Stocks Mostly Higher In Reaction To Manufacturing Data
With traders reacting positively to manufacturing data from around the globe, stocks have moved mostly higher during trading on Monday. The major averages have moved back to the upside after posting notable losses last week.
The strength on Wall Street is partly due to the release of reports showing a slowdown in the pace of contraction in manufacturing activity in both China and Europe.
Adding to the buying interest, the Institute for Supply Management released a separate report showing that U.S. manufacturing activity unexpectedly expanded in the month of September.
The ISM said its purchasing managers index rose to 51.5 in September from 49.6 in August, with a reading above 50 indicating an expansion in manufacturing activity. Economists had expected the index to show a much more modest increase to a reading of 49.7.
Airline stocks are seeing considerable strength on the day, driving the NYSE Arca Airline Index up by 1.5 percent. SkyWest (SKYW) and Delta are turning in two of the sector's best performances.
Significant strength has also emerged among brokerage stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Broker/Dealer Index. Steel, banking, and natural gas stocks are also seeing notable strength, moving higher along with most of the major sectors.
While the tech-heavy Nasdaq has pulled back well off its best levels, the Dow and the S&P 500 are holding on to strong gains. The Dow is up 152.27 points or 1.1 percent at 13,589.40 and the S&P 500 is up 13.66 points or 1 percent at 1,454.33, while the Nasdaq is up 20.75 points or 0.7 percent at 1,136.98.
| Canadian Market |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | TSX Up As Euro Zone Worries Ease - Canadian Commentary
Canadian stocks were moving higher Monday morning as commodities turned firm after the International Monetary Fund and the European Central Bank backed the Spanish bank stress test results, saying the publication of the results will strengthen the viability of confidence in the Spanish banking sector. Also, upbeat manufacturing data from south of the border helped lift trader sentiment.
The S&P/TSX Composite Index jumped 83.01 points or 0.67 percent to 12,400.47.
The Diversified Materials Index gained about 2 percent, with First Quantum Minerals and Inmet Mining adding close to 3 percent each. Teck Resources gathered nearly 2 percent.
The price of Crude oil was little changed Monday morning amid lingering worries over the demand growth. The Bank of Japan's quarterly "tankan" index was minus 3, wider than the previous quarter's minus 1. Meanwhile, a survey by the China Federation of Logistics & Purchasing said its monthly index of manufacturing activity stood at 49.8 points on a 100-point scale.
Crude for November delivery edged up $0.34 to $92.53 a barrel.
In the oil patch, Trilogy Oil rose close to 4 percent. Cenovus Energy and Canadian Natural Resources moved up close to 2 percent each.
The price of gold was moving higher Monday morning as the the U.S. dollar was trading weak versus a basket of currencies ahead of this week's macroeconomic data. gold for December gained $5.10 to $1,779.60 an ounce.
Among gold plays, Centerra gold gained 5 percent, while Alamos gold Inc. was adding nearly 3 percent. Agnico-Eagle Mines , Goldcorp. and Barrick gold gathered just over 1 percent each.
Gold miner Crocodile gold Corp. announced that its Chief Financial Officer Stephen Woodhead will be leaving the company, on personal grounds. The stock added 1 percent.
Bombardier Inc. (BBD_A.TO, BBD_B.TO) said its unit Bombardier Aerospace received orders for a total of Global business jets from an undisclosed customer, valued at approximately $500 million. Separately, the company announced that it will deliver 50 million euro worth of trains to Deutsche Bahn AG. The stock was up 3 percent.
Hydroelectric power generation company Emera Inc. (EMA.TO) edged up 0.50 percent after announcing the increase in the annual dividend rate to $1.40 from $1.35 per common share.
Meanwhile, food and beverage company Molson Coors (TPX_B.TO) shed over 4 percent after announcing the formation of a new business segment, Molson Coors Europe, by combining its existing businesses in the UK and Ireland with its recently-acquired business in nine Central European countries
Oil and gas company Brownstone Energy, Inc. (BWN.V) lost close to 5 percent after reporting fiscal 2012 loss of C$27.1 million or C$0.21 per share, wider than C$1.6 million or C$0.02 per share in the year-ago period.
