Feb 15, 2013
MarketWatch | Wall Street at Close Report February 15, 2013.: S&P 500 up for 7th week; Dow down for 2nd
SAN FRANCISCO (MarketWatch) — The S&P 500 Index finished Friday with its seventh consecutive week of gains as a choppy trading day was buffeted by worries of weak retail sales and supported by positive economic data.
The S&P 500 index SPX -0.10% fell 1.59 points, or 0.1%, to close at 1,519.79, with telecom the best gainer and energy the biggest decliner among its 10 major industry groups. The index, however, rose 0.1% for the week, extending a seven-week winning streak not seen since January 2011.
U.S. stocks hit their lows of the day in afternoon trading following a Bloomberg News report that a Wal-Mart Stores Inc. WMT -2.15% executive called the retailer’s February sales “a total disaster” in an internal email. Read more on Wal-Mart exec's email.
The Dow Jones Industrial Average DJIA +0.06% rose 8.37 points, or less than 0.1%, to close at 13,981.76. That comeback wasn’t enough to save the Dow for the week as it logged its second week of losses in a row, with a 0.1% decline.
Sixteen of the Dow’s 30 components closed in positive territory with Coca-Cola Co. KO +1.57% shares 1.6% higher. Reflecting the day’s choppy trading, the index crossed zero 37 times during the session.
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DEALBOOK ALERT Friday, February 15, 2013 4:38 PM EST
|Regulators investigating possible insider trading in the $23 billion takeover of H. J. Heinz have a frozen account linked to suspicious trades, according to a court filing on Friday.|
|In the filing made in Federal District Curt in Manhattan, the Securities and Exchange Commission took action against a Zurich-based trading account that reaped $1.7 million in gains. The emergency action, the S.E.C. said on Friday, will prevent the suspects from collecting their profits or moving the money overseas.|
|The identity of the Heinz traders is not yet clear. An S.E.C. statement referred only to “unknown traders.” The agency said its investigation is continuing.|
|“Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential nonpublic information,” Daniel M. Hawke, head of the S.E.C.’s market abuse unit, said in a statement.|
|As the agency took action on Friday, it could cast a cloud over the Heinz deal. Authorities will no doubt turn their focus toward the limited universe of insiders who tipped traders to the takeover.|
READ MORE »http://dealbook.nytimes.com/2013/02/15/s-e-c-acts-on-suspicious-heinz-trading/?emc=na
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MarketWatch | Euro markets at Close Report February 15, 2013.: Europe stocks slip with G-20 meeting in focus.
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets inched lower on Friday, with investors remaining on the sidelines while finance ministers and central bankers from the Group of 20 nations began a closely watched two-day meeting in Moscow amid rising global currency tensions.
The Stoxx Europe 600 index XX:SXXP -0.16% fell 0.2% to close at 287.34, leaving the index flat for the week.
Is Heinz Buffett's last big deal?
A look at the strategy behind the Heinz deal, which may reveal the lengths to which Warren Buffett is willing to go to deploy spare cash. Photo: Getty Images.
“This week, markets have moved around a lot, but haven’t made any big moves overall. I would call this a consolidation week, after we had stocks move very strongly to the upside in the beginning of the year,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
So far this year, the Europe benchmark index has added 2.7%.
“The rally has been justified on the basis of fundamentals, but you also have central banks injecting liquidity into the market, so in that sense the moves have been artificial. We would have a very different environment if it wasn’t for the central bank liquidity and we should keep in mind that at some point the economy should become self sustained,” he said.
Shares of precious-metals miners were among the biggest decliners after a round of downgrades by Citigroup. Shares of Randgold Resources Ltd. UK:RRS -3.79% dropped 3.8% and Fresnillo PLC UK:FRES -6.34% lost 6.3% as ratings on both U.K. miners were slashed to sell from neutral, while Petropavlovsk PLC UK:POG -4.76% shaved off 4.8% as it was cut to neutral from buy. See: Soros cuts back on gold and Citi talks price 'hibernation'.
Also on the decline in Europe, shares of Aker Solutions ASA dropped more than 10% after the Norwegian oil-services firm reported fourth-quarter profit below market expectations.
AFP/Getty Images Enlarge Image
On an upbeat note, shares of luxury-goods firm PPR SA FR:PP +7.63% jumped 7.6% as the Gucci owner said it is confident of its prospects for 2013 after posting a rise in net profit last year. See: PPR confident for 2013 amid luxury boom .
