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Oct 16, 2012

European Markets at Close Report | MarketWatch -October 16, 2012-: Spain bailout chatter lifts European stocks

By Sara Sjolin, MarketWatch 

LONDON (MarketWatch) — Spain led European stocks to higher ground Tuesday, with banks pacing gains after reports suggested the country is one step closer to making a formal bailout request and may get Germany’s support. 

The Stoxx Europe 600 index XX:SXXP +1.32% jumped 1.3% to close at 274.38, its best daily performance since Oct. 1. 

Refugees to Turkey top 100,000 Turkey says the number of Syrian refugees housed in camps in the south of the country has exceeded 100,000, a level Ankara previously described as a “psychological limit." 

“It’s all related to the bailout,” said Predrag Dukic, senior equity sales trader at CM Capital Markets in Madrid.
“People believe the Spanish bailout is closer now after Germany indicated they were open for a precautionary line of credit and that is helping push stocks higher today.”
The positive news flow about Spain’s potential bailout boosted risk-sensitive sectors such as banks and resource firms. BBVA SA ES:BBVA +5.98% BBVA +7.25% jumped 6%, Banca Popolare dell’Emilia Romagna Scarl IT:BPE +7.83% rose 7.8% and Lloyds Banking Group PLC UK:LLOY +6.05% LYG +5.75% advanced 6.1%.
Spain occupied investors’ minds after media reports said late Monday that Madrid is ready to formally request financial aid but that officials are delaying an announcement because of concerns about the effect on other euro-zone countries. A formal bailout request is necessary for Spain to allow the European Central Bank to buy its sovereign debt.
The reports said that Spain is considering requesting a direct line of credit, rather than seeking immediate aid from the European Stability Mechanism rescue fund. See: Spain outlines path to bailout request: report
Germany is open to granting Spain a precautionary credit line to the rescue fund, Bloomberg reported, citing senior coalition lawmakers. See: Germany open to precautionary Spanish credit line

Reuters Enlarge Image
Luis De Guindos, Spain’s economy minister.
In Madrid, the IBEX 35 index XX:IBEX +3.41% rallied 3.4% to 7,940.20, the biggest jump since early September.
“A move like today suggests that we are pricing in a bailout, and the more we rally now” the less room there will be for gains after a decision is made, Dukic said.
“But I do certainly believe that if we get a bailout or precautionary credit line the market will move higher.”
Banks posted some of the biggest gains in Spain, shrugging off a recent round of ratings downgrades by Standard & Poor’s Ratings Services. The credit rating agency cut 15 of the country’s banks following a sovereign credit downgrade earlier this month.
Banco Santander SA ES:SAN +4.32% SAN +3.53% rose 4.3%, Bankinter SA ES:BKT +7.36% jumped 7.4% and Banco de Sabadell SA ES:SAB +4.21% gained 4.2%.
U.S. earnings were also in focus, with Goldman Sachs Group Inc. GS +0.36% swinging to third-quarter profit and boosting quarterly dividends to 50 cents a share from 46 cents. See: Goldman Sachs swings to profit, boosts dividend
“U.S. earnings are very encouraging and supportive to global markets. We’ve seen the [International Monetary Fund] and other world economic institutions suggesting that we are in a recession and then these companies come out with positive results. It gives us hope that not all is lost in the global economy,” CM Capital Markets’s Dukic said. 

U.S. stocks were also higher on Wall Street. See: U.S. stocks rise on earnings, Spain news
Data out of Germany, the largest European economy, also attracted investors’ attention. The ZEW expectations index rose to minus 11.5 points in October from a reading of minus 18.2 in September, beating analysts’ estimates. See: German ZEW investor expectations gauge rises


Banks also traded higher in Frankfurt, where Deutsche Bank AG DE:DBK +4.16% DB +4.39% rose 5.1% and Commerzbank AG DE:CBK +3.79% gained 4.1%.
The DAX 30 index DX:DAX +1.58% closed 1.6% higher at 7,376.27.
And in Paris, shares of Credit Agricole SA FR:ACA +5.28% gained 5.3%, BNP Paribas SA FR:BNP +4.33% added 4.3% and Société Générale SA FR:GLE +3.86% rose 3.9%.
Oil group Total SA FR:FP +2.73% TOT +2.81% also moved higher, up 2.7%, as oil prices wobbled. See: Crude-oil futures struggle for direction
The CAC 40 index FR:PX1 +2.36% increased 2.4% to 3,500.94.
Among U.K. energy shares, Royal Dutch Shell PLC UK:RDSB +1.07% RDS.B +1.13% rose 1.1% as BP PLC UK:BP +1.35% BP +1.67% added 1.4%.
Miners were also on the rise, as most metals prices moved higher. Kazakhmys PLC UK:KAZ +2.75% put on 2.8% and BHP Billiton PLC UK:BLT +1.17% BHP +1.13% AU:BHP -0.84% rose 1.2%. See: Gold futures push higher, aided by dollar losses
Rio Tinto PLC UK:RIO +2.94% RIO +2.29% AU:RIO -1.25% climbed 2.9%, as the company said that its global mine output rose 5% in the third quarter and that it’s on track to produce 250 million metric tons of iron ore this year. See: Rio Tinto maintains 2012 iron ore guidance.
Bucking the positive trend in London, shares of GKN PLC UK:GKN -3.35% lost 3.4%, after the engineering group reported adjusted third-quarter pretax results slightly lower than in 2011. See: GKN: Softness in European auto, industrial markets.
The FTSE 100 index UK:UKX +1.12% picked up 1.1% to 5,870.54, with HSBC Holdings PLC UK:HSBA +1.78% HBC +1.73% HK:5 +1.21% up 1.8%.
Outside the main indexes, Finnish tire maker Nokian Renkaat Oyj FI:NRE1V -11.85% tumbled 12% as it warned operating profit in second half of the year will be weaker than last year. 

