London open: Stocks rise despite contradictory reports on Spain
Market Movers
techMARK 2,101.51 +0.42%
FTSE 100 5,835.25 +0.51%
FTSE 250 11,921.27 +0.55% - Portugal, Greece and Spain in the spotlight
- Markets await economic data from UK and Eurozone
- Rio Tinto and Anglo American gain
London's FTSE 100 index registered a strong start on Tuesday morning as investors celebrated signs of progress in the Eurozone.
Markets finished with just slight gains on Monday despite some better-than-expected US retail sales data and decent third-quarter figures from banking giant Citigroup.
Market analyst Craig Erlam from Alpari said this morning: "This just shows that the Eurozone is still at the forefront of everyone's minds this week. The EU summit on Thursday and Friday is all investors seem to care about at the moment. It is not often that we see such positive retail sales data and corporate earnings completely ignored."
Portugal has been hit by protests after it revealed its 2013 budget yesterday which includes tax rises and spending cuts and is likely to see the country fall into its third year of recession.
Greek Prime Minister Antonis Samaras said in Athens last night that he is confidence that Greece will receive its next tranche of the bailout.
The Spanish government is preparing to make a request for aid, according to an article in the Financial Times last night, but is being held back by considerations relating to Germany and Italy. Bloomberg, however, is reporting that Spain's Prime Minister believes that holding out for longer will win the country better terms. A similar report yesterday from Dow Jones Newswires -citing the Mexican President- may have weighed on Spanish bonds.
Meanwhile, Standard & Poor's has cut its long-term credit ratings for 11 Spanish banks and short-term ratings on four, as is often to be expected after having done the same with the underlying sovereign previously.
Markets will be keeping an eye out for a short-term Spanish debt auction scheduled for later this morning, the first issuance since Standard & Poor's (S&P) downgraded the country's debt rating last week to just one notch above 'junk status'.
Economic data from home and away is due out today. In the UK, the Office for National Statistics releases September inflation data at 09:30 (consensus estimate: 2.2% year-on-year, last: 2.5% year-on-year). The September producer price indices will also be released at 09:30 (consensus estimate: 0.2% month-on-month, last: 2.0% month-on-month). Inflation figures and economic sentiment surveys are also due out in the Eurozone. FTSE 100: Rio and Anglo provide a lift early on
Diversified mining group Rio Tinto rose after hailing a strong set of production results in the third quarter, with iron ore, copper, bauxite, alumina, and titanium dioxide output up year-on-year.
Sector peer Anglo American gained after saying that the illegal occupation of the Sishen Mine - owned by its subsidiary Kumbia Iron Ore - has been brought to an end by police. The company said it could get back to business as soon as possible.
Airline group IAG was a heavy faller after Liberum Capital downgraded its recommendation for the shares to 'sell'.
Global engineering firm GKN fell after warning that macroeconomic conditions have deteriorated in recent weeks and it was seeing evidence of softening in order books.
Telecoms titan BT Group was in demand after Nomura reiterated its 'buy' rating on the stock, saying it prefers it to Vodafone on "structural growth drivers and dividend outlook".
FTSE 250: Bellway and N Brown surge after results
UK housebuilder Bellway was a high riser after delivering a solid increase in full-year pre-tax profit, helped by a strong performance in London, and said reservations since July 31st have remained in line with expectations.
Internet and catalogue home shopping firm N Brown wasn't far behind after reporting that sale and profits ahead of expectations in the first half, with like-for-like (LFL) sales growth accelerating in the second quarter.
Mining group Bumi fell after financier Nathaniel Rothschild resigned from the board, saying he had lost confidence in the management's ability to stand up for investors.
