Sep 26, 2012
U.S. stocks fall, S&P 500 still on losing streak Major indexes end lower, with the S&P 500 Index locking in a fifth day of losses, its longest such streak since July, as austerity unrest in Europe sparked investor concern.
|ADVFN III||World Daily Markets Bulletin|
Wednesday, 26 September 2012
Sales of new single-family houses in August down 0.3% from July's revised level | ESA Residential Sales ( August 2012) pdf.
Sales of new single-family houses in August were 373,000 at a seasonally adjusted annual rate, down 0.3 percent from July’s revised level, but up 27.7% from August 2011.
|ADVFN III||Morning Euro Markets Bulletin|
Wednesday, 26 September 2012
|London Market Report|
| Stocks tumble on QE3 efficacy fears|
The old adage about the US sneezing and the UK therefore catching a cold is as apposite as ever with the UK market opening lower after a non-voting member of the US Federal Reserve member cast doubts over the efficacy of the Fed's asset purchase programme.
"We are unlikely to see much benefit to growth or employment from further asset purchases," said Charles Plosser, the President of the Philadelphia Fed Bank.
Plosser also suggested that short-term interest rates will need to be hiked earlier than the currently envisaged time frame of the middle of 2015.
Although Plosser is a known hard-liner and his comments therefore did not come as too much of a surprise, they weren't what the market wanted to hear; asset purchases - or quantitative easing (QE)
In company news, first half profits from international home emergency business Homeserve will be higher than in the corresponding period of last year, and therefore higher than some broker estimates. Adjusted pre-tax profit for the six months ending September 30th is expected to be higher than the £23.5m achieved at the interim stage last year, principally due to the benefits of increasing ownership of Domeo from 49% to 100%. Broker Peel Hunt had forecast £20m.
Waste management group Shanks said it now expects results for the year to March 31st 2013 to be slightly below the current range of expectations after market conditions in the UK and Dutch solid waste markets deteriorated significantly in the first half. Shanks said its organics, hazardous waste, and UK municipal businesses continued to perform robustly and in line with company expectations.
Performance across ICAP's voice and electronic businesses has remained more muted than anticipated at the time of the inter-dealer broker's annual general meeting in July. On the plus side, although activity in global markets has remained subdued in the last six months or so, there has been some improvement in trading volumes in September. As a result, group revenue in the six months ending September 30th is expected to be around 14% lower than the previous year.
Growth has slowed at pizza delivery firm Domino's Pizza. Like-for-like sales in the UK in the third quarter were up by 3.7%, versus 4.1% the year before and 5.7% in the first six months of the financial year.
FTSE 100 - Risers
British American Tobacco (BATS) 3,215.00p +0.37%
Compass Group (CPG) 723.50p +0.21%
SABMiller (SAB) 2,734.00p +0.09%
United Utilities Group (UU.) 729.50p 0.00%
Smith & Nephew (SN.) 693.00p 0.00%
SSE (SSE) 1,397.00p -0.07%
Imperial Tobacco Group (IMT) 2,343.00p -0.09%
British Sky Broadcasting Group (BSY) 750.50p -0.13%
Diageo (DGE) 1,750.50p -0.20%
National Grid (NG.) 692.00p -0.22%
FTSE 100 - Fallers
RSA Insurance Group (RSA) 114.40p -3.62%
Evraz (EVR) 242.60p -2.96%
Vedanta Resources (VED) 1,019.00p -2.67%
Anglo American (AAL) 1,854.00p -2.45%
Kazakhmys (KAZ) 700.00p -2.30%
Royal Bank of Scotland Group (RBS) 263.80p -2.30%
Kingfisher (KGF) 264.10p -2.15%
ARM Holdings (ARM) 572.50p -2.14%
Polymetal International (POLY) 1,046.00p -2.06%
Weir Group (WEIR) 1,774.00p -2.04%
FTSE 250 - Risers
TR Property Inv Trust Sigma Shares (TRYS) 78.75p +9.53%