Sara Sjolin is a MarketWatch reporter, based in London.

ADVFN World Daily Markets Bulletin -October 16, 2012-.

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Daily world financial news

Tuesday, 16 October 2012

US Market
Stocks Rally In Reaction To Latest Earnings News
10/16/2012 12:15 PM ET
Stocks have shown a strong upward move over the course of the trading day on Tuesday, adding to the gains posted in the previous session. The markets have benefited from a positive reaction to the latest batch of earnings news.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 120.26 points or 0.9 percent at 13,544.49, the Nasdaq is up 28.80 points or 0.9 percent at 3,092.98 and the S&P 500 is up 12.96 points or 0.9 percent at 1,453.09.
The strength on Wall Street comes on the heels of the release of quarterly results from some big-name companies, including financial giant Goldman Sachs , which reported better than expected third quarter earnings.
Goldman Sachs reported adjusted third quarter earnings of $2.85 per share compared to a year-ago loss of $0.84 per share, while analysts had expected earnings of $2.12 per share. Shares of Goldman Sachs are up by 0.8 percent on the news.
Beverage giant Coca-Cola also reported third quarter earnings that came in slightly above analyst estimates but on weaker than expected revenues.
Johnson & Johnson reported third quarter earnings and sales that exceeded analyst estimates and also raised its full-year guidance.
Traders are also digesting news that health insurer UnitedHealth raised its full-year guidance and that online retailer Amazon is hiring for more than 50,000 seasonal positions this holiday season.
Shares of Citigroup (C) are also in focus after the financial giant announced that Vikram Pandit has stepped down as the company's Chief Executive Officer and as a member of the Board.
Citigroup also said its board has unanimously elected Michael Corbat as CEO and a director of the Board. Corbat previously served as Citigroup's CEO of Europe, Middle East and Africa.
Separate reports showing a rebound by industrial production and a continued increase by homebuilder confidence may also be contributing to the strength on Wall Street.
The Labor Department also released a report showing that consumer prices rose by slightly more than expected in the month of September due to another jump in energy prices.
Sector News
Steel stocks have moved sharply higher over the course of the trading day, driving the NYSE Arca Steel Index up by 2.4 percent. With the gain, the index has risen to its best intraday level in almost a month.
Cliffs Natural Resources and Olympic Steel are turning in two of the steel sector's best performances, surging up by 6.5 percent and 5.8 percent, respectively.

10/16/2012 12:15 PM ET
Oil service stocks are also seeing considerable strength on the day, with the Philadelphia Oil Service Index up by 1.9 percent. The strength in the sector comes in spite of a modest decrease by the price of Crude oil.
Semiconductor, electronic storage, gold, and chemical stocks are also posting notable gains, moving higher along with most of the major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.4 percent, while Hong Kong's Hang Seng ended the day up by 0.3 percent.
The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 1.1 percent, the German DAX Index jumped 1.6 percent and the French CAC 40 Index soared 2.4 percent.
In the bond market, treasuries have come under pressure amid the strength on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, has risen by 5 basis points to 1.713 percent.

Canadian Market
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Commodities, Data Lift TSX Tuesday Morning

Canadian stocks were trading higher Tuesday morning amid steady commodities, with better-than-expected U.S. retail sales and inflation data, and easing concerns about a Greek exit from the euro zone bolstering investors' appetite for risk. Furthermore, a key survey from across the Atlantic revealed German investor confidence improved for a second month in October.

Today's data from south of the border also came in encouraging, with US homebuilders confidence rising to a new six-year high and industrial production moving up in the month of September.

The S&P/TSX Composite Index rose 133.44 points or 1.09 percent to 12,363.39.

The Diversified Materials Index rose nearly 2 percent, with First Quantum Minerals (FM.TO), Teck Resources(TCK_B.TO) and Inmet Mining (IMN.TO) gathering around 2 percent each.

The price of crude oil was ticking lower Tuesday morning on supply concerns after the EU imposed new sanctions on Iran. Crude for November delivery edged down $0.06 to $91.79 a barrel.

In the oil patch, Vermilion Energy (VET.TO), Niko Resources (NKO.TO) and Suncor Energy (SU.TO) rose around 2 percent each.

The price of gold was recovering from its one-month low Tuesday morning as the U.S. dollar was struggling versus a basket of currencies amid the release of inflation data. Gold for December added $8.50 to $1,746.10 an ounce

Among gold plays, Royal Gold (RGL.TO), Agnico-Eagle Mines (AEM.TO), Goldcorp. (G.TO) and Barrick Gold (ABX.TO) gathered around 2 percent each.

Meanwhile, metals mining company Lithium Americas Corp. (LAC.TO) lost over 3 percent after reporting first-quarter net loss of $1.2 million or $0.02 per share, compared to $2.1 million or $0.02 per share last year.

Gold miner Petaquilla Minerals (PTQ.TO) slipped 2 percent after it said its rejected the hostile offer by Inmet Mining Corp. (IMN.TO) to acquire all of its outstanding common shares in exchange of 0.0109 Inmet shares and $0.001 in cash; or a amount not more than $0.48 per Petaquilla share.

In economic news, Statistics Canada said non-resident investors acquired $6.9 billion of Canadian securities in August, with focus turning to debt instruments from equity. Meanwhile, Canadian investors reduced their holdings of foreign securities by $1.7 billion, following three straight months of acquisition.

Separately, the agency revealed that manufacturing sales increased 1.5 percent to $49.5 billion in August, the highest sales level since March 2012. The gain largely reflected increases in the petroleum and coal products, and motor vehicle industries. Manufacturers in 11 out of 21 industries reported higher sales, representing over three quarters of total manufacturing.

