Stocks See Initial Weakness Amid Fiscal Cliff, Europe Worries
Stocks moved to the downside at the start of trading on Monday, giving back some ground after moving notably higher over the course of the previous week. The major averages all moved to the downside but remain well off their recent lows.
The major averages have recently bounced off their lows for the session but remain in the red. The Dow is down 80.65 points or 0.6 percent at 12,929.03, the Nasdaq is down 6.59 points or 0.2 percent at 2,960.26 and the S&P 500 is down 7.41 points or 0.5 percent at 1,401.74.
The initial weakness on Wall Street reflected lingering concerns about the looming fiscal cliff, with U.S. lawmakers getting back to work following the Thanksgiving recess.
While leaders of both parties have called for compromise, the issues of taxes on the wealthy and entitlement reform are likely to remain major sticking points.
Traders are also keeping an eye on developments in Europe, where finance ministers are holding another meeting regarding another round of financing for Greece.
A final agreement on providing more aid for Greece has been pushed back a number of times, and worries about another delay are weighing on the markets.
Some negative sentiment has also been generated by the results of elections in the Spanish region of Catalonia, which have raised concerns about Spain's ability to push through reforms.
Airline stocks have shown a notable move to the downside in early trading, dragging the NYSE Arca Airline Index down by 1.6 percent. Delta and GOL Linhas are turning in two of the sector's worst performances.
Banking, healthcare provider, and gold stocks are also seeing early weakness, although selling pressure remains relatively subdued.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. While Japan's Nikkei 225 Index edged up by 0.2 percent, Hong Kong's Hang Seng Index ended the day down by 0.2 percent.
Meanwhile, the major European markets have all moved to the downside on the day. The German DAX Index has dropped by 0.3 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 0.5 percent and 0.7 percent, respectively.
In the bond market, treasuries have moved moderately higher after trending lower in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 1.654 percent.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Slips As Traders Focus Greece Bailout - Canadian Commentary
After extending gains for the past six straight sessions, Canadian stocks were lingering in the red Monday morning as commodities were flat as worries over Greece and Spain led to risk aversion, ahead of yet another meeting by euro zone finance ministers in Brussels.
Euro zone finance ministers are meeting again in Brussels today to finalize a deal to clear the next tranche of financing for Greece, after failing to forge an agreement on November 21. Once the deal is struck, lenders will release a loan installment worth 31.5 billion euros to the troubled euro nation.
The S&P/TSX Composite Index surrendered 48.36 points or 0.40 percent to 12,164.88, after adding 400 points or just over 3 percent in the past six straight trading sessions.
The Diversified Materials Index shed nearly 1 percent, with Teck Resources and Inmet Mining losing about 1 percent each. First Quantum Minerals slipped 0.50 percent.
The price of Crude oil was ticking lower Monday morning as traders await cues from the euro zone finance ministers' meet in Brussels. Crude for January slipped $0.76 to $87.52 a barrel.
In the oil patch, Paramount Resources and Bonterra Energy were down about 2 percent each. TransGlobe Energy lost over 4 percent.
The price of gold was little changed Monday morning as the euro was steady with Greece awaiting EUR 31.5 billion aid. gold for December eased $2.20 to $1,749.20 an ounce.
Among gold plays, Barrick gold , Goldcorp. and Royal gold were down around 2 percent each.
Private equity investors and asset manager Onex Corp. eased 0.60 percent after it said it would acquire USI, a leading U.S. provider of insurance brokerage services, for $2.3 billion.
Meanwhile, Research In Motion extended gains, adding about 2 percent.
Renewable power generating company Brookfield Renewable Energy Partners L.P. (BEP_UN.TO) edged up 0.30 percent after announcing its intention to commence an offer to acquire all of the issued and outstanding common shares of Western Wind Energy Corp. (WND.V) for cash consideration of C$2.50 per share. Shares of Western Wind surged 12 percent to C$2.720, just above the offer price.
In economic news from the euro zone, Germany's consumer confidence is set to decline in December, a survey published by market research group GfK showed. The forward-looking consumer sentiment index for December fell to 5.9 from November's downwardly revised reading of 6.1. December's reading was below the expected level of 6.2. The income expectations sub-index slipped to 17.8 points in November from 29.9 points last month. The propensity to buy index came in at 29.4, down from 33.9 in October. Meanwhile, the economic outlook index gained 1.2 points to -14.6 in November. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Drop Before Eurogroup Meeting
The European markets are trading lower on Monday, as worries over Greece and Spain led to risk aversion, ahead of yet another meeting by Eurozone finance ministers in Brussels.
Eurozone finance ministers will meet again in Brussels later today to finalize a deal to clear the next tranche of financing for Greece, after failing to forge an agreement on November 21. Once the deal is struck, lenders will release a loan installment worth 31.5 billion euros to the troubled euro nation.
