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Jun 26, 2013

Mandated U.S. Budget Cuts Ripple Through Private Sector . NYT: ALERTS FGC BOLSA - FGC FINANCIAL MARKETS; June 26, 2013.



FGC BOLSA- FGC FIN

Compiled: June 26, 2013 06:08:04 PM

Mandated U.S. Budget Cuts Ripple Through Private Sector
Many companies providing support services are cutting employees as work vanishes after federal spending was trimmed by $85 billion on March 1.

Stocks Show Strong Upward Move, Adding To Yesterday's Gains: Wall Street at Close Report by RTTNews; June 26, 2013.

Stocks Show Strong Upward Move, Adding To Yesterday's Gains - U.S. Commentary

Stocks Show Strong Upward Move, Adding To Yesterday's Gains - U.S. Commentary
6/26/2013 4:23 PM ET
Stocks turned in another strong performance during trading on Wednesday, continuing to recover from the recent sell-off. The gains on the day extended the strong upward move that was seen over the course of the previous session.

The major averages pulled back off their best levels going into the close but still closed notably higher. The Dow jumped 149.83 points or 1 percent to 14,910.14, the Nasdaq advanced 28.34 points or 0.9 percent to 3,376.22 and the S&P 500 climbed 15.23 points or 1 percent to 1,603.26.

The strength on Wall Street came as traders continued to pick up stocks at reduced levels following the sharp drop seen in the aftermath of the Federal Reserve's recent monetary policy announcement.
The major averages posted steep losses last Wednesday and Thursday and saw further downside on Monday, hitting two-month lows.

Easing concerns about a Chinese credit crunch also generated some buying interest following reassuring comments from the People's Bank of China.

Citing a statement on the bank's website, the New York Times said the Bank of China has provided liquidity support to some financial institutions that meet the demands of macro prudence.
Traders also reacted positively to the Commerce Department's revised report on first quarter GDP, which showed a substantial downward revision to the pace of growth.

The Commerce Department said its final reading on first quarter gross domestic product showed 1.8 percent growth, well below the previous estimate of a 2.4 percent increase.
The sharp downward revision to the pace of GDP growth came as a surprise to economists, who had expected the increase to be unrevised.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Until we see the monthly breakdown of the new consumption figures tomorrow, it is unclear exactly how these first-quarter revisions will affect our second-quarter GDP growth forecast, which is currently for a gain of between 1.5% and 2.0%."

"But it is possible that the downward revision to the first quarter will require an upward revision to the second quarter," he added.

While the GDP report is mostly seen as old news, the size of the downward revision may have eased concerns about the outlook for the Federal Reserve's stimulus program.

Sector News
Biotechnology stocks showed a particularly strong move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 3.1 percent. The gain lifted the index further off the two-month closing low it set last Thursday.

Affymetrix (AFFX) and Nektar Therapeutics (NKTR) turned in two of the biotech sector's best performances, surging up by 9.4 percent and 8.3 percent, respectively.

Considerable strength also emerged among defense stocks, as reflected by the 1.7 percent gain posted by the Philadelphia Defense Sector Index. ITT Corp. (ITT) and GenCorp (GY) posted notable gains.
Software stocks also showed a strong move to the upside, resulting in a 1.6 percent gain by the Dow Jones Software Index. Adobe Systems (ADBE) helped lead the sector higher after Jefferies raised its rating on the software developer to Buy from Hold.

Pharmaceutical, utilities, and railroad stocks also posted strong gains, moving higher along with most of the other major sectors.

Meanwhile, gold stocks moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 6.1 percent. A steep drop by the price of gold contributed to the weakness in the sector, with gold for August delivery tumbling $45.30 to $1,229.80 an ounce.

Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. While Japan's Nikkei 225 Index slumped by 1 percent, Hong Kong's Hang Seng Index surged up by 2.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. The U.K.'s FTSE 100 Index rose by 1 percent, while the German DAX Index advanced by 1.7 percent and the French CAC 40 Index jumped by 2.1 percent.

In the bond market, treasuries saw some volatility but managed to end the day firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5 basis points to 2.539 percent after ending the previous session at a nearly two-year closing high.

Looking Ahead

Another batch of economic data is scheduled to be released on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, personal income and spending, and pending home sales.


ADVFN III Evening Euro Markets Bulletin; June 26, 2013.

 
ADVFN III Evening Euro Markets Bulletin
Daily world financial news Wednesday, 26 June 2013


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Stocks closed higher for a second day as China moved to provide liquidity assistance to its battered interbank lending maket and a member of the US Federal Reserve - Narayana Kocherlakota - described markets´ reaction to the central bank´s last policy stamtement as overdone.

Back in the UK all eyes were on the Chancellor´s Spending Review for fiscal year 2015. Osborne outlined how he intends to allocate cuts worth 2.7% of his budget between departments. For its part, in its twice-annual Financial Stability report the Bank of England indicated that banks could be vulnerable to a sharp rise in interest rates.

Also worth noting, in a speech delivered in London David Miles, an external member of the Monetary Policy Committee MPC, argued that: “I do not think we should be in any hurry in the UK to move the monetary policy dials back to more normal settings Indeed, it might well be right for the next move in the UK to push them even further to give more support to demand.”

Acting as a backdrop, analysts at Credit Suisse commented that they would not be surprised if Chinese gross domestic product GDP trend-growth moves towards 6%, although they do not believe that it will fall below that pace.