From the U.S., the Labor Department said its consumer price index rose by 0.6 percent in September, matching the increase seen in August. Economists had been expecting prices to increase by about 0.5 percent. Excluding the jump in energy prices as well as a modest increase in food prices, the core consumer price index edged up by 0.1 percent for the third straight month. The core index had been expected to rise by about 0.2 percent.

Meanwhile, the Federal Reserve released a report showing that U.S. industrial production rose by more than expected in the month of September. The Fed said industrial production increased by 0.4 percent in September after tumbling by a revised 1.4 percent in August. Economists had expected production to edge up by 0.2 percent compared to the 1.2 percent drop originally reported for the previous month.

A report from the National Association of Home Builders showed that the NAHB/Wells Fargo Housing Market Index inched up to 41 in October from 40 in September. The modest increase matched economist estimates.

Elsewhere, euro zone inflation for September was revised down to 2.6 percent from the initial estimate of 2.7 percent, Eurostat said. The inflation rate, thus remained steady compared to August's 2.6 percent.

U.K. annual inflation reached the lowest since November 2009, data from the Office for National Statistics showed. Consumer price inflation fell to 2.2 percent, in line with forecast, from 2.5 percent in August. Nonetheless, it remains above the central bank's 2 percent target.

Meanwhile, German economic sentiment improved more than expected in October, a survey by the Center for European Economic Research (ZEW) showed. The ZEW Indicator of Economic Sentiment increased to -11.5 in October from -18.2 in September. This was forecast to rise to -14.9. This was the second increase of the indicator in a row.

European Market
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European Markets Finished Solidly Higher On Spanish Bailout Hopes
10/16/2012 11:57 AM ET
The European markets rallied higher on Tuesday, after reports that Spain is nearing a bailout request. The continued rise in German investor sentiment also contributed to the positive mood. Banks were among the best performing stocks Tuesday, despite the S&P downgrade of a number of Spanish banks.
The Spanish government is prepared to officially request a bailout, but the plan is being delayed due to external factors including its possible influence on the decision of other euro area countries such as Italy.
Financial Times reported Monday that Spain is waiting for such issues to be resolved. Quoting a senior official with the Spanish economy ministry, the newspaper said the government is making the request just to satisfy the conditions of the European Central Bank to start buying its bonds.
Spain's borrowing costs declined at its bill auction on Tuesday as investors expect the nation to make a formal bailout request without further delay. The treasury raised EUR 4.863 billion from the issue of 12- and 18-month treasury bills. The amount exceeded the target range of EUR 3.5 billion-EUR 4.5 billion.
The yield on 12-month bills fell slightly to 2.823 percent from 2.835 percent at the prior auction in September. The average yield on 18-month bills dipped to 3.022 percent from 3.072 percent.
The Portuguese government on Monday announced another round of austerity measures with tax hikes and spending cuts, while the economy is forecast to enter a third year of recession in 2013.
Presenting the details of the draft 2013 budget, Finance Minister Vitor Gaspar said the average income tax rate would increase to 13.2 percent in 2013 from 9.8 percent this year.
The Ministry proposed to cut the number of income-tax brackets to 5 from 8 and also plans to impose an extraordinary additional surcharge on income of 4 percent. There will also be a special "social solidarity" tax of 2.5 percent on income.
The independent Office for Budget Responsibility on Tuesday said it has overestimated the strength of economic growth over the last two years. The OBR said in its forecast evaluation report that spending reduction together with tax increases might have hurt the economy more than initially estimated.
The euro Stoxx 50 index of Eurozone bluechip stocks increased by 2.50 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, advanced 1.33 percent.
The DAX of Germany climbed by 1.58 percent and the CAC 40 of France gained 2.36 percent. The FTSE 100 of the U.K. rose by 1.21 percent and the SMI of Switzerland added 1.04 percent.

