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Nov 2, 2012

DealBook Afternoon Edition -November 2, 2012-: Reading the Fine Print in Abacus and Other Soured Deals



Friday, November 2, 2012
TOP STORY
Reading the Fine Print in Abacus and Other Soured Deals Many of the soured investment products that helped lead to the financial crisis contained ample disclosures of their risks, but the sophisticated investors who lost billions failed to heed warning signs that should have led them to further investigation.
  • DEALBOOK »
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    DEALBOOK HIGHLIGHTS
    Restoration Hardware Jumps in Market Debut Shares in Restoration Hardware opened up at $32.28, more than 35 percent higher than their initial offer price, as investors' appetite for the stock appeared undiminished by the storm-shortened week.
    Berkshire to Buy Oriental Trading Company With the holidays approaching, Warren E. Buffett has found a way to stock up on all the elf hats and reindeer paper plates anyone could ever need: by buying an 80-year-old retailer overflowing with them.
    R.B.S. Expects Fine Over Libor Investigation The Royal Bank of Scotland said on Friday that it would probably face financial penalties connected to the rate-rigging investigation, as the British bank reported a net loss in the third quarter of the year.
    Nomura Faces Another Insider Trading Case On Friday, the Japanese bank said it was likely involved in a new insider trading case, months after the firm's chief executive, Kenichi Watanabe, resigned following similar allegations.
    LOOKING AHEAD
    Economic Reports Economic information to be released on Monday includes the Institute for Supply Management Services Report for October.
    Corporate Earnings Companies scheduled to release quarterly earnings reports on Monday include HSBC, Humana and Toyota Motor.
    In the United States On Monday, a federal judge in Madison, Wis., will begin hearing testimony on Apple's claims that Google's Motorola unit breached licensing patents.
    Overseas On Sunday, G-20 finance ministers and central bank chiefs will meet to discuss Europe's debt crisis.

Wall Street at Close Report | MarketWatch -November 2, 2012-: U.S. stocks fall sharply; election eyed

By Polya Lesova and Deborah Levine, MarketWatch 

NEW YORK (MarketWatch)U.S. stocks fell sharply on Friday, as cheer over better-than-expected employment data gave way to nervousness ahead of the U.S. presidential election next week. 

The equity market had been buoyed at the open by data showing that the American economy created more jobs than expected in October, pointing to a gradual but steady improvement in the labor market.


Bloomberg endorses Obama New York City Mayor Michael Bloomberg endorsed Barack Obama for president, citing his positions on climate change, abortion and marriage equality as major factors in his decision. 

However, jitters about Tuesday’s presidential and Congressional elections quickly prevailed.
“Investors are telling me they’re doing nothing until next week,” said Dan Greenhaus, chief global strategist at BTIG. “All that matters at this point is the fact that the election is in a few days.” 

The Dow Jones Industrial Average DJIA -1.05%  dropped 139.46 points, or 1.1%, to 13,093.16. It had traded as high as 13,289.45. The blue-chip index posted a 0.1% decline for the week.

Oil giant Chevron Corp. CVX -0.20%  and equipment maker Caterpillar Inc. CAT +0.49%  were the top losers in the Dow, falling 2.8% and 2.1%, respectively. Bank of America Corp. BAC -0.10%  was the top gainer in the Dow, with its shares ending up 1.1%. 

The S&P 500 index SPX -0.94%  lost 13.39 points, or 0.9% to end at 1,414.20, with energy and materials the biggest losers among its 10 major industry groups. For the week, the index gained 0.2%.
The Nasdaq Composite index COMP -1.26%  fell 37.93 points, or 1.3%, to 2,982.13. For the week, it dropped 0.2%. 

However, jitters about Tuesday’s presidential and Congressional elections quickly prevailed.
“Investors are telling me they’re doing nothing until next week,” said Dan Greenhaus, chief global strategist at BTIG. “All that matters at this point is the fact that the election is in a few days.” 

The Dow Jones Industrial Average DJIA -1.05%  dropped 139.46 points, or 1.1%, to 13,093.16. It had traded as high as 13,289.45. The blue-chip index posted a 0.1% decline for the week. 

Oil giant Chevron Corp. CVX -0.20%  and equipment maker Caterpillar Inc. CAT +0.49%  were the top losers in the Dow, falling 2.8% and 2.1%, respectively. Bank of America Corp. BAC -0.10%  was the top gainer in the Dow, with its shares ending up 1.1%. 

The S&P 500 index SPX -0.94%  lost 13.39 points, or 0.9% to end at 1,414.20, with energy and materials the biggest losers among its 10 major industry groups. For the week, the index gained 0.2%.
The Nasdaq Composite index COMP -1.26%  fell 37.93 points, or 1.3%, to 2,982.13. For the week, it dropped 0.2%. 

After trading flat for most of the morning, U.S. stock futures had turned higher when the government reported that nonfarm payrolls increased by 171,000 in October, more than the 120,000 rise expected by economists. 

Hiring also rose faster than expected in the preceding two months than previously believed, the data showed. Read: Economy adds 171,000 jobs as hiring picks up. 
 
The unemployment rate, drawn from a separate survey of about 60,000 households, edged up to 7.9% from 7.8%, as expected. The jobs report comes just days before Tuesday’s presidential election between President Barack Obama and Republican challenger Mitt Romney. 

Several analysts said the data may prove supportive for Obama, which may not be good for markets because of the perception that he’ll have a harder time negotiating with a Congress split between Republicans and Democrats to tackle a package of expiring tax breaks and spending measures that threaten to push the economy into a recession.

“The fiscal cliff is going to be more difficult under Obama,” Greenhaus said.
Before and after the jobs report, analysts also talked about the potential implication for the Federal Reserve’s easy monetary policy if the employment trend continues to improve. The Fed recently launched an open-ended mortgage-bond-buying program, which some economists call its third round of quantitative easing. 