In parallel, and following this afternoon´s weaker-than-expected GDP report Stateside, economists at Barclays were writing to clients that: “We look for consumption growth to slow somewhat further in the second quarter and our second quarter GDP tracking stands at 1.8%, implying a sub-2.0% first half of 2013.”

They added that to achieve the FOMC's current growth forecast for the year as a whole would take a 'significant acceleration' in the second half, 'something we judge very unlikely' they added.

Gains in the financial sector were offsetting falls in the mining sector mining sector on Wednesday as bargain hunters stepped in following recent falls. Aberdeen Asset Management, Schroders, Resolution and Prudential, four stocks that have been hit hard by market volatility over the last month, were among the top risers today as sentiment picked up.

FTSE 100: Aberdeen gains as bargain-hunters step in

Shares of Aberdeen Asset Management jumped after HSBC lifted the investment firm to overweight from neutral.

Insurance, savings and investment group Legal & General rose on plans to purchase UK annuity buy-out firm Lucida for £151m after identifying retirement solutions as one of its "five key themes for growth".

Chemicals group Croda was also a high riser after UBS upgraded its rating on the stock from 'sell' to 'neutral' as part of a more upbeat stance on the sector. The broker said that softer comparatives due in the second half for chemicals stocks, combined with recent falls, creates a more attractive entry point.

Leading the downside was the mining sector, as metal prices -particulalry those for precious metals - tumbled across the board, owing to a stronger dollar, the increased likelihood that the Federal Reserve will soon 'taper' stimulus if economic data continues to improve and – of course- the weaker outlook for China. Both gold and silver prices were trading at multiyear lows today.

Antofagasta, Anglo American, Fresnillo, Randgold Resources, ENRC and Vedanta all registered steep losses.

A number of heavyweight stocks traded lower after going ex-dividend on Wednesday, including Next, Tate & Lyle and Compass.

Shares of Direct Line Insurance Group climbed 4% after announcing plans to reduce costs by £130m and cut about 2,000 jobs.

FTSE 250: Afren rockets after exploration results pay off

Afren’s shares surged as the UK oil explorer said it discovered a better-than-expected oil section at an exploration well offshore Nigeria.

Interdealer broker ICAP was a heavy faller after going ex-dividend.

Hochschild Mining and Polymetal retreated as miners took a hit from falling commodity prices including gold, silver and copper.

FTSE 100 - Risers
Aberdeen Asset Management (ADN) 378.30p +4.76%
International Consolidated Airlines Group SA (CDI) (IAG) 264.20p +3.24%
Croda International (CRDA) 2,429.00p +3.14%
ITV (ITV) 137.50p +2.92%
Resolution Ltd. (RSL) 278.80p +2.76%
Prudential (PRU) 1,059.00p +2.72%
easyJet (EZJ) 1,279.00p +2.48%
Wolseley (WOS) 3,028.00p +2.47%
Unilever (ULVR) 2,591.00p +2.45%
Land Securities Group (LAND) 876.00p +2.40%

FTSE 100 - Fallers
Fresnillo (FRES) 866.50p -3.56%
Anglo American (AAL) 1,256.00p -3.31%
Randgold Resources Ltd. (RRS) 3,972.00p -3.05%
Antofagasta (ANTO) 801.50p -2.14%
Vedanta Resources (VED) 1,028.00p -1.72%
Tate & Lyle (TATE) 801.50p -1.48%
Intertek Group (ITRK) 2,943.00p -1.18%
Petrofac Ltd. (PFC) 1,205.00p -1.15%
Melrose Industries (MRO) 242.00p -1.10%
Eurasian Natural Resources Corp. (ENRC) 211.70p -1.07%

FTSE 250 - Risers
Kazakhmys (KAZ) 262.40p +7.37%
Afren (AFR) 130.60p +7.31%
TalkTalk Telecom Group (TALK) 231.90p +5.70%
Thomas Cook Group (TCG) 121.80p +5.18%
Dixons Retail (DXNS) 41.67p +5.04%
Barratt Developments (BDEV) 307.40p +4.63%
F&C Asset Management (FCAM) 95.20p +4.62%
National Express Group (NEX) 223.70p +4.48%
Computacenter (CCC) 447.20p +4.36%
Taylor Wimpey (TW.) 94.95p +4.34%

FTSE 250 - Fallers
ICAP (IAP) 353.60p -8.58%
NMC Health (NMC) 267.70p -8.32%
Hochschild Mining (HOC) 164.80p -6.47%
Polymetal International (POLY) 464.00p -5.69%
African Barrick Gold (ABG) 103.80p -5.46%
Evraz (EVR) 100.20p -4.66%
Ferrexpo (FXPO) 134.70p -3.92%
KCOM Group (KCOM) 81.00p -3.69%
IP Group (IPO) 131.00p -3.68%
Crest Nicholson Holdings (CRST) 312.00p -3.38%

FTSE TechMARK - Risers
Triad Group (TRD) 8.00p +6.67%
Torotrak (TRK) 28.00p +5.66%
Skyepharma (SKP) 63.00p +4.13%
Optos (OPTS) 117.00p +4.00%
XP Power Ltd. (DI) (XPP) 1,229.00p +2.42%
CML Microsystems (CML) 470.00p +1.62%
Sepura (SEPU) 118.50p +0.85%
Emblaze Ltd. (BLZ) 50.00p +0.50%
Innovation Group (TIG) 28.00p 0.00%
Parity Group (PTY) 28.75p 0.00%