Barr (A.G.) (BAG) 454.60p +0.93%
JPMorgan Indian Inv Trust (JII) 362.79p +0.89%
ITE Group (ITE) 207.70p +0.73%
Cranswick (CWK) 795.00p +0.70%
Menzies(John) (MNZS) 640.50p +0.55%
Homeserve (HSV) 222.20p +0.50%
Dignity (DTY) 921.50p +0.49%
BTG (BTG) 324.10p +0.40%
Petra Diamonds Ltd.(DI) (PDL) 118.50p +0.34%
FTSE 250 - Fallers
Shanks Group (SKS) 77.20p -14.46%
Imagination Technologies Group (IMG) 475.70p -8.52%
Bumi (BUMI) 160.00p -4.76%
ICAP (IAP) 328.00p -4.62%
Millennium & Copthorne Hotels (MLC) 482.90p -4.38%
Ferrexpo (FXPO) 198.80p -4.33%
Talvivaara Mining Company (TALV) 150.60p -4.20%
Domino's Pizza Group (DOM) 543.50p -3.46%
Afren (AFR) 134.00p -2.90%
St James's Place (STJ) 360.00p -2.68%
|UK Event Calendar|
Panmure Gordon & Co, S & U, Snoozebox Holdings, Trap Oil Group
INTERIM DIVIDEND PAYMENT DATE
British American Tobacco, Lancashire Holdings
INTERIM EX-DIVIDEND DATE
Bovis Homes Group, Braime (T.F.& J.H.) Holdings, Braime (T.F.& J.H.) Holdings (Non-Voting), BrainJuicer Group, Brightside Group, British Smaller Companies VCT 2, Centrica, Christie Group, Derwent London, Dignity, Drax Group, Filtrona PLC, Good Energy Group, H.R. Owen, Invesco Perpetual UK Small Companies Inv Trust, IS Solutions, Kentz Corporation Ltd., M. P. Evans Group, Morgan Sindall Group, Morrison (Wm) Supermarkets, Netplay TV, Networkers International, North American Income Trust (The), Primary Health Properties, Quarto Group Inc., Real Estate Investors, Rotala, RSA Insurance Group, Smurfit Kappa Group, Vitec Group, Wynnstay Group
QUARTERLY EX-DIVIDEND DATE
Africa Opportunity Fund Ltd., Dow Chemical Co, Yamana Gold Inc.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)
SPECIAL EX-DIVIDEND PAYMENT DATE
Highland Gold Mining Ltd.
Absolute Return Trust Ltd. GBP Shares, Intercede Group, Micro Focus International, Namibian Resources, Sirius Minerals, Sofia Property Fund Ltd., Sweett Group, WYG
ICAP, Topps Tiles
UK ECONOMIC ANNOUNCEMENTS
CBI Distributive Trades Surveys (11:00)
FINAL EX-DIVIDEND DATE
Anite, Development Securities, Hansard Global, Oxford Instruments, Photo-Me International
|US Market Report|
Stocks Close Firmly Negative On Afternoon Sell-Off
Stocks moved sharply lower over the course of the trading day on Tuesday after moving moderately higher in morning trading. Lingering concerns about the global economic outlook weighed on the markets, overshadowing upbeat U.S. consumer confidence data.
The major averages ended the day firmly in negative territory, at their worst levels of the session. The Dow fell 101.37 points or 0.8 percent to 13,457.55, the Nasdaq tumbled 43.05 points or 1.4 percent to 3,117.73 and the S&P 500 slid 15.30 points or 1.1 percent to 1,441.49.
The early strength on Wall Street was partly due to the release of a report from the Conference Board showing a much bigger than expected improvement in U.S. consumer confidence during the month of September.
The Conference Board said its consumer confidence index jumped to 70.3 in September from a revised 61.3 in August. Economists had expected the index to climb to 64.8 from the 60.6 originally reported for the previous month.
The much bigger than expected increase lifted the consumer confidence index to its highest level since reaching 71.6 in February.
Buying interest remained relatively subdued, however, as traders worried about whether the outlook for the global economy supports further upside for the markets.
The subsequent pullback was partly due to comments by Philadelphia Federal Reserve President Charles Plosser, who warned that the Fed's recently announced third round of quantitative easing is not likely to do much to benefit growth or employment.
Plosser, who is not currently a voting member of the Fed's monetary policy committee, said a small drop in interest rates is not likely to overturn the strong desire to save and induce households to spend more.
