jobs report for October. The markets were slightly negative in early trade, as investors exercised caution ahead of the report. The initial reaction to the jobs report was very positive, propelling the markets into the green. However, as the session progressed, those gains began to slowly erode. Investor will now shift their focus to the U.S. presidential election, which will take place on Tuesday, November 6th.
Greece is "way behind" its bailout program goals due to the standstill in consolidation and basic structural reforms, Bundesbank Executive Board member Andreas Dombret said Thursday.
"Politicians and the EU are willing to assist Greece, but Greece must, first and foremost, help itself" he said in a speech at the reception of the Bundesbank Representative Office.
Announcing and passing laws is not enough if the administration and the general public undermine them, Dombret said. "It is now the task of the Troika to decide impartially whether Greece meets the conditions for further assistance."
A leading think tank on Friday lowered its growth forecast for the British economy next year, while stressing that the fiscal consolidation efforts in the U.K. and Europe are having a large negative impact on growth.
The gross domestic product is expected to grow 1.1 percent in 2013, with no contribution from net trade, the National Institute of Economic and Social Research (NIESR) said in a quarterly report. This was lower than its July forecast of 1.3 percent growth.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.42 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.19 percent.
The DAX of Germany climbed by 0.38 percent and the CAC 40 of France gained 0.49 percent. The FTSE 100 of the U.K. declined by 0.06 percent, but the SMI of Switzerland rose by 0.62 percent.
In Frankfurt, Beiersdorf increased by 7.26 percent. The company reported growth in profit and revenues for the first nine months of the year.
Deutsche Telekom fell by 3.52 percent, on reports that the company's dividend payouts could be reduced by a third in 2013.
In Paris, Alcatel Lucent dropped by 6.67 percent, after reporting a quarterly loss.
Total rose by 0.59 percent, following an upgrade from Societe Generale.
In London, Tullow Oil climbed by 2.70 percent. JP Morgan upgraded its rating on the stock to "Overweight" from "Neutral."
Royal Bank of Scotland declined by 2.23 percent, after the company reported a third quarter loss.
Admiral Group fell by 5.25 percent. The company announced in its third quarter update that group turnover was down 2 percent.
Activity in Eurozone's manufacturing sector decreased for the fifteenth consecutive month in October, though at a marginally slower rate than estimated earlier, as domestic market conditions remained subdued and trade flows deteriorated further, final data released by Markit Economics showed Friday.
The seasonally adjusted purchasing managers' index (PMI) decreased to 45.4 in October from 46.1 in September. The latest reading was slightly higher than 45.3 seen in the preliminary estimates.
Germany's manufacturing sector contraction in October was less severe than expected earlier, but activity dropped for the eighth consecutive month, final survey data released by Markit Economics revealed Friday.
The Markit/BME Germany Purchasing Managers' Index fell to 46 from 47.4 in September, well below the long-term average of 52. The final score came in higher than the flash estimate of 45.7.
French manufacturing activity continued to decline in October, but at a more moderate pace than thought earlier, detailed results of a survey by Markit Economics revealed Friday.
The headline purchasing managers' index, a seasonally adjusted index designed to measure the performance of the manufacturing economy, rose to 43.7 from 42.7 in September. The flash reading was 43.5.
The British construction sector expanded modestly in October, contrary to economists' expectations for a decline, data released by Markit Economics showed Friday.
The seasonally adjusted purchasing managers' index (PMI) for the construction sector increased to 50.9 in October from 49.5 in September. In index rose above the no-change 50 mark that separates growth from contraction, while economists expected a lower reading of 49.
Employment in the U.S. increased by more than economists had anticipated in the month of October, according to a report released by the Labor Department on Friday, although the report also showed an uptick by the unemployment rate.
The report said non-farm payroll employment increased by 171,000 jobs in October following an upwardly revised increase of 148,000 jobs in September. Economists had expected employment to increase by about 125,000 jobs compared to the increase of 114,000 jobs originally reported for the previous month.
Despite the continued job growth, the unemployment rate edged up to 7.9 percent in October from 7.8 percent in September due to an increase by the size of the workforce. The modest increase by the unemployment rate matched economist estimates.
New orders for U.S. manufactured goods showed a notable rebound in the month of September, according to a report released by the Commerce Department on Friday, with the bounce largely due to a jump in orders for transportation equipment.
The report said factory orders increased by 4.8 percent in September after tumbling by a revised 5.1 percent in August. Economists had expected orders to increase by about 4.9 percent compared to the 5.2 percent drop originally reported for the previous month. |
| Asia Market | 11/2/2012 7:23 AM ET
Positive global cues following the release of a slew of positive economic reports from China and the U.S. as well as better-than-expected second-quarter earnings results from IT major Wipro lifted Indian shares notably higher on Friday. The rupee also traded marginally higher despite weakness in the euro/dollar pair, boosting investor sentiment.