FTSE TechMARK - Fallers
Kofax (KFX) 320.00p -3.03%
SDL (SDL) 275.00p -1.87%
BATM Advanced Communications Ltd. (BVC) 15.75p -1.56%
RM (RM.) 65.00p -1.52%
Ricardo (RCDO) 381.50p -1.42%
Microgen (MCGN) 143.50p -1.37%
Vectura Group (VEC) 81.00p -1.22%
Antisoma (ASM) 1.64p -0.61%
Phoenix IT Group (PNX) 159.75p -0.47%
Vislink (VLK) 31.38p -0.40%

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European Markets Climbed On Positive German Data
The European markets extended the gains from the previous session on Wednesday, finishing solidly in positive territory. The markets received a boost from the unexpected increase in German consumer confidence and managed to shrug off the unexpected downward revision to U.S. first quarter GDP. The positive U.S. economic data that was released Tuesday continued to fuel hopes for economic recovery.

The European Central Bank Chief Mario Draghi said that it has done as much as it can to support the euro area economy, and now governments should do their part to strengthen the region.

"The ECB has done as much as it can to stabilize markets and support the economy," President Draghi told the French parliament on Wednesday.

Now governments and parliaments should do all they can to raise growth potential and build a stronger and more stable EMU, he added.

Although euro area has made much progress in recent years, it still faces many challenges, Draghi said. The ECB stands ready to act again when needed, he reiterated, adding that there are limits to what monetary policy can achieve. Monetary policy cannot create real economic growth, the ECB Chief said. "If growth is stalling because the economy is not producing enough or because firms have lost competitiveness, this is beyond the power of the central bank to fix," Draghi said.

Germany's economic recovery is set to gather momentum in the coming months after making a week start, but growth will be slightly slower this year than estimated earlier, a report released by the Ifo Institute showed Wednesday. The firm, meanwhile, maintained its growth projection for 2014.

As per the revised estimate, the largest Eurozone economy is expected to grow at an annual average rate of 0.6 percent this year, which is slower than the 0.8 percent gain the institute had forecast in its April report. The revised figure indicates a slowdown from the 0.7 percent growth recorded in 2012. Going ahead, growth is seen accelerating to 1.9 percent in 2014, which is in line with the previous prediction.

The British government announced a new round of spending-cuts on Wednesday, with plans to raise GBP 11.5 billion in savings from government budgets, in a bid to reduce the soaring current account deficit and boost economic growth. A major portion of the planned amount will be used for investment in infrastructure.

Setting out the departmental budgets for the financial years 2015 and 2016, Chancellor of the Exchequer George Osborne said in the Spending Review that by boosting the austerity program the government plans to move from "rescue to recovery". "We've always believed that the deficit mattered; that we need to take tough decisions to deal with our debts", Osborne said, and cautioned that though the government has successfully lowered the shortfall by a third it still remains very high, and action should be taken to bring it down to sustainable levels.

The renewed austerity program is expected to allow a further GBP 3 billion per year to be spent on capital from the year 2015 to 2016, boosting investment in infrastructure and supporting economic growth. The amount will primarily be used for investment in affordable housing.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 2.29 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.94 percent.

The DAX of Germany climbed by 1.66 percent and the CAC 40 of France advanced by 2.09 percent. The FTSE 100 of the U.K. rose by 1.00 percent and the SMI of Switzerland gained 2.12 percent. In Frankfurt, RWE increased by 2.16 percent. Credit Suisse upgraded the stock to ''Neutral'' from ''Underperform.''
Metro gained 2.14 percent. Societe Generale initiated the stock with a ''Hold'' rating. Lanxess fell by 3.55 percent, following a price target cut at Goldman Sachs.

Dialog Semiconductor rose by 0.15 percent. Merrill Lynch initiated the stock with an ''Underperform'' rating.

In Paris, Credit Agricole climbed by 3.35 percent. Societe Generale and BNP Paribas added 3.48 percent and 2.87 percent respectively. Unibail-Rodamco finished higher by 2.35 percent, after UBS upgraded the stock to ''Buy'' from ''Neutral.''

Aberdeen Asset Management surged by 4.79 percent, after HSBC upgraded the stock to "Overweight" from "Neutral." Croda International advanced by 3.18 percent, after UBS upgraded the stock to "Neutral" from "Sell." Victrex also rose by 2.33 percent after UBS upgraded it to "Neutral" from "Sell."

Stagecoach, which said underlying annual profit rose and that the new year has started well, gained 3.61 percent. Oil and gas group Afren reported a significant find offshore Nigeria. The stock surged by 7.64 percent.

Bunzl decreased by 0.88 percent, after a trading update.

Craneware sank by 11.30 percent. The firm sees full-year revenue below current market expectations.

Novartis climbed by 1.86 percent in Zurich. The Company said late-breaking results showed that omalizumab met all primary and secondary endpoints of a pivotal Phase III safety registration study in chronic spontaneous urticaria, a chronic and debilitating form of hives with limited approved treatment options.

German consumer morale is set to climb to its highest level in almost six years in July amid increased optimism about the general economic prospects as well as continued rise in income expectations, a survey by the market research firm GfK revealed Wednesday.

The forward-looking consumer confidence index for July rose to 6.8 from 6.5 in June. The reading was the highest since September 2007, when the index scored 7.3. Economists had forecast the index to stay unchanged at the June level.