In economic news Statistics Canada said the Industrial Product Price Index moved lower for a fourth straight month, edging down 0.1 percent in August compared with July, mainly due to the result of lower prices for motor vehicles and other transportation equipment. Meanwhile, the Raw Materials Price Index (RMPI) rose 3.4 percent in August, mostly because of higher prices for mineral fuels, specifically Crude oil.
From south of the border, the the Institute for Supply Management said its purchasing managers index rose to 51.5 in September from 49.6 in August, with a reading above 50 indicating an expansion in manufacturing activity. Economists had expected the index to show a much more modest increase to a reading of 49.7.
Elsewhere, activity in the euro zone manufacturing sector in September decreased at a slightly slower pace than estimated earlier, final data from a survey by Markit Economics showed. The seasonally adjusted purchasing managers' index for the manufacturing sector came in at a six-month high of 46.1 in September, slightly higher than 46 recorded in the preliminary estimates.
Germany's manufacturing contracted at a slower pace in September due to slower reductions in output and new orders as well as a stabilization of manufacturing employment levels, survey data from Markit Economics revealed.
Meanwhile, a report from the Eurostat showed that unemployment in the euro zone remained unchanged for the second successive month in August. The seasonally adjusted unemployment rate was 11.4 percent, unchanged from July and June. The latest figure also matched economists' expectations. |
| European Market | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | European Markets Rally After Strong ISM Manufacturing Report
The European markets finished solidly in the green at the beginning of the new trading week. The markets began the session in positive territory, as they staged a recovery from Friday's losses. The markets received a tremendous boost in the afternoon, after the U.S. ISM manufacturing result came in much higher than expected.
The International Monetary Fund and the European Central Bank backed the Spanish bank stress test results, saying the publication of the results will strengthen the viability of confidence in the Spanish banking sector. Moody's Investors Service, however, said in its credit outlook today that the planned recapitalization of struggling Spanish banks may not restore market confidence fully.
The euro Stoxx 50 index of Eurozone bluechip stocks increased by 1.90 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.38 percent.
The DAX of Germany rose by 1.53 percent and the CAC 40 of France advanced by 2.39 percent. The FTSE 100 of the U.K. gained 1.37 percent and the SMI of Switzerland added 1.77 percent.
In Frankfurt, Bayer climbed by 2.74 percent and Evotec gained 5.87 percent. The companies have entered into a five-year, multi-target collaboration with the goal of developing three clinical candidates for the treatment of endometriosis.
SAP AG rose by 0.18 percent, after the U.S. Department of Justice approved its acquisition of Ariba Inc.
Commerzbank rose by 3.10 percent and Deutsche Bank added 2.55 percent.
In Paris, Credit Agricole S.A. increased by 7.36 percent. The French lender has entered into exclusive negotiations with Alpha Bank to acquire the entire share capital of Emporiki.
Societe Generale gained 3.85 percent and BNP Paribas added 3.49 percent.
In London, BHP Billiton finished higher by 2.57 percent. The mining giant projected its copper production to grow at a compound annual growth rate of 10 percent up to end fiscal 2015.
Xstrata climbed by 2.35 percent, after the company agreed to a revised $33 billion takeover bid from Glencore International. Shares of Glencore finished with a loss of 0.32 percent.
Barclays rose by 3.49 percent and Royal Bank of Scotland gained 3.66 percent. HSBC finished higher by 2.48 percent and Lloyds Banking Group added 2.95 percent.
The euro area unemployment rate was unchanged at a record high in August as firms continued to scale back their operations in response to weak demand, data released by the statistical office Eurostat showed Monday.
The seasonally adjusted unemployment rate was 11.4 percent in August, unchanged from July and June that were revised from 11.3 percent. The latest figure was the highest on record and matched economists' expectations. Activity in the Eurozone manufacturing sector in September decreased at a slightly slower pace than estimated earlier, final data from a survey by Markit Economics showed Monday.
The seasonally adjusted purchasing managers' index for the manufacturing sector came in at a six-month high of 46.1 in September, slightly higher than 46 recorded in the preliminary estimates. In August the reading was 45.1.
Germany's manufacturing contracted at a slower pace in September due to slower reductions in output and new orders as well as a stabilization of manufacturing employment levels, survey data from Markit Economics showed Monday. The final seasonally adjusted Markit/BME Germany Purchasing Managers' Index rose to 47.4 from 44.7 in August.