“There is an expectation that future quantitative easing is now on hold,” though the Fed will continue its current program, said Andrew Brenner, head of international fixed income at National Alliance Securities.
“Investors are now betting that the Fed may not be on hold all through 2015. Some may be focusing on the election and Obama’s chances.” 

Gold and oil futures declined on Friday, while the U.S. dollar advanced against a basket of major currencies, with the dollar index DXY +0.65%  up 0.6% to its highest level in almost two months. Read: Gold futures fall below $1,700 an ounce. 
 
Polya Lesova is MarketWatch's New York deputy bureau chief. Deborah Levine is a MarketWatch reporter, based in San Francisco.


Business in Vancouver | BIV Today's Business News -October 2, 2012-: Idled sawmill in Cranbrook goes up in flames



Forestry

Idled sawmill in Cranbrook goes up in flames

Another sawmill has gone up in flames – but this time no one was injured, as the mill had been idle for some time.

Politics and Policy

 

Government miscommunicates probe into Clark's departed chief of staff “incident of concern”

Christy Clark's chief of staff Ken Boessenkool had no meetings with the head of B.C.'s Public Service Agency, Lynda Tarras, in the days prior to his resignation over an alleged misconduct – despite Clark saying the investigation was being handle by Tarras.
 

Liquor privatization documents reveal secret government consultation

The biggest pre-distribution liquor warehouse in B.C. was consulted by the provincial government before it joined the bidding for Liquor Distribution Branch logistics, documents obtained under Freedom of Information reveal.

Hospitality and Tourism

 

NDP would restore Tourism BC to industry control

In the past, the NDP has opposed the privatization of public services, but in the case of Tourism BC, that's what needs to happen, says NDP Leader Adrian Dix.

Economy and Finance

B.C. loses 11,000 jobs in October: StatsCan

There were 11,000 fewer jobs in British Columbia in October compared with September – the highest loss of any province in the country, according to Statistics Canada numbers released this morning.
 
B.C. is experiencing a flurry of mergers and acquisitions that include seafood companies, video production companies and architectural firms.

Education and Research

SFU support workers plan no-holds-barred, all-campus strike

Support workers at Simon Fraser University have scheduled an all-out, all-campus withdrawal of services on November 7, and members of CUPE 3338 say picket lines will go up at all three SFU campuses.

NYT Opinion Today -INovember 2, 2012-: Defense of the Undecided

The New York Times

November 2, 2012

Opinion Today


Campaign Stops

In Defense of the Undecided

They may pay less attention to the news, but voters who take their time choosing between Obama and Romney have some admirable qualities.
Nature Votes Last
Opinionator

Nature Votes Last

Republicans can get away with fact-denial, so long as reality does not shatter the picture.
Op-Docs

The Black Vote for Gay Marriage

Focusing on pastors with opposing views on same-sex marriage, the filmmaker Yoruba Richen explores the influence of African-Americans on a ballot initiative in Maryland.
Should New York Build Sea Gates?
Room for Debate

Should New York Build Sea Gates?

How can we better protect New York City from flooding?
Op-Ed Contributor

Innovative Immigrants

Why new Americans often make the best entrepreneurs.
Op-Ed Contributor

Don't Get Found Out

The 11th commandment at the heart of the BBC scandal: you're not doing anything wrong if the only people who know are you, the person you're doing it to and the people you're doing it with.
Misunderestimating Spain
Latitude

Misunderestimating Spain

To suggest, as Mitt Romney does, that Spain's current woes are due to government profligacy is to take the wrong lesson from its experience and risk making its problems worse.
Bad Blood in the Bald Hills
Opinionator

Bad Blood in the Bald Hills

As the Civil War raged in the East, settler-Indian violence tore apart northern California.
ADVERTISEMENT
Editorial

The Junk Is Back in Junk Bonds

As institutional investors pull back, individual investors need more warning and protection.
Editorial

Subject to Deportation

The Constitution requires a lawyer to tell a client who is not an American citizen that pleading guilty to a criminal offense carries the risk of deportation.
Editorial

Even Death Won't Part Them Now

After a state politician retires, goes to jail or dies, it's time to close shop, including the campaign fund.
Editorial

Hurricane Tracking in Peril

Satellites were used to predict Hurricane Sandy's path, but their future is at risk because of budget cuts and mismanagement.

The Opinion Pages

Read the full opinion report, including editorials, columns, op-eds and Opinionator. Go to the Section »
No Comment Necessary: This Is Still America
Taking Note

No Comment Necessary: This Is Still America

Senator James Inhofe said President Obama "has tried to destroy every institution that makes America great."
Who Will Vote?
Evaluations

Who Will Vote?

Further notes on the great polling debate.
Lessons from Sandy: Building with Resilience in Mind
Dot Earth Blog

Lessons from Sandy: Building with Resilience in Mind

A look at ways to cut disaster losses before disasters occur.

ADVFN III World Daily Markets Bulletin -November 2, 2012-.