The French economy fell into recession in the first quarter as initially estimated, final data from the statistical office Insee showed Wednesday. Gross domestic product shrank 0.2 percent, the same rate of fall as seen in the fourth quarter of 2012. Both figures came in line with initial estimate published on May 15.

Mortgages on residential properties in Spain decreased sharply in April, data released by statistical office INE showed Wednesday. The number of mortgages constituted on residential properties plunged 18.1 percent on an annual basis to 17,508 in April. Compared to March this year, however, the number of home mortgages increased 7.6 percent.

In a major shock to economists, the Commerce Department released a report on Wednesday showing a substantial downward revision to the pace of U.S. economic growth in the first quarter of 2013. The Commerce Department said its final reading on first quarter gross domestic product showed 1.8 percent growth, well below the previous estimate of a 2.4 percent increase.

The sharp downward revision to the pace of GDP growth came as a surprise to economists, who had expected the increase to be unrevised.

US Market Report
Stocks Give Back Ground But Remain Firmly Positive

After moving sharply higher in early trading on Wednesday, stocks have given back some ground but remain mostly positive. The gains on the day are extending the rebound that was seen over the course of the previous session.

The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 101.61 points or 0.7 percent at 14,861.92, the Nasdaq is up 24.98 points or 0.8 percent at 3,372.87 and the S&P 500 is up 11.31 points or 0.7 percent at 1,599.34.

The strength on Wall Street comes as traders continue to pick up stocks at reduced levels following the sell-off that was seen in the aftermath of the Federal Reserve's recent monetary policy announcement. The major averages posted steep losses last Wednesday and Thursday and saw further downside on Monday, hitting two-month lows. Easing concerns about a Chinese credit crunch have also generated some buying interest following reassuring comments from the People's Bank of China.

Citing a statement on the bank's website, the New York Times said the Bank of China has provided liquidity support to some financial institutions that meet the demands of macro prudence. Traders are also digesting the Commerce Department's revised report on first quarter GDP, which showed a substantial downward revision to the pace of growth. The Commerce Department said its final reading on first quarter gross domestic product showed 1.8 percent growth, well below the previous estimate of a 2.4 percent increase.

The sharp downward revision to the pace of GDP growth came as a surprise to economists, who had expected the increase to be unrevised.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Until we see the monthly breakdown of the new consumption figures tomorrow, it is unclear exactly how these first-quarter revisions will affect our second-quarter GDP growth forecast, which is currently for a gain of between 1.5% and 2.0%." "But it is possible that the downward revision to the first quarter will require an upward revision to the second quarter," he added.

While the GDP report is mostly seen as old news, the size of the downward revision may have eased concerns about the outlook for the Federal Reserve's stimulus program.

Sector News

Biotechnology stocks continue to turn in some of the market's best performances in mid-day trading, with the NYSE Arca Biotechnology Index up by 3.1 percent. The gain is lifting the index further off the two-month closing low it set last Thursday. Affymetrix has helped to lead the biotech sector higher, surging up by 9.9 percent. Earlier in the session, shares of Affymetrix hit their best intraday level in well over two months.

Considerable strength is also visible among software stocks, as reflected by the 1.5 percent gain being posted by the Dow Jones Software Index. Adobe Systems is posting a notable gain after Jefferies raised its rating on the software developer to Buy from Hold.

Defense, utilities, and railroad stocks are also seeing significant strength, although buying interest has waned from earlier in the session.

Meanwhile, gold stocks have moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 4.8 percent. A sharp drop by the price of gold is contributing to the weakness in the sector, with gold for August delivery tumbling $40.10 to $1,235 an ounce.


Broker Tips
ACM Shipping Group: Espirito Santo increases target from 150p to 185p keeping a buy recommendation.

Afren: Canaccord Genuity moves target from 210p to 220p and keeps a buy recommendation.

Aggreko: Deutsche Bank cuts target from 2250p to 2100p, while its buy recommendation remains unchanged.

Aveva: Jefferies raises target from 2560p to 2740p and retains a buy recommendation.

Berkeley Group: Jefferies ups target from 2005p to 2018p reiterating a hold recommendation.

British American Tabacco: UBS reduces target from 4050p to 3850p, while its buy recommendation is kept.

bwin.party: Exane lowers target from 165p to 160p and keeps an outperform rating.

Compass Group: JP Morgan takes target from 890p to 950p and retains an overweight rating.

Craneware: Numis cuts target from 405p to 390p reiterating a hold recommendation. Investec reduces target from 410p to 365p, while upgrading from hold to buy.

Debenhams: HSBC Holdings moves target from 120p to 110p keeping an overweight rating.

Diageo: Nomura reduces target from 2400p to 2250p, while maintaining its buy recommendation.

Domino Printing: UBS moves target from 750p to 700p, while keeping its buy recommendation.

Ferrexpo: JP Morgan cuts target from 200p to 135p and leaves its underweight rating unchanged.

Gem Diamonds: JP Morgan ups target from 172p to 193p keeping an overweight rating.

G4S: RBC Capital Markets upgrades from neutral to outperform, while retaining a target of 260p.

Hays: UBS shifts target from 120p to 110p and keeps a buy recommendation.

Henderson Group: Citi reduces target from 185p to 168p, while leaving its buy recommendation unaltered.

Investec: Numis lowers target from 585p to 551p, while upgrading to buy.

Kenmare Resources: JP Morgan shifts target from 34p to 30p staying with its neutral rating.

Lonmin: UBS raises target from 230p to 280p and upgrades from sell to neutral.

