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Tuesday, February 12, 2013
Feb 12, 2013
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MarketWatch | Wall Street at Close Report February 12, 2013.: Dow closes above 14,000, hits 5-year high
SAN FRANCISCO (MarketWatch) — U.S. stocks pushed against resistance levels Tuesday as blue chips, led by the financial sector, closed at levels not seen in more than five years.
The Dow Jones Industrial Average DJIA +0.34% rose 47.46 points, or 0.3%, to close at 14,018.70, with 23 of 30 components finishing in positive territory. Tuesday’s close is the best since Oct. 12, 2007, and 1% off its record close of 14,164.53, set on Oct. 9, 2007. The index hit an intraday high of 14,038.97 on Tuesday.
State of the Union mystery to traders
Wall Street Journal’s Paul Vigna reports traders have a wary eye on President Obama's agenda he'll lay out in his State of the Union address.
Financial stocks boosted blue chips with Bank of America Corp. BAC +3.25% leading the way with a 3.3% gain. Shares of J.P. Morgan Chase & Co. JPM +0.99% rose 1%, Travelers Cos. TRV +0.87% advanced 0.9%, and American Express Co. AXP +0.35% closed 0.4% higher.
Coca-Cola Co. KO -2.72% was the worst performer on the Dow industrials, declining 2.7%, after the beverage giant’s quarterly revenue growth came in below analyst estimates. See: Coca-Cola profit rises 13% on higher case volume.
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|Choppy Trading Persists On Wall Street In The Late Morning |
After showing a lack of direction in early trading on Tuesday, stocks have continued to turn in a lackluster performance throughout the morning. The major averages have been bouncing back and forth across the unchanged line, unable to sustain any significant moves.
The choppy trading on Wall Street comes amid another light day on the U.S. economic data front, with traders looking ahead to President Barack Obama's State of the Union address later this evening.
Obama is expected to lay out his vision for the U.S. during the address to a joint session of Congress, which is due to begin at 9 pm ET.
While most of the major sectors are showing only modest moves, substantial strength has emerged among housing stocks. Reflecting the strength in the housing sector, the Philadelphia Housing Sector Index has surged up by 2.9 percent.
Masco (MAS) has helped to lead the housing sector higher, with the home improvement and building products maker surging up by 14.3 percent after unexpectedly reporting an adjusted fourth quarter profit.
Electronic storage and banking stocks are seeing more moderate strength in late morning trading, while weakness remains visible among telecom stocks. Level 3 Communications is posting a steep loss after reporting its fourth quarter results.
The major averages are currently all in positive territory, although the tech-heavy Nasdaq is up only 0.09 points or less than a tenth of a percent at 3,192.09. The Dow is up 26.72 points or 0.2 percent at 13,997.96 and the S&P 500 is up 1.23 points or 0.1 percent at 1,518.24.
|Commodities, Nexen Lift TSX Tuesday Morning - Canadian Commentary |
Canadian stocks were moving higher Tuesday morning amid varied cues from the commodities and global equity after North Korea confirmed it has successfully conducted a third nuclear test that Pyongyang had pledged to conduct. South Korea has raised its military alert in the wake of the suspected nuclear test.
Meanwhile, Moody's Investors Service said the downside risks to the global economic recovery have diminished since the end of last year, but a slow pace of economic growth is still likely in many economies.
The S&P/TSX Composite Index gained 48.34 points or 0.38 percent to 12,796.49.
The price of Crude oil was extending gains Tuesday morning amid escalating tension in the Middle East following Iran's nuclear programme, and North Korea's third nuclear test. Meanwhile, the OPEC in its monthly oil market report nudged up 2013 global oil demand growth forecast to 0.80 mbd.
In its monthly Oil Market Report released Tuesday, the OPEC revised up 2013 world oil demand by 80,000 barrels per day to 0.80 mbd, with bulk of the growth seen coming from China, which is forecast to increase by 0.4 mbd. However, the cartel expects OECD demand to contract 0.3 mbd.
Today after the market hours, the API will release its US Crude oil inventories report for the weekended February 08.
Crude for March delivery added $0.59 to $97.62 a barrel.
In the oil patch, Nexen Inc. gained 2 percent after announcing that it has received approval from the Committee on Foreign Investment in the US (CFIUS) with respect to the proposed acquisition of Nexen by CNOOC Limited, and now has all of the requisite approvals to proceed to close.
On the other hand, energy infrastructure company TransCanada Corp. lost over 1 percent after posting lower fourth-quarter 2012 net income of C$306 million or C$0.43 per share versus the prior year's C$376 million or C$0.53 per share.
The price of gold was little changed Tuesday morning as G20 finance ministers and central bankers gather in Moscow this week, bracing for currency war talks. gold for April edged up $1.10 to $1,650.20 an ounce.