ADVFN III World Daily Markets Bulletin
Daily world financial news

Friday, 02 November 2012


US Market

11/2/2012 12:12 PM ET 
After moving sharply higher over the course of the previous session, stocks have given back some ground during trading on Friday. While the monthly employment report showed stronger than expected job growth, traders seemed reluctant to continue buying stocks after yesterday's rally.
The major averages have moved roughly sideways in recent trading, stuck in negative territory. The Dow is down 38.87 points or 0.3 percent at 13,193.75, the Nasdaq is down 9.27 points or 0.3 percent at 3,010.79 and the S&P 500 is down 2.14 points or 0.2 percent at 1,425.45.
The pullback by stocks comes despite the release of a report from the Labor Department showing that the U.S. economy added more jobs than anticipated in the month of October.
The report said non-farm payroll employment increased by 171,000 jobs in October following an upwardly revised increase of 148,000 jobs in September.
Economists had expected employment to increase by about 125,000 jobs compared to the increase of 114,000 jobs originally reported for the previous month.
Despite the continued job growth, the unemployment rate edged up to 7.9 percent in October from 7.8 percent in September due to an increase by the size of the workforce. The modest increase by the unemployment rate matched economist estimates.
James Knightley, senior economist at ING, said, "Over the past week we have seen GDP, the ISM report, construction activity, confidence and the employment report point to a strengthening U.S. economy."
"With the unemployment rate trending downwards and the economy adding jobs this is boosting incomes and the feeling of job security," he added.
While the report helped to push stocks higher at the start of trading, buying interest waned not long after the open.
Even though the job growth surpassed expectations, concerns about the global economic outlook continued to weigh on investor sentiment.
Some traders also felt that the upbeat data was priced into the markets with yesterday's rally and looked to do some profit taking rather than pushing stocks even higher.
Sector News
Gold stocks have shown a substantial move to the downside, moving lower along with the price of the precious metal. With gold for December delivery tumbling $32.90 to $1,682.60 an ounce, the NYSE Arca Gold Bugs Index is down by 3.5 percent.
Considerable weakness has also emerged among networking stocks, as reflected by the 2.4 percent loss being posted by the NYSE Arca Networking Index. Alcatel-Lucent (ALU) has helped to lead the sector lower, falling by 10.8 after reporting disappointing third quarter results.
Steel, computer hardware, and airline stocks have also come under pressure on the day, while strength remains visible among commercial real estate stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday, benefiting from the overnight rally on Wall Street. Japan's Nikkei 225 Index advanced by 1.2 percent, while Hong Kong's Hang Seng Index ended the day up by 1.3 percent.
Meanwhile, the major European markets have turned mixed over the course of the trading day. While the U.K.'s FTSE 100 Index has dipped below the unchanged, the German DAX Index and the French CAC 40 Index remain up by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries are seeing modest weakness but have climbed well off their worst levels of the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.3 basis points at 1.738 percent.

Canadian Market
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11/2/2012 11:07 AM ET 
After moving higher in the past straight six sessions, Canadian stocks were lingering in the red Friday morning as commodities faltered and jobs data from both sides of the border came in mixed. While Canadian jobs growth stalled in October following two consecutive months of increases, employment in the U.S. increased by more than economists had anticipated.
Also, trades preferred to cash in on recent gains as the main index surged to a six-week high in the previous session.
The S&P/TSX Composite Index lost 67.19 points or 0.54 percent to 12,432.57, after gaining over 300 points or nearly 2.5 percent in the past six straight sessions.
The price of crude oil oil was leveling off from its two-week high Friday morning as traders speculate that demand for crude will be lower than anticipated in the aftermath of Hurricane Sandy. Crude for December shed $1.63 to $85.46 a barrel.
In the oil patch, Crescent Point Energy (CPG.TO) and Niko Resources (NKO.TO) were down around to 4 percent each.
Penn West Petroleum (PWT.TO) lost about 5 percent after slipping into the red in third quarter, reporting a net loss of C$67 million or C$0.14 per share compared to a net income of C$138 million or C$0.29 per share last year. The company declared a dividend of C$0.27 per share for the quarter.
The price of gold moving lower Friday morning as the US dollar was trading firm versus a basket of currencies amid the release of non-farm payroll data. Gold for December lost $30.50 to $1,685.00 an ounce.
Among gold plays, Agnico-Eagle Mines (AEM.TO) and New Gold (NGD.TO) dived around 5 percent each.
Goldcorp. (G.TO), Barrick Gold (ABX.TO) and Allied Nevada Gold (ANV.TO) were down around 2 percent each.
Pharmaceutical company Valeant Pharmaceuticals International, Inc. (VRX.TO) eased about 0.50 percent after reporting net income of $7.65 million or $0.02 per share for the third quarter, sharply lower than $40.86 million or $0.13 per share in the prior-year quarter. Excluding items, adjusted income for the quarter was $357.5 million or $1.15 cash earnings per share, compared to $211.91 million or $0.66 cash earnings per share in the year-ago quarter.
Business data provider Thomson Reuters Corp. (TRI.TO) posted higher third-quarter earnings of $462 million compared with last year's $369 million, with quarterly earnings per share improving to $0.56 from $0.44 a year ago. However, adjusted earnings from continuing operations were $445 million lower than $453 million in the previous year, while corresponding adjusted earnings remained flat at $0.54 per share. Analysts expected the company to report earnings of $0.48 per share for the quarter. The stock slipped 1.5 percent.
Printing papers and pulp products company Resolute Forest Products (RFP.TO) swung to profit in third quarter, reporting net income of $31 million or $0.32 per share compared with a loss of $44 million or $0.46 per share in the 2011 third quarter. However excluding $24 million of special items, quarterly net income was $7 million or $0.07 per share, down significantly from $50 million, or $0.50 per share last year. Analysts were expecting the company to report earnings of $0.23 per share for the quarter. The stock dived 4 percent.
Meanwhile, base-metals miner Inmet Mining (IMN.TO) rose over 5 percent after reporting improved third quarter net income of $116.23 million or $1.67 per share compared to $97.99 million or $1.41 per share last year. Analysts were expecting the company to earn C$1.04 per share for the quarter.
Engineering and construction company SNC-Lavalin Group (SNC.TO) gained over 5 percent after reiterating its 2012 net income guidance in a range of C$325 million - C$340 million. The company reported a lower third-quarter net income at C$114.9 million or C$0.76 per share compared to C$124.5 million or C$0.82 per share last year.
In economic news, Statistics Canada said the nation added 1,800 jobs in October, missing economists expectations for 5000 job creations. The unemployment rate remained at 7.4 percent. On an yearly basis, employment increased 1.3 percent or 229,000, all in full-time work.
From the U.S., the Labor Department said non-farm payroll employment increased by 171,000 jobs in October following an upwardly revised increase of 148,000 jobs in September. Economists had expected employment to increase by about 125,000 jobs compared to the increase of 114,000 jobs originally reported for the previous month. Despite the continued job growth, the unemployment rate edged up to 7.9 percent in October from 7.8 percent in September due to an increase by the size of the workforce. The modest increase by the unemployment rate matched economist estimates.
Separately, the Commerce Department said factory orders increased by 4.8 percent in September after tumbling by a revised 5.1 percent in August. Economists had expected orders to increase by about 4.9 percent compared to the 5.2 percent drop originally reported for the previous month
Elsewhere, activity in euro zone's manufacturing sector decreased for the fifteenth consecutive month in October, though at a marginally slower rate than estimated earlier, as domestic market conditions remained subdued and trade flows deteriorated further, final data released by Markit Economics showed. The seasonally adjusted purchasing managers' index decreased to 45.4 in October from 46.1 in September. The latest reading was slightly higher than 45.3 seen in the preliminary estimates.
Meanwhile, Germany's manufacturing sector contraction in October was less severe than expected earlier, but activity dropped for the eighth consecutive month, final survey data released by Markit Economics revealed. The Markit/BME Germany Purchasing Managers' Index fell to 46 from 47.4 in September.

