May 28, 2013
AsiaAsian stocks mostly rise in choppy trade Most Asian markets rise after the Dow Jones industrials end at a record high, although trading is choppy as concern that the Federal Reserve may taper its bond purchases tempers optimism.
Hong Kong stocks lose ground after recent gains HONG KONG (MarketWatch) -- Hong Kong stocks declined Wednesday after two straight days of gains, as some consumer and property shares came under profit-taking pressure despite strong overnight gains on Wall Street and a modest advance for mainland Chinese equities. The Hang Seng Index fell 0.3% to 22,848.27 and the Hang Seng China Enterprises Index shed 0.4% to 22,842.40. China Overseas Land & Investment Ltd. dropped 0.8%, conglomerate Swire Pacific Ltd. shed 1.5%, and ports operator Cosco Pacific Ltd. lost 2.1%, with each paring strong gains recorded earlier in the week. China's Shanghai Composite added 0.2% to 2,326.71. 9:50 p.m. Today
Australia stocks advance; ANZ plans share buyback LOS ANGELES (MarketWatch) - Australian stocks rose Wednesday, keying off a rally on Wall Street overnight following data suggesting recovery in the U.S. economy remains on track. The S&P/ASX 200 rose 0.2%, looking for its second straight win this week. Banking stocks were mixed, with shares of Australia & New Zealand Banking Group up 0.3% after the company said it plans a share buyback of 425 million Australian dollars ($406.19 million). ANZ said it's "comfortable" with its current capital position, and that the buyback plan will offset the dilutive impact of a recent issue of new stock. Mining shares were mostly higher, though shares of gold producer Newcrest Mining Ltd. gave up 1.8%. In the media space, shares of News Corp. jumped 3% after Chairman Rupert Murdoch told investors that the print media company to be spun out the conglomerate next month might consider newspaper acquisitions in the U.S. "if the price were right," but that regulatory hurdles made such deals "pretty unlikely." News Corp. is the parent company of MarketWatch.com, publisher of this report. 8:35 p.m. Today
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks climbed on Tuesday, bouncing back from last week’s losses after data showed consumer confidence rising in May and the real-estate market picking up speed.
U.S. Treasury prices fell, pushing the 10-year yield to a 13-month high, while the dollar DXY +0.72% strengthened and Japan’s yen USDJPY +1.39% softened.
Watch Tiffany, Omthera
MarketWatch's Polya Lesova takes a look at key stocks markets will be watching, including Tiffany and Omthera Pharmaceuticals.
The Conference Board reported confidence rose to a five-year high in May, with consumers more upbeat about the economy over the next six months.
Separately, the S&P/Case-Shiller home-price index for March found home prices rose 10.9% from the year-ago figure.
“Economic optimism is as high as a kite,” emailed Kevin Giddis, a fixed-income analyst at Raymond James, noting the better-than-expected housing numbers and the rise in consumer sentiment.
Notching another record close, the Dow Jones Industrial Average DJIA +0.69% rose as much as 218 points, and ended with a gain of 106.29 points at 15,409.39, with all but four of its 30 components rising.
The advance had the Dow Jones Industrial Average extending its Tuesday winning streak to a 20th session, the longest Tuesday winning streak ever, according to Ryan Detrick, senior technical strategist at Schaeffer’s Investment
The S&P 500 index SPX +0.63% added 10.46 points to 1,660.06, with financials pacing sector gains and telecommunications the leading laggard.
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Shares making noteworthy moves Tuesday included Tiffany & Co. TIF +3.95% , up 4% after the jewelry retailer reported quarterly earnings above expectations.
Tesla Motors Inc. TSLA +0.60% jumped nearly 14% in the wake of the electric-car maker’s stock-and-note offering last week that netted nearly $1 billion.
Exelon Corp. EXC -7.53% fell 7.5% after Deutsche Bank AG downgraded the operator of nuclear reactors to hold from buy.