Gold miner Petropavlovsk rose after saying it was on track to achieve its full-year production target of at least 700,000oz.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 41.20p +2.17%
Kazakhmys (KAZ) 703.50p +1.96%
Antofagasta (ANTO) 1,277.00p +1.59%
Evraz (EVR) 232.60p +1.48%
ARM Holdings (ARM) 586.00p +1.47%
Vedanta Resources (VED) 1,087.00p +1.40%
Aviva (AV.) 334.90p +1.33%
Randgold Resources Ltd. (RRS) 7,640.00p +1.33%
Petrofac Ltd. (PFC) 1,632.00p +1.30%
Royal Bank of Scotland Group (RBS) 271.50p +1.27%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 154.80p -2.03%
GKN (GKN) 208.60p -1.56%
Serco Group (SRP) 572.50p -0.69%
Pennon Group (PNN) 719.00p -0.35%
Hargreaves Lansdown (HL.) 723.00p -0.34%
Meggitt (MGGT) 401.80p -0.17%
IMI (IMI) 901.50p -0.17%
GlaxoSmithKline (GSK) 1,435.00p -0.14%
Whitbread (WTB) 2,368.00p -0.08%
Tesco (TSCO) 309.80p -0.06%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 290.80p +7.82%
Bellway (BWY) 1,010.00p +6.32%
Petropavlovsk (POG) 445.40p +4.36%
Perform Group (PER) 416.50p +4.12%
Bodycote (BOY) 357.70p +3.65%
Imagination Technologies Group (IMG) 460.00p +3.60%
Paragon Group Of Companies (PAG) 230.10p +3.18%
Pace (PIC) 171.70p +2.94%
Millennium & Copthorne Hotels (MLC) 512.50p +2.71%
JD Sports Fashion (JD.) 770.00p +2.60%
FTSE 250 - Fallers
Ophir Energy (OPHR) 585.50p -2.34%
F&C Asset Management (FCAM) 95.15p -1.86%
Daejan Holdings (DJAN) 2,777.42p -1.68%
Go-Ahead Group (GOG) 1,278.00p -0.93%
Informa (INF) 397.10p -0.77%
Regus (RGU) 104.20p -0.76%
Euromoney Institutional Investor (ERM) 769.50p -0.71%
Aveva Group (AVV) 2,023.00p -0.69%
Dignity (DTY) 930.00p -0.64%
UK Event Calendar Tuesday October 16
INTERIMS
Brown (N.) Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Capacity Utilisation (US) (16:15)
Consumer Price Index (EU) (10:00)
Consumer Price Index (US) (13:30)
Harmonised Index of Consumer Prices (EU) (10:00)
Industrial Production (US) (16:15)
New Car Registrations (EU) (10:00)
ZEW Survey (EU) (10:00)
ZEW Survey (GER) (10:00)
Q3
GKN
GMS
Blavod Wines & Spirits, Energetix Group
FINALS
Bellway, EpiStem Holdings, Plexus Holdings, Smiths News, Spirit Pub Company
IMSS
GKN
EGMS
Global Ports Investments GDR (REG S)
AGMS
In-Deed Online
UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
Producer Price Index (09:30)
Retail Price Index (09:30)
| US Market Report | US close: Retail sales lift for equities
Market movers
Dow Jones Industrial: +95 at 13,424
S&P 500: +12 at 1,440
NASDAQ Composite: +20 at 3,064 Despite warnings from the likes of the Bank of Israel's governor, Stanley Fisher, regarding the downside risks to global growth forecasts, US stocks made a strong start to the week, boosted by better than expected retail sales and consensus beating results from Citigroup.
Meanwhile, in a speech at the annual meeting of the National Association for Business Economics (NABE), New York Federal Reserve (Fed) president William Dudley reassured his audience that the central bank will only begin to unwind its lax monetary policy once the US recovery is well-anchored.
Dudley was optmistic about the US recovery in 2013 in spite of the market's continuous concerns over the European sovereign debt crisis and the US "fiscal cliff" - the $600bn of tax increases and spending cuts that will come into force in 2013 unless Congress reaches an agreement on the nation's budget deficit.
Dudley insisted that the Fed would have to be sure that the recovery is on solid footing before it changes its monetary policy. "If we were to see some good news on growth I would not expect us to respond in a hasty manner," he said in New York.
On the other hand, it appears as if more could have been done. "With the benefit of hindsight, monetary policy needed to be still more aggressive," Dudley said. "A more front-loaded programme would avoid greater attenuation compared to a policy that started out less aggressive but added stimulus gradually over time."
The NY Fed president denied there was any conflict between the Fed's dual mandate of full employment and price stability because inflation will remain below 2% and the Fed can keep price increases under control by paying interest on excess reserves.
"Only as we became confident that the recovery was securely established would I expect our monetary policy stance to evolve to ensure that it remained appropriate to achievement of our objective: maximum sustainable employment in the context of price stability," he said. Citigroup gets fixed income boost
Banking colossus Citigroup saw revenue from trading fixed income securities surge by just under two-thirds year-on-year in the third quarter, putting a positive sheen on the company's results.