European Market
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11/2/2012 1:20 PM ET 
The Swiss stock market finished Friday's session with a gain and closed above the 6,700 point mark. The market got off to a rather sluggish start, but rose steadily following the release of the better than expected U.S. jobs report for October. However, profit taking set in during late trading.
The U.S. jobs report showed better than expected jobs growth and the figures from the prior month were revised upward. The data sparked gains among financial stocks, as well as economically sensitive stocks and luxury goods.
The Swiss Market Index climbed by 0.62 percent Friday and finished at 6,701.37. The SMI ended the week with an increase of 1.5 percent. The Swiss Leader Index gained 0.68 percent Friday and the Swiss Performance Index added 0.61 percent.
Luxury goods companies Richemont and Swatch extended their gains from the previous session. Richemont climbed by 2.9 percent and Swatch increased by 2.8 percent. Sulzer was also among the biggest gainers, with an increase of 2.1 percent, after the company held an "Investor Day."
Among the defensive heavyweights, Novartis rose by 1.1 percent and Roche climbed by 0.7 percent. Nestle lagged behind, with a gain of 0.1 percent. Among the cyclical stocks, Kuehne + Nagel increased by 1.5 percent and SGS added 1.5 percent. Sika and Sonova both rose by 1.5 percent and Adecco advanced by 1.1 percent.
11/2/2012 12:55 PM ET 
The majority of the European markets ended Friday's session in the green, following the better than expected U.S. jobs report for October. The markets were slightly negative in early trade, as investors exercised caution ahead of the report. The initial reaction to the jobs report was very positive, propelling the markets into the green. However, as the session progressed, those gains began to slowly erode. Investor will now shift their focus to the U.S. presidential election, which will take place on Tuesday, November 6th.
Greece is "way behind" its bailout program goals due to the standstill in consolidation and basic structural reforms, Bundesbank Executive Board member Andreas Dombret said Thursday.
"Politicians and the EU are willing to assist Greece, but Greece must, first and foremost, help itself" he said in a speech at the reception of the Bundesbank Representative Office.
Announcing and passing laws is not enough if the administration and the general public undermine them, Dombret said. "It is now the task of the Troika to decide impartially whether Greece meets the conditions for further assistance."
A leading think tank on Friday lowered its growth forecast for the British economy next year, while stressing that the fiscal consolidation efforts in the U.K. and Europe are having a large negative impact on growth.
The gross domestic product is expected to grow 1.1 percent in 2013, with no contribution from net trade, the National Institute of Economic and Social Research (NIESR) said in a quarterly report. This was lower than its July forecast of 1.3 percent growth.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.42 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.19 percent.
The DAX of Germany climbed by 0.38 percent and the CAC 40 of France gained 0.49 percent. The FTSE 100 of the U.K. declined by 0.06 percent, but the SMI of Switzerland rose by 0.62 percent.
In Frankfurt, Beiersdorf increased by 7.26 percent. The company reported growth in profit and revenues for the first nine months of the year.
Deutsche Telekom fell by 3.52 percent, on reports that the company's dividend payouts could be reduced by a third in 2013.
In Paris, Alcatel Lucent dropped by 6.67 percent, after reporting a quarterly loss.
Total rose by 0.59 percent, following an upgrade from Societe Generale.
In London, Tullow Oil climbed by 2.70 percent. JP Morgan upgraded its rating on the stock to "Overweight" from "Neutral."
Royal Bank of Scotland declined by 2.23 percent, after the company reported a third quarter loss.
Admiral Group fell by 5.25 percent. The company announced in its third quarter update that group turnover was down 2 percent.
Activity in Eurozone's manufacturing sector decreased for the fifteenth consecutive month in October, though at a marginally slower rate than estimated earlier, as domestic market conditions remained subdued and trade flows deteriorated further, final data released by Markit Economics showed Friday.
The seasonally adjusted purchasing managers' index (PMI) decreased to 45.4 in October from 46.1 in September. The latest reading was slightly higher than 45.3 seen in the preliminary estimates.
Germany's manufacturing sector contraction in October was less severe than expected earlier, but activity dropped for the eighth consecutive month, final survey data released by Markit Economics revealed Friday.
The Markit/BME Germany Purchasing Managers' Index fell to 46 from 47.4 in September, well below the long-term average of 52. The final score came in higher than the flash estimate of 45.7.
French manufacturing activity continued to decline in October, but at a more moderate pace than thought earlier, detailed results of a survey by Markit Economics revealed Friday.
The headline purchasing managers' index, a seasonally adjusted index designed to measure the performance of the manufacturing economy, rose to 43.7 from 42.7 in September. The flash reading was 43.5.
The British construction sector expanded modestly in October, contrary to economists' expectations for a decline, data released by Markit Economics showed Friday.
The seasonally adjusted purchasing managers' index (PMI) for the construction sector increased to 50.9 in October from 49.5 in September. In index rose above the no-change 50 mark that separates growth from contraction, while economists expected a lower reading of 49.
Employment in the U.S. increased by more than economists had anticipated in the month of October, according to a report released by the Labor Department on Friday, although the report also showed an uptick by the unemployment rate.
The report said non-farm payroll employment increased by 171,000 jobs in October following an upwardly revised increase of 148,000 jobs in September. Economists had expected employment to increase by about 125,000 jobs compared to the increase of 114,000 jobs originally reported for the previous month.
Despite the continued job growth, the unemployment rate edged up to 7.9 percent in October from 7.8 percent in September due to an increase by the size of the workforce. The modest increase by the unemployment rate matched economist estimates.
New orders for U.S. manufactured goods showed a notable rebound in the month of September, according to a report released by the Commerce Department on Friday, with the bounce largely due to a jump in orders for transportation equipment.
The report said factory orders increased by 4.8 percent in September after tumbling by a revised 5.1 percent in August. Economists had expected orders to increase by about 4.9 percent compared to the 5.2 percent drop originally reported for the previous month.