10/16/2012 11:57 AM ET
In Frankfurt, Commerzbank gained 4.15 percent and Deutsche Bank finished higher by 4.95 percent.
In Paris, Societe Generale climbed by 4.00 percent. BNP Paribas rose by 4.40 percent and Credit Agricole added 5.53 percent.
LVMH Moët Hennessy Louis Vuitton rose by 3.63 percent. The company said that its total revenue for the first nine months of 2012 rose 22 percent to EUR19.87 billion from EUR16.30 billion in the same period last year.
In London, mining stocks were among the positive performers. Rio Tinto increased by 2.94 percent and BHP Billiton gained 1.40 percent. Kazakhmys rose by 2.97 percent and Antofagasta finished higher by 1.83 percent.
Petropavlovsk gained by 3.16 percent, after the company announced that gold production in the third quarter increased by 39 percent.
Barclays climbed by 3.84 percent and Lloyds Banking Group added 5.96 percent. Royal Bank of Scotland rose by 4.21 percent and HSBC advanced by 1.95 percent.
GKN declined by 3.41 percent, after the company's third quarter results came in lower than in the previous year.
Roche finished with a gain of 0.38 percent in Zurich, after posting higher sales of CHF 11.27 billion for the third quarter.
UBS closed higher by 3.0 percent. Chief Financial Officer Tom Naratil said the Swiss bank fired as many as 550 employees after suffering a $2.3 billion loss from unauthorized trading last year.
Eurozone inflation for September was revised down to 2.6 percent from the initial estimate of 2.7 percent, Eurostat said Tuesday. The inflation rate thus remained steady compared to August's 2.6 percent.
Eurozone exports grew by seasonally adjusted 3.7 percent in August from a month ago, when it fell 2.2 percent, Eurostat reported Tuesday. Likewise, imports rose 2.1 percent, reversing last month's 0.8 percent drop.
The trade surplus totaled EUR 9.9 billion in August, up from EUR 7.2 billion in July. Meanwhile, on an unadjusted basis, the trade surplus fell to EUR 6.6 billion from EUR 14.7 billion in the prior month.
German investor sentiment rose for a second straight month in October, with the risks faced by the economy abating somewhat in the recent weeks, a key survey revealed Tuesday. The ZEW Indicator of Economic Sentiment increased to -11.5 in October from -18.2 in September. This was forecast to rise to -14.9.
U.K. annual inflation reached the lowest since November 2009, as last year's increase in utility prices dropped out of the annual comparison in September. Consumer price inflation fell to 2.2 percent in September, in line with forecast, from 2.5 percent in August, data published by the Office for National Statistics revealed Tuesday.
10/16/2012 11:57 AM ET
Output price inflation in the UK accelerated unexpectedly in September, data released by the Office for National Statistics showed Tuesday. The output price index for home sales of manufactured products rose 2.5 percent year-on-year in September, compared with a rise of 2.3 percent in the previous month. Economists expected the rate of increase to slow to 2.2 percent.
On a monthly basis, the price index rose 0.5 percent. This compares with a rise of 0.5 percent between July and August. Economists had forecast a 0.3 percent rise in the index in September.
Consumer prices in the U.S. rose by slightly more than expected in the month of September, according to a report released by Labor Department on Tuesday, with the price growth largely due to another jump in energy prices.
The Labor Department said its consumer price index rose by 0.6 percent in September, matching the increase seen in August. Economists had been expecting prices to increase by about 0.5 percent.
With utilities output showing a notable rebound, the Federal Reserve released a report on Tuesday showing that U.S. industrial production rose by more than expected in the month of September.
The Fed said industrial production increased by 0.4 percent in September after tumbling by a revised 1.4 percent in August. Economists had expected production to edge up by 0.2 percent compared to the 1.2 percent drop originally reported for the previous month.
Homebuilder confidence in the U.S. edged slightly higher in October, according to a report released by the National Association of Home Builders on Tuesday, with the increase lifting homebuilder confidence to a new six-year high.
The report showed that the NAHB/Wells Fargo Housing Market Index inched up to 41 in October from 40 in September. The modest increase matched economist estimates.

Asia Market
Asian Markets Trade Higher On Wall Street Cues
10/15/2012 11:42 PM ET
Asian stock markets are trading firm on Tuesday with the overnight surge on Wall Street on the back of an upbeat retail sales report buoying up sentiment to a significant extent. Though some of the markets are trading off their earlier highs, the mood remains fairly upbeat.
The Australian market started off on a high note with investors indulging in some brisk buying at several counters, but pared a substantial portion of its gains past noon with the mood turning slightly cautious at higher levels.
Financial, consumer staples, healthcare, industrial and information technology stocks are mostly up with strong gains. Energy, mining and property trusts stocks are trading mixed.
The benchmark S&P/ASX 200 index, which advanced to around 4,517, is currently trading at 4,496, up 12.6 points or 0.3 percent from its previous close. The broader All Ordinaries index is up 12.5 points or 0.3 percent at 4,518, nearly 20 points off the day's high of 4,537.9.
Among bank stocks, ANZ Bank, Commonwealth Bank of Australia and Westpac are up 0.2 to 0.6 percent, while National Australia Bank is trading higher by 1.5 percent. Bendigo & Adelaide Bank and Bank of Queensland are also trading firm.
Top miners BHP Billiton (BHP, BBL) and Rio Tinto (RIO) are trading lower by 1 percent and 1.4 percent, respectively.
Lend Lease Group shares are up nearly 5 percent following an announcement from the company that discrepancies in its construction company Abigroup's accounts were a one-off item and will not affect its financial results.
Perseus Mining announced that sales for the September quarter were 4.7 percent down on the previous quarter, due to a 2.7 percent drop in gold prices.
Fortescue Metals, Leighton Holdings, Bluescope Steel, ALS, Aristocrat Leisure and QBE Insurance Group are up 2 to 2.6 percent. Fairfax Media, Alumina , AMP, Aurora Oil & Gas, CFS Retail Property Trust and Cochlear are also trading notably higher.
Meanwhile, Regis Resources, Oil Search, Boart Longyear and Lynas Corporation are trading lower, losing 1.4 to 3.2 percent.
According to data released by the Australian Bureau of Statistics, personal finance loans declined by 3.3 percent to A$7.220 billion in August from a downwardly revised A$7.469 billion in July.
Total commercial loans in August fell 5.2 percent to A$27.591 billion, seasonally-adjusted, from A$29.098 billion in July. Lease finance was down 5.1 percent from the previous month to A$528 million, while housing finance for owner occupiers rose 1.3 percent to A$13.647 billion.