In deal news, Fidelity National Financial Inc. FNF -0.57% has agreed to acquire Lender Processing Services Inc. LPS +1.82% for around $2.9 billion. Under the terms of the deal, Lender Processing, a technology company that services the mortgage and real-estate industries, can seek further offers until July 7.
The Nasdaq Composite COMP +0.86% gained 29.74 points to 3,488.89.
For every three stocks falling, roughly three gained on the New York Stock Exchange, where 724 million shares traded. Composite volume surpassed 3.3 billion.
On the New York Mercantile Exchange, oil rose for the first session in five, with crude futures for July delivery CLN3 +0.90% rising 86 cents to $95.01 a barrel.
Gold futures for August delivery GCQ3 -0.90% fell $7.80 to $1,379.70 an ounce on the Comex division of the Nymex.
Wall Street’s rally follows a long holiday weekend, with investors returning to gains in Asia and Europe.
U.S. equities have advanced, with the S&P 500 up 147% since March 2009, in a bull market fed by three rounds of bond buys by the Federal Reserve and as corporate earnings exceeded expectations.
But not all strategists are voicing optimism about the rally, saying investors chasing performance could be driving stocks to unsustainable levels.
In Tokyo, the yen pulled back over concerns about rising Japanese government bond yields. That allowed Japanese stocks to overcome a volatile session and close higher, with the Nikkei 225 index JP:NIK +1.20% gaining 1.2%. Other Asian markets also closed higher.
U.S. stocks fell for the first week in five last week on fears that the Fed would begin to pare back its bond-buying program.
“The Fed continues to speak to the market, but only in ways that would suggest that they are truly divided as a board. While the Fed chairman suggested that the current buying program could be reduced, he stopped short of offering the metrics that would lead them to do just that,” wrote Giddis.
“The broader metrics are known: a 6.5% unemployment rate and the inflation rate above 2.5%. Neither of which are present today,” he added.
Kate Gibson is a reporter for MarketWatch, based in New York.
Stocks shaved their gains but still ended in positive territory across the board Tuesday following a long holiday weekend, buoyed by supportive comments from central banks around the world and a pair of upbeat economic data.
The blue-chip index finished higher for the 20th-straight Tuesday. The last time the index even got this far was in 1927 when the Dow closed up 15 consecutive Tuesdays between June 1927 and September 1927.
(Read More: 'Lion Share' of Stock Gains Are Still Ahead: Altman)
"If you believe in calendar folklore, the day after a three-day weekend has a bias to the upside and the final week of the month has a bias to the upside and it's terrific Tuesday again," noted Art Cashin, director of floor operations at UBS Financial Services. Cashin also noted that trading volume has been on the lighter side.
The Dow Jones Industrial Average shaved its gains but still logged a triple-digit gain, led by Cisco and United Health. The Dow was up 218 points at session high.
The S&P 500 and the Nasdaq also ended higher. Both indexes closed higher for the 10th-consecutive Tuesday. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 14.
(Read More: 5% Pullback 'A Matter of Time': S&P)
Most key S&P sectors were in positive territory, led by banks and materials, while utilities declined.
Last week, all three major averages logged weekly losses for the first time in five weeks, rattled by worries the Federal Reserve may soon start to pare back its bond buying.