Asia Market
11/2/2012 7:23 AM ET 
Positive global cues following the release of a slew of positive economic reports from China and the U.S. as well as better-than-expected second-quarter earnings results from IT major Wipro lifted Indian shares notably higher on Friday. The rupee also traded marginally higher despite weakness in the euro/dollar pair, boosting investor sentiment.
The benchmark BSE Sensex moved in the range of 18,688-18,794 before ending up 194 points or 1.04 percent at 18,755, with 26 of its components advancing. Among the decliners, Bharti Airtel lost 2.1 percent on concerns with regard to partial re-farming of telecom spectrum, while Sun Pharma, Jindal Steel and Hindustan Unilever fell less than a percent each. Capital goods, auto, banking and IT stocks led the rally.
Bajaj Auto climbed 2.8 percent after the two-wheeler manufacturer posted a modest 4 percent rise in October sales and said sales would accelerate in the coming months. Likewise, Hero MotoCorp rose 1.8 percent after posting a modest 3 percent rise in two-wheeler sales in October. Maruti Suzuki rose 0.3 percent, Tata Motors added a percent and Mahindra & Mahindra rallied 2.2 percent.
IT major Wipro pared early gains to end 0.3 percent higher, while rivals Infosys and TCS gained about a percent each. Wipro reported a jump of 24 percent jump in second-quarter consolidated net profit and announced the demerger of its non-information technology businesses into a separate entity.
Among metal stocks, Tata Steel, Hindalco and Sterlite rose 1-3 percent. Larsen & Toubro jumped 2.5 percent, extending Thursday's gains after winning new orders. ITC rose 1.2 percent after recent losses, private sector lender ICICI Bank jumped 2.4 percent, state-run Gail soared 4.2 percent and drug maker Lupin added 2.3 percent.
Union Bank of India soared 8.2 percent on robust results. The state-run lender reported a 57 percent surge in quarterly net profit due to lower provisioning. ONGC edged up 0.4 percent amid reports that the oil & gas major has finalized a Rs 8,000 crore surface facility revamp program for its three onshore assets - Ankleshwar, Ahmedabad and Mehsana - in Gujarat.
CESC advanced 1.8 percent on reports that the RP-Sanjiv Goenka group is mulling options for demerging its supermarket chain Spencer's. Godrej Consumer Products added a percent after it acquired a 51 percent stake in Darling Group in Kenya. DLF edged up 0.3 percent as it concluded the sale of a land parcel in Mumbai.
State-run oil retailers ended on a mixed note after the government put on hold a decision to increase the price of non-subsidized LPG cylinders. BPCL slid half a percent, while IOC rose 1.5 percent and HPCL gained 0.6 percent.
Market heavyweight Reliance Industries edged down 0.2 percent after the oil ministry described as "baseless and frivolous" the allegations of granting undue favors to the company. Marico tumbled 4.4 percent on disappointing earnings results.
Elsewhere, other Asian markets rose broadly, mirroring the rally on Wall Street and in Europe overnight as a slew of positive economic reports from China and the U.S. fueled hopes that the global economy is regaining some traction.
European stocks were trading on a lackluster note following the previous session's rally as corporate earnings continued to be lukewarm and investors awaited the release of a key U.S. employment report due later in the day.

Commodities
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11/2/2012 7:14 AM ET 
The price of crude oil was leveling off from its two-week high Friday morning as traders speculate that demand for crude will be lower than anticipated in the aftermath of Hurricane Sandy.
Light Sweet Crude Oil (WTI) futures for December delivery, shed $0.71 to $86.38 a barrel. Yesterday, oil settled near a two-week high after the Energy Information Administration's weekly oil report showed a decline in U.S. crude stockpile even as analysts expected an increase. Crude prices were also supported by a slew of upbeat macroeconomic data from the U.S., with some positive manufacturing data from China
Thursday during trading hours, the EIA revealed that U.S. crude oil inventories dipped 2.0 million barrels, while gasoline stocks added 0.90 million barrels in the weekended October 26. Analysts expected crude oil inventories to jump 1.50 million barrels and gasoline stocks to add 200,000 barrels last week.
This morning, the U.S. dollar advanced back near a three-week high versus the euro, while paring recent losses against sterling. The buck was steady near a 4-month high versus the yen and moving higher against the Swiss franc.
In economic news, activity in euro zone's manufacturing sector decreased for the fifteenth consecutive month in October, though at a marginally slower rate than estimated earlier, as domestic market conditions remained subdued and trade flows deteriorated further, final data released by Markit Economics showed. The seasonally adjusted purchasing managers' index decreased to 45.4 in October from 46.1 in September. The latest reading was slightly higher than 45.3 seen in the preliminary estimates.
Meanwhile, Germany's manufacturing sector contraction in October was less severe than expected earlier, but activity dropped for the eighth consecutive month, final survey data released by Markit Economics revealed. The Markit/BME Germany Purchasing Managers' Index fell to 46 from 47.4 in September.
Traders will look to the non-farm payroll report for the month of October from the U.S. Labor Department, due out at 8.30 a.m.ET. Economists expect non-farm payrolls for October to increase by 125,000, while the unemployment rate is expected to edge up to 7.9 percent.
Later during the session, the Commerce Department is due to release its report on factory goods orders for September. Economists estimate a 4.9 percent increase in orders for factory goods following a 5.2 percent increase in August.