G-20 meeting in focus
For the broader market, investors trained their attention on developments in Moscow where the gathering of G-20 finance ministers and central bankers got under way. The Japanese yen rebounded on growing expectations the G-20 won’t single out Tokyo for pursuing a weaker currency, despite currency tensions that have been amplified by the yen’s sharp plunge. See: Russian meteor christens G-20 meeting
However, a Reuters report quoted a G-20 official as saying a final communiqué won’t repeat an earlier Group of Seven pledge that members won't target exchange rates. See: Yen rebound falters with focus on G-20 .
“You have to remember that all these currency moves also can be seen as a positive. If a country is trying to bring down its currency, it means it will inject more liquidity into the system and that has been driving the rally,” said Gijsels from BNP Paribas Fortis Global Markets.
Stronger-than-expected manufacturing data for the New York region briefly helped lift the trading mood. The Empire State index jumped to 10 in February form negative 7.8 in the prior month, exceeding analysts’ forecast of a negative 2 reading. See: Manufacturing improves in New York
The University of Michigan-Thomson Reuters consumer-sentiment gauge rose to a preliminary February reading of 76.3—the highest level since November—from a final January reading of 73.8, reports said. See: University of Michigan consumer sentiment rises in February
Meanwhile, data showed industrial production in the U.S. slipped 0.1% in January, after gains of 1.4% in November and 0.4% in December. See: Industrial production slips in January
U.S. stocks traded mixed on Wall Street. See: U.S. stocks edge up after Empire State data .
Among country-specific indexes in Europe, the U.K.’s FTSE 100 index UK:UKX +0.01% closed marginally higher at 6,328.26 and closed out the week with a 1% gain.
Anglo American PLC UK:AAL +1.29% rose 1.3%, after the miner’s chief executive Cynthia Carroll said she sees a better 2013 after a challenging 2012. See: Anglo American CEO expects better year in 2013 .
France’s CAC 40 index FR:PX1 -0.25% fell 0.3% to 3,660.37, but gained 0.3% on the week. Shares of Renault SA FR:RNO +3.47% rose 3.5% after J.P. Morgan Cazenove lifted the car maker to overweight from neutral.
Germany’s DAX 30 index DX:DAX -0.49% shaved off 0.5% to 7,593.51, with shares of E.ON SE DE:EOAN -1.50% off 1.3%, as the utility firm sold its stake in a Finnish nuclear project. The German benchmark lost 0.8% on the week. See: E.ON sells stake in Finnish nuclear project.
Shares of Commerzbank AG DE:CBK +0.95% added 1.2%, after the bank said operating profit more than doubled in 2012 compared with the year before.
Outside the major indexes, shares of Italian oil major Eni SpA IT:ENI +2.14% E +2.14% gained 2.1% after the company announced plans to raise its 2012 dividend despite a drop in fourth-quarter profit. See: Eni raises dividend despite fourth-quarter profit drop .
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
Stocks Showing A Lack Of Direction In Early Trading
Extending a recent sideways trend, stocks are showing a lack of direction in early trading on Friday. The major averages are lingering near the unchanged line after closing mixed in each of the three previous sessions.
The major averages are currently posting modest gains, hovering just above the unchanged line. The Dow is up 4.63 points or less than a tenth of a percent at 13,978.02, the Nasdaq is up 2.19 points or 0.1 percent at 3,200.85 and the S&P 500 is up 0.78 points or 0.1 percent at 1,522.16.
The choppy trading on Wall Street comes as traders express some uncertainty about the outlook for the markets after recent strength lifted the major averages to multi-year highs.
While the major averages have largely held on to their recent gains, a lack of meaningful catalysts has prevented the markets from seeing much further upside.
A mixed batch of economic data is also contributing to today's lackluster performance, with traders digesting a pair of reports showing an expansion in New York manufacturing activity but an unexpected drop in industrial production.
The New York Federal Reserve said its general business conditions index jumped to a positive 10.0 in February from a negative 7.8 in January, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to climb to a negative 1.8.
With the much bigger than expected increase, the general business conditions index turned positive for the first time since July of 2012.
Meanwhile, the Federal Reserve said industrial production edged down by 0.1 percent in January following a revised 0.4 percent increase in December.
