|ADVFN III||World Daily Markets Bulletin|
US Market Reports
Stocks Moving Mostly Higher In Early Trading
After moving mostly lower over the course of the previous session, stocks have moved back to the upside in early trading on Friday. The major averages have all climbed into positive territory, although buying interest seems somewhat subdued.
The major averages have pulled back off their highs for the young session in recent trading but remain in positive territory. The Dow is up 72.96 points or 0.6 percent at 13,037.06, the Nasdaq is up 10.01 points or 0.3 percent at 3,017.57 and the S&P 500 is up 5.43 points or 0.4 percent at 1,382.35.
The early strength on Wall Street is largely due to a positive reaction to quarterly results from big-name companies such as Microsoft (MSFT), General Electric (GE), and McDonald's (MCD).
After the close of trading on Thursday, Microsoft reported fiscal third quarter earnings of $0.60 per share, better than the consensus estimate of $0.58 per share. Revenues rose 6 percent to $17.4 billion, exceeding the $17.2 billion consensus estimate.
While GE reported first quarter net earnings that fell year-over-year, the diversified conglomerate reported adjusted earnings of $0.34 per share, a penny above analyst estimates. Revenues fell 8 percent year-over-year to $35.2 billion but also came in above expectations.
Fast food giant McDonald's reported first quarter earnings that rose to $1.23 per share from $1.15 per share in the year-ago quarter, in line with estimates. The company also reported sales growth that matched the expectations of economists.
Honeywell (HON), Advanced Micro Devices (AMD), and Capital One Financial (COF) are among the other well-known companies that reported better than expected quarterly results.
The upbeat earnings news has generated some positive sentiment, although trading activity is relatively subdued amid a lack of major U.S. economic data and lingering uncertainty about the financial situation in Europe.
Nonetheless, software stocks are seeing considerable strength on the heels of the news from Microsoft, with the Dow Jones Software Index up by 2 percent. Shares of Microsoft have jumped by 4.5 percent.
Considerable strength is also visible among oil service stocks, as reflected by the 1.8 percent gain being posted by the the Philadelphia Oil Service Index. Schlumberger (SLB) is helping to lead the sector higher after reporting strong first quarter earnings growth.
Meanwhile, semiconductor stocks are seeing early weakness, with SanDisk (SNDK) and Altera (ALTR) posting notable losses after reporting disappointing first quarter results.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Friday. While Japan's Nikkei 225 Index ended the day down by 0.3 percent, Hong Kong's Hang Seng Index edged up by 0.1 percent
Meanwhile, the major European markets have all moved to the upside on the day. The German DAX Index is up by 1 percent, while the U.K.'s FTSE 100 Index is up by 0.4 percent and the French CAC 40 Index is up by 0.1 percent.
In the bond market, treasuries are giving back some ground after moving higher in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 1.989 percent.
Canadian Market Report
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Canadian Pacific Railway Q1 Results Top Estimates
Canadian Pacific Railway Ltd. reported Friday a sharp increase in first-quarter profit, reflecting an 18 percent growth in freight revenues. Both earnings per share and revenues topped analysts' expectations.
Citing the continued successful execution of its "Multi-Year Plan" as reason for the enhanced financial results, the company said it is confident that it can continue to deliver improvements in its operating metrics and financial performance and further growth in shareholder value.
Fred Green, president and chief executive officer of the company said, "We have improved operating momentum, we are delivering excellent service and we have a stronger, more resilient rail network. This quarter, we generated an 18% year-over-year increase in freight revenues."
In the first quarter, the North American transcontinental railway company's net income more than quadrupled to C$142 million or C$0.82 per share from C$34 million or C$0.20 per share reported a year ago.
On average, 15 analysts polled by Thomson Reuters expected the company to earn C$0.80 per share. Analysts' estimates typically exclude special items.
Total revenues for the quarter grew to C$1.38 billion from C$1.16 billion in the prior-year quarter, which also exceeded analysts' estimate of C$1.33 billion. Freight revenues were C$1.34 billion.
Average fuel price increased 12 percent to $3.50 per U.S. Gallon.
Operating ratio improved 1,050 basis points to 80.1 percent. "The CP Board and management team is confident in the Company's Plan and its goal of delivering a 70% to 72% operating ratio for 2014, and an operating ratio of between 68.5% to 70.5% for 2016," Green added.
During the first quarter, the company issued $71 million 4.28 percent senior secured notes due in 2027 for net proceeds of $71 million.
CP closed Thursday' regular trading at $76.45 on the NYSE. On the Toronto Stock Exchange, the stock ended at C$76.03.
European Market Report
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European Markets In Positive Territory
The European markets are in positive territory in afternoon trading Friday, after German business sentiment showed a surprise improvement. The Asian markets ended mostly up and the U.S. index futures point to a higher open.
Sentiment was also influenced by rumors suggesting that the Chinese central bank may announce a reserve requirement ratio reduction.
The G20 finance ministers and central bank governors are meeting in Washington on the sidelines of the semi-annual spring meetings of the World Bank and the International Monetary Fund.
The Euro Stoxx 50 index of eurozone bluechip stocks is climbing 1.18 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.68 percent.
The German DAX is rising 0.92 percent and the French CAC 40 is advancing 0.55 percent. The UK's FTSE 100 is gaining 0.21 percent and Switzerland's SMI is gaining 0.28 percent.
In Frankfurt, Deutsche Bank is rising 1.6 percent and Commerzbank is rising 1 percent. Merck, which will abstain from major takeovers until the end of next year to focus on cost reduction and job cuts, is climbing 2.1 percent.