ADVFN III Evening Euro Markets Bulletin -November 2, 2012-:

ADVFN III Evening Euro Markets Bulletin
Daily world financial news

Friday, 02 November 2012


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London close: Footsie struggles to hold on to gains after jobs data
Market Movers
  • techMARK 2,104.52 -0.28%
  • FTSE 100 5,868.55 +0.11%
  • FTSE 250 12,120.83 +0.24%
- US jobs provide temporary boost, but gains trimmed
- Data unlikely to change Fed's stance, says analyst
- Financials Admiral and RBS disappoint

While the closely-watched US jobs report provided a bit of a bounce in early afternoon trade, the Footsie had pared gains to finish flat by the close as the initial euphoria surrounding the figures died away.

US non-farm payrolls rose by 171,000 last month, well above the 125,000 expected by the market consensus. The unemployment rate did increase, by 10 basis points to 7.9%, but this was expected.

What's more, upwards revisions were made to previous months' figures which added "more lustre to an already-solid report", said analyst Michael Gapen from Barclays Research.

The Footsie jumped to an intraday high of 5,888 shortly after the data was released, but quickly came pulling back to its starting point after US stock markets opened. "Despite the better numbers the initial gains proved to be somewhat short-lived as markets fizzled out like a damp firework ahead of the weekend and the outcome of next week's US elections," said market analyst Michael Hewson from CMC Markets.

Barclays Research's Gapen said that the labour market is exhibiting good momentum heading into Q4, "although we would not be surprised to see some volatility in upcoming jobless claims and payrolls as a result of Hurricane Sandy. We do not see the momentum in hiring and decline in the unemployment rate in recent months as changing the calculus for the Fed at this stage."

In domestic, the UK economy is not expected to contract this year, but ill-timed fiscal consolidation in Europe and other external risks continue to pose risks, the National Institute of Economic and Social Research (NIESR) said in its latest quarterly forecasts.

The British economy is now expected to grow by 0.1% in 2012, which marks a slight upwards revision on its previous forecasts. Next year however the external environment is no longer being forecast to make a contribution to aggregate demand, leading the NIESR to reduce its forecast for gross domestic product (GDP) downwards, to 1.1%, as net trade will not make any positive contribution.
FTSE 100: Financials provide a drag
Car insurance firm Admiral dropped after seeing a 2% decrease in third-quarter turnover. "Little has changed since the half year. The UK car insurance market is cyclical and we are in the softer part of the cycle with premium rates coming down," said Chief Executive Henry Engelhardt.

Banking giant RBS fell after reporting a statutory loss before tax of £1.26bn for the three months to September 30th after taking a £1.46bn charge in own-credit adjustments and a £400m bill for PPI redress. Investec maintained its 'sell' rating for the stock this morning, saying that it had expected a loss of £1.0bn.

Lloyds fell lower following its sharp rise on Thursday on the back of its third-quarter update, which showed figures were in line with expectations. Meanwhile, sector peer HSBC was also under the weather after the Financial Stability Board said that it (along with Citigroup, Deutsche Bank and JPMorgan Chase) must hold additional capital in order to be able absorb possible losses.

Airlines group IAG was the top performer this afternoon, up three per cent over 168p. Technical analysts at Charles Stanley said today: "A close above 168p would suggest that this line is giving way and would amount to a 'trading buy' signal."

Oil giant Tullow was also a high riser after JPMorgan Cazenove upgraded its stance on the shares to 'overweight'. In contrast, engineering giant Weir was under the weather after Jefferies cut its rating to 'hold' and supermarket group Morrisons fell after Morgan Stanley downgraded the stock to 'underweight'.

Shares in luxury brand Burberry were making gains ahead of its first-half results on November 7th. Seymour Pierce has raised its target and maintained its 'buy' rating this morning, saying that risks to forecasts are now 'on the upside'.
FTSE 250 movers: Shares in Bumi rocket on proposal news
Mining group Bumi advanced after saying it has appointed Rothschild Goup as its financial adviser with immediate effect to evaluate the proposal received from Long Haul Holdings.

Shares in Dixons rose once again, boosted by the news that its main High Street rival, Comet, is likely to go into administration. Also Seymour Pierce has said that John Lewis's strong start to their new Windows 8 range is a positive sign for Dixons.

Meanwhile, hotels group Millennium & Copthorne fell despite seeing RevPAR rise 2.6% in the third quarter, with London enjoying an Olympic boost.

Hikma Pharmaceuticals also fell after saying it is considering the future of its Generics business as its Eatontown facility in New Jersey continues to be dogged by compliance issues.

Gold miner Centamin has once again taken a hit, one day after shares rebounded after returning to the market following a suspension from trade. Earlier this week the firm's shares plummeted after media reports claimed that an Egyptian court had labelled its Sukari mining concession, its primary source of revenue, as void.

FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 169.10p +3.55%
Burberry Group (BRBY) 1,253.00p +3.13%
Tullow Oil (TLW) 1,445.00p +2.70%
Whitbread (WTB) 2,456.00p +2.68%
GKN (GKN) 216.70p +2.22%
Capita (CPI) 737.50p +2.08%
Hargreaves Lansdown (HL.) 762.00p +2.08%
Evraz (EVR) 243.30p +2.06%
Imperial Tobacco Group (IMT) 2,392.00p +1.79%
Carnival (CCL) 2,539.00p +1.72%

FTSE 100 - Fallers
Admiral Group (ADM) 1,081.00p -5.34%
Severn Trent (SVT) 1,557.00p -2.44%
Weir Group (WEIR) 1,751.00p -2.40%
Pennon Group (PNN) 701.00p -2.30%
Royal Bank of Scotland Group (RBS) 281.30p -2.05%
GlaxoSmithKline (GSK) 1,361.50p -1.87%
Associated British Foods (ABF) 1,370.00p -1.72%
Smith & Nephew (SN.) 638.00p -1.62%
Petrofac Ltd. (PFC) 1,599.00p -1.48%
Randgold Resources Ltd. (RRS) 7,325.00p -1.48%

FTSE 250 - Risers
Bumi (BUMI) 283.00p +13.97%
Dixons Retail (DXNS) 25.84p +10.52%
Chemring Group (CHG) 277.30p +6.41%
Homeserve (HSV) 235.20p +5.38%
Brown (N.) Group (BWNG) 354.90p +4.47%
RPS Group (RPS) 237.40p +4.12%
FirstGroup (FGP) 208.40p +3.99%
PayPoint (PAY) 826.50p +3.38%
Talvivaara Mining Company (TALV) 135.40p +3.36%
Spectris (SXS) 1,818.00p +3.30%

FTSE 250 - Fallers
Centamin (DI) (CEY) 60.50p -9.84%
Millennium & Copthorne Hotels (MLC) 480.00p -6.16%
Lancashire Holdings (LRE) 848.00p -3.03%
Debenhams (DEB) 120.00p -2.99%
Balfour Beatty (BBY) 311.40p -2.93%
Ocado Group (OCDO) 62.60p -2.49%
Hikma Pharmaceuticals (HIK) 738.50p -2.06%
Savills (SVS) 414.90p -1.98%
Hunting (HTG) 779.00p -1.95%
Cable & Wireless Communications (CWC) 37.31p -1.82%

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Europe midday: Europe stands pat while waiting for US Employment Report
-Investors waiting on US employment report
-Eurozone manufacturing sectors slightly above consensus, but in contration
-Alcatel plunges after reporting Q3 losses
-Beiersdorf lifts revenue outlook
-Rumors that Deutsche Telekom to cut dividend

FTSE-100: -0.09%
Dax-30: -0.14%
Cac-40: -0.02%
FTSE Mibtel 30: -0.60%
Ibex 35: +0.50%
Stoxx 600: +0.16%

After yesterday's 1 per cent rise, European equities on the average decide to take a breather and trade flat with a mixed balance while waiting for the latest monthly employment report Stateside to come out at 12:30 London time.

Yesterday's better-than-expected US labor market data (weekly initial claims and the ADP employment change) already gave the European benchmarks a leg up, but it seems even the bulls prefer to wait for a confirmation from the "official" data before making another move.

Also of interest, in today's Financial Times James Mackintosh tells readers that recent market moves –gains led by cyclicals- show that there is quite a bit of optimism regarding economic growth. In his opinion, however, that is only justified if one believes that central banks have more ammunition left in their armouries –or not- as Governor King has recently suggested.

Other considerations to be taken into account by the shortest-term investors and traders are that the last two months of the year are usually amongst the best for equities and the still relatively "bearish" sentiment (as a contrarian indicator) of small investors, according to the latest weekly survey data out from AAII.

Alcatel burns a hole in investors´ pockets


Company earnings continue to cause scares on the Old Continent. Today, Alcatel Lucent plunges almost 7% on the Cac 40 after reporting that it swung to losses in the third quarter. According to Bloomberg data, out of the 164 Eurostoxx 600 companies that have reported earnings, only 54% have managed to beat consensus. Yet there are those positive reports at least and today we see the maker of Nivea Beiersdorf jump 6% after increasing annual revenue forecast.

Unfortunately for the bulls, its fellow Dax 30 member Deutsche Telekom plummets almost 3% after the German business daily Handelsblatt reported that the company is considering slashing its dividend by up to a third from 2013 onwards.

By sectors, the best performance in the DJ Stoxx 600 is now to be seen by companies in the following industrial groups: Basic Resources (+1.31%), Automobiles & Parts (+1.14%) and Industrial Goods & Services (+1.06%). Meanwhile, Telecommunications (-0.88%), Utilities (-0.76%) and Health Care (-0.60%) lead the decliners.
Eurozone PMI slightly ahead of forecasts


While waiting for the US macro data (apart from the Employment Report, we'll also see the New York ISM and factory orders), we've had a barrage of manufacturing sector come out from the Eurozone. In general terms, both the individual countries and the sector as a whole narrowly beat forecasts. However, it should be noted that all of the readings remained below 50, implying a contraction in the sector.

The Markit Eurozone purchasing managers index for the month of October
has come in 45.4, versus last month´s reading of 46.1 (Consensus: 45.3).

The Markit German purchasing managers index for the month of October
has come in 46, versus last month´s reading of 47.4 (Consensus: 45.7).

The Markit French purchasing managers index for the month of October
has come in 43.7, versus last month´s reading of 42.7 (Consensus: 43.5). Single currency dropping towards technical support ahead of data


The euro/dollar is now down by 0.48% to 1.2885.

Brent crude futures are off by 0.14% to $109.40
US Market Report
US open: Traders bank profits ahead of election
    Market movers
    Dow Jones: -40 at 13,193
    S&P 500: -3 at 1,425
    NASDAQ Composite: -9 at 3,011
After initially opening firmer after better than expected non -farm payrolls data for October, stocks have turned back, with some traders closing positions ahead of next Tuesday's presidential election.

October data showed 171,000 jobs were added in the month, ahead of the 120,000 additions expected by the market.

The unemployment rate, however, edged up to 7.9% in October from 7.8% in September.

The main benchmark indices are all lower, despite some well received trading updates from TripAdvisor, Priceline.com and Starbucks.

Results from online travel agent TripAdvisor last night after the bell came in ahead of expectations on the back of a strong increase in web traffic.