Economists had expected production to increase by 0.3 percent, matching the growth originally reported for the previous month.
Most of the major sectors are showing only modest moves in early trading, although considerable weakness has emerged among gold stocks. The NYSE Arca Gold Bugs Index is down by 3 percent, with a sharp drop by the price of gold weighing on the sector.
Oil service and natural gas stocks are also seeing early weakness, while airline stocks are regaining some ground after coming under pressure on Thursday.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. While Japan's Nikkei 225 Index tumbled by 1.2 percent, Hong Kong's Hang Seng Index edged up by 0.1 percent.
Meanwhile, the major European markets have moved to the upside on the day. The German DAX Index has edged up by 0.1 percent, while the U.K.'s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.5 percent.
In the bond market, treasuries are seeing modest weakness on the heels of the mixed economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.2 basis points at 2.012 percent.
Commodities Drag TSX Lower At Open Friday
Toronto stocks moved down at open Friday amid marginal selling in commodities, with the S&P/TSX Composite Index losing 28.66 points or 0.22 percent to 12,693.13.
Royal Gold, Agnico-Eagle Mines and Barrick Gold were down over 1 percent each.
In the oil patch, Baytex Energy Corp. lost close to 2 percent.
The price of crude oil was paring recent gains Friday morning as traders focus to the G20 meeting, which is expected to address the so called 'currency wars'. Crude for March delivery shed $0.66 to $96.65 a barrel.
The price of gold was extending its six-month low Friday morning, with the euro trading weak as traders await cues from the G20 meeting. Gold fort April lost $19.40 to $1,616.10 an ounce.
In corporate news from Canada, Goldcorp. reported improved fourth-quarter net earnings of $504 million, or $0.47 per share compared to $405 million or $0.39 per share in the same period a year ago. Adjusted net earnings were $465 million or $0.57 per share compared to $531 million, or $0.66 per share. Analysts expected the company to report earnings of $0.54 per share for the quarter.
Crude oil pipeline operator Enbridge Inc. reported lower fourth-quarter net earnings of C$146 million or C$0.18 per share compared to C$159 million or C$0.21 per share a year ago. However, on an adjusted basis, quarterly earnings totaled C$327 million or C$0.42 per share. Analysts expected earnings per share of C$0.44 for the quarter.
Property owner Brookfield Asset Management, Inc. posted a rise in fourth-quarter 2012 funds from operations to $459 million or $0.67 per share from $397 million or $0.58 per share last year, while net income attributable to Brookfield shareholders dropped to $492 million or $0.72 per share from last year's $588 million, or $0.90 per share.
Insurance services provider Fairfax Financial Holdings reported that its fourth-quarter net earnings was $404.1 million or $18.90 per share compared to a net loss of $771.5 million or $38.47 per share in the year ago quarter.
Wealth management and investment fund company CI Financial Corp. reported a fourth-quarter earnings of C$0.34 per share, up from C$0.31 per share in the same period last year. Analysts expected the company to earn $0.34 per share for the quarter.
Wood products company, West Fraser Timber reported improved fourth-quarter profit at C$22.9 million or C$0.51 per share compared to C$6.0 million or C$0.14 per share in the year-ago quarter. Excluding items, adjusted earnings from continuing operations for the quarter were C$1.25 per share, compared to an adjusted loss from continuing operations of C$0.35 million. Analysts expected the company to earn C$1.15 per share for the quarter.
Forest products company Canfor Corp. swung to profit in fourth-quarter, reporting net income of C$21.6 million or C$0.15 per share compared to net loss of C$44.1 million or C$0.31 per share in the comparable quarter last year.
Communications and media company Rogers Communications Inc. posted fourth quarter net income of C$529 million, higher than C$327 million last year, while quarterly earnings per share rose to C$1.02, from C$0.61 a year ago. On an adjusted basis, net income improved to C$455 million or C$0.88 per share from the prior year's C$350 million or C$0.66 per share. Analysts expected earnings per share of C$0.72 for the quarter. Separately, the company announced a 10 percent increase to the annualized dividend rate from C$1.58 to C$1.74 per Class A Voting and Class B Non-Voting share.
In economic news, Statistics Canada said merchandise imports fell 2.8 percent in December and merchandise exports declined 0.9 percent. As a result, Canada's trade deficit with the world decreased from $1.7 billion in November to $901 million in December.