10/15/2012 11:42 PM ET
The Japanese stock market is trading firm, with upbeat U.S. retail sales data and the yen's decline against the U.S. dollar triggering some strong buying at several front line counters.
Steel, non-ferrous metals, financial, communications, precision instruments, pulp & paper and automobile stocks are mostly trading higher. Pharmaceuticals, oil, foods and electric power stocks are trading mixed.
The benchmark Nikkei 225 index, which rose to around 8,675, was up 80.9 points or 0.9 percent at 8,658.8 at the end of the morning session.
Softbank Corp. shares moved up by over 10 percent. The company had announced on Monday that it will buy a 70 percent stake in U.S. mobile carrier Sprint Nextel Corp. for about $20 billion, in the biggest-ever overseas acquisition by a Japanese firm.
UBE Industries, Citizen Holdings, Tosoh, Kobe Steel, Credit Saison, Kuraray, Konami Corp., UNY Co. and Shinsei Bank gained 3 to 4.8 percent.
Credit Saison, Sumitomo Heavy Industries, Mitsubishi Chemical Holdings, Asahi Glass, Mitsubishi Electric, Ebara Corp., Yahoo Japan, Trend Micro, Sumitomo Mitsui Trust Holdings, Dai-ichi Life Insurance and Mizuho Financial Group were among the other big gainers.
Among the losers in the index, Kirin Holdings, Unitia, Sharp Corp., Dowa Holdings, Chubu Electric Power, Nippon Sheet Glass, JX Holdings and Nippon Light Metal drifted down by 1.4 to 3.2 percent.
In the currency market, the U.S. dollar traded in the upper 78 yen range in early deals in Tokyo. The yen is currently trading at 78.76 to the dollar.
Among other markets in the Asia-Pacific region, New Zealand, Singapore, South Korea and Taiwan are trading notably higher. Hong Kong, Malaysia and Indonesia are up with modest gains, while Shanghai is up marginally.
On Wall Street, stocks moved mostly higher on Monday with traders reacting positively to an upbeat retail sales report. Citigroup's better-than-expected results too aided sentiment to an extent.
The major averages ended the session near their best levels of the day. While the Dow ended up 95.4 points or 0.7 percent at 13,424.2, the Nasdaq rose 20.1 points or 0.7 percent to 3,064.2 and the S&P 500 climbed 11.5 points or 0.8 percent to 1,440.1.
Major European markets too closed higher on Monday. While the U.K.'s FTSE 100 index edged up by 0.2 percent, the German DAX and the French CAC 40 Index gained 0.4 percent and 0.9 percent, respectively.
U.S. Crude oil pared much of the losses but still ended a penny lower on Monday, after overcoming demand growth concerns linked to the tension between Turkey and Syria.
10/15/2012 11:42 PM ET
Oil prices pared losses after some encouraging macroeconomic data from the U.S. and China lifted global equity markets, with the dollar coming off the session's high over the Middle East imbroglio.
Crude for November delivery shed $0.01 to close at $91.85 a barrel on the New York Mercantile Exchange.

Forex Market
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10/16/2012 10:28 AM ET 
With utilities output showing a notable rebound, the Federal Reserve released a report on Tuesday showing that U.S. industrial production rose by more than expected in the month of September.
The Fed said industrial production increased by 0.4 percent in September after tumbling by a revised 1.4 percent in August. Economists had expected production to edge up by 0.2 percent compared to the 1.2 percent drop originally reported for the previous month.
The rebound by industrial production was partly due to a 1.5 percent jump in utilities output in September, which came after a 4.3 percent drop in August.
A resumption of activity at idled facilities along the Gulf of Mexico also contributed to the rebound in industrial production, the Fed said.
The report said manufacturing output edged up by 0.2 percent in September after falling by 0.9 percent in August, while mining output rose by 0.9 percent following a 1.6 percent drop in the previous month.
Robert Kavcic, an economist with BMO Capital Markets, said, "A bounce-back in industrial production in September provides a decent handoff to the fourth quarter, but more broadly, the U.S. factory sector has geared down this year."
said capacity utilization climbed to 78.3 percent in September from a revised 78.0 percent in August, coming in line with economist estimates.
Capacity utilization in the manufacturing sector was unchanged at 76.8 percent, while capacity utilization in the mining and utilities sectors rose to 89.1 percent and 74.8 percent, respectively.

10/16/2012 10:40 AM ET 
Homebuilder confidence in the U.S. edged slightly higher in October, according to a report released by the National Association of Home Builders on Tuesday, with the increase lifting homebuilder confidence to a new six-year high.
The report showed that the NAHB/Wells Fargo Housing Market Index inched up to 41 in October from 40 in September. The modest increase matched economist estimates.
With the increase, the index rose for the sixth consecutive month, reaching its highest level since coming in at 42 in June of 2006.
NAHB Chairman Barry Rutenberg said, "Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year."
"The concern is that, even though demand for new homes is rising, overly tight credit conditions are still constraining new building and new purchases at a time when that kind of economic activity and the job growth it generates are greatly needed," he added.
The modest increase by the housing market index came as the component measuring traffic of prospective buyers jumped to 35 in October from 30 in September, reaching its highest level since April of 2006.
Meanwhile, the components measuring current sales conditions and sales prospects for the next six months were both unchanged from the previous month at 42 and 51, respectively.
The housing market index for the Western region climbed to 49 in October from 44 in September, while the indexes for the South and the Northeast both rose by three points to 42 and 34, respectively.
On the other hand, the housing market index for the Midwest dropped to 41 in October from 45 in September, offsetting the gain seen in the previous month.
Wednesday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of September.
Economists expect housing starts to climb to an annual rate of 765,000 in September from 750,000 in August, while building permits are expected to rise to 810,000 from 803,000.

ADVFN III Evening Euro Markets Bulletin -October 16, 2012.

ADVFN III Evening Euro Markets Bulletin  
Daily world financial news

Tuesday, 16 October 2012

London Market Report
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London close: US earnings spark surge in UK stocks
Market Movers
  • techMARK 2,113.19 +0.97%
  • FTSE 100 5,870.54 +1.12%
  • FTSE 250 11,985.30 +1.09%
- US earnings lift sentiment
- Spain nearing a bailout request
- German ZEW index beats forecasts

Better-than-expected earnings from Goldman and Johnson & Johnson and signs of progress in the Eurozone saw the FTSE 100 surge 1.2 per cent on Tuesday afternoon.

"Global markets roared with optimism today as investors adopted a risk-on attitude thanks to strong US corporate results," said financial trade Shavaz Dhalla from Spreadex. According to Thomson Reuters Starmine data, over two-thirds of US companies that have reported earnings so far have either met or beaten expectations.

Dhalla said: "Thus, in the context of tightening regulations, banking scandals and countries nearing the end of their financial tether, investors can at least take comfort in the fact that many US companies are still managing to ride the current slowdown in global growth surprisingly well."