The ministers held a conference call on Saturday to clear the hurdles before the Monday meeting. Speaking to the French media on Sunday, French Finance Minister Pierre Moscovici said the Eurogroup is close to a deal.
Voters in Spain's wealthy autonomous region of Catalonia have backed separatist parties seeking independence for the region in Sunday's provincial elections, preliminary results revealed. The results gain particular significance against the background of austerity efforts by Spain.
The euro Stoxx 50 index of eurozone bluechip stocks is losing 0.39 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.31 percent.
The German DAX is losing 0.2 percent and the French CAC 40 is dropping 0.6 percent. The UK's FTSE 100 and Switzerland's SMI are dropping 0.4 percent and 0.3 percent, respectively.
In Frankfurt, ThyssenKrupp is dropping 3.2 percent after Credit Suisse cut the steel giant to ''Neutral'' from ''Outperform.''
Commerzbank and Deutsche Bank are moderately lower.
Bucking the trend, Lufthansa is gaining 1.4 percent and Deutsche Boerse is rising 1 percent.
Chevreux raised HOCHTIEF to ''Outperform'' from ''Underperform.'' The stock is moderately higher.
In Paris, Lafarge is falling 2.4 percent and Michelin is losing 1.5 percent.
BNP Paribas, Societe Generale and Credit Agricole are dropping between 1.4 percent and 1.1 percent.
Alcatel Lucent is gaining 1.9 percent. The telecom equipment maker is said to be in talks with Goldman Sachs Group Inc. about a loan to bolster its balance sheet.
Metal fabrication firm Vallourec also is advancing 1.1 percent.
In London, Barclays is losing 4.1 percent as Qatar Holding sold its remaining warrants in the lender. Meanwhile, JPMorgan raised its rating on the stock. Royal Bank of Scotland is falling 2.1 percent and Lloyds Banking is losing around 2 percent.
Aberdeen Asset Management reported higher earnings for the fiscal year, and posted about 10 percent growth in assets under management. The stock is nearly unchanged.
SDL is declining over 11 percent as the company expects full year profit to decline from current expectations.
Cranswick, which reported first-half results, is climbing 9 percent.
Swiss Financial Market Supervisory Authority FINMA Monday ordered capital restrictions and an acquisition ban on UBS Investment Bank. Any important, new business initiative that the Investment Bank intends to take must be approved by the regulator initially. The stock is down 0.6 percent in Zurich.
Reinsurer Swiss Reinsurance Co. estimates claims burden from Hurricane Sandy to be around $900 million, net of retrocession and before tax. Total insured losses are expected between $20 billion and $25 billion. The stock is down 1.1 percent.
Straumann is surging close to 5 percent after Vice Chairman Thomas Straumann sold a 10 percent holding in the company.
Across Asia/Pacific, markets had a mixed outing. Australia's All Ordinaries advanced 0.3 percent and Japan's Nikkei 225 gained 0.2 percent. However, China's Shanghai Composite Index and Hong Kong's Hang Seng declined 0.5 percent and 0.2 percent, respectively.
In the U.S., futures point to a lower open on Wall Street. In the previous abbreviated session that followed the Thanksgiving Day holiday, stocks saw significant strength with technology stocks helping to lead the way higher. The Dow jumped 1.4 percent, the Nasdaq soared 1.4 percent and the S&P 500 surged 1.3 percent.
In the commodity space, Crude for January delivery is losing $0.53 to $87.75 per barrel and December gold is sliding $4.8 to $1746.6 a troy ounce.
| Asia Market | Asian Markets Mostly Up In Positive Territory
Asian markets are mostly trading higher on Monday with investors picking up stocks, amid optimism that the eurozone finance ministers will agree on a bailout package for Greece. A positive close in the U.S. and European markets on Friday is also aiding market sentiment to a notable extent.
The Australian market is trading marginally higher, amid stock specific activity. Consumer staples, industrial and mining stocks are trading firm, while financial, energy and healthcare stocks are trading mixed.
The benchmark S&P/ASX 200 index is up 10.8 points or 0.2 percent at 4,423.8. The broader All Ordinaries index is trading at 4,442.2, up 10.7 points or 0.2 percent from its previous close.
Among bank stocks, ANZ Bank and Westpac are trading lower by 0.4 percent and 1 percent, respectively. Commonwealth Bank of Australia is trading higher by 0.5 percent and National Australia Bank is up 0.2 percent.
Bendigo & Adelaide Bank rose sharply in early trades following announcement from the bank that it would buy the majority of assets of Southern Finance Group for A$290 million. However, the stock pared most of its gains subsequently and is currently trading just 0.5 percent higher from its previous closing price. Bank of Queesnland is up nearly a percent.
Among top miners, BHP Billiton (BHP, BBL), Rio Tinto (RIO, RIO.L) and Newcrest Mining are up 0.6 to 1.2 percent, while Fortescue Metals is up as much as 3.5 percent.
