Mar 11, 2013
Wall Street at Close Report March 11, 2013.: U.S. stocks rise; S&P 500 nears record by Kate Bibson, MarketWatch.
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks furthered their record climb on Monday, bringing the S&P 500 within nine points of an all-time high and the Dow industrials extending their longest winning run in nearly a year.
Dell and Carl Icahn reach confidentiality pact
Paul Vigna and David Benoit discuss Dell agreeing to allow Car Icahn to review its books, and Jonnelle Marte looks at what to do with your tax refund.
The S&P 500 index SPX +0.32% added 5.04 points, or 0.3%, to 1,556.22, leaving it around nine points from its closing high of 1,565.15, hit in October 2007.
The financial sector led the gains, with shares of Genworth Financial Inc. GNW +6.71% jumping 6.7% after Barron’s reported that the shares of the recently reorganized life insurer and provider of mortgage securities could nearly double in the next year.
After hitting an all-time high last week on a better-than-expected monthly jobs report, the Dow industrials DJIA +0.35% on Monday chalked up another record finish, its fifth in a row, after climbing for a seventh consecutive session to end at 14,447.29, up 50.22 points, or 0.4%. The winning streak is the longest since March 15, 2012.
“As long as there is this widely held view that we’re in for a correction, we’re likely not going to have one,” added Luschini of expectations that the market was due for a pullback, given the more than 10% rise by the Dow so far this year.
The Nasdaq Composite index COMP +0.26% added 8.51 points, or 0.3%, to end at 3,252.87.
Advancers just outpaced decliners on the New York Stock Exchange, where almost 599 million shares traded. Composite volume approached 3 billion.
On the New York Mercantile Exchange, crude oil for April delivery CLJ3 +0.02% erased losses to finish at $92.06 a barrel, up 11 cents, or 0.1%. Gold futures GCJ3 +0.23% rose $1.10, or 0.1%, to settle at $1,578 an ounce on the Comex division on the NYMEX.
U.S. equities reversed course Monday as investors bought into a dip that came after disappointing data from the world’s second-largest economy.
“With China’s revival that we had seen coming out of last year, these figures collectively were a little bit of a setback,” said Luschini, referring to economic reports that had Chinese consumer prices rising, consumer spending slowing and industrial production slowing. The reports were likely impacted by China’s Lunar New Year holiday, he added. See: China’s inflation climbs; other indicators soften.
Intrade halted trading, with the Irish online betting service saying it is looking into possible financial irregularities. See: All bets off as Intrade shuts down.
Taber Andrew Bain
Icahn Enterprises LP IEP +0.66% said it signed a confidentiality pact with Dell Inc. DELL +1.48% , less than a week after investor Carl Icahn joined those opposed to co-founder Michael Dell’s plan to take the personal-computer maker private. Shares of Dell gained 1.5%. See: Icahn’s firm signs confidentiality pact with Dell.
Shares of Dick’s Sporting Goods Inc. DKS -10.85% fell nearly 11% after the retailer projected profit below expectations.
Kate Gibson is a reporter for MarketWatch, based in New York.
By Michael Howard Saul
NEW YORK (MarketWatch) — A state judge stopped Mayor Michael Bloomberg’s administration from banning New York City restaurants and other venues from selling large sugary drinks, a major defeat for the mayor who has made public a health initiatives a cornerstone of his tenure at City Hall.
The city is “enjoined and permanently restrained from implementing or enforcing the new regulations,” New York Supreme Court Judge Milton Tingling decided Monday.
The regulations are “fraught with arbitrary and capricious consequences,” the judge wrote. “The simple reading of the rule leads to the earlier acknowledged uneven enforcement even within a particular city block, much less the city as a whole.the loopholes in this rule effectively defeat the state purpose of the rule.”
|London Market Report|
|London close: FTSE 100 breaches 6,500 despite mixed data |
The FTSE 100 breached the psychological barrier of 6,500 on Monday afternoon, hitting fresh five-year highs, though gains were only slight given a barrage of mixed economic data released earlier in the session.FTSE 100: Banks decline on calls for operations to be divided
The fact that a number of benchmark indices around the globe are trading at (or close to) record highs also saw traders rein in their risk appetite today, given the market's impressive performance so far in 2013. Today's 0.3% increase for the FTSE 100 has extended the index's year-to-date rise to 10.3%.
Investors were clearly still reacting in a positive manner to the impressive employment report from the States released on Friday, which revealed that the US economy added 236,000 jobs in February, well ahead of the 160,000 estimate, causing the jobless rate to unexpectedly fall to 7.7%.
However, the bullish mood was tempered slightly by a number of headwinds this morning, including data from economic powerhouse China which showed that industrial production weakened in February, lending and retail sales growth slowed while inflation climbed.