Bonds in Spain advanced today after the Treasury saw solid demand at a short-term bond auction this morning admits expectations that the country is ready to request a bailout. The Treasury raised €4.86bn, topping the high-end of its €3.5-4.5bn target. Demand totalled €13.654bn overall, while yields edged lower.

The German ZEW survey which measures economic sentiment improved to -11.5 in October, from -18.2 the month before and better than the -14.9 estimate.

UK CPI inflation fell from 2.5% to 2.2% in September, in line with market expectations, taking the rate to its lowest level since November 2009 and close to the 2% target set by the Bank of England. Bank of America Merrill Lynch strategist John Wraith told Reuters: "Inflation numbers were in line with expectations, which on one level doesn't mean very much but on another level probably hardened more expectations of more QE being announced in November."
FTSE 100: Financials & miners jump on increased risk appetite
Financial and resource stocks were performing well on Tuesday afternoon as investors adopted a 'risk-on' attitude on the back of improved newsflow from the Eurozone and better-than-expected corporate results in the US. Lloyds, Admiral, Royal Bank of Scotland and Barclays were leading financials higher, while mining peers Evraz, Polymetal and Kazakhmys were also in demand.

Diversified mining group Rio Tinto rose after hailing a strong set of production results in the third quarter, while Anglo American gained after saying that the illegal occupation of its Sishen Mine has been brought to an end by police.

Heading the other way was global engineering firm GKN after warning that macroeconomic conditions have deteriorated in recent weeks and it was seeing evidence of softening in order books. Investec this morning cut its price target on the stock and retained a 'hold' rating.

Telecoms titan BT Group was higher after Nomura reiterated its 'buy' rating on the stock, saying it prefers it to Vodafone on "structural growth drivers and dividend outlook". Meanwhile, airline group IAG was a heavy faller after Liberum Capital downgraded its recommendation for the shares to 'sell'.
FTSE 250: N Brown jumps after first-half beat
Internet and catalogue home shopping firm N Brown topped the risers list on Tuesday afternoon, gaining 12% after beating forecasts in the first half. The company reported that revenue in the 26 weeks to September 1st came in at £379.3m, up 4.3% on the year and ahead of the consensus estimate of £371.7m.

Chip group Imagination Technologies was also a high riser after both Liberum Capital and Numis upgraded their ratings on the stock.

Oil group Ophir Energy was the worst performer of the day after Deutsche Bank downgraded the stock to 'sell' and cut its price target from 565p to 505p.

High Street betting firm William Hill gained after agreeing on a revised and increased possible offer with GVC for Sportingbet.

Thermal processing services provider Bodycote was in demand after buying US-based Carolina Commercial Heat Treating from Bluewater Thermal Solutions for $68m. The company also said it was trading line with expectations in the most recent quarter.

UK housebuilder Bellway was also 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.

FTSE 100 - Risers
Evraz (EVR) 243.70p +6.33%
Lloyds Banking Group (LLOY) 42.76p +6.05%
Admiral Group (ADM) 1,175.00p +5.00%
Royal Bank of Scotland Group (RBS) 280.00p +4.44%
Barclays (BARC) 246.10p +3.91%
Shire Plc (SHP) 1,856.00p +3.46%
ARM Holdings (ARM) 596.00p +3.20%
Polymetal International (POLY) 1,160.00p +3.02%
Weir Group (WEIR) 1,771.00p +2.97%
Rio Tinto (RIO) 3,061.00p +2.94%

FTSE 100 - Fallers
GKN (GKN) 204.80p -3.35%
International Consolidated Airlines Group SA (CDI) (IAG) 155.60p -1.52%
Capita (CPI) 733.00p -0.81%
InterContinental Hotels Group (IHG) 1,593.00p -0.69%
Tesco (TSCO) 307.90p -0.68%
Pennon Group (PNN) 717.00p -0.62%
Sainsbury (J) (SBRY) 356.40p -0.39%
WPP (WPP) 854.50p -0.18%
Vodafone Group (VOD) 173.00p -0.17%
Meggitt (MGGT) 402.00p -0.12%

FTSE 250 - Risers
Brown (N.) Group (BWNG) 306.90p +13.79%
Imagination Technologies Group (IMG) 478.90p +7.86%
Perform Group (PER) 430.00p +7.50%
Kenmare Resources (KMR) 40.10p +6.56%
Paragon Group Of Companies (PAG) 237.10p +6.32%
Persimmon (PSN) 786.00p +5.29%
William Hill (WMH) 342.00p +4.91%
Berkeley Group Holdings (The) (BKG) 1,491.00p +4.41%
Bodycote (BOY) 359.40p +4.14%
Cranswick (CWK) 765.50p +3.45%

FTSE 250 - Fallers
Ophir Energy (OPHR) 579.50p -3.34%
Diploma (DPLM) 447.30p -1.65%
ITE Group (ITE) 198.90p -1.63%
Stobart Group Ltd. (STOB) 116.80p -1.52%
Talvivaara Mining Company (TALV) 133.80p -1.18%
Invensys (ISYS) 224.00p -1.02%
Greggs (GRG) 486.10p -0.96%
Carpetright (CPR) 693.00p -0.93%
Dignity (DTY) 927.50p -0.91%
TalkTalk Telecom Group (TALK) 178.40p -0.89%

Europe Market Report
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Europe midday: Germany may be open to a precautionary credit line for Spain
-Germany may be open to granting Spain a precautionary credit line -Reports
-Contradictory reports on whether Spain will ask for a bail-out
-Some Euro zone banks regaining access to unsecured funding-Barclays
-Spanish 10 year bond yields down 5bp to 5.77 per cent

FTSE-100: 0.99%
Dax-30: 1.29%
Cac-40: 1.02%
FTSE-Mibtel 30: 1.24%
Ibex 35: 2.34%
Stoxx 600: 0.83%

The major European equity benchmarks are now registering large gains. That following reports that Germany may be open to granting Spain a precautionary credit line.
Also adding to the favourable sentiment, The Financial Times wrote this morning that Spain may be close to asking for a bail-out. However, it added that it is being delayed by considerations put forth by Germany and by worries over what the repercussions of that could be for Italy.