Post-tax profit of $59.4m in the third quarter was equivalent to 41 cents a share, up 4 cents a share on last year's third quarter result.

Sector peer Priceline.com is also soaring after its results yesterday revealed things are not so bad in Europe as had been feared.

Post-tax earnings were up 27% from a year earlier on the back of a 25% increase in gross bookings.

Overpriced coffee peddler Starbucks saw like-for-like sales growth of 6% in the third quarter. Shares frothed higher despite revenue of $3.36bn being short of the $3.39bn analysts had been expecting.


S&P 500 - Risers
TripAdvisor Inc. (TRIP) $35.38 +20.30%
Priceline.Com Inc. (PCLN) $649.09 +10.75%
Starbucks Corp. (SBUX) $51.30 +10.05%
Alpha Natural Res (ANR) $9.44 +6.54%
Washington Post Co. (WPO) $353.92 +4.26%
Whole Foods Market Inc. (WFM) $98.45 +4.22%
Beam Inc. Common Stock (BEAM) $57.64 +3.71%
Rowan Companies plc (RDC) $32.86 +2.46%
Harman International Industries Inc. (HAR) $44.50 +2.44%
Simon Property Group Inc. (SPG) $155.83 +2.15%

S&P 500 - Fallers
Pitney Bowes Inc. (PBI) $12.60 -13.94%
First Solar Inc. (FSLR) $22.80 -7.87%
Fluor Corp. (FLR) $53.31 -7.54%
Chesapeake Energy Corp. (CHK) $18.82 -6.25%
American International Group Inc. (AIG) $33.13 -5.88%
Newmont Mining Corp. (NEM) $50.17 -5.73%
Republic Services Inc. (RSG) $26.81 -5.30%
Hartford Financial Services Group Inc. (HIG) $21.03 -4.06%
Genworth Financial Inc. (GNW) $5.99 -3.70%
CF Industries Holdings Inc. (CF) $203.59 -3.46%

Dow Jones I.A - Risers
Bank of America Corp. (BAC) $9.85 +1.13%
Walt Disney Co. (DIS) $50.33 +1.10%
McDonald's Corp. (MCD) $87.59 +0.91%
Home Depot Inc. (HD) $62.66 +0.64%
Merck & Co. Inc. (MRK) $46.20 +0.57%
Procter & Gamble Co. (PG) $69.57 +0.46%
Intel Corp. (INTC) $22.36 +0.45%
General Electric Co. (GE) $21.42 +0.37%
Pfizer Inc. (PFE) $24.64 +0.35%
United Technologies Corp. (UTX) $79.22 +0.20%

Dow Jones I.A - Fallers
Chevron Corp. (CVX) $109.36 -1.88%
Travelers Company Inc. (TRV) $69.01 -1.73%
Caterpillar Inc. (CAT) $86.52 -1.29%
Mondelez International Inc. (MDLZ) $26.48 -1.21%
International Business Machines Corp. (IBM) $195.29 -0.94%
Alcoa Inc. (AA) $8.67 -0.91%
Exxon Mobil Corp. (XOM) $90.78 -0.90%
JP Morgan Chase & Co. (JPM) $42.58 -0.62%
Wal-Mart Stores Inc. (WMT) $73.05 -0.54%
Boeing Co. (BA) $70.46 -0.47%

Nasdaq 100 - Risers
Priceline.Com Inc. (PCLN) $649.09 +10.75%
Starbucks Corp. (SBUX) $51.30 +10.05%
Whole Foods Market Inc. (WFM) $98.45 +4.22%
Sirius Satellite Radio Inc. (SIRI) $2.88 +2.67%
Liberty Interactive Corp (LINTA) $20.93 +1.85%
Amazon.Com Inc. (AMZN) $235.56 +1.47%
Research in Motion Ltd. (RIMM) $8.79 +1.03%
Netflix Inc. (NFLX) $78.34 +0.84%
Yahoo! Inc. (YHOO) $17.08 +0.77%
Virgin Media Inc. (VMED) $32.73 +0.73%

Nasdaq 100 - Fallers
Vertex Pharmaceuticals Inc. (VRTX) $43.87 -13.09%
Monster Beverage Corp (MNST) $43.74 -2.78%
VeriSign Inc. (VRSN) $40.03 -2.73%
Alexion Pharmaceuticals Inc. (ALXN) $89.99 -2.61%
Green Mountain Coffee Roasters Inc. (GMCR) $25.76 -2.22%
F5 Networks Inc. (FFIV) $84.35 -2.03%
KLA-Tencor Corp. (KLAC) $47.76 -1.97%
Altera Corp. (ALTR) $31.02 -1.87%
Randgold Resources Ltd. Ads (GOLD) $117.29 -1.87%
Life Technologies Corp. (LIFE) $49.46 -1.61%
Broker Tips
Broker tips: Admiral, Weir, Burberry
Investec has retained a 'sell' recommendation and 570p target for car insurance firm Admiral after the group revealed that revenue growth had slowed in the third quarter.

"We believe that, while the forecast 7% yield will support the stock, paying 12x earnings for what is essentially a UK motor insurer is too much," said analyst Kevin Ryan.

Jefferies has downgraded its rating for engineering giant Weir from 'buy' to 'hold' ahead of its third-quarter results next week, saying that its short-term stance is one of 'rising caution' over risks to 2012 and 2013 consensus forecasts.

"We have not turned hugely bearish on Weir (more that we are cautious over the near-term) and we continue to like the business over the long-term," the broker said. "There is, however, insufficient upside to our target (1900p) to warrant a more positive recommendation." The previous target was 2,185p.

Seymour Pierce has raised its target and maintained its 'buy' rating for luxury brand Burberry ahead of the group's first-half results on November 7th.

The broker estimates a first-half profit before tax (PBT) of £165m, earnings per share of 27.4p and a dividend per share of 7.8p. Full-year PBT forecasts are £390, slightly below the consensus estimate of £400m.