| Stocks Under Pressure Amid Lingering Fiscal Cliff Worries
Stocks moved lower at the start of trading on Wednesday, extending the downward move seen over the course of the previous session. The major averages have slid firmly into negative territory, further offsetting the strong gains posted last week.
The major averages have seen some further downside in recent trading, falling to new lows for the young session. The Dow is down 70.99 points or 0.6 percent at 12,807.14, the Nasdaq is down 22.99 points or 0.8 percent at 2,944.80 and the S&P 500 is down 9.46 points or 0.7 percent at 1,389.48.
The early weakness on Wall Street reflects lingering concerns about the looming fiscal cliff, with lawmakers in Washington encountering familiar disagreements over taxes on the wealthy and entitlement reform.
While some Republicans have indicated that they would approve an increase in revenues by closing tax loopholes, President Barack Obama and other Democrats continue to push for higher tax rates on wealthy Americans.
Later this morning, Obama will deliver remarks at an event at the White House urging Congress to extend the tax cuts for the middle class, arguing that the middle class shouldn't be held hostage while lawmakers debate extending the tax cuts for the wealthy.
The President and Vice President Joe Biden will also hold a meeting with business leaders to discuss the actions needed to keep the economy growing and find a balanced approach to reduce the deficit.
Gold stocks have shown a notable move to the downside in early trading, dragging the NYSE Arca Gold Bugs Index down by 1.8 percent. The weakness among gold stocks comes as the price of the precious metal is falling by more than $30 an ounce.
Considerable weakness has also emerged among computer hardware stocks, as reflected by the 1.7 percent loss being posted by the NYSE Arca Computer Hardware Index. Logitech (LOGI) and Lexmark (LXK) are posting notable losses.
Steel, oil service, and biotechnology stocks are also seeing early weakness, moving lower along with most of the major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.2 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.7 percent, the U.K.'s FTSE 100 and the French CAC 40 Index are both down by 0.5 percent.
In the bond market, treasuries continue to recover from the notable pullback that was seen last week. 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 1.606 percent. | Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | | TSX Dives At Open Wednesday
Toronto stocks moved down at open Wednesday amid selling in commodities, with the S&P/TSX Composite Index losing 94.24 points or 0.78 percent to 12,017.40.
The Diversified Materials Index lost over 1 percent, with Inmet Mining shedding close to 3 percent. First Quantum Minerals and Teck Resources were down over 1 percent each.
Among gold plays, Royal Gold, Agnico-Eagle Mines, Barrick Gold and Goldcorp. surrendered about 3 percent each. BlackBerry maker Research In Motion extended losses for a second session, dipping close to 5 percent.
Information technology services provider CGI Group Inc. eased 0.75 percent after slipping into the red in third-quarter, reporting net loss.
Meanwhile, mobile phone retailer Glentel Inc. moved up nearly 2 percent after it said it would acquire, through its wholly-owned United States of America subsidiary Glentel (USA), Inc, Automotive Technologies, Inc. dba Wireless Zone, a 428-store franchise system in the United States that sells Verizon Wireless products and services for $83.3 million.
The price of crude oil was moving lower Wednesday morning on risk aversion amid fear of a looming budget crisis in the U.S. Also, traders await cues from the official inventories data due out later during the session. Today during trading hours, the EIA will release its US crude oil inventories data for the weekended November 23. Analysts expect crude supplies to increase 500,000 barrels and gasoline stocks to add 1 million barrels last week.
Crude for January shed $0.99 to $86.19 a barrel.
The price of gold was moving lower Wednesday morning as the US dollar was trading firm, with traders shifting their focus to US fiscal cliff. Gold for December lost $24.90 to $1,717.40 an ounce.
In corporate news from Canada, information technology services provider CGI Group Inc. slipped into the red in third-quarter, reporting net loss of C$167.97 million or C$0.58 per share compared to profit of C$69.54 million or C$ 0.26 per share prior year. CGI incurred acquisition-related and integration charges totaling $248.3 million during the period. Excluding Logica results, the company generated fourth-quarter revenue of C$1.04 billion, representing year-over-year growth of 3.6 percent.
Convenience stores operator Alimentation Couche-Tard Inc. reported a much improved second-quarter net earnings of $175.2 million or $0.94 per share compared to $113.5 million or $0.61 per share in the same quarter last year.
Mobile phone retailer Glentel Inc. said it would acquire, through its wholly-owned United States of America subsidiary Glentel (USA), Inc, Automotive Technologies, Inc. dba Wireless Zone, a 428-store franchise system in the United States that sells Verizon Wireless products and services for $83.3 million. | European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Fiscal Cliff Worries Haunt European Markets
The European markets are mostly lower on Wednesday, as worries about the fiscal cliff in the U.S. escalated with the remarks of Senate Majority Leader Harry Reid on Tuesday. The Asian markets fell, taking cues from Wall Street overnight.
Tuesday, Senate Majority Leader Harry Reid, D-Nev., said lawmakers have made "little progress" on addressing the fiscal cliff, while his Republican counterpart Mitch McConnell, R-Ken., accused Democrats of remaining in campaign mode.