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Tiffany shot higher after the upscale jeweler posted better-than-expected quarterly results. Last year, Tiffany's results were hurt by signs of a slowdown in China and disappointing sales of its silver jewelry. Merck gained after Jefferies upgraded the pharmaceuticals giant to "buy" from "hold" and called the company among the best restructuring plays in the drug group. Valeant Pharmaceuticals zipped higher after the Canadian drugmaker agreed to acquire privately-held Bausch & Lomb in a deal worth $8.7 billion. Tesla extended its rally after the electric car maker's stock-and-note offering last week that raised nearly $1 billion and following recent positive comments from Goldman Sachs. Meanwhile, General Motors and Ford advanced after Bank of America Merrill Lynch raised its targets for both automakers. Treasury bonds extended losses, boosting yields up to new highs for the year. The yield on benchmark 10-year Treasury notes surged to 2.122 percent, taking out the previous intraday high of 2.087 percent hit on March 8. The government sold $35 billion in 2-year notes at a high yield of 0.283 percent. The bid-to-cover, an indicator of demand, was 3.04. The Treasury will auction $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.—By CNBC's JeeYeon Park. Follow JeeYeon on Twitter: @JeeYeonParkCNBC Coming Up This Week: WEDNESDAY: MBA mortgage applicaitons, Bank of Canada announcement, 5-yr note auction, ExxonMobil shareholder mtg; Earnings from Chico's, Michael Kors THURSDAY: GDP, jobless claims, corporate profits, pending home sales index, natural gas inventories, oil inventories, 7-yr note auction, Fed balance sheet/money supply; Earnings from Costco, Joy Global, Lions Gate Ent. FRIDAY: Personal income & outlays, Chicago PMI, consumer sentiment, farm prices, OPEC mtg
Spot Prices as of close of trading in New York
Tuesday, May 28, 2013
Tuesday, May 28, 2013
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|London Market Report|
| London close: Stimulus hopes drive triple-digit gains for FTSE 100 |
While hopes have now faded for a long-term continuation of stimulus measures in the US, speculation surrounding continued monetary easing in Europe and Japan sparked a huge surge on equity markets on Tuesday.FTSE 100: Petrofac gains on broker comments
After reaching a 13-year high on Wednesday, the FTSE 100 dropped sharply in the latter part of last week on fears of a scaling back of quantitative easing from the US Federal Reserve as well as some gloomy economic data from China.
However with UK and US markets closed for national holidays on Monday, traders were looking to play catch up after missing out on the previous day's rally seen elsewhere on European indices. The Footsie for its part bounced back with triple-digit gains on Tuesday, up 108 points or 1.6%.
Helping the bullish mood today were comments from a European Central Bank board member who said that the bank could still cut interest rates if needed to support the economy and that the "possibility of further easing was not exhausted". Meanwhile, minutes from the Bank of Japan's latest meeting released this weekend showed that policymakers remained committed to their recent aggressive easing action until inflation reaches the 2.0% target.
"Clearly investors were distraught last week that the crutch supporting the US economy could be removed which devastated confidence levels. However, the recent announcements that officials from the Eurozone and Japan will be bucking the trend and continuing their support is sitting well with investors," said Financial Trader Shavaz Dhalla from Spreadex.
"Thus, today's rally is a result of investors' first opportunity to shrug off the worrying comments from US officials and instead replace this with supportive comments from other global officials," he said.
Sentiment was boosted further today by a survey of home prices and consumer confidence data in the States which both beat forecasts, with the latter surging to a five-year high.
Oilfield services group Petrofac was a high riser today after a positive note out on the stock from ABN Amro. The broker highlighted the fact that even after the forecast decline the company's return on capital employed is expected to be at 43% come 2015, from 49% last year.
Tour operator TUI Travel was among the best performers, rising in sympathy with French peer Club Mediterranee after its shareholders Fosun International and Axa Private Equity joined forces to make a 540m bid for the firm.
Drugs giant AstraZeneca higher after saying that it will continue to "vigorously" defend the intellectual property rights protecting its asthma medicine Pulmicort Respules. The company is appealing against a US court ruling that the patent protecting Pulmicort from rival drugs in the US is invalid. Sector peers Shire and GlaxoSmithKline were also in demand early on, with the latter being boosted by an upgrade by Deutsche Bank to 'buy'.
Financial stocks were also performing well as markets on the whole rebounded from last week's sell-off. HSBC, Barclays and Standard Chartered were in positive territory, joined by part-nationalised lenders RBS and Lloyds which were both shrugging off downgrades by Citigroup today.
Wood Group was also higher on news that its PSN business will continue to provide duty holder and asset management services to the Hummingbird Spirit floating storage offloading production vessel, under a new contract extension worth $87m from Teekay.
