ADVFN III World Daily Markets Bulletin -September 14, 2012-.


ADVFN III World Daily Markets Bulletin
Daily world financial news

Friday, 14 September 2012

US Market Reports
Stocks Moving Mostly Higher, Adding To Yesterday's Gains

Stocks have moved mostly higher in early trading on Friday, extending the substantial upward move that was seen in the previous session. The major averages have climbed firmly into positive territory, reaching new multi-year intraday highs.

The major averages have seen some further upside in recent trading, reaching new highs for the young session. The Dow is up 66.44 points or 0.5 percent at 13,606.30, the Nasdaq is up 25.60 points or 0.8 percent at 3,181.43 and the S&P 500 is up 8.03 points or 0.6 percent at 1,468.02.

The early strength on Wall Street comes as traders continue to react positively to the Federal Reserve's announcement of its decision to provide further economic stimulus by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.

Looking ahead, the Fed said it would continue its purchases of mortgage-backed securities until the outlook for the labor market improves substantially.

The central bank also left interest rates at near-zero levels and said exceptionally low rates are likely to be warranted at least through mid-2015.

Traders are also digesting a mixed batch of economic data, including a report from the Commerce Department showing slightly stronger than expected retail sales growth amid a jump in gas prices.

Benefiting from optimism about the outlook for demand, steel stocks have shown a particularly strong upward move in early trading. The NYSE Arca Steel Index has surged up by 4 percent, reaching its best intraday level in over four months.

Gold stocks are also seeing considerable strength amid a modest increase by the price of the precious metal. Housing, oil service, and computer hardware stocks are also posting substantial gains, moving higher along with most of the major sectors.

In overseas trading, stock markets across the Asia-Pacific region saw considerable strength on Friday following the overnight rally on Wall Street. Japan's Nikkei 225 Index surged up by 1.8 percent, while Hong Kong's Hang Seng Index jumped by 2.9 percent.

The major European markets have also moved sharply higher on the day. While the French CAC 40 Index is up by 2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are up by 1.5 percent and 1.3 percent, respectively.

In the bond market, treasuries have shown a notable move to the downside, extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.1 basis points at 1.817 percent.
Canadian Market Report
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TSX Jumps At Open Friday

Bay Street stocks were extending gains at open Friday amid smart buying across a variety of sectors, with the S&P/TSX Composite Index surging 123.45 points or 1 percent to 12,483.61.

The Diversified Materials Index rose over 3 percent, with First Quantum Minerals gaining nearly 6 percent. Inmet Mining and Teck Resources were up nearly 4 percent each.

In the oil patch, Niko Resources gathered over 5 percent. Pacific Rubiales Energy and Cenovus Energy moved up around 2 percent each.

Among gold plays, Allied Nevada Gold, Barrick Gold  and Goldcorp. gained around 2 percent each. Communications equipment manufacturing company Evertz Technologies Ltd. rose over 3 percent after reporting improved first quarter profit.

Contact lenses retailer Coastal Contacts Inc.  added over 1 percent despite posting a wider third quarter net loss.

Meanwhile, Golden Minerals Company dived 17 percent after announcing that it has entered into an underwriting agreement with Wells Fargo Securities to sell 5,497,504 units at a price of $5.75 per unit.

The price of gold was steady around its six-month high Friday morning as the U.S. dollar was trading lower versus a basket of currencies after the Federal Reserve announced the much anticipated QE3. Gold for December edged down $1.90 to $1,770.20 an ounce.

In corporate news from Canada, communications equipment manufacturing company Evertz Technologies Ltd.  reported improved first quarter profit at C$24.8 million or C$0.34 per share compared to C$17.6 million or C$0.23 per share in the same period last year. Analysts were expecting the company to earn C$0.25 per share for the first quarter.

Contact lenses retailer Coastal Contacts Inc. reported a wider third quarter net loss at C$1.9 million or C$0.07 per share compared to C$1.5 million or C$0.06 per share in the year-earlier quarter. Analysts were expecting the company to report breakeven earnings for the quarter.

In economic news, Statistics Canada said manufacturing sales fell 1.5 percent to $48.3 billion in July mainly due to declines in transportation equipment. Manufacturers in 11 of 21 industries reported lower sales, representing over 60 percent of total manufacturing. Moreover, inventories rose 1.0 percent in July to $65.5 billion, led by increases in the aerospace product and parts, and machinery industries
European Market Report
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European Markets Rally On Fed QE3 Announcement
The European markets are sharply higher in afternoon trading Friday, boosted by the Federal Reserve's announcement of open-ended monetary easing. Miners and banks are seeing strong upward move. The Asian markets gained and the U.S. index futures are higher.

The Fed, at the end of a two-day policy meeting, announced a plan to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Fed also said it would continue its purchases of mortgage-backed securities until the outlook for the labor market improves substantially.

The 'Operation Twist' program also will be continued. Thus, the actions taken together will increase the central bank's holdings of longer-term securities by about $85 billion each month through the end of the year.