European Markets Declined On Weak GDP Data
The European markets finished in the red on Thursday, dragged lower by weaker than expected GDP results in the Eurozone. Larger than expected economic contractions, especially those in Germany and France, weighed on investor sentiment. Thursday's session was also negatively impacted by some mixed earnings reports. Investors will be watching for any announcements from Friday's G-20 meeting.
Professional forecasters surveyed by the European Central Bank have lowered their view on growth and inflation outlook for the euro area, results of a quarterly survey published in the latest ECB bulletin revealed Thursday.
Real GDP growth expectations for 2013 were lowered to zero from 0.3 percent growth forecast previously, the ECB Survey of Professional Forecasters showed. The outlook for 2014 was reduced to 1.1 percent from 1.3 percent. Growth is seen at 1.6 percent in 2015.
The main factor behind the downward revision for 2013 is the weaker than expected development in economic activity in the fourth quarter of 2012. Preliminary estimates from Eurostat showed today that the Eurozone economy contracted further at a faster than expected pace in the fourth quarter.
French Prime Minister Jean-Marc Ayrault reportedly said Wednesday that the country may miss its deficit reduction target of 3 percent of GDP for 2013, due to weak economic growth.
Speaking to a French television channel, he, however, said that the government could attain a balanced budget in 2017, as targeted earlier. Ayrault said that growth in France as well as in Europe is weaker than expected.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.71 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.12 percent.
The DAX of Germany dropped by 1.05 percent and the CAC 40 of France fell by 0.78 percent. The FTSE 100 of the U.K. decreased by 0.41 percent and the SMI of Switzerland finished down by 0.00 percent.
In Frankfurt, Rheinmetall increased by 7.21 percent. The company report fiscal 2012 earnings before interest and taxes of 301 million euros compared to 354 million euros last year.
In Paris, BNP Paribas climbed by 1.97 percent. The company unveiled plans to cut costs and expand in the Asia-Pacific region.
EDF advanced by 4.99 percent, after the utility group reported a 5 percent rise in full-year 2012 net income. Renault surged by 7.65 percent, after forecasting continued growth in global auto sales.
In London, Rio Tinto Plc declined by 0.14 percent. The mining giant recorded a $3.0 billion loss in 2012, as against a profit of $6.77 billion in 2011, of which $14 million was attributable to non-controlling interests.
Barclays decreased by 1.98 percent, after Investec Securities downgraded the stock to "Hold" from "Buy." Vodafone extended its losses from the previous session, falling by 2.39 percent. The recent weakness has been attributed to reports the Company is considering an acquisition of Kabel Deutschland.
Next increased by 1.21 percent, after HSBC upgraded the retailer to "Overweight" from "Neutral." ABB rose by 5.63 percent in Zurich. The engineering firm posted earnings that beat estimates. Nestle dropped by 2.33 percent, after reporting slower than expected growth.
Zurich Insurance Group finished up by 0.46 percent, after reporting higher fourth-quarter 2012 net income after tax attributable to shareholders of $983 million, compared with the prior year's $540 million.
The Eurozone contracted the most since the first quarter of 2009, after the unresolved sovereign debt crisis took its toll even on the economic powerhouse Germany.
Gross domestic product declined at a faster-than-expected pace of 0.6 percent, much bigger than the previous quarter's 0.1 percent fall, flash estimates from Eurostat showed Thursday. It was worse than a 0.4 percent drop forecast by economists.
Asian Markets Mostly Trade Lower
Asian stock markets are mostly trading in negative territory on Friday as weaker than expected GDP results in the Eurozone led to renewed concerns about the global economy. Investors also treaded cautiously ahead of the G-20 meeting in Moscow over the weekend.
The Australian stock market is trading lower, backing down from four-and-a-half years, as disappointing earnings results of banks and miners weighed on investor sentiment.
In early morning trades, the benchmark S&P/ASX 200 Index is down 9.40 points or 0.19 percent to 5,027.50, while the All Ordinaries Index is trading lower by 8.20 points or 0.16 percent to 5,049.00.
In the mining space, BHP Billiton (BHP) is trading lower by 0.62 percent and Rio Tinto (RIO) is declining 2.07 percent.