Positive comments from Bank of America Merrill Lynch were helping share prices of a number of retailers this morning after the broker raised its targets for Sainsbury, Marks & Spencer and Tesco.
FTSE 250: Victrex jumps after first-half report
Polymer manufacturer Victrex was a high riser on the second-tier index after increasing its interim dividend by 15% despite a slight fall in profits. The company however still managed to beat profit before tax forecasts by 2.0% in the first half.
Soft drinks maker AG Barr was also up as it managed to increase revenues by 2.4% in the first quarter in spite of the dismal weather.
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| FTSE 100 - Risers |
Aggreko (AGK) 1,812.00p +4.68%
easyJet (EZJ) 1,300.00p +4.00%
International Consolidated Airlines Group SA (CDI) (IAG) 283.80p +3.96%
WPP (WPP) 1,190.00p +3.84%
Melrose Industries (MRO) 264.70p +3.72%
Petrofac Ltd. (PFC) 1,389.00p +3.66%
CRH (CRH) 1,440.00p +3.60%
Weir Group (WEIR) 2,375.00p +3.49%
Babcock International Group (BAB) 1,205.00p +3.34%
TUI Travel (TT.) 369.20p +2.98%
FTSE 100 - Fallers
Eurasian Natural Resources Corp. (ENRC) 248.00p -2.67%
Evraz (EVR) 143.90p -1.64%
Anglo American (AAL) 1,540.50p -1.03%
Randgold Resources Ltd. (RRS) 4,945.00p -0.86%
Severn Trent (SVT) 2,064.00p -0.34%
FTSE 250 - Risers
Victrex (VCT) 1,765.00p +8.42%
New World Resources A Shares (NWR) 111.60p +5.48%
Cable & Wireless Communications (CWC) 46.29p +5.20%
Ashtead Group (AHT) 666.00p +5.13%
International Personal Finance (IPF) 555.00p +5.11%
Telecity Group (TCY) 989.50p +4.99%
Persimmon (PSN) 1,280.00p +4.92%
Spirax-Sarco Engineering (SPX) 2,923.00p +4.88%
Supergroup (SGP) 789.00p +4.57%
Brewin Dolphin Holdings (BRW) 219.80p +4.32%
FTSE 250 - Fallers
FirstGroup (FGP) 124.20p -2.51%
Hochschild Mining (HOC) 241.50p -2.35%
EnQuest (ENQ) 130.40p -2.10%
Heritage Oil (HOIL) 148.90p -2.04%
HICL Infrastructure Company Ltd (HICL) 128.10p -1.46%
Daejan Holdings (DJAN) 3,900.00p -1.27%
Inmarsat (ISAT) 643.00p -1.00%
Carpetright (CPR) 635.50p -0.94%
Dechra Pharmaceuticals (DPH) 702.50p -0.92%
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|Europe Market Report|
| Europe midday: Europe's leaders need to wake up, The Economist says |
- Europe's leaders need to wake upThe EconomistConstruction stocks lead gains
- Spain's pain is likely to continueThe Economist
- Soothing remarks from ECB policymakers
- Sharp drop in French consumer confidence
FTSE 100: 2.03%
FTSE Mibtel 30: 2.22%
Ibex 35: 2.51%
Stoxx 600: 1.68%
Is the anaesthetising effect of quantitative easing supporting stocks? According to The Economist magazine that would seem to be a fair description of today's goings-on in markets.
The lead article in this week's edition of the magazine predicts that Europe will be "under a shadow for years to come" if Eurozone leaders continue on 'this' trajectory. In fact, Europe's leaders must grasp that if they do not act, the Eurozone faces stagnation or break-up possibly both, and unlike Japan it is not 'cohesive,' it warns.
As if on cue, European Central Bank governing council member Jorg Asmussen yesterday reiterated that the monetary authority will continue to pursue an accommodative policy. He has been joined today by his peer Peter Praet, who was cited as saying that the ECB has not yet exhausted its interest rate tool.