Micro Focus: Credit Suisse increases target from 760p to 807p and reiterates an outperform rating.

New World Resources: JP Morgan reduces target from 70p to 50p retaining an underweight rating.

Page Group: UBS moves target from 500p to 475p and maintains a buy recommendation.
Petrofac: Exane cuts target from 1840p to 1600p and stays with its neutral rating.

Polymetal International: Citi upgrades to neutral with a target of 529p.

REXAM: Deutsche Bank lowers target from 570p to 550p leaving its buy recommendation unaltered.

SAB Miller: Numis initiates with a target of 3700p and a buy recommendation.

Smith (DS): Bank of America ups target from 262p to 288p and reiterates a buy recommendation.

Stagecoach: Investec places its target prev.: 320p under review and retains an add rating.

Talvivaara Mining: JP Morgan reduces target from 25p to 13p and maintains a neutral rating.

Trifast: N+1 Singer shifts target from 60p to 68p and reiterates a buy recommendation.

U.S. stocks leap as GDP offsets taper talk: Wall Street at Close Report by MarketWatch; June 26, 2013.

By Kate Gibson, MarketWatch 
 
NEW YORK (MarketWatch)U.S. stocks jumped Wednesday, pulling benchmark indexes into positive terrain for the week, as a revision in economic growth calmed concern about U.S. monetary policy. 

Gross domestic product expanded 1.8% from January through March, down from an earlier estimate of 2.4%, the Commerce Department reported

“The downward revision makes some investors feel that perhaps tapering isn’t as imminent as it appeared last week,” said Stuart Freeman, chief equity strategist at Wells Fargo Advisors, referring to market concerns that the Federal Reserve might scale back its $85 billion in monthly bond purchases sooner rather than later. 

“That’s speculation, because if the Fed is seeing more growth ahead, it may not have been a surprise to them that it was a downward revision,” added Freeman. 

Speaking on Bloomberg television Wednesday, Federal Reserve Bank of Richmond President Jeffrey Lacker called the 1.8% GDP figure consistent with his outlook, and said the central bank was not anywhere near to making cuts in its balance sheet. 


Making its 14th triple-digit move out of 18 sessions in June, the Dow Jones Industrial Average DJIA +1.02%  jumped as much as 178 points, and finished with a gain of 149.83 points, or 1%, at 14,910.14, with Boeing Co. BA +2.11%  pacing gains that included all but three of the Dow’s 30 components. 

The S&P 500 SPX +0.96%  climbed 15.23 points, or 1%, to 1,603.26, with health care and utilities leading the gains among its 10 major industry groups. 

The gains come on “continued momentum from markets, having been really battered over the last five days or so,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. 

The S&P 500 remains roughly 70 points below “where we peaked in late May,” said Luschini of the 1,669 close on May 21, a day before Fed Chairman Ben Bernanke said the Fed could begin reducing its monetary easing later this year so long as the economy is strong enough. 

The Nasdaq Composite COMP +0.85%  added 28.34 points, or 0.9%, to 3,376.22. 


For every stock falling, more than three gained on the New York Stock Exchange, where nearly 745 million shares traded. Composite volume approached 3.5 billion. 

Gold futures for August delivery GCQ3 -3.95%  fell $45.20, or 3.6%, to $1,229.80 an ounce on the New York Mercantile Exchange. 

Gold offers “no cash flow and no dividends,” said Freeman, who added that a rising dollar and interest rates also present a bearish case for the metal. 

“On Feb. 15, we advocated stepping out of gold at $1,600 an ounce,” said Luschini, who argued that the commodity now has a cost to carry, given there are positive real interest rates being offered in the bond market. 
 
For every stock falling, more than three gained on the New York Stock Exchange, where nearly 745 million shares traded. Composite volume approached 3.5 billion. 

Gold futures for August delivery GCQ3 -3.95%  fell $45.20, or 3.6%, to $1,229.80 an ounce on the New York Mercantile Exchange. 

Gold offers “no cash flow and no dividends,” said Freeman, who added that a rising dollar and interest rates also present a bearish case for the metal. 

“On Feb. 15, we advocated stepping out of gold at $1,600 an ounce,” said Luschini, who argued that the commodity now has a cost to carry, given there are positive real interest rates being offered in the bond market. 


Why markets misread Bernanke
The Federal Reserve chairman's news conference a week ago was widely seen as a signal that the Fed is preparing to wean the economy off easy money. Not so, David Wessel argues. 

The GDP report, while disappointing, “fits the inertia we’ve had economically, but it’s rear-view mirror, as opposed to recent data, the Fed statement, and what lies ahead,” said Luschini at Janney Montgomery Scott. 

Bernanke said last week that the Fed could start slowing asset purchases later this year if the economy improves further. 

“Especially in light of the FOMC, everything is about what is to come as opposed to revisions to three-month-old data,” said Luschini. 

Equities mostly climbed in Europe and Asia as China’s money-market rates declined in the wake of a statement from the People’s Bank of China that it had moved to stabilize interbank lending rates

Global markets have settled down in part because of “calming comments from the People’s Bank of China regarding its intention to stabilize a fragile credit situation among small banks in that country,” Fred Dickson, chief investment strategist at Davidson Companies, noted in emailed research. 

Kate Gibson is a reporter for MarketWatch, based in New York.

BIV Today's Business News; June 26, 2013.





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CMI I spotPrices as of close of trading in New York; June 26, 2013.