On the economic front, Eurostat said Eurozone inflation increased as initially estimated to 2.6 percent in August. Also, the number of persons employed remained stable in the euro area during the second quarter.

The Euro Stoxx 50 index of eurozone bluechip stocks is climbing 2.02 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.97 percent. The German DAX is climbing 1.56 percent and the French CAC 40 is gaining 2.04 percent. The UK's FTSE 100 is rising 1.65 percent while Switzerland's SMI is advancing moderately by 0.79 percent.

In Frankfurt, Volkswagen is surging 4.1 percent. BMW and Daimler are gaining 3 percent and 2.7 percent, respectively. ThyssenKrupp is climbing 3.5 percent. Outside the main index, Salzgitter is surging 4.9 percent. Commerzbank is gathering 2.3 percent and Deutsche Bank is advancing 1.5 percent. UBS cut Deutsche Bank to "Neutral" from "Buy." Commerzbank cut Fraport to "Hold" from "Buy." The stock is up modestly.

Those making notable losses include Fresenius, Fresenius Medical Care, Beiersdorf, Merck and Henkel. Berenberg lowered its rating on EON. The stock is down 0.5 percent. Peer RWE is falling 0.7 percent after a price target reduction.

Fashion and lifestyle firm Gerry Weber International reported a 22 percent increase in third-quarter profit, but margin declined from last year. The stock is moderately lower.

In Paris, Steel giant ArcelorMittal is surging 6.7 percent. Carmakers Peugeot and Renault are gaining 5.2 percent and 5 percent, respectively.

Among lenders, BNP Paribas is advancing 4 percent. Societe Generale is gaining 3.6 percent and Credit Agricole is rising 3.3 percent. Saint-Gobain is adding 5.1 percent, Bouygues is rising 3.5 percent and Vinci is climbing 3.1 percent.

In London, Anglo American is adding 6.3 percent and Antofagasta is jumping 8.3 percent. BHP Billiton is gaining 4.3 percent and Rio Tinto is jumping 6.1 percent.

Eurasian Natural Resources is climbing 9.2 percent, Vedanta is gaining 11.8 percent and Kazakhmys is advancing around 11 percent. Russian steel maker Evraz is surging 11.8 percent. Gold miner Petropavlovsk is surging over 12 percent.

Royal Bank of Scotland Group said it plans to launch an initial public offering of its fully-owned subsidiary Direct Line Insurance Group Plc in an all-secondary offering by the lender. The stock is gaining 3.4 percent.

Barclays is advancing 3.8 percent and Lloyds Banking is gathering 3.5 percent. JD Wetherspoon is climbing 4.3 percent after announcing full year results.

Chemring Group is gaining 7.2 percent. The company announced extension of deadline by the Takeover Panel for Carlyle Group to make an offer for the firm.

ABB is gaining 3.4 percent in Stockholm. Exane BNP raised its rating on the stock. Unicredit is up 3.3 percent in Milan. HSBC cut its rating on the stock.
Asia Market Reports
Asian Markets Follow US Shares Higher On Fed Move

Asian stock markets rose sharply on Friday, joining a rally in U.S. stocks overnight, after the U.S. Federal Reserve announced a $40 billion a month "open-ended" program of mortgage backed security purchases while also committing itself to keep interest rates exceptionally low until at least 2015 to aid U.S. recovery.

The Fed said it would continue easing until the labor market outlook improves "substantially." Investors cheered Fed's commitment to action as weaker growth and low interest rates abroad may result in big inflow of funds to emerging markets.

The Fed, which was under pressure to act amid the sagging economies of Europe and the United States, has succeeded in conveying a consisting message that investors can count on low interest rates and accommodative monetary policy for a considerable time.

The Fed's latest action came a week after the European Central Bank announced bond-buying measures to check volatility in sovereign bonds of troubled European countries. It is now widely expected that the Bank of Japan would eventually follow the Federal Reserve on easing monetary policy, when the policy board meets next week.

Tokyo stocks rose sharply as the Fed's stronger-than-expected move on mortgage-backed securities heightened expectations that the Bank of Japan would ease its policy further to support the export-reliant economy at its policy meeting next week. Hinting at possible yen intervention, Japan's finance minister today urged the Bank of Japan to act at the right time.

The Nikkei average jumped 1.8 percent to end at its highest level since March 23, while the broader Topix index added 1.7 percent. Shares sensitive to growth and inflation benefited the most.

Steelmakers JFE Holdings and Nippon Steel jumped about 5 percent each, while Sumitomo Metal Mining soared 9.4 percent, benefiting from a positive Credit Suisse appraisal. Oil firm Inpex climbed 5.9 percent, shipping line Mitsui OSK jumped 5.7 percent, realty firm Mitsui Fudosan rallied 5.5 percent and trading house Mitsubishi Corp. advanced 4 percent. Financials also ended sharply higher, with Nomura, Dai-ichi Life Insurance and Sumitomo Mitsui Financial Group adding 4-5 percent.