Rio Tinto on Thursday reported a loss for fiscal 2012 after recording impairment charges of $14.36 billion. The mining giant reported a loss of $2.99 billion for 2012, compared to profit of $5.83 billion in the prior year.
Among banks, Commonwealth Bank of Australia is down 0.04 percent, while National Australia Bank is adding 1.11 percent and Westpac (WBK) is up 0.14 percent.
ANZ Banking's net profit for the first quarter dropped by about 20 percent from last year to A$1.36 billion. However, the lender's unaudited underlying profit for the quarter rose 6.2 percent from the year-ago period to A$1.53 billion. The company's shares are trading lower by 0.84 percent.
Sims Metal Management (SMS) said it will write down the value of inventory at its British operations by A$78 million after discovering a possible case of fraud. Accordingly, the recycler will record an impairment charge of A$354 million, related to its UK and US operations, against its results for the half year ended December 31, 2012. Shares of the company are trading lower by more than 2 percent.
In the currency market, the Australian dollar is trading flat against the U.S. dollar following weak eurozone data and encouraging U.S. jobs figures. In early morning trades, the local unit was trading at US$1.0349, down from US$1.0350 on Thursday.
The Japanese market is trading in negative territory as a stronger yen weighed on export-oriented stocks. Investors treaded cautiously following weaker than expected GDP results in the Eurozone - especially those in the largest economies of Germany and France.
In the auto sector, Toyota Motor (TM) is trading lower by 2.60 percent and Honda Motor (HMC) is declining 2.71 percent. Among exporters, Canon (CAJ) is down 0.90 percent, Panasonic (PC) is losing 2.68 percent and Casio Computer Co. is declining 2.96 percent.
Shares of Orix Corp. (IX) are trading lower by 1.86 percent. The Nikkei business daily reported that the leasing company is in the final stages of talks to buy asset management company Robeco, an affiliate of Dutch lender Rabobank, for about 250 billion yen.
Shares of Trend Micro are down more than 8 percent. The computer security company reported Thursday that its profit for the year to December declined 22 percent from last year to 13.4 billion yen.
On the economic front, Japan is on Friday scheduled to release final December figures for industrial production and capacity utilization.
Little change is expected from last month's preliminary reading that showed a 7.8 percent annual contraction and a 2.5 percent monthly gain for output, as well as a 0.2 percent monthly decline in capacity utilization.
In the currency market, the U.S. dollar was trading in the lower 93 yen-range on Friday. In early morning trades, the dollar was quoted in a range of 92.97-93.00 yen, down 0.48 from Thursday's close of 93.45-93.46 yen in Tokyo.
Among other markets in the region, Hong Kong, New Zealand, Malaysia and Singapore are trading in negative territory. Meanwhile, Indonesia and South Korea are trading higher. The markets in Taiwan and China remain closed on Friday for the Lunar New Year holidays. Both will re-open on Monday.
Crude Slips Below $97
The price of crude oil was paring recent gains Friday morning as traders focus to the G20 meeting, which is expected to address the so called 'currency wars'.
Light Sweet Crude Oil (WTI) futures for March delivery, slipped $0.39 to $96.92 a barrel. Yesterday, oil settled marginally higher on some upbeat jobs claims data even as investors weighed some supply concerns due to geopolitical tensions in the Middle East. Nevertheless, a strengthening dollar limited some of the gains made by oil intraday. Investors also digested the soft euro zone GDP data which showed the economy to have contracted the most since the first quarter of 2009, with the unresolved sovereign debt crisis taking a toll even on the economic powerhouse Germany.
This morning, the U.S. dollar was hovering around its 3-week high versus the euro and extending its 6-month high against sterling. The buck was hovering around its two-and half year high versus the yen and ticking higher against the Swiss franc.
Gold Slips Amid Weak Euro
The price of gold was extending its six-month low Friday morning, with the euro trading weak as traders await cues from the G20 meeting.
Gold for April delivery, the most actively traded contract, shed $8.50 to $1,627.00 an ounce. Yesterday, gold settled at a fresh 6-month low as the dollar strengthened against some major currencies on some weak GDP data from the euro zone, indicating the economy to be in deep recession. Investors also weighed a lull in demand for the precious metal in China with the New Year holidays in progress. On a positive note, a World Gold Council report showed demand for the precious metal in the fourth quarter was the highest in six quarters.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 1,322.97 tons from 1,325.99 tons.