Among gold plays, Royal gold was up over 3 percent. Barrick gold and Detour Gold moved up about 1 percent each.
Commercial and industrial machinery and equipment company Toromont Industries (TIH.TO) gained over 4 percent after reporting improved fourth-quarter net earnings at C$44.9 million or C$0.59 per share compared to C$34.2 million or C$0.44 per share in the year ago quarter.
Paper products company Resolute Forest Products (RFP.TO) rose over 3 percent after reporting a wider fourth-quarter net loss of $36 million or $0.38 per share compared to a net loss of $6 million or $0.06 per share last year. Excluding special items of $70 million net income was $34 million or $0.35 per share. Analysts expected the company to report profit of $0.21 per share for the quarter.
Meanwhile, fertilizer makers Potash Corp. and Agrium Inc. slipped nearly 1 percent each.
In economic news from the euro zone, U.K. inflation has been at 2.7 percent since October, the Office for National Statistics reported. This was the longest period for which consumer price growth has remained unchanged, it said. The rate continues to hover above the central bank's 2 percent target.
Separately, the statistics office said UK output price inflation eased to 2 percent in January from 2.2 percent in December. On a monthly basis, the output price index rose 0.2 percent. Both the figures matched economists' forecasts.
|European Markets Climbed On Positive Earnings Reports |
The European finished Tuesday's session in positive territory, despite the news that North Korea conducted a third nuclear test. The markets received a boost from some better than expected earnings reports.
Investors were hesitant to take positions ahead of some important upcoming global events. U.S. President Barack Obama will give his much anticipated State of the Union address later today. Investors will be also watching for any developments from the G-20 meeting, which will be held on Friday.
Eurozone finance ministers on Monday maintained that Cyprus need to take strong measures to tackle money-laundering before receiving a bailout from its Eurozone partners. However, no rescue deal is likely to be in place before the presidential elections due this month.
"A private firm needs to get involved" to look into the money laundering allegations and a report will be obtained in March, Jeroen Dijsselbloem, new chief of the Eurogroup, said after the ministers' meeting in Brussels on Monday.
Any deal will have to wait until the Cypriot presidential elections scheduled for February 17. Dijsselbloem, who is also the Dutch Finance Minister, indicated that a bailout deal between Cyprus and international creditors will be in place by next month.
Standard & Poor's lifted its outlook on Ireland's credit rating to stable from negative as it expects an improvement in government debt-servicing costs and refinancing risks on the back of a bank debt deal reached by the nation with the European Central Bank.
The rating agency affirmed the long- and short-term foreign and local currency sovereign credit ratings on Ireland at 'BBB+/A-2'.
Meanwhile, Moody's Investors Service today said the downside risks to the global economic recovery have diminished since the end of last year, but a slow pace of economic growth is still likely in many economies. The outlook for the euro zone is less optimistic, with the ratings agency expecting growth to stagnate during 2013.
The euro Stoxx 50 index of eurozone bluechip stocks increased by 0.88 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.48 percent.
The DAX of Germany climbed by 0.35 percent and the CAC 40 of France advanced by 0.99 percent. The FTSE 100 of the U.K. rose by 0.85 percent and the SMI of Switzerland gained 0.26 percent.
In Frankfurt, ThyssenKrupp declined by 0.62 percent. The steel giant reported a 38 percent decline in net profit for its fiscal quarter through December. Fraport AG, the owner and operator of Germany's Frankfurt Airport, rose by 0.13 percent after reporting a 4.9 percent drop in passenger traffic at the Frankfurt Airport for January.
In Paris, L'Oreal climbed by 3.80 percent. The beauty and cosmetic products giant reported a near 18 percent jump in net profit for fiscal year 2012 and said it expects to outperform the market in 2013.
Michelin dropped by 4.33 percent, after the tire maker issued a cautious outlook for 2013.
Danone declined by 1.08 percent, after Morgan Stanley downgraded the stock to "Underweight" from "Equal weight."
In London, Barclays surged by 8.57 percent. The lender unveiled plans to cut at least 3,700 positions globally in 2013 under a restricting plan.
Rolls-Royce Holdings finished up by 0.26 percent, after bagging an $83.7 million contract for engines to power 19 V-22 aircraft operated by the US Marine Corps and Air Force.
BAE Systems fell by 1.93 percent, after JP Morgan initiated coverage on the stock with a "Neutral" rating.
France's current account shortfall increased more than economists expected in December, data released by the Bank of France showed Tuesday.
The current account deficit, on a seasonally and working-day adjusted basis, increased to EUR3.6 billion in December from EUR2.8 billion in November, which was revised from EUR2.9 billion. Economists were looking for a EUR3.5 billion shortfall for December.