Spot Prices as of close of trading in New York
Wednesday, June 26, 2013

Updated 6/26/2013 Today Change Week Ago Month Ago Year Ago
GOLD $1,231.30 -$45.40 $1,375.30 $1,389.15 $1,574.10
SILVER $18.69 -$0.94 $21.71 $22.58 $27.05
PLATINUM $1,306.10 -$46.60 $1,426.10 $1,455.20 $1,428.80
PALLADIUM $640.90 -$29.50 $703.00 $728.90 $594.00
GOLD/SILVER RATIO 65.88


European stocks extend gains to a second day: European Markets at Close report by MarketWatch; June 26, 2013.




By Sara Sjolin, MarketWatch 
 
LONDON (MarketWatch) European stock markets rose for a second straight day on Wednesday, fueled by a strong session in the U.S. and better-than-expected German consumer-confidence data. 

The Stoxx Europe 600 index XX:SXXP +1.73%  rallied 1.7% to close at 284.54, marking the biggest one-day percentage gain since April. 

Last week, the index dropped to the lowest level in 2013 on concerns the U.S. Federal Reserve will soon scale back its asset purchases. The benchmark is on track for a 5.4% monthly loss, which would mark the biggest one-month percentage decline since May 2012. 

“From a technical perspective, given the large selling bias we have encountered over the last few sessions, with valuations remaining undemanding and U.S. data providing upside support, many fresh buyers have again entered into new longs,” said Atif Latif, director of trading at Guardian Stockbrokers. He remains bullish on equities. 

Among notable movers in the pan-European index, shares of Direct Line Insurance Group PLC UK:DLG +3.79%  climbed 3.8% after the U.K. firm announced plans to cut costs by 130 million pounds ($200 million) and cut about 2,000 jobs. 

Spanish banks gained after Citigroup lifted the country’s banking sector to neutral. Bankinter SA ES:BKT +7.31% , which was upgraded to buy from sell, added 7.3%, and Banco Santander SA ES:SAN +3.74%   SAN +2.63% , which was lifted to neutral from sell, gained 3.7%. The IBEX 35 index XX:IBEX +2.83%  jumped 2.8% to 7,823.00. 

Investors took inspiration from the U.S., where indexes rose for a second day, even as data showed the U.S. economy in the first quarter expanded by 1.8% instead of 2.4% as previously estimated.

“Future doubts over the strength of the recovery could well delay the Fed’s plan to put the brakes on QE later this year, but this revision by itself is not going to be significant enough to cause a U-turn in the Fed’s plan to put the brakes on QE later as we head into 2014. We are all with the Fed in a data dependent world,” said Nancy Curtin, chief investment officer of Close Brothers Asset Management, in emailed comments. 

Data out on Tuesday showed increases in durable-goods orders, new-home sales and consumer confidence, which helped lift markets to sharp gains. The advances came despite the looming prospect that the Federal Reserve may slow its bond purchases if the U.S. economy improves further. Also read: Bill Gross says Fed’s tapering plan may be too hasty.
 

MarketWatch/William Watts
Europe stocks rise for a second straight session on Wednesday.
Most Asia markets also closed in positive territory on Wednesday. But China’s Shanghai Composite CN:SHCOMP -0.41%  dropped 0.4% as interbank money market rates remained unusually high, although down a bit from Tuesday.

German data improve

In Germany, the DAX 30 index DX:DAX +1.66%  climbed 1.7% to 7,940.99. Data showed German consumers are optimistic about the summer, with the GfK consumer-climate study forecasting a value of 6.8 points in July, up from 6.5 points in June. 

The report comes after data out earlier this month pointed to an improvement in the euro-zone economy, with the manufacturing PMI climbing to a 16-month high and German business confidence rising for a second straight month. The brighter spots shouldn’t, however, weaken the case for a further rate cut from the European Central Bank, when the bank meets next week, said Jack Kelly, investment director for global bonds, at Standard Life Investments. 

“The economy is not strong enough although the core data has been resilient recently. The German Ifo was again a good number and we’ve seen improvement in PMIs across Europe, but bank lending and financial conditions, which are a lot of the things the ECB looks at, are still very weak in the periphery and more work needs to be done Europe. We haven’t reached a turning point yet,” he said.
“But I’m not banking on dramatic action [at the meeting next week]. I think they’ll adopt a wait-and-see approach, partly because of the data and also because the choices are politically difficult,” he added. 

France’s CAC 40 index FR:PX1 +2.09%  gained 2.1% to 3,726.04. 

Shares of Unibail-Rodamco SE FR:UL +3.43%  added 3.4% after UBS lifted the property-investment firm to buy from neutral. 

The U.K.’s FTSE 100 index UK:UKX +1.04%  rose 1% to 6,165.48.
Shares of Aberdeen Asset Management PLC UK:ADN +4.76%  jumped 4.8% after HSBC lifted the investment firm to overweight from neutral. 

Outside the major indexes, shares of Afren PLC UK:AFR +7.31%  jumped 7.3% and Lekoil Ltd. UK:LEK +9.64%  surged 9.6% after the two firms said their Ogo well offshore Nigeria discovered a significant light oil field. 

Shares of Etablissementen Franz Colruyt NV BE:COLR +8.32%  jumped 8.3% in Brussels after the discount food retailer late Tuesday reported a 6.2% rise in full-year operating profit.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.


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ADVFN III World Daily Markets Bulletin; June 26, 2013.