Nevertheless, Market Analyst Craig Erlam from Alpari said that traders are unlikely to get too carried away with the data "given that the Chinese Lunar New Year probably distorted the figures, meaning they're not a true reflection of how the economy is performing."
The move by Fitch Ratings to downgrade its credit rating for Italy was limiting gains today. Fitch has lowered Italy to 'BBB+' from 'A-' and kept the outlook at 'negative', saying that last month's inconclusive elections make it unlikely a stable new government can be formed in the next few weeks. A worse-than-forecast economic growth figure was also dampening sentiment surrounding Italy, causing bond yields to climb on the secondary debt market.
Elsewhere in the Eurozone, Germany reported a larger-than-expected increase in exports in January, while French industrial output dropped more than expected.
Barclays and RBS were both heavy fallers after the Parliamentary Commission on Banking Standards called for British banks to be forced to divide its routine retail operations from investment operations. The panel is looking for ways to bring about banking reform as part of the Banking Reform Bill, which is set to be debated in parliament at the start of next week.
Cyclical sectors on the whole were hit by the disappointing economic figures from China this morning. Mining counterparts Evraz and Kazakhmys both made suffered significant declines.
Accountancy software giant Sage fell sharply after Bank of America Merrill Lynch downgraded its rating for the stock from 'neutral' to 'underperform'. The broker said in a research note that investors should remain cautious as to whether Sage can pull off its move to cloud computing.
Meanwhile, drinks company SABMiller rose following a reported target upgrade from RBC Capital markets, while sector peer Diageo was higher after saying an overhaul of its global supply operations will lead to cost savings of £60m per annum over the next three years.
Oilfield services group Petrofac was slightly higher after being awarded a project management contract by Petróleos Mexicanos (PEMEX) for technical assistance and supervision for the Lakach project offshore Mexico.
FTSE 250: Anite dives on after third-quarter statement
Anite shares plunged after an underwhelming third-quarter trading update. Investec downgraded its rating on the stock from 'buy' to 'hold', saying that the company would need a strong fourth quarter to meet its full-year forecasts.
Ophir shares tanked with analysts saying that the stock has hit technical resistance in the form of its primary downtrend line.
Raven Russia rose after unveiling its financial results for the year ended December 31st, which revealed that underlying operating profit rose 63% to $112.1m, underpinned by profitable acquisitions. The Russia-focused property investment company reported that net rental and related income for the year increased by 49% to $136.5m.
Betting group Ladbrokes has unveiled plans to extend its relationship with Playtech, the online gaming software company, as part of the former's 're-invigoration' of its Digital business, pushing shares in both groups higher. Daniel Stewart & Company said the deal could mark a change in fortunes for Ladbrokes.
|FTSE 100 - Risers |
Melrose Industries (MRO) 271.10p +4.03%
Antofagasta (ANTO) 1,095.00p +2.43%
Weir Group (WEIR) 2,474.00p +2.40%
Morrison (Wm) Supermarkets (MRW) 268.50p +2.09%
Pearson (PSON) 1,187.00p +1.89%
British American Tobacco (BATS) 3,628.00p +1.85%
United Utilities Group (UU.) 723.50p +1.69%
Aggreko (AGK) 1,909.00p +1.60%
Experian (EXPN) 1,163.00p +1.48%
Sainsbury (J) (SBRY) 346.90p +1.43%
FTSE 100 - Fallers
Evraz (EVR) 260.90p -2.47%
Kazakhmys (KAZ) 520.50p -2.25%
Barclays (BARC) 311.50p -2.23%
Sage Group (SGE) 341.90p -2.15%
Land Securities Group (LAND) 832.50p -1.77%
Royal Bank of Scotland Group (RBS) 301.30p -1.60%
GKN (GKN) 279.00p -1.38%
Resolution Ltd. (RSL) 266.60p -1.22%
Carnival (CCL) 2,502.00p -1.07%
WPP (WPP) 1,077.00p -1.01%
FTSE 250 - Risers
Raven Russia Ltd (RUS) 74.95p +14.69%
Ladbrokes (LAD) 239.80p +6.48%
Regus (RGU) 157.90p +5.13%
Dignity (DTY) 1,430.00p +4.69%
WH Smith (SMWH) 733.00p +3.97%
Playtech Ltd. (PTEC) 570.00p +3.35%
Computacenter (CCC) 502.00p +3.16%
EnQuest (ENQ) 140.60p +3.00%
TalkTalk Telecom Group (TALK) 265.70p +2.90%
Enterprise Inns (ETI) 114.70p +2.87%
FTSE 250 - Fallers
Anite (AIE) 130.00p -16.13%
Ophir Energy (OPHR) 450.00p -13.79%
International Personal Finance (IPF) 465.00p -4.02%
RPS Group (RPS) 248.00p -3.88%
Homeserve (HSV) 235.00p -3.69%
ICAP (IAP) 330.20p -3.62%
Alent (ALNT) 377.00p -3.58%
Kenmare Resources (KMR) 31.30p -3.48%
Dunelm Group (DNLM) 788.50p -3.07%
Centamin (DI) (CEY) 52.45p -2.42%
|Europe Market Report|
|Europe midday: EU and IMF willing to give Portugal greater leeway |
- EU and IMF willing to give Portugal more leeway-Reuters
- Fitch downgrades Italy by one notch to BBB+
- Spanish and Italian risk premiums converge
- Oil down on Saudi production and dollar strength
FTSE Mibtel 30: -0.82%
Ibex 35: -1.13%
Stoxx 600: -0.34%
European stocks were still trading with modest losses by midday, albeit larger ones in the Eurozone periphery. That came after news that ratings agency Fitch last Friday just before the close of equity markets lowered its rating on Italy´s sovereign debt by one notch, to BBB+ (with a negative outlook).