Bloomberg is also casting a spotlight on Spain today. However, it was earlier reporting that Spain's PM believes that holding out for longer will win the country better terms, similar to what other reports seem to be pointing to yesterday.

Meantime, S&P has further cuts its long term credit ratings on 11 Spanish banks and short - term rates on four. This is normal as financial institutions' credit ratings are usually linked to the sovereign's by means of the so-called zero coupon curve.

The Spanish Treasury has sold 4.86bn euros in 12 and 18 month bills this morning, more than the 4.5bn which had been expected and at lower rates than the last time around.
Car sales off
Luxury group LVMH has today unveiled a further slowdown in comparable sales growth in the third quarter, to 6%.

Roche Holdings gained 0.5% after reporting third- quarter sales that exceeded analyst estimates.

Registrations plummeted 11% to 1.13m vehicles last month from 1.27m a year earlier, according to data out from the Brussels-based European Automobile Manufacturers' Association (ACEA). It was the 12th consecutive monthly drop and the biggest decline since October 2010.

As an aside, The Telegraph was reporting this morning that French business leaders are in a state of near panic over the seriousness of the current financial crisis.

From a sector stand-point the best performance is now to be seen in shares of the following industrial groups: Banks (2.05%), Technology (1.93%) and Insurance (1.69%).
Better than forecast economic numbers

Eurozone consumer prices for the month of September have come in at a 2.6% year-on-year rate of change (Consensus: 2.7%).

The German ZEW Institute's investor sentiment index for the month of September increased to -11.5 points, after -18.2 points in the month before (Consensus: -14.9). Slight gains in other asset classes

The euro/dollar is now up by 0.84% to the 1.3056 dollar mark.

Front month Brent crude futures are falling by 0.294 dollars to the 115.46 dollar mark on the ICE.

US Market Report
US mid-morning: Stocks at day's best levels
-Citi board ousts Pandit over poor execution-Bbg
-Two German lawmakers support precautionary credit line for Spain

Dow Jones Industrial: 0.87%
Nasdaq Comp.: 0.97%
S&P 500: 0.89%

The main US equity benchmarks are trading comfortably higher, apparently benefitting from reports and hopes that Spanish authorities may be making progress towards asking for a full rescue programme from their European partners.

Also helping stocks, undoubtedly, is the release of several better than expected quarterly earnings reports today from the likes of Johnson&Johnson, United Health, and Goldman Sachs as well as generally better than expected macroeconomic data.

As regards Goldman Sachs, the Wall Street giant has announced third-quarter net income of $1.51bn, or $2.85 per share (Consensus: $2.28), compared with a loss of $393m, or 84 cents, versus a year earlier.

Results from Coca Cola and State Street, on the other hand, came in 'mixed.'

HCA and Murphy Oil have both announced special dividend payments today. The latter has also unveiled a $1bn share buy-back programme.

Not to be lost sight of, IBM and Intel will publish their latest quarterly results after tonight's close.

Citigroup has turned around and is now moving higher despite the surprise resignation of its Chief Executive, Vikram Pandit. Worth pointing out in this regard, Bloomberg is now reporting that he was in fact ousted over his performance.
Slightly better than expected data-points

US core consumer prices rose at a 2.0% year-on-year clip in September, as expected.

Meantime, US industrial production rose by 0.4% month-on-month in September (Consensus: 0.2%). Compensating the above, in part, previous months' data for manufacturing sector output was revised down.

Long-term capital inflows increased to $90b in August (Consensus: $45.3bn), after $67.2bn.

The NAHB home-builder sentiment index gained 1 point, to 41 points, in September, its highest level since June 2006.

Front month West Texas crude futures are now up by 0.02% to the 91.86 dollar mark on the NYMEX.

10 year US Treasuries are also moving lower, by 14/32 dollars, with yields at 1.71%.

S&P 500 - Risers
First Solar Inc. (FSLR) $24.05 +8.09%
Fossil Inc. (FOSL) $91.94 +8.05%
Murphy Oil Corp. (MUR) $63.65 +7.89%
Cliffs Natural Resources Inc. (CLF) $43.81 +6.50%
Kroger Co. (KR) $24.55 +4.78%
State Street Corp. (STT) $43.46 +4.52%
Juniper Networks Inc. (JNPR) $17.51 +4.29%
Gannett Co. Inc. (GCI) $18.57 +4.03%
MetLife Inc. (MET) $36.35 +4.01%
Williams Companies Inc. (WMB) $37.25 +3.91%

S&P 500 - Fallers
W.W. Grainger Inc. (GWW) $203.22 -5.86%
PNC Financial Services Group (PNC) $60.67 -3.60%
Omnicom Group Inc. (OMC) $50.95 -2.88%
Advanced Micro Devices Inc. (AMD) $2.67 -2.73%
Forest Laboratories Inc. (FRX) $35.74 -2.35%
Republic Services Inc. (RSG) $27.68 -1.25%
Alpha Natural Res (ANR) $8.38 -1.17%
Cablevision Systems Corp. (CVC) $17.52 -1.16%
Quest Diagnostics (DGX) $63.23 -1.13%
Avon Products Inc. (AVP) $17.08 -1.10%