The French manufacturing conditions worsened in September, but at a slightly less than initially estimated pace, survey data from Markit Economics showed Monday. The Purchasing Managers' Index plunged to 42.7 in September, the lowest since April 2009, from 46 in August. The flash reading for September was 42.6.
U.K. manufacturing sector continued to contract in September on lackluster order inflows and mounting job losses amid a prolonged recession, a closely watched survey revealed Monday.
The seasonally adjusted Purchasing Managers' Index dropped unexpectedly to 48.4 from 49.6 in August, results of a survey by the Chartered Institute of Purchasing & Supply and Markit Economics showed.
After three consecutive months of contraction, activity in the U.S. manufacturing sector unexpectedly expanded in the month of September, according to a report released by the Institute for Supply Management on Monday.
The ISM said its purchasing managers' index rose to 51.5 in September from 49.6 in August, with a reading above 50 indicating an expansion in manufacturing activity. Economists had expected the index to show a much more modest increase to a reading of 49.7.
Construction spending in the U.S. unexpectedly decreased in the month of August, according to a report released by the Commerce Department on Monday, with the report showing drops in spending on both public and private construction.
The report said construction spending fell 0.6 percent to an annual rate of $837.1 billion in August after falling by a revised 0.4 percent to $842.0 billion in July. The drop came as a surprise to economists, who had expected spending to increase by 0.6 percent. |
| Asia Market | Asian Stocks Fall On EU Debt Worries
Asian stocks fell in thin trading on Monday, weighed down by uncertainty about Spain's bailout. The bank stress tests in Spain came in line with expectations, but investors were worried about Spain's financial health after Spain said its public debt and deficit will rise far above earlier forecasts in 2013.
With Spain's debt financing problems mounting, investors awaited the outcome of Moody's latest review of the country's sovereign rating. Growth worries also came back to haunt markets after data from China to Japan showed sluggish business activity.
Official data showed that China's official factory purchasing managers' index rose to 49.8 in September from 49.2 in August, falling short of expectations for an expansion. Manufacturing activity contracted for the second straight month, adding to fears about a Sharp slowdown in the world's second largest economy.
The markets in mainland China and Hong Kong were shut for holidays. The Chinese market will remain closed for the whole week on account of the Golden Week holidays running from September 30 to October 7.
Japan's Nikkei index slid 0.8 percent to its lowest level in nearly a month after the Bank of Japan's tankan survey showed business sentiment among large manufacturers worsened in the three months to September, with the headline index deteriorating to minus 3 from a minus 1 reading in the previous June survey. The broader Topix index fell 0.7 percent.
Automaker Toyota Motor, steelmaker JFE Holdings and tire maker Bridgestone fell 2-3 percent on concerns over economic slowdown and the ongoing territorial dispute with China, while shares of eAccess soared 26 percent on reports of a potential acquisition by Softbank.
Heavyweight Fast Retailing retreated 2 percent, Advantest, the world's biggest producer of memory-chip testers, tumbled 3.7 percent on a brokerage downgrade and Tokyo Electron edged down 0.6 percent.
Australian shares finished largely unchanged after data out of China and Japan added to signs of deepening global economic slowdown. Both the benchmark S&P/ASX and the broader All Ordinaries index rose less than 0.1 percent each, led by gains in the mining sector after Arrium, formerly OneSteel, rejected a A$1.01 billion takeover offer from a consortium including Noble Group and POSCO, saying the proposal is not in the best interests of Arrium shareholders. Shares of the mining and steel maker jumped 25 percent.
Shares of Fortescue Metals Group rose 0.3 percent on saying it has processed the first ore through its second iron ore processing facility at Christmas Creek in Western Australia's Pilbara.
BHP Billiton gained 0.2 percent and Rio Tinto closed on a flat note, while gold miner Newcrest slipped 0.3 percent after a private exploration company backed by high-profile shareholders including Leigh Clifford, Mark Carnegie and Jeremy Barlow lodged a claim aimed preventing Newcrest Mining from expanding its $2 billion Cadia East project in New South Wales.
Banks gained ground ahead of the Reserve Bank of Australia Board meeting tomorrow, with many expecting a status quo decision despite significant deterioration in the outlook for growth. ANZ, Commonwealth, NAB and Westpac rose less than half a percent each.