According to Fitch, "The inconclusive results of the Italian parliamentary elections on February 24-25th make it unlikely that a stable new government can be formed in the next few weeks. The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession."
While much market commentary highlighted that this action merely brings Fitch 'in-line' with the views of its peers it seems to have done little to help sentiment.
The above also came ahead of this week´s European Council summit, where leaders were expected to discuss possible solutions to the still festering financial crisis in Cyprus and a partial postponement of some countries´ budget deficit reduction targets.
Acting as a backdrop, Der Spiegel wrote of the creation by academics of a new Euro-sceptic party in Germany.
Meanwhile, and in Spain, over the weekend newspaper El País reported on the falling popularity of the single currency.
On a more upbeat note German Finance Minister Wolfgang Schaeuble told Austria´s Der Staandard that a British exit from the euro would be a catastrophe.
As well, Reuters cited sources as indicating that the European Union and International Monetary Fund are willing to give Portugal extra time to meet its budget deficit targets.
From a sector stand-point the worst performance was to be seen in the following sectors: Banks (-1.06%) and Real estate (-0.81%)
The contraction of Portugal´s economy at a 1.8% quarter-on-quarter rate in the fourth quarter of 2012 was confirmed on Monday morning.
Italy´s economy shrank at a 0.9% quarterly pace, data from ISTAT revealed.
French industrial production fell by 1.2% month-on-month in January (Consensus: -0.2%).
Germany´s trade surplus fell to 13.7bn in January (Consensus: 13.9bn).
Single currency stuck towards 1.30
The euro/dollar was off by -0.01%, to 1.3010, with some market commentary highlighting the recent rise in ´short´ positions against the single currency.
Front month Brent crude futures were down by 0.562 dollars to the 110.23 dollar mark on the ICE.
|US Market Report|
|US open: Overseas news flow drags Wall Street down |
- Overseas news flow is a drag on Wall Street
- Data heavy week ahead
Dow Jones Industrials: -0.03%
Nasdaq Composite: -0.33%
S&P 500: -0.15%
The major US equity market averages were trading slightly lower on Monday ahead of the release of a bevy of US macroeconomic indicators throughout the week.
That came after weaker than expected Chinese data out overnight alongside elevated consumer prices and a ratings downgrade on Italy from ratings agency Fitch.
Of note, the bank sector was benefitting from positive broker commentary, with analysts at UBS having upgraded their view on Citi to buy from neutral.
In a similar vein, positive noises were also be heard from Nomura on the likes of Citi, Goldman Sachs and JP Morgan.
Dick´s Sporting Goods fell after guiding lower on earnings per share for the full year.
Bond insurer Genworth Financial rocketed higher after a positive mention in the latest edition of Barron´s. "The price is eight times estimated 2013 earnings of $1.21 a share. Prior to the financial crisis, a more typical price/earnings multiple was 12-18 times forward earnings," the prestigious financial weekly pointed out.
Apple had been downgraded by Credit Agricole to outperform from buy.
Analysts at RBC Capital raised their price targets on shares of Google (to $950 from $840) and Yahoo (to $24 from $22).
Front month crude futures were lower by 0.25% to the 91.72 dollar per barrel level on the NYMEX.
10 year US Treasury yields were up by 1 basis point, to the 2.05% level.