"In fact, driving down interest rates even further may encourage consumers to save even more to make up for lower returns," Plosser said.
"Thus, in my view, we are unlikely to see much benefit to growth or to employment from further asset purchases," he added. "If I am right, then conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed's credibility."
Among individual stocks, shares of Staples (SPLS) came under pressure after the office supplies retailer announced that it is embarking on a strategic plan to better serve the needs of its customers and accelerate growth. Staples ended the day down by 4.5 percent.
Staples said it is accelerating the closure of approximately fifteen U.S. stores and plans to close 45 stores and several sub-scale delivery businesses in Europe.
Construction equipment maker Caterpillar (CAT) also posted a notable loss after cutting its guidance for 2015. The company said it now expects earnings of $12 to $18 per share compared to its previous forecast for earnings of $15 to $20 per share.
Meanwhile, shares of Vail Resorts (MTN) turned in a strong performance after the resort operator reported a narrower than expected fourth quarter loss on better than expected revenues. Vail surged up by 8.2 percent on the day.
|Wednesday newspaper round-up|
Arctic oil, patents, SNB ...
French oil giant Total has warned against drilling for oil in the Arctic, the FT reports. Christophe de Margerie, Total’s chief executive, told the Financial Times the risk of an oil spill in such an environmentally sensitive area was simply too high. 'Oil on Greenland would be a disaster,' he said in an interview. 'A leak would do too much damage to the image of the company.'
With two parties in government, there are twice as many opportunities for ministers to toss out hare-brained schemes to the conference faithful on how to promote growth, suggests Ian King, the Business Editor at The Times. Most never get off the ground, King believes. He suggests the Chancellor of the Exchequer, George Osborne, should widen the scope of plans for a 'patent box' to include software, a sector in which the UK is historically strong. The sector is largely excluded because it uses other forms of intellectual property to win commercial protection. King notes that Aveva, the engineering software supplier and 'an unsung hero of the sector', says that, with the grants it receives locally, it can effectively open a new office in China at no cost.
Switzerland’s central bank has become a conduit for vast flows of capital into German Bunds and other haven bonds, exacerbating the Eurozone’s North-South divide, the Telegraph reports, citing a report by debt-ratings agency Standard & Poor's. The Swiss National Bank had bought €80bn (£64bn) of German, Dutch, French, Finnish and Austrian bonds this year to counter a flood of money entering the country and hold the franc at 1.20 to the euro.
The Independent reports that Silvio Berlusconi, the former Prime Minister of Italy, is back with an attack on the Germans. In one of the few interviews he has given since stepping down, Berlusconi called Germany a "hegemonic state that is dictating rules on discipline and austerity to other European countries".
Dollar firms after Plosser slams QE3
The dollar advanced against major currencies on Tuesday after a US central banker said the Federal Reserve’s latest bond buying programme is unlikely to stimulate economic activity.
The ICE dollar index, which measures the US currency against a basket of six others, advanced to 79.672 from 79.571 on Monday.
In a speech to financial market trade groups in Philadelphia, Federal Reserve Bank of Philadelphia President Charles Plosser said: "We are unlikely to see much benefit to growth or employment from further asset purchases."
While criticising the Fed's new bond buying programme, he added that the central bank may increase interest rates way before the current mid-2015 target.
The greenback was also boosted by some encouraging data on the US housing market. The S&P/Case-Shiller 20-city composite index showed US house prices increased 1.6% in July, to almost a two year high.
Against the Japanese yen, the dollar bought ¥77.78 compared to ¥77.88 on Monday.
Meanwhile the euro recovered from a week low on Tuesday as focus remained on the Eurozone debt crisis, and in particular, any fresh news on a possible bailout for Spain. The nation's Andalucia region may ask for a €4.9bn in financial aid.
Concern about the size of Greece's deficit kept a lid on the euro's recovery after Germany's Der Spiegel said it could as much as €20bn.
The single currency was trading at $1.2926 after earlier touching a low of $1.2885.
Sterling fell to $1.6187 from $1.6212 the previous session while the Australian dollar changed hands at $1.0450 from $1.0421 on Monday.