In economic news, the contraction in Australia's manufacturing sector accelerated in September, weighed down by a pullback in the mining sector and the impact of a stronger Australian dollar, data released by the Australian Industry Group showed. The manufacturing index dropped 1.2 points to 44.1 in the month, with a reading below 50 indicating contraction. Separately, a private gauge of Australian inflation edged up modestly in September, but still remained within the RBA's target band of 2 to 3 percent.
New Zealand shares fell modestly in line with lackluster regional cues. The benchmark NZX-50 index eased 0.1 percent, with gold miner OceanaGold pacing the declines with a 3 percent loss after gold prices slipped from a seven-month high, tracking a weaker euro amid worries over Spain's debt levels and a possible sovereign rating cut to' junk' status.
Exporter Fisher & Paykel Healthcare lost 2.2 percent as the kiwi dollar held near a 12-month high against its Australian counterpart ahead of RBA rate decision tomorrow. Among the prominent gainers, Fletcher Building, the nation's largest construction company, rose 1.3 percent, while NZ Oil & Gas and Air New Zealand added 1-2 percent.
India's benchmark Sensex was moving up 0.3 percent, tracking firm European cues after Moody's said a planned recapitalization of struggling Spanish banks will materially enhance the solvency of affected institutions and help restore market confidence in Spain's banking system as a whole. However, the ratings agency warned that the recapitalization amounts published by Spain are not enough to keep Spanish banks stable in highly adverse scenarios.
Elsewhere, Indonesia's Jakarta Composite index was down 0.6 percent, Singapore's Straits Times index shed 0.2 percent and the Taiwan Weighted average lost half a percent.
On Wall Street, stocks managed to recover some early losses, but still ended the session on a weak note on Friday, with concerns over Spain's ability to deal with its banks and weak U.S. economic data on Chicago-area business activity and consumer spending weighing on the markets. The Dow edged down 0.4 percent, the tech-heavy Nasdaq slid 0.7 percent and the S&P 500 dropped half a percent. |
| Commodities | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | U.K. Manufacturing PMI Remains In Negative Territory
U.K. manufacturing sector continued to contract in September on lackluster order inflows and mounting job losses amid a prolonged recession, a closely watched survey revealed Monday.
The seasonally adjusted Purchasing Manager's Index dropped unexpectedly to 48.4 from 49.6 in August, results of a survey by the Chartered Institute of Purchasing & Supply and Markit Economics showed.
A reading below 50 suggests contraction in the sector. The index was forecast to improve to 49.9 in September.
Companies reported that production was lower during the month due to reduced inflows of new export business and subdued domestic market conditions.
Nonetheless, new orders increased for the second successive month. Export orders, however, declined for the sixth consecutive month amid weaker demand from the EU and Asia.
"Domestically, UK consumers appear to be doing their part for the recovery, with a strengthening in demand for consumer goods," said David Noble, chief executive officer at CIPS. However, it remains to be seen if this demand will hold strong with inflation creeping into the equation.
Manufacturers were also hurt by rising cost pressures. The average input price inflation rose to a 6-month high due to higher cost of chemicals, energy, foodstuffs, metals, oil and plastics.
Output price inflation was the lowest in eight months as weak demand and strong competition restricted manufacturers' pricing power.
Meanwhile, staffing levels declined for the fifth successive month and the steepest rate since November 2011. Factories shed jobs due to tough market conditions, lower production and the presence of spare capacity.
Despite the disappointing manufacturing PMI data, the Bank of England is likely to keep the key rate at 0.50 percent and to stick to the current quantitative easing plans, IHS Global Insight's Chief UK economist Howard Archer said.
Data from the Bank of England showed a less than expected increase in mortgage approvals in August, today. The mortgage approvals secured on dwellings increased to 47,665 in August from 47,556 in July. The expected level for August was 49,300.
Total lending to individuals fell by GBP 0.4 billion in August. The annual growth was broadly unchanged at 0.6 percent.
Today's figures suggest that the industrial and housing sectors cannot be relied upon to help to return the economy to a sustained period of growth, Samuel Tombs, an economist at Capital Economics said.
The U.K. economy shrank at a less than initially estimated pace of 0.4 percent in the second quarter. |
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