In the energy sector, Woodside Petroleum is up 0.5 percent, Origin Energy is adding 0.6 percent and Caltex Australia is gaining about 1.2 percent, while Santos and Oil Search are trading flat.
Boart Longyear, Sims Metal Management, Atlas Iron and Panaust are up 3.3 to 4 percent.
Seven West Media, Bluescope Steel, Challenger, Monadelphous Group, ALS, Paladin Energy, Fairfax Media, Qantas Airways and AGL Energy are all trading higher by 1.5 to 2.8 percent.
Duet Group, Beach Energy, Harvey Norman Holdings and Leighton Holdings are also trading notably higher.
In the currency market the Australian dollar is trading higher amid hopes of a Greek bailout. The Aussie is currently trading at US$1.0457, up from Friday's close of US$1.0398.
The Japanese market opened on a firm note, extending recent gains, with a weaker yen prompting investors to indulge in buying.
The benchmark Nikkei 225 index, which rose to around 9,488 after opening at 9,466, was up 58.3 points or 0.6 percent at 9,425.1 when the morning session ended.
Automobile, electric power, pulp & paper and oil stocks were mostly up in positive territory, while pharmaceuticals, foods and retail stocks had a mixed outing.
Nisshinbo Holdings Inc., Nisshin Steel, Pioneer Corp., Oki Electric Industry and Sumco Corp. gained more than 4 percent.
Nippon Sheet Glass, Taiyo Yuden, Yaskawa Electric Corp., Kansai Electric Power, Mitsumi Electric, Mitsubishi Electric Corp., Advantest Corp. and Hino Motors moved up 3 to 4 percent.
Chubu Electric Power, Yokohama Rubber, Mitsubishi Motors, Kobe Steel, J Front Retailing, Toyota Motor , Nissan Motor, TDK Corp., Fuji Electric, Nippon Soda, Kawasaki Heavy Industries, Nippon Suisan Kaisha and Nomura Holdings also rose sharply.
Meanwhile, Tokyo Tatemono, JX Holdings, NTN Corp., Softbank Corp., KDDI Corp., Mitsubishi Estate, Sony Corp. and Olympus Corp. drifted lower by 0.4 to 1.2 percent.
In the currency market, the U.S. dollar traded traded around mid-82 yen range in early deals in Tokyo. The yen is currently trading at 82.30 to the dollar.
Among other markets in the Asia-Pacific region, Indonesia, New Zealand, Singapore and Taiwan are trading higher. Shanghai and South Korea are down marginally, while Malaysia is trading flat.
On Wall Street, stocks rallied sharply on Friday, with traders indulging in some heavy buying after recent losses. An unexpected improvement in German business confidence in November and renewed optimism about Greece too aided the surge.
The Dow jumped 172.9 points or 1.4 percent to 13,009.7, the Nasdaq soared 40.3 points or 1.4 percent to 2,966.9 and the S&P 500 surged up 18.2 points or 1.3 percent to 1,409.2.
Major European markets too ended on a firm note on Friday. While the U.K.'s FTSE 100 index moved up 0.5 percent, the German DAX index and the French CAC 40 Index both ended the day up by 0.9 percent.
U.S. Crude oil settled sharply higher on Friday, tracking rising global equity markets with the dollar weakening against some major currencies. Crude prices also benefited by easing supply concerns from the Middle East and lower U.S. Crude stockpiles last week.
Crude for January delivery gained $0.90 or 1.0 percent to close at $88.28 a barrel on the New York Mercantile Exchange. |
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| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | Crude Slips Below $88
The price of Crude oil was ticking lower Monday morning as traders await cues from the euro zone finance ministers' meet in Brussels.
Light Sweet Crude oil futures for January delivery, shed $0.32 to $87.96 a barrel. Last week, oil moved up nearly 2 percent with developments in the Middle East suggest mediators were on the verge of a breakthrough for an immediate end to hostilities between Israel and Hamas that controls the Gaza Strip.
This morning, the U.S. dollar was lingering around its 3-week low versus the euro and moving lower against sterling. The buck continued to level off from its 7-month high versus the yen and flat against the Swiss franc.
Euro zone finance ministers meeting is underway in Brussels to finalize a deal to clear the aid payment for Greece, after failing to forge an agreement on November 21. Once the deal is struck, lenders will release the loan installment worth EUR 31.5 billion to Greece.
During this week, traders will look to the Commerce Department's new home sales report for October, the results of house price surveys by the S&P/Case-Shiller and the Federal House Finance Agency and the National Association of Realtors' pending home sales index for October. The focus is also likely to be on a host of Fed speeches scheduled for the week, including the one by Federal Reserve Chairman Ben Bernanke
Also, focus will be on the Crude oil inventories data from the API, due out Tuesday after the market hours, and the EIA due out the subsequent day. |
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