A leading indicator of the British increased for the second successive month in December, though modestly, led mainly by positive contributions from consumer confidence and the yield spread, data from a survey by the Conference Board showed Tuesday. The leading index moved up 0.1 percent month-on-month to 103.5 in December, after rising 0.2 percent in November.
U.K. consumer price inflation continued to remain unchanged above the central bank target in January, while manufacturers' input cost inflation accelerated to the highest since March 2012, driven by Crude oil prices.
Headline inflation has been at 2.7 percent since October, the Office for National Statistics reported Tuesday. This was the longest period for which consumer price growth has remained unchanged, the agency said. The rate continues to hover above the central bank's 2 percent target.
UK output price inflation eased to 2 percent in January from 2.2 percent in December, data released by the Office for National Statistics showed Tuesday.
On a monthly basis, the output price index rose 0.2 percent. Both the figures matched economists' forecasts.
|Asian Markets Mostly Trade Higher, Japan Surges |
Asian stock are mostly trading higher on Tuesday despite weak cues overnight from Wall Street, though some of the regional bourses continued to remain closed for the Lunar New Year holidays.
The Japanese market surged higher on the back of a weaker yen, while the Australian stock market is trading higher, led by financial stocks.
In early morning trades, Australia's benchmark S&P/ASX 200 Index is adding 16 points or 0.31 percent to 4,975 after touching a fresh 34-month high of 4,981.5 in early trading. The broader All Ordinaries index is gaining 16 points or 0.31 percent to 4,996, after touching the 5,000 mark in intraday trading.
Shares in the information , industrial, telecom and financial sectors are trading higher, while energy, materials and stocks are trading in negative territory.
Among banks, ANZ Banking is adding 0.32 percent, Commonwealth Bank is up 0.78 percent and Westpac is gaining 0.21 percent. National Australia Bank is trading lower by 0.31 percent.
In the mining sector, BHP Billiton is up 0.03 percent, while Rio Tinto is trading lower by 0.29 percent and Newcrest Mining is down more than 2 percent.
Shares in Whitehaven Coal Ltd. are gaining more than 6 percent after the company's Maules Creek coal mine in New South Wales received approval from the federal government.
Industrial equipment maker Bradken Ltd.'s first-half profit rose by 9 percent to A$46.7 million, reflecting strong demand for its products from the resources industry. The company's shares are up 10.8 percent.
The Reserve Bank of Australia said it has sold its 50 percent stake in Securency, a firm alleged to have bribed foreign officials to secure note-printing contracts. The central bank will receive A$64 million after offloading its share in Securency to U.K. film manufacturer Innovia, which already owns the remaining 50 percent stake in the company.
On the economic front, the National Australia Bank said Tuesday that an index measuring confidence came in with a score of 3 in January, following the revised score of 2 in December. Business conditions came in at -2, which was still an improvement from -5 in the previous month.
NAB chief economist Alan Oster said in a release accompanying the data, "That recovery mainly reflects external factors, including the rally in global equity markets and generally better activity in China, as well as recent RBA cuts. However confidence remains below long-run average levels."
Meanwhile, the Reserve Bank of Australia will provide credit card data for December. In November, purchases were at A$21.8 billion, while balances were at A$49.5 billion.
In the currency market, the Australian dollar is trading slightly lower against the U.S. dollar. In late-morning trades, the local unit was quoted at US$1.0284, down from US$1.0301 on Monday.
The Japanese market is trading sharply higher, as exporters gained on the back of a weaker yen.
The yen weakened against both the U.S. dollar and the euro after Japanese Economic Minister Akira Amari said the government will take steps to drive the country's stock market higher by the end of March. The yen's weakness also reflects comments by U.S. Treasury official Lael Brainard, who backed Japan's efforts to rejuvenate the and end deflation.
In late-morning trades, the benchmark Nikkei 225 Index was gaining 270.59 points or 2.43 percent to 11,423.75.
Among exporters, Toyota Motor Corp. is gaining more than 2.6 percent, Honda Motor is up almost 2 percent, Canon Inc. is advancing 2.5 percent and Nikon Corp. is adding more than 1.5 percent.
Olympus Corp. is adding 0.81 percent after the Nikkei business daily reported that the company's capital ratio for the nine months ended December was better than expected.
Meanwhile, shares of Nissan Motor Co. are trading lower by almost 4 percent after the company reported a 47 percent decline in group operating profit for the quarter ended December, to 62.1 billion yen. The company cited weak sales in China and double-digit declines in sales in Europe as well as Japan as reasons for the decline in profit.
Renesas Electronics Corp. is trading lower by more than 7 percent after the chipmaker said Friday that it will likely report an operating loss of 26 billion yen for fiscal 2012, compared to its previous forecast for a profit of 21 billion yen. The company had reported operating loss of 56.7 billion yen for fiscal 2011.