The bank reported earnings per share (EPS) of $1.06, excluding extraordinary items, compared to the 97 cents expected by the market. Revenue came in at $19.4bn.
Including extraordinary items, earnings fell 88% to 15 cents per share compared to $1.23 last year. The one-time items include a tax benefit, a write-down for the disposal of its stake in Smith Barney, and accounting adjustments.
"Our core businesses showed momentum during the quarter as we increased lending and generated higher operating revenues," said Chief Executive Office Vikram Pandit.
American phone company Sprint Nextel finished lower after Softbank confirmed that it will acquire a 70% share in the company for $20.1bn. The deal will be the largest acquisition ever made by a Japanese company.
According to a statement by Softbank, the operation will take place with a direct purchase of $8bn of Sprint's treasury stock, while the remaining $12.1bn will be acquired via market transactions.
Softbank says both boards of directors have approved the deal and that they expect the transaction to close in mid-2013.
The deal has put the kibosh on any hopes of Sprint Nextel buying MetroPCS.
Chip-maker panned
Advanced Micro Devices, a distant second to Intel in the US computer chip manufacturing market, is rumoured to be slashing around one-fifth of its workforce.
In contrast, Texas Instruments was wanted on reports that online retail giant Amazon may buy its mobile devices chip unit. The theory goes that Amazon, which produces the popular Kindle ebook reader device, is looking to move into the smartphone market and deeper into the tablet market.
Blackrock and CarMax rose on the back of positive comments on the companies' share prices in the latest edition of Barron's. Toy maker Hasbro, however, eased after Goldman Sachs downgraded the stock to "sell" from "neutral".
Shares of Eli Lilly advanced after the drugs maker released positive results for a late-stage study of a gastric cancer drug. The company also benefitted today from positive broker comments.
Retail sales data boosts GDP tracking estimates
US retail sales, excluding automobiles, rose 1.1% in September, comfortably beating the consensus expectation of a 0.6% rise. The previous month's reading has been revised down to a rise of 0.8% from a preliminary estimate of 1.0%.
The above data (and revisions) pushed Barclays Research's tracking estimate for growth in third quarter gross domestic product higher, by 0.2 percentage points, to 2%.
In other economic news, the Empire State Manufacturing Index for October remained in negative territory for the third month in a row, at -6.2, though this was an improvement from September's reading of -10.2. The sub-index for new orders increased to -8.9 from -14.
Business inventories climbed by 0.6% month-on-month in August (Consensus: 0.5%).
Bonds and crude futures fall
10-year US Treasuries were down by 1/16 dollars, with yields at the 1.66% mark.
Front month West Texas crude futures were barely changed, down 7 cents at $91.79 a barrel on the NYMEX.
S&P 500 - Risers
Alpha Natural Res (ANR) $8.48 +7.61%
Citigroup Inc. (C) $36.66 +5.50%
PulteGroup Inc. (PHM) $16.40 +5.06%
Cablevision Systems Corp. (CVC) $17.73 +4.85%
American Tower Corp (Reit) (AMT) $75.35 +4.41%
Eli Lilly and Company (LLY) $52.53 +4.12%
Abbott Laboratories (ABT) $72.05 +4.00%
Weyerhaeuser Co. (WY) $27.30 +3.96%
Crown Castle International (CCI) $67.05 +3.71%
Intuitive Surgical Inc. (ISRG) $512.53 +3.63%
S&P 500 - Fallers
Metropcs Communications Inc. (PCS) $11.33 -4.63%
Harris Corp. (HRS) $46.86 -4.05%
Hasbro Inc (HAS) $37.75 -3.94%
Apollo Group Inc. (APOL) $27.66 -3.42%
BMC Software Inc. (BMC) $41.49 -2.49%
CONSOL Energy Inc. (CNX) $34.36 -2.22%
Bed Bath & Beyond Inc. (BBBY) $60.32 -1.84%
Mattel Inc. (MAT) $35.42 -1.64%
QEP Resources Inc (QEP) $31.52 -1.50%
Range Resources Corp. (RRC) $70.68 -1.46%
Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.44 +3.51%
Merck & Co. Inc. (MRK) $46.59 +2.13%
Home Depot Inc. (HD) $60.65 +1.83%