Without action by Congress, approximately $600 billion in automatic tax increases and government spending cuts are currently due to go into effect at the end of the year. A number of economists have warned that going over the fiscal cliff could push the U.S. economy back into recession.
The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.47 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.22 percent.
The German DAX is declining 0.2 percent and the French CAC 40 is losing 0.4 percent. The UK's FTSE 100 is falling 0.3 percent. Switzerland's SMI is, however, up 0.2 percent.
In Frankfurt, Deutsche bank is declining 2.1 percent and Commerzbank is losing 1.7 percent. Fresenius Medical Care is declining 1.7 percent and Infineon Technologies is losing 1.6 percent. Automakers Volkswagen and Daimler are unchanged while BMW is moderately higher. Jungheinrich is dropping 2.4 percent. Cheuvreux raised the stock to ''Outperform'' from ''Underperform.''
In Paris, Lafarge is dropping 2.2 percent. Berenberg cut the stock to ''Hold'' from ''Buy.'' STMicroelectronics is losing 2 percent and carmaker Renault is falling 1.8 percent. Lenders BNP Paribas, Societe Generale and Credit Agricole are falling between 1.8 percent and 1.2 percent.
UBS added Alcatel Lucent to ''Least Preferred List'' in telecom equipment. The stock is up 0.6 percent. EADS is climbing 1.9 percent and Veolia Environnement is advancing 1.6 percent. LVMH is gaining around 1 percent on a positive broker recommendation.
In London, Evraz and Bunzl are declining around 3.5 percent each. International Consolidated Airlines is falling around 2 percent.
Xstrata, Glencore, Vedanta and Eurasian Natural Resources are losing between 1.4 percent and 1.1 percent.
Smith & Nephew is losing 0.8 percent. The company announced an agreement to acquire Healthpoint Biotherapeutics for an all-cash offer of $782 million.
Vodafone is down 0.6 percent, following a broker downgrade.
Tour operator Thomas Cook reported a wider loss for the year, as revenues dropped in an unfavorable currency translation environment and the company incurred hefty fuel costs. However, the company said it is optimistic about future. The stock is gaining 2.7 percent.
United Utilities is gaining 1.9 percent. The water utility reported a higher first-half profit, as revenues grew by regulated price increase. The firm said it is on track to deliver its 2010-15 regulatory outperformance targets. Peer Severn Trent is gaining 1.2 percent.
Marks & Spencer is climbing 3.3 percent. Burberry and Next are up 1.9 percent and 1.2 percent, respectively.
Swiss Life currently expects net profit in double-digit millions for fiscal year 2012. The company will cut 300 to 400 jobs in Germany and Switzerland over the next three years. The stock is down 1.9 percent in Zurich.
Raiffeisen Bank International reported increased profit for the nine-month period, while net interest income contracted 5 percent. The stock is falling over 5 percent in Vienna.
At 8.00 am ET, Destatis is slated to release inflation figures for November, which may influence trading. Germany's EU harmonized inflation is seen slowing to 2 percent from 2.1 percent in October. Consumer price inflation is forecast to fall to 1.9 percent from 2 percent last month. | Asia Market | | Asian Markets Mostly Trade Lower On U.S. Fiscal Worries
Asian stock markets are mostly trading notably lower on Wednesday with investors pressing sales, tracking a weak lead from Wall Street where stocks posted notable losses overnight amid lingering worries about the looming fiscal cliff. Some profit taking due to a lack of positive triggers from the region too appear to be contributing to the decline.
In the Australian market, mining and energy stocks are dragging the indices down. Stocks from consumer discretionary and industrial sections are also mostly trading weak, while financial, healthcare and information technology stocks are trading mixed.
The benchmark S&P/ASX 200 index, which declined to 4,433, is trading at 4,437.4, down 19.4 points or 0.4 percent from its previous close.
Among top miners, BHP Billiton is down 1 percent, Rio Tinto is trading lower by 2 percent and Newcrest Mining is down with a loss of 1.6 percent, while Fortescue Metals, faring relatively better, is trading 0.4 percent down.
In the energy space, Oil Search, Origin Energy and Caltex Australia are down 0.6 to 0.8 percent, while Santos and Woodside Petroleum are trading lower by 1.3 percent and 1.1 percent, respectively.
Among bank stocks, National Australia Bank and Westpac (WBK) are up marginally, ANZ Bankis trading flat and Commonwealth Bank of Australia is trading modestly lower. Bendigo & Adelaide Bank is down 0.6 percent and Bank of Queensland is down marginally.
Paladin Energy is down nearly 4 percent. Iluka Resources is trading lower by 3.7 percent, while Seek, Perseus Mining and James Hardie Industries are down 3 to 3.3 percent.
Leighton Holdings is down 2.8 percent. The company has announced that its subsidiary Thiess has won two contracts worth A$220 million for work on a Queensland coal mine being built by the BHP Billiton Mitsubishi Alliance.
Atlas Iron, Alumina, Lynas Corporation, Challenger, Incitec Pivot, Seven West Media, Downer EDI, Qantas Airways, Oz Minerals and Whitehaven Coal are trading lower by 2 to 2.8 percent.