Hochtief is declining 2.4 percent. Berenberg initiated the stock with a "Hold" rating. GSW Immobilien is declining about 1 percent. HSBC cut the stock to "Neutral" from "Overweight."
In Paris, Societe Generale, BNP Paribas and Credit Agricole are climbing between 4.5 percent and 3.7 percent. Suez Environnement's first-quarter revenues grew 2.2 percent, amid a difficult economic environment in Europe. The stock is gaining 1.4 percent.
Schneider Electric is losing 0.2 percent. The company reported more than 9 percent growth in first-quarter sales.
In London, Barclays is gaining 1.7 percent and Lloyds is climbing 2.9 percent. IMI is rising 1.6 percent after reporting first-half results in line with expectations.
Man Group is climbing 4 percent.
Gambling company William Hill said first-quarter sales and operating profit increased from last year. The stock is up 3 percent.
SuperGroup shares are plunging nearly 38 percent after the company issued yet another profit warning. Nestlé confirmed its 2012 sales growth forecast after reporting a 5.6 percent increase in first-quarter sales. The stock is down 0.3 percent in Zurich.
AkzoNobel is up 0.9 percent in Amsterdam. Commercebank reduced the stock to "Hold" from "Reduce." Novo Nordisk is down 1.2 percent in Copenhagen.
In economic news, Germany's producer price inflation accelerated unexpectedly in March on higher energy prices, data from the Federal Statistical Office showed today. Producer price inflation rose to 3.3 percent on a yearly basis from 3.2 percent in February.
German business sentiment improved unexpectedly in April, the Munich-based Ifo institute reportedly said. The business climate index rose to 109.9 in April from 109.8 in March. Economists were forecasting the reading to drop to 109.5.
U.K. retail sales logged a better-than-expected expansion in March, data from the Office for National Statistics showed Friday.
Asia Market Reports
Asian Shares End Mostly Lower After US Data
Most Asian shares ended lower on Friday, as weak U.S. economic data and growing concerns over Spanish debt financing despite a relatively successful bond auction yesterday kept the overall mood cautious ahead of the weekend.
Investors looked ahead to the G20 and IMF meet in Washington at the weekend after IMF managing director Christine Lagarde said that supplying more capital directly to European banks could help ease the debt crisis. Crude and copper futures were higher and the euro rose against the dollar after Lagarde said in an interview with Bloomberg Television that Spain is not in need of the fund's support.
Tokyo stocks lost ground, as a slew of earnings results due next week and uncertainty ahead of the Bank of Japan's April 27 policy board meeting rendered investor mood cautious. Both the Nikkei average and the broader Topix index shed around 0.3 percent each. Canon slid half a percent and Fanuc lost 0.8 percent ahead of their earnings results on Wednesday.
Automakers such as Honda Motor and Toyota lost 1-2 percent and tech majors like Advantest, Tokyo Electron and Fujifilm Holdings fell between 0.3 percent and 2.3 percent, while Olympus soared 6.4 percent on news of shareholders approving a new board.
Toshibha lost 2.4 percent after its U.S. memory-making partner SanDisk posted quarterly sales and profit that fell short of street estimates. JFE Holdings tumbled 3.3 percent on a Nikkei report that it plans to invest Y1 trillion in the next three years ending March 2015.
China's Shanghai Composite index rallied 1.2 percent on renewed hopes of fiscal and monetary stimulus, while Hong Kong's Hang Seng index ended marginally higher.
Australian shares posted modest gains to finish at a fresh eight-month high, as investors raised bets on a cut in official interest rates when the RBA board meets on May 1. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index edged up around 0.1 percent each. Major miners BHP Billiton and Rio Tinto ended on a flat note, while ANZ, Commonwealth and Westpac rose between 0.3 percent and 0.6 percent.
Oil Search climbed 5.7 percent, a day after its LNG Project partner ExxonMobil discovered more gas in Papua New Guinea's Western Province. Boral fell 2.9 percent after the building materials producer cut its annual profit guidance, citing rainy weather in eastern Australia and weak residential housing activity. James Hardie shares lost 1.1 percent.
South Korea's Kospi average fell 1.3 percent to a one-week low, as disappointing U.S. labor market and housing data weighed on large-cap bluechip shares. LG Chem plunged 9.2 percent as the nation's biggest chemicals maker posted a worse-than-estimated 42 percent decline in first-quarter net profit, hurt by rising raw material costs and low product prices amid waning Chinese demand.
Shares of POSCO ended down 0.4 percent. After the market closed, the steelmaker, backed by billionaire investor Warren Buffett, reported a 42 percent drop in its first-quarter earnings, citing high raw material costs and sluggish global demand.
New Zealand shares fell, led by Cavalier after the carpet maker said it will likely post a full-year loss due to business restructuring. Shares of the company plunged 11 percent to a two-year low, while the benchmark NZX-50 index dropped 0.3 percent. Heartland New Zealand, the would-be bank, tumbled 5 percent, Fletcher Building, the nation's largest construction company, fell 2.2 percent and utility Contact Energy eased 0.4 percent, but SkyCity Entertainment Group rose 2.1 percent and PGG Wrightson climbed 5.3 percent.
India's benchmark Sensex was last trading down 1.1 percent as investors took profits following four sessions of gains. Elsewhere, Malaysia's KLSE Composite eased 0.3 percent, Singapore's Straights Times index was down 0.4 percent and the Taiwan Weighted average fell 1.5 percent, while Indonesia's Jakarta Composite index rose 0.4 percent.