ADVFN III World Daily Markets Bulletin
Daily world financial news Wednesday, 26 June 2013


US Market
Stocks Climbing Further Off Recent Lows 
Stocks moved sharply higher at the start of trading on Wednesday, adding to the gains posted in the previous session. The major averages showed strong moves to the upside, climbing further off Monday's two-month lows.
The major averages have pulled back off their highs for the young session but are currently holding on to strong gains. The Dow is up 119.34 points or 0.8 percent at 14,879.65, the Nasdaq is up 27.54 points or 0.8 percent at 3,375.42 and the S&P 500 is up 13.72 points or 0.9 percent at 1,601.75.
The initial strength on Wall Street came as traders continued to pick up stocks at reduced levels following the sell-off seen in the aftermath of the Federal Reserve's recent monetary policy announcement. Easing concerns about a Chinese credit crunch have also generated some buying interest following reassuring comments from the People's Bank of China.
Citing a statement on the bank's website, the New York Times said the Bank of China has provided liquidity support to some financial institutions that meet the demands of macro prudence. Traders are also digesting the Commerce Department's revised report on first quarter GDP, which showed a substantial downward revision to the pace of growth.
The Commerce Department said its final reading on first quarter gross domestic product showed 1.8 percent growth, well below the previous estimate of a 2.4 percent increase. The sharp downward revision to the pace of GDP growth came as a surprise to economists, who had expected the increase to be unrevised.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Until we see the monthly breakdown of the new consumption figures tomorrow, it is unclear exactly how these first-quarter revisions will affect our second-quarter GDP growth forecast, which is currently for a gain of between 1.5% and 2.0%." "But it is possible that the downward revision to the first quarter will require an upward revision to the second quarter," he added.
Biotechnology stocks have shown a strong upward move in early trading, driving the NYSE Arca Biotechnology Index up by 2.3 percent. Affymetrix has helped to lead the biotech sector higher, surging up by 6.9 percent. Early strength is also visible among electronic storage stocks, as reflected by the 1.6 percent gain being posted by the NYSE Arca Disk Drive Index. With the gain, the index has reached a nine-month high.
Housing, commercial real estate, defense, and pharmaceutical stocks are also seeing early strength, while gold stocks are bucking the uptrend amid a sharp drop by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. While Japan's Nikkei 225 Index slumped by 1 percent, Hong Kong's Hang Seng Index surged up by 2.4 percent.
Meanwhile, the major European markets have all moved to the upside on the day. The U.K.'s FTSE 100 Index is up by 1 percent, while the German DAX Index is up by 1.7 percent and the French CAC 40 Index is up by 2.1 percent.
In the bond market, treasuries are regaining some ground after falling sharply over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.9 basis points at 2.52 percent.

Canadian Market
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Teck Resources Gets Regulatory Approval For Renewal Of Share Buy-Back Program
Teck Resources Limited Quote, said it has been informed that the Toronto Stock Exchange or TSX has accepted Teck's notice of intention to make a normal course issuer bid to purchase its Class B subordinate voting shares.
As per the normal course issuer bid, Teck may purchase up to 20 million Class B subordinate voting shares during the period starting June 28, 2013 and ending on June 27, 2014, representing approximately 3.53% of the outstanding Class B subordinate voting shares, or 4.39% of the public float, as of June 19, 2013. 566.84 million Class B subordinate voting shares were issued and outstanding as of June 19, 2013.
The average daily trading volume calculated in accordance with the policies of the TSX for the Class B subordinate voting shares during the six-month period ended May 31, 2013 was 2.11 million. As a result, under the TSX's rules, Teck may purchase a maximum of 526,427 Class B subordinate voting shares being 25% of the average daily trading volume on any one day, except pursuant to permitted exceptions. The actual number of Class B subordinate voting shares to be purchased and the timing of any such purchases will be determined by Teck from time to time as market conditions warrant. All repurchased shares will be cancelled.
Teck stated that it is making the normal course issuer bid because it believes that the market price of their Class B shares may not reflect its underlying value and that the share buy-back program may provide value by reducing the number of shares outstanding at attractive prices.

Under Teck's previously approved normal course issuer bid, during the 12 month period commencing June 27, 2012, Teck purchased an aggregate of 10 million Class B subordinate voting shares at a weighted average price of $29.85 per share. All repurchased shares were cancelled, the company said.