Chinese shares underperformed regional markets, with the benchmark Shanghai Composite index rising 0.6 percent, as the Fed's promise to buy mortgage-backed securities at a pace of $40 billion a month raised concerns that inflationary pressure may increase domestically. Hong Kong's Hang Seng index soared 2.9 percent, with resource-related stocks leading the rally.

Australian shares followed U.S. shares higher, with the Fed's much-awaited QE3 announcement underpinning sentiment. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 1.2 percent each, with miners rallying taking cues from strength in the metals pack.

BHP Billiton gained 1.6 percent and Rio Tinto rallied 2.8 percent, while gold miner Newcrest soared 7.30 percent amid the surge in gold prices Thursday. Fortescue Metals shares were placed in a trading halt until Tuesday pending an announcement from the company on its debt restructuring.

Banks also rose across the board, with ANZ, Commonwealth and NAB adding about half a percent each, while Westpac rose 1.3 percent. Construction company Leighton Holdings climbed 4.7 percent after its wholly-owned subsidiary Thiess Pty won a $154 million contract to build transport facilities in Sydney's CBD.

Seoul shares jumped about 3 percent to a five-month high, as investors cheered the Federal Reserve's move to launch a new round of bond buying and Standard & Poor's upgrade of South Korea's credit rating. The benchmark Kospi average rose 2.9 percent to breach the 2,000-point mark, with steel firms and brokerage stocks outperforming.

Apple's component suppliers LG Display and SK Hynix jumped about 5 percent each, rebounding from the previous session's retreat after many analysts predicted that Apple will sell more than 10 million units of the newly-unveiled iPhone 5 by the end of this month.

Standard & Poor's today joined its fellow ratings agencies in upgrading the sovereign ratings on South Korea, citing waning geopolitical threats on the Korean peninsula amid stable political conditions in North Korea. The ratings agency lifted Korea's credit rating to "A plus" from "A", the fifth-highest level on its rating grade, and affirmed its foreign-currency short-term ratings at "A-1", reflecting the firm's expectations that the Democratic People's Republic of Korea will remain politically stable in the next three to five years.

New Zealand shares pared early gains to end modestly higher. The benchmark NZX-50 rose 0.2 percent to a fresh four-year high, with gold miner OceanaGold climbing 8 percent after gold prices surged up 2 percent overnight in the aftermath of the FOMC announcement. NZX, the stock exchange regulator, rallied 2.8 percent, Fletcher Building, the nation's largest construction company, gained 1.6 percent and carpet maker Cavalier rose about a percent.

Trade Me shares added 1.8 percent after the NZX said the online auction site will replace Nuplex Industries in the NZX20 index comprised of most liquid companies. Exporter Fisher & Paykel Healthcare led the decliners on the exchange, tumbling 6.6 percent as the kiwi dollar climbed to a six-month high.

Elsewhere, India's benchmark Sensex was last rallying 2.5 percent on hopes the government would speed up reforms after the Cabinet Committee on Political Affairs approved a Rs. 5 hike in the price of diesel and limited supply of subsidized LPG cylinders to six per household in a year.

Indonesia's Jakarta Composite index was up 2.1 percent, Malaysia's KLSE Composite index rose 0.9 percent, Singapore's Straits Times index was rising 1.3 percent and the Taiwan Weighted average added 2.1 percent
Commodities
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Crude Jumps Above $100 On QE3

The price of crude oil surged Friday morning as demand worries eased after the Federal Reserve announced the much awaited monetary stimulus measures.

Light Sweet Crude Oil (WTI) futures for October delivery, rose $1.71 to $100.20 a barrel Yesterday, oil ended at a four-month high after the U.S. Federal Reserve announced the much anticipated additional quantitative easing measures to stimulate growth in the world's largest economy. Prices were also supported by increasing tensions in the Middle East, with the U.S. Ambassador to Libya killed and protests spreading to more locations in the Arab world targeting the U.S.

This morning, the U.S. dollar was extending its four-month low versus the euro and sterling. The buck was leveling off from its seven-month low against the yen, while ticking lower against the Swiss franc.

In economic news, euro zone inflation increased as initially estimated to 2.6 percent in August, final data issued by Eurostat showed Friday. The rate rose from 2.4 percent in July. The central bank aims to retain inflation rates below, but close to, 2 percent over the medium term. Month-on-month, consumer prices were up 0.4 percent, in line with economists' expectations.

A separate report from the Eurostat revealed that the number of persons employed remained stable in the euro area during the second quarter, after falling 0.3 percent sequentially in the prior quarter.

Traders will look to the inflation data from the U.S. Labor Department due out at 8.30 a.m ET. Economists expect the headline index to have risen by 0.6 percent and the core reading by 0.2 percent. In July, consumer prices remained unchanged.

Simultaneously, the Commerce Department will release its report on retail sales for the month of August. Economists estimate a 0.8 percent increase each in retail sales and excluding autos sales.

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