Be that as it may, however, certain strategists at bond-manager PIMCO, were of the opinion that there are asset markets which are now entering 'bubble' territory.
Also worth pointing out, yesterday's edition of The Wall Street Journal called attention to the rift between the ECB and Germany over how to proceed with creating a banking union. The same newspaper commented on Tuesday on how a book recommending that Portugal leave the Eurozone has reached the top of the 'Bestsellers' list' in that country, while local elections over the weekend - in Italy - saw a sharp rise in rates of voter abstention.
OMV sold a stake of around 9% in the Nabucco gas pipeline project to French group GDF Suez.
Volkswagen and German union IG Metall reached an accord on wage increases covering more than 100,000 workers.
From a sector standpoint the best performance was to be seen in the following sectors within the DJ Stoxx 600: Banks (2.57%), Construction&Materials (2.09%) and Travel&Leisure (2.06%).
Very weak data in France and Spain
INSEE's French consumer confidence gauge fell to the 79.0 point mark, from 83 in the month before (Consensus: 85.0).
Spanish mortgage lending collapsed at a 34.1% year-on-year rate in March.
German import prices dropped by 1.4% month-on-month in April (Consensus: 0.4%).
Single currency lower on ECB 'talk'
The euro/dollar was down by 0.54% to the 1.2860 dollar mark.
Front month Brent crude futures were rising by 1.648 dollars to the 104.33 dollar mark on the ICE.
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|US Market Report|
| Stocks Holding On To Strong Gains After Early Rally |
After moving sharply higher in early trading on Tuesday, stocks have continued to perform well over the course of the morning. The major averages have remained firmly in positive territory, offsetting the losses posted last week.
The strength on Wall Street comes as some traders are buying on the dip that was seen last week, which ended a four-week winning streak for the major averages.
Traders have also reacted positively to some upbeat U.S. economic data, including a report from the Conference Board showing that consumer confidence jumped to a five-year high in May.
Considerable strength remains visible among networking stocks, as reflected by the 2.6 percent gain being posted by the NYSE Arca Networking Index. Alcatel-Lucent has helped to lead the sector higher, surging up by 5.4 percent.
Healthcare provider stocks are also seeing significant strength on the day, resulting in a 2.5 percent gain by the Morgan Stanley Healthcare Provider Index. Health Management Associates and PharMerica are posting notable gains.
Brokerage, insurance, biotechnology, and railroad stocks are also turning in strong performances, reflecting broad based buying interest.
The major averages have given back some ground in recent trading but are holding on to strong gains. The Dow is up 175.13 points or 1.1 percent at 15,478.23, the Nasdaq is up 44.51 points or 1.3 percent at 3,503.65 and the S&P 500 is up 18.59 points or 1.1 percent at 1,668.19.
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| Broker tips: SABMiller, AG Barr, Victrex|
Credit Suisse continues to expect SABMiller to 'outperform' despite cutting its target for the beverages stock from 4,000p to 3,920p on the back of negative foreign exchange movements.
Nevertheless, analysts remain upbeat despite the stock's recent strong run: "Whilst the shares are +25% year-to-date (versus sector +15%), the weaker £/$ has helped by c10% (SAB is listed in £, but reports in $, so has translation benefits from weaker £/$). Adjusting for this, the shares have performed only in line with the sector year-to-date now trading on a c5.0% price-to-earnings premium to the sector, we don't view valuation as too demanding."
First-quarter results from AG Barr were "very strong" according to Canaccord Genuity, but the broker has downgraded the soft drinks company from 'buy' to 'hold' following its recent outperformance and share gains.
The broker highlighted a number of positives with the company's trading update on Tuesday but said it has moved to a 'hold' rating ahead of the Competition Commission's provisional findings into the company's proposed merger with Britvic in early June. Canaccord said that the shares are now "up with events" and has kept its target of 570p.
Shares in polymer manufacturer Victrex surged after a forecast-beating first-half report, the standout of which was the 15% increase in the dividend, according to Jefferies.