JP Morgan Chase & Co. (JPM) $42.38 +1.83%
Pfizer Inc. (PFE) $25.57 +1.79%
Wal-Mart Stores Inc. (WMT) $77.15 +1.77%
Travelers Company Inc. (TRV) $69.79 +1.56%
Alcoa Inc. (AA) $8.80 +1.27%
Intel Corp. (INTC) $21.73 +1.16%
Procter & Gamble Co. (PG) $68.71 +1.13%
Dow Jones I.A - Fallers
AT&T Inc. (T) $35.21 -1.18%
American Express Co. (AXP) $57.59 -0.52%
Nasdaq 100 - Risers
Virgin Media Inc. (VMED) $31.87 +3.78%
Intuitive Surgical Inc. (ISRG) $512.53 +3.63%
Texas Instruments Inc (TXN) $28.22 +3.45%
Sandisk Corp. (SNDK) $43.73 +3.43%
Fossil Inc. (FOSL) $85.09 +2.85%
Amgen Inc. (AMGN) $86.22 +2.64%
Baidu Inc. (BIDU) $113.82 +2.34%
Autodesk Inc. (ADSK) $31.90 +2.24%
Monster Beverage Corp (MNST) $58.31 +2.15%
Wynn Resorts Ltd. (WYNN) $116.25 +2.14%
Nasdaq 100 - Fallers
Apollo Group Inc. (APOL) $27.66 -3.42%
BMC Software Inc. (BMC) $41.49 -2.49%
Bed Bath & Beyond Inc. (BBBY) $60.32 -1.84%
Mattel Inc. (MAT) $35.42 -1.64%
Dollar Tree Stores Inc. (DLTR) $40.52 -1.43%
Yahoo! Inc. (YHOO) $15.66 -1.39%
Citrix Systems Inc. (CTXS) $66.79 -1.34%
Costco Wholesale Corp. (COST) $96.51 -1.07% |
| FX and Commodities round-up | FX round-up: Dollar retains slim gains
The dollar made mild progress against major currencies on Monday as investors cheered a stronger than expected US retail sales report.
The ICE dollar index, which measures the US unit against a basket of six major currencies, climbed to 79.712 from 79.678 on Friday.
The latest report from the US Commerce Department said retail and restaurant sales rose 1.1% in September from the previous month, rising for the third consecutive month.
Dollar gains were limited however following a weaker than expected October report on manufacturers in the New York region. This month's reading was the weakest since 2010.
The euro recovered from earlier weakness to trade at $1.2952, barely changed from $1.2956 on Friday, as focus turns to this week's two-day European Union summit in Brussels, which kicks off on Thursday. EU leaders are expected to discuss reforms to the Eurozone budget.
Markets are also hopeful the meeting will bring some clarity on when a possible Spanish bailout will happen and how Greece's debt crisis can be resolved.
Sterling fell to a one-month low against the dollar on Monday on concern about the persistently weak UK economic outlook and the possibility of further monetary easing from the Bank of England. Sterling fell to $1.6048 from $1.6078.
Against the yen, the greenback fetched ¥78.72 from ¥78.41 the previous session while the Australian dollar bought $1.0258 versus $1.0233 on Friday. Commodities: Oil barely changed
Crude oil futures settled almost flat on Monday, after spending most of the day in the red, as traders fretted about weak oil demand.
The spotlight initially turned to slowing global oil demand after the International Energy Agency cut its 2012 outlook for oil demand growth last week. The IEA also said it sees increased production from oil rich nations such as Iraq, Libya and the US.
Oil cartel OPEC also doused market fears about surplus supplies after it said it anticipates the oil markets to stay well supplied into next year.
Crude for November delivery fell 1 cent to settle at $91.85 a barrel on the New York Mercantile Exchange after a brief fall below $90 earlier in the session.
Oil prices managed to climb back above $90 as concern about escalating tensions in the Middle East brought buyers back in.
Meanwhile the European benchmark Brent crude finished up $1.18 at $115.80 a barrel on the ICE futures exchange.
Among precious metals gold nursed a 1.3% loss on Monday and hit an intra-day low of $1,729.70 as the dollar strengthened and US stock markets rallied.
Gold for December delivery declined $22.10 to settle at $1,737.60 an ounce, extending the previous session's decline.
Silver for December lost 93 cents at $32.74 an ounce while palladium for December delivery dropped $6.45 at $632.60 an ounce. January platinum tumbled $27 to $1,632.30 an ounce. |
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