On the economic front, the Bank of Japan said Tuesday that the M2 money stock in Japan was up 2.7 percent on year in January, standing at 829.9 trillion yen. That beat forecasts for an increase of 2.6 percent, which would have been unchanged from the December reading.
M3 money stock was up 2.3 percent to 1,138.4 trillion yen - matching expectations following the 2.2 percent gain in the previous month. L money stock added an annual 1.4 percent to 1,475.7 trillion yen after rising 1.1 percent a month earlier.
Many of the regional bourses continue to remain closed on Tuesday, including Malaysia, Singapore, Taiwan, China and Hong Kong. Among the other markets that are open, New Zealand and Indonesia are trading modestly higher, while South Korea is trading in negative territory.
On Wall Street, stocks saw modest weakness throughout much of the trading session on Monday after moving lower in early trading. Selling pressure remained subdued, however, limiting the downside for the markets.
The major averages climbed near the unchanged line in the final hour of trading but still ended the day in the red. The Dow dipped 21.73 points or 0.2 percent to 13,971.24, the Nasdaq edged down 1.87 points or 0.1 percent to 3,192.00 and the S&P 500 slipped 0.92 points or 0.1 percent to 1,517.01.
The European markets finished Monday's trading session with mixed results. The DAX of Germany declined by 0.27 percent, while the CAC 40 of France rose by 0.03 percent. The FTSE 100 of the U.K. gained 0.16 percent and the SMI of Switzerland advanced by 0.20 percent.
U.S. Crude oil snapped a two-day losing streak to end sharply higher Monday, with investors upbeat over demand growth prospects in China after some strong data last week showed more-than-expected imports in January, indicative of increased consumption in the world's second largest economy.
Crude Oil futures for March delivery added $1.31 or 1.4 percent to close at $97.03 a barrel on the New York Mercantile Exchange.
|OPEC Nudges Up 2013 Global Oil Demand Forecast |
The Organization of the Petroleum Exporting Countries nudged up its 2013 world oil demand growth forecast to 0.80 million barrels per day amid signs of recovery in the global and colder weather at the start of this year.
In its monthly Oil Market Report released Tuesday, the OPEC revised up 2013 world oil demand by 80,000 bd to 0.80 mbd, with bulk of the growth is seen coming from China, which is forecast to increase by 0.4 mbd. However, the cartel expects OECD demand to contract 0.3 mbd.
On the supply side, non-OPEC oil supply growth in 2012 is estimated at 0.5 mbd, broadly in line with the previous assessment. In 2013, non-OPEC supply is expected to increase by 0.9 mbd, unchanged from the previous month Growth is seen coming mainly from the US, Canada, the Sudans, Brazil, Australia, and Kazakhstan.
Meanwhile, the OPEC left its world economic growth forecast for the year 2012 unchanged at 3.0 percent. However, US growth expectations for 2013 were trimmed to 1.80 percent from 2.0 percent. The euro zone is still forecast to recover to 0.1 percent from a decline of 0.4 percent in 2012. China continues to benefit from increasing global trade and is forecast to expand at 8.1 percent in 2013 and 7.8 percent in 2012, up 0.1 and 0.2 percentage points, respectively.
Light Sweet Crude oil futures for March delivery, are adding $0.25 to $97.28 a barrel.
MarketWatch | Europe Markets at Close Report February 12, 2013.: Europe stocks gain as Barclays jumps; G-20 eyed.
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets moved mostly higher on Tuesday, with Barclays PLC shares rallying after a well-received earnings report, while investors more broadly stayed on the sidelines ahead of the G-20 meeting later in the week.
The Stoxx Europe 600 index XX:SXXP +0.51% rose 0.2% to 285.22, recouping from a 0.6% loss from Monday.
North Korea appears to carry out nuclear test
An "artificial earthquake" was detected in the northeastern area of North Korea where previous nuclear tests were detonated. The WSJ's Evan Ramstad has the details on what would be the nation's third experimental detonation.
“We won’t see too many moves in the run-up to the next big international event, the G-20 meeting on Friday. People don’t want to do too much ahead of that and want to see what they say about currency depreciation,” said John Redwood, chief of the investment committee at Evercore Pan-Asset.
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Commentary February 12, 2013.
After turning in a relatively lackluster performance in the previous session, stocks may continue to experience choppy trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets. (Feb 12, 2013) Full Article
Overall credit card spending in New Zealand climbed a seasonally adjusted 0.4 percent on month in January, Statistics New Zealand said on Tuesday. (Feb 12, 2013) Full Article
Eurozone finance ministers on Monday maintained that Cyprus need to take strong measures to tackle money-laundering before receiving a bailout from its Eurozone partners. However, no rescue deal is likely to be in place before the presidential elections due this month. (Feb 12, 2013) Full Article