European Market
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European Markets Firmly In Positive Territory
The European markets are firmly in positive territory on Wednesday, extending the previous session's gains, as some key data from the U.S. in the previous session fuelled hopes of an economic recovery. Investors also pondered over comments from the People's Bank of China that the recent volatility in short-term interest rates in its money market is temporary.
A survey by market research firm GfK revealed that German consumer morale is set to climb to its highest level in almost six years in July amid increased optimism about the general economic prospects as well as continued rise in income expectations. Meanwhile, the Ifo Institute trimmed Germany's growth forecast for 2013. As per the revised estimate, the largest Eurozone economy is expected to grow at an annual average rate of 0.6 percent this year, which is slower than the 0.8 percent gain the institute had forecast in its April report.
European Central Bank Governor Mario Draghi said the central bank has done as much as it can to stabilize markets and support the economy. Now governments and parliaments should do all they can to raise growth potential and build a stronger and more stable EMU, he said in a speech to French parliament.
At 7.30 am ET, U.K. Chancellor George Osborne is set to unveil the Spending Review for 2015-16. He will cut spending of Whitehall departments by 11.5 billion pounds. Defence spending is likely to see a reduction, while school and health service will be ring-fenced.
The Euro Stoxx 50 index of eurozone bluechip stocks is gaining 1.99 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 1.62 percent. The German DAX is adding 1.5 percent and the French CAC 40 is up 1.8 percent Switzerland's SMI is climbing 1.7 percent while the UK's FTSE 100 is advancing 1.0 percent.
In Frankfurt, Infineon Technologies is gaining 3.1 percent and SAP is advancing 2.9 percent. RWE is up 2.4 percent. Credit Suisse raised the stock to ''Neutral'' from ''Underperform.'' Metro is gaining 3 percent. Societe Generale initiated the stock with a ''Hold'' rating.
Lanxess is falling 2.5 percent, following a price target cut at Goldman Sachs. Dialog Semiconductor is falling 3.5 percent. Merrill Lynch initiated the stock with an ''Underperform'' rating.
In Paris, Carrefour is climbing 4.3 percent. Credit Agricole, Societe Generale and BNP Paribas are rising between 3.2 percent and 2.8 percent. Unibail-Rodamco is flat after UBS raised the stock to ''Buy'' from ''Neutral.''
In London, Aberdeen Asset Management is surging 5.3 percent. Construction firm Persimmon and insurer Prudential are adding 3.8 percent. Stagecoach, which said underlying annual profit rose and that the new year has started well, is gaining around 4 percent.
Oil and gas group Afren reported a significant find, offshore Nigeria. The stock is surging close to 8 percent. Bunzl is losing 0.6 percent after a trading update Miners are under pressure. Eurasian Natural resources, Randgold, Antofagasta and Anglo American are falling between 3.4 percent and 1.8 percent.
Craneware is plunging more than 11 percent. The firm sees full-year revenue below current market expectations. Novartis is up nearly 3 percent in Zurich. The company said late-breaking results showed that omalizumab met all primary and secondary endpoints of a pivotal Phase III safety registration study in chronic spontaneous urticaria, a chronic and debilitating form of hives with limited approved treatment options.
Grocery retailer Colruyt is gaining 8 percent in Brussels after reporting earnings.

Asia Market
Asian Stocks End Mostly Higher On US Data
Asian stocks rose for the first time in three days on Wednesday, as investors cheered encouraging U.S. data and comments by European Central Bank President Mario Draghi that the central bank is far from exiting its accommodative monetary policy. Money-market rates and the cost of one-year interest-rate swaps both edged down in China after the People Bank of China soothed investors' fears saying it had provided cash to some banks facing temporary shortage and that it stands ready to act again to prevent a possible credit crunch.
Chinese stocks, however, fell further on concerns the worst cash crunch in a decade will worsen the country's economic slowdown. The benchmark Shanghai Composite index ended 0.4 percent lower at 1,952, extending losses for a sixth consecutive session. Hong Kong's Hang Seng index rallied 2.4 percent, as investors went bargain hunting in mainland banks after recent sharp losses.
Japanese share fell sharply, taking cues from weakness in the Chinese market. The benchmark Nikkei average dropped 135 points or a percent to 12,834, while the broader Topix index shed 0.9 percent. Battered China-linked shares like Komatsu, Daikin Industries and Hitachi Construction Machinery erased early gains to end down between 0.4 percent and 2.1 percent.
SoftBank Corp edged down 0.2 percent after shareholders of Sprint Nextel Corp voted in favor of a sweetened takeover offer from the Japanese mobile operator. Tech stocks Canon and Tokyo Electron lost 2-4 percent, while Toyota Motor gained half a percent and Sumitomo Mitsui Financial Group advanced 0.6 percent.
Australian shares rallied, snapping four days of losses, as fears that a liquidity shortage could threaten China's economic growth eased. The benchmark S&P/ASX 200 jumped 2 percent early in the session before paring some gains to end up 76 points or 1.6 percent at 4,732. Lenders such as Commonwealth, NAB, Westpac and ANZ all rose about 2 percent each, while miners Fortescue, BHP and Rio Tinto closed up between 2.4 percent and 3.3 percent. Gold miner Newcrest ended on a flat note even as gold prices slumped to a 34-month low.
Aquila Resources rose 2 percent after the company said it is delaying construction of its Eagle Downs coal project in Queensland to keep a lid on costs. Paladin Energy slumped 6.8 percent as it delayed until August a deal to sell a minority stake in its flagship Langer Heinrich mine in Namibia.
Seoul shares ended a choppy session largely unchanged, with the recent spike in global bond yields causing some discomfort. Reversing early losses, the benchmark Kospi average ended up 3 points or 0.2 percent at 1,783 in relatively thin trading, supported by gains in technology stocks.
LG Electronics and SK Hynix rose more than 2 percent each, but heavyweight Samsung Electronics dropped 2.8 percent to a 9-1/2-month low ahead of its June quarter earnings due next week. Woori Finance Holdings soared 5.4 percent after the government decided to split the company into three groups as part of the efforts to sell its majority stake in three stages by the end of 2014.

New Zealand shares rebounded from a three-month low, with sentiment bolstered by upbeat U.S. data. The benchmark NZX-50 rallied 1.8 percent to 4,394, with 39 of its components advancing. Vital Healthcare soared 9.3 percent after the medical and healthcare property investor said it would raise $39.2 million from a rights issue.
Retailers bounced back with Kathmandu Holdings climbing 6.7 percent, while the Warehouse Group and Hallenstein Glasson Holdings rose 3