Dow Jones I.A - Risers
Intel Corp. (INTC) $22.23 +2.28%
Caterpillar Inc. (CAT) $84.53 +2.08%
United Technologies Corp. (UTX) $77.50 +1.77%
Boeing Co. (BA) $73.44 +1.65%
Travelers Company Inc. (TRV) $70.92 +1.62%
Alcoa Inc. (AA) $8.94 +1.56%
3M Co. (MMM) $94.16 +1.48%
Cisco Systems Inc. (CSCO) $18.82 +1.46%
American Express Co. (AXP) $58.37 +1.35%
Johnson & Johnson (JNJ) $69.50 +1.31%

Dow Jones I.A - Fallers
Mondelez International Inc. (MDLZ) $27.03 -0.70%
Coca-Cola Co. (KO) $37.91 -0.57%
Wal-Mart Stores Inc. (WMT) $76.79 -0.47%

Nasdaq 100 - Risers
Fossil Inc. (FOSL) $91.94 +8.05%
Mattel Inc. (MAT) $36.70 +3.61%
Avago Technologies Ltd. (AVGO) $34.38 +3.57%
Sears Holdings Corp. (SHLD) $62.15 +3.04%
Autodesk Inc. (ADSK) $32.84 +2.95%
Nvidia Corp. (NVDA) $13.14 +2.74%
Liberty Interactive Corp (LINTA) $20.27 +2.71%
Adobe Systems Inc. (ADBE) $33.18 +2.63%
Broadcom Corp. (BRCM) $33.94 +2.48%
Sandisk Corp. (SNDK) $44.74 +2.31%

Nasdaq 100 - Fallers
Fastenal Co. (FAST) $45.10 -0.99%
Infosys Technologies Ltd. (INFY) $44.22 -0.79%
Activision Blizzard Inc. (ATVI) $11.23 -0.71%
Mondelez International Inc. (MDLZ) $27.03 -0.70%
Warner Chilcott Plc (WCRX) $12.89 -0.46%
Vodafone Group Plc ADS (VOD) $27.90 -0.43%
Micron Technology Inc. (MU) $5.70 -0.35%
Garmin Ltd. (GRMN) $39.97 -0.35%
Expedia Inc. (EXPE) $54.32 -0.31%
O'Reilly Automotive Inc. (ORLY) $82.38 -0.16%

Broker Tips
Broker tips: Hargreaves Lansdown, BT, GKN
Credit Suisse analysts have downgraded Hargreaves Lansdown to 'underperform' from 'neutral' but have raised their price target for the stock from 480p to 655p.

The Swiss bank believes that the shares, trading at an all-time high (up 70% year-to-date), and on a calendar year price earnings ratio of 23 are up with events.

Moreover, the regulatory uncertainty from the retail distribution review has the potential to disrupt the current pricing model, consume management time and raise operational costs.

Nomura kept its 'buy' rating for telecoms giant BT Group on Tuesday saying that, while first-half results are likely to be hit by the economic downturn, it still prefers the business over sector peer Vodafone (rated 'neutral').

The broker said: "BT has not re-rated against VOD on price-to-earnings grounds in the last two years despite superior EBITDA growth and guidance that implies more of the same.

"Unless VOD can secure an increased US dividend, we expect investors to focus on consolidated operations in the near term, and we support a tighter valuation discount for BT."

Investec has trimmed its target for engineering group GKN after its Driveline division suffered from a worse-than-expected weakening in automotive demand and associated operational issues.

Investec has maintained its 'hold' rating for GKN and reduced its target from 240p to 224p.

The New York Times Opinions Today -October 16, 2012-.: The Arizonification of America

The New York Times

October 16, 2012

Opinion Today

Campaign Stops

The Arizonification of America

On immigration policy, Arizona leads the way, but maybe not where we thought it was going.

'Bronx Obama'

This short documentary features Louis Ortiz, a man from the Bronx whose life is turned upside down when he discovers his uncanny resemblance to the President.
Opinionator | Draft

A Short Defense of Literary Excess

Why I am attracted to novelists who cannot resist the extra adjective, the additional image, the scale-tipping clause.
Visualizing Vastness
Opinionator | Me, Myself and Math

Visualizing Vastness

Making sense of astronomical numbers in the universe ... and in wealth inequality.
Op-Ed Contributor

The Price of a 50-Year Myth

The "eyeball to eyeball" imagery of the Cuban missile crisis has contributed to some of our most disastrous foreign policy decisions - and it is a myth.
Op-Ed Contributor

Paul Ryan, Catholic Dissident

In the vice-presidential debate, neither candidate was true to the Catholic church on abortion.
Supporting Pakistanis, Stopping the Taliban
Room for Debate

Supporting Pakistanis, Stopping the Taliban

Is there a way to safely support women's rights in Taliban-heavy areas, or is it time to take a tougher stance?
The Nakba, Then and Now

The Nakba, Then and Now

More veteran Jewish fighters are talking about the massacre of Palestinians at Israel's independence. Is that because the country they fought to create is not the country they now live in?

If Roe v. Wade Goes

A Romney-Ryan victory could result in re-criminalizing abortion in much of America.

Adolescents in Grown-Up Jails

Mixing young prisoners with adults is bad, and putting them in solitary confinement is even worse.

Mr. Romney Needs a Working Calculator

Mitt Romney's claim that he can lower tax rates by 20 percent and pay for it by ending deductions has run into a wall.

The Opinion Pages

Read the full opinion report, including editorials, columns, op-eds and Opinionator. Go to the Section »
Taking Note

'Obama Phone'

A Tea Party group has turned the viral video into an ad.
No Indian Point + No Fracking = More Coal Burning?
Dot Earth Blog

No Indian Point + No Fracking = More Coal Burning?

How a New York ban on nuclear power and fracking would lead to more coal pollution, and why that doesn't matter to some people.