S&P 500 - Risers
Genworth Financial Inc. (GNW) $10.47 +6.40%
McGraw-Hill Companies Inc. (MHP) $48.81 +2.63%
Bed Bath & Beyond Inc. (BBBY) $60.65 +2.16%
Pitney Bowes Inc. (PBI) $14.26 +2.15%
Sealed Air Corp. (SEE) $22.95 +2.02%
QEP Resources Inc (QEP) $31.77 +1.70%
Electronic Arts Inc. (EA) $18.87 +1.56%
Mosaic Company (MOS) $61.11 +1.48%
Chesapeake Energy Corp. (CHK) $21.64 +1.45%
Unum Group (UNM) $26.88 +1.40%
S&P 500 - Fallers
Cliffs Natural Resources Inc. (CLF) $23.97 -3.07%
Monster Beverage Corp (MNST) $46.00 -2.83%
Netflix Inc. (NFLX) $179.53 -2.80%
Valero Energy Corp. (VLO) $44.26 -2.73%
Edwards Lifesciences Corp. (EW) $87.98 -2.57%
Alpha Natural Res (ANR) $8.37 -2.45%
Intuit Inc. (INTU) $66.22 -2.26%
Tesoro Corp. (TSO) $57.18 -2.09%
Peabody Energy Corp. (BTU) $21.55 -2.05%
Akamai Technologies Inc. (AKAM) $36.49 -2.01%
Dow Jones I.A - Risers
Unitedhealth Group Inc. (UNH) $54.44 +1.17%
Boeing Co. (BA) $81.71 +0.59%
United Technologies Corp. (UTX) $92.60 +0.58%
Bank of America Corp. (BAC) $12.13 +0.46%
Merck & Co. Inc. (MRK) $43.16 +0.44%
JP Morgan Chase & Co. (JPM) $50.39 +0.38%
Caterpillar Inc. (CAT) $90.84 +0.36%
Johnson & Johnson (JNJ) $78.45 +0.33%
American Express Co. (AXP) $64.90 +0.32%
Walt Disney Co. (DIS) $57.55 +0.28%
Dow Jones I.A - Fallers
General Electric Co. (GE) $23.51 -1.07%
Microsoft Corp. (MSFT) $27.71 -1.04%
Intel Corp. (INTC) $21.36 -1.02%
AT&T Inc. (T) $36.44 -0.67%
Hewlett-Packard Co. (HPQ) $20.86 -0.67%
Verizon Communications Inc. (VZ) $47.65 -0.65%
International Business Machines Corp. (IBM) $209.09 -0.61%
Travelers Company Inc. (TRV) $81.41 -0.29%
Exxon Mobil Corp. (XOM) $88.74 -0.26%
Home Depot Inc. (HD) $71.21 -0.22%
Nasdaq 100 - Risers
Bed Bath & Beyond Inc. (BBBY) $60.65 +2.16%
Facebook Inc. (FB) $28.37 +1.47%
Wynn Resorts Ltd. (WYNN) $118.92 +1.34%
Sears Holdings Corp. (SHLD) $50.26 +1.17%
Dell Inc. (DELL) $14.31 +1.09%
Staples Inc. (SPLS) $13.07 +0.85%
Express Scripts Holding Co (ESRX) $59.29 +0.82%
Cerner Corp. (CERN) $93.00 +0.77%
Intuitive Surgical Inc. (ISRG) $517.86 +0.63%
Life Technologies Corp. (LIFE) $60.97 +0.48%
Nasdaq 100 - Fallers
Monster Beverage Corp (MNST) $46.00 -2.83%
Intuit Inc. (INTU) $66.22 -2.26%
Akamai Technologies Inc. (AKAM) $36.49 -2.01%
Cognizant Technology Solutions Corp. (CTSH) $79.15 -1.69%
Apple Inc. (AAPL) $425.80 -1.37%
Mylan Inc. (MYL) $30.33 -1.32%
Starz Class A (STRZA) $20.17 -1.22%
Yahoo! Inc. (YHOO) $22.62 -1.21%
Amgen Inc. (AMGN) $91.88 -1.20%
Nvidia Corp. (NVDA) $12.67 -1.17%
|Broker tips: Sage, Anite, Ashtead |
Accountancy software giant Sage suffered a steep fall on Monday after Bank of America Merrill Lynch downgraded its rating for the stock from 'neutral' to 'underperform'.
The broker said in a research note that investors should remain cautious as to whether Sage can pull off its move to cloud computing.
Investec has downgraded its rating for software provider Anite from 'buy' to 'hold', saying that the stock has come close to its target.
While the shares suffered a 9.29% drop to 140.6p on Monday morning, they finished Friday's session at the 155p level - not far off Investec's unchanged target of 157p - having risen from around the 140p mark at the start of 2013.
Cantor Fitzgerald reiterated its 'buy' recommendation and 650p target for construction firm Ashtead after recent forecast-beating jobs data from the US.
"Friday's US non-farm payrolls provided further evidence that US construction markets are improving," said analyst Caroline de La Soujeole. "[This] could mark the cyclical upturn that will add to Ashtead's structural growth."