The benchmark BSE Sensex moved in the range of 18,688-18,794 before ending up 194 points or 1.04 percent at 18,755, with 26 of its components advancing. Among the decliners, Bharti Airtel lost 2.1 percent on concerns with regard to partial re-farming of telecom spectrum, while Sun Pharma, Jindal Steel and Hindustan Unilever fell less than a percent each. Capital goods, auto, banking and IT stocks led the rally.
Bajaj Auto climbed 2.8 percent after the two-wheeler manufacturer posted a modest 4 percent rise in October sales and said sales would accelerate in the coming months. Likewise, Hero MotoCorp rose 1.8 percent after posting a modest 3 percent rise in two-wheeler sales in October. Maruti Suzuki rose 0.3 percent, Tata Motors added a percent and Mahindra & Mahindra rallied 2.2 percent.
IT major Wipro pared early gains to end 0.3 percent higher, while rivals Infosys and TCS gained about a percent each. Wipro reported a jump of 24 percent jump in second-quarter consolidated net profit and announced the demerger of its non-information technology businesses into a separate entity.
Among metal stocks, Tata Steel, Hindalco and Sterlite rose 1-3 percent. Larsen & Toubro jumped 2.5 percent, extending Thursday's gains after winning new orders. ITC rose 1.2 percent after recent losses, private sector lender ICICI Bank jumped 2.4 percent, state-run Gail soared 4.2 percent and drug maker Lupin added 2.3 percent.
Union Bank of India soared 8.2 percent on robust results. The state-run lender reported a 57 percent surge in quarterly net profit due to lower provisioning. ONGC edged up 0.4 percent amid reports that the oil & gas major has finalized a Rs 8,000 crore surface facility revamp program for its three onshore assets - Ankleshwar, Ahmedabad and Mehsana - in Gujarat.
CESC advanced 1.8 percent on reports that the RP-Sanjiv Goenka group is mulling options for demerging its supermarket chain Spencer's. Godrej Consumer Products added a percent after it acquired a 51 percent stake in Darling Group in Kenya. DLF edged up 0.3 percent as it concluded the sale of a land parcel in Mumbai.
State-run oil retailers ended on a mixed note after the government put on hold a decision to increase the price of non-subsidized LPG cylinders. BPCL slid half a percent, while IOC rose 1.5 percent and HPCL gained 0.6 percent.
Market heavyweight Reliance Industries edged down 0.2 percent after the oil ministry described as "baseless and frivolous" the allegations of granting undue favors to the company. Marico tumbled 4.4 percent on disappointing earnings results.
Elsewhere, other Asian markets rose broadly, mirroring the rally on Wall Street and in Europe overnight as a slew of positive economic reports from China and the U.S. fueled hopes that the global economy is regaining some traction.
European stocks were trading on a lackluster note following the previous session's rally as corporate earnings continued to be lukewarm and investors awaited the release of a key U.S. employment report due later in the day. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | 11/2/2012 7:14 AM ET
The price of crude oil was leveling off from its two-week high Friday morning as traders speculate that demand for crude will be lower than anticipated in the aftermath of Hurricane Sandy.
Light Sweet Crude Oil (WTI) futures for December delivery, shed $0.71 to $86.38 a barrel. Yesterday, oil settled near a two-week high after the Energy Information Administration's weekly oil report showed a decline in U.S. crude stockpile even as analysts expected an increase. Crude prices were also supported by a slew of upbeat macroeconomic data from the U.S., with some positive manufacturing data from China
Thursday during trading hours, the EIA revealed that U.S. crude oil inventories dipped 2.0 million barrels, while gasoline stocks added 0.90 million barrels in the weekended October 26. Analysts expected crude oil inventories to jump 1.50 million barrels and gasoline stocks to add 200,000 barrels last week.
This morning, the U.S. dollar advanced back near a three-week high versus the euro, while paring recent losses against sterling. The buck was steady near a 4-month high versus the yen and moving higher against the Swiss franc.
In economic news, activity in euro zone's manufacturing sector decreased for the fifteenth consecutive month in October, though at a marginally slower rate than estimated earlier, as domestic market conditions remained subdued and trade flows deteriorated further, final data released by Markit Economics showed. The seasonally adjusted purchasing managers' index decreased to 45.4 in October from 46.1 in September. The latest reading was slightly higher than 45.3 seen in the preliminary estimates.
Meanwhile, Germany's manufacturing sector contraction in October was less severe than expected earlier, but activity dropped for the eighth consecutive month, final survey data released by Markit Economics revealed. The Markit/BME Germany Purchasing Managers' Index fell to 46 from 47.4 in September.
Traders will look to the non-farm payroll report for the month of October from the U.S. Labor Department, due out at 8.30 a.m.ET. Economists expect non-farm payrolls for October to increase by 125,000, while the unemployment rate is expected to edge up to 7.9 percent.
Later during the session, the Commerce Department is due to release its report on factory goods orders for September. Economists estimate a 4.9 percent increase in orders for factory goods following a 5.2 percent increase in August. |
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