Shares of Aristocrat Leisure Limited are trading marginally lower despite the company reporting a surge in earnings. The company announced that its net profit for the nine months to September 30, 2012, rose to A$45.5 million from A$19.9 million in the prior corresponding period.
Meanwhile, Primary Healthcare, Aurora Oil & Gas, ResMed Inc. and Tatts Group are trading in positive territory, gaining 1.7 to 3 percent.
In economic news, total construction work done in Australia rose by a lower than expected 1.7 percent in the September quarter, according to the data released by the Australian Bureau of Statistics.
The bureau said total building work done in the September quarter, including homes and non-residential buildings like offices and shops, declined 1.6 percent from the June quarter. Engineering work done, which includes mines, roads, bridges and the like, was up 3.8 percent in the quarter.
In the currency market, the Australian dollar opened lower and was quoting at US$1.0448 in early trades, down from Tuesday's close of US$1.0480.
The Japanese stock market opened weak with investors pressing sales, tracking the overnight cues from Wall Street.
The benchmark Nikkei 225 index, which staged a modest recovery and moved past 9,400 after opening nearly 50 points down at 9,375.5, faltered again and was down 79.4 points or 0.8 percent at 9,343.9 when the morning session ended.
Financial, automobile, steel, non-ferrous metals, insurance and marine transport stocks traded weak. Real estate, pharmaceuticals, retail and foods stocks were mixed.
Alps Electric and Pioneer Corp. lost around 6 percent. Mitsumi Electric, Okuma Corp., Nippon Suisan KK, Ebara Corp, Kobe Steel, Toshiba Corp., Citizen Holdings, Nomura Holdings, Konica Minolta, Mitsui Chemicals and Yaskawa Electric are trading lower by 3 to 5 percent.
Mitsubishi Materials, Mitsui Mining & Smelting, Toho Zinc, JFE Holdings, Fujikura, Sumco Corp., Advantest Corp. (ATE), Nippon Steel & Sumitomo Metal Corp., Pacific Metals, NTN Corp., Sumitomo Electric Industries, Nisshin Steel and Canon Inc were all trading lower by over 2 percent at the break.
Among the gainers in the Nikkei index, Ajinomoto Co. Inc. was up 2.8 percent, Nippon Electric Glass moved up 2.4 percent, Tokyu Land, JX Holdings and Dainippon Sumitomo Pharma gained 1.6 to 1.8 percent, and Asahi Glass moved up 1.3 percent.
Astellas Pharma, Taiheiyo Cement, Kirin Holdings, Asahi Group Holdings and Nippon Meat Packers also posted notable gains.
Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, Indonesia and South Korea are trading notably lower. Singapore and Taiwan are down with modest losses, while Malaysia and New Zealand are trading flat. Markets across the region turned in a mixed performance on Tuesday | Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | | Crude Slips On Demand Concerns
The price of crude oil was moving lower Wednesday morning on risk aversion amid fear of a looming budget crisis in the U.S. Also, traders await cues from the official inventories data due out later during the session.
Light Sweet Crude Oil (WTI) futures for January delivery, lost $0.63 to $86.55 a barrel. Yesterday, oil settled lower on demand growth concerns after the Organization for Economic Co-operation and Development cut its global growth forecast, once again fueling fears of a global recession. Nonetheless, oil found some support on some upbeat U.S. macroeconomic data and the euro zone deal to the Greek imbroglio.
Tuesday after the market hours, the API said US crude oil inventories rose 2 million barrels and gasoline stocks gained 2.3 million barrels in the weekended November 23.
The price of gold was moving lower Wednesday morning as the US dollar was trading firm, with traders shifting their focus to US fiscal cliff.
Gold for December delivery, the most actively traded contract, eased $3.60 to $1,738.70 an ounce. Yesterday, gold extended losses for a second session after some upbeat macroeconomic data out of the U.S. and an euro zone deal with a new bailout program for Greece. Nevertheless, investor focus now shifts to the looming fiscal cliff with billions of dollar in spending cuts and tax increases indicated to begin in January, unless an agreement is reached.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to a record high of 1,345.81 tons from 1,342.20 tons.
This morning, the U.S. dollar was leveling off from its 3-week low versus the euro and sterling. The buck was ticking higher against the Swiss franc, while continuing to retreat from its 7-month high versus the yen.
In economic news from the euro zone, Destatis is slated to release inflation figures for November at 8.00 a.m ET. Germany's EU harmonized inflation is seen slowing to 2 percent from 2.1 percent in October. Consumer price inflation is forecast to fall to 1.9 percent from 2 percent last month.
Traders will look to the new home sales report for October from the U.S. Commerce Department, due out at 10 am ET. Economists expect new home sales to come in at a seasonally adjusted annual rate of 387,000 for October compared to 389,000 in the previous month.
Today during trading hours, the EIA will release its US crude oil inventories data for the weekended November 23. Analysts expect crude supplies to increase 500,000 barrels and gasoline stocks to add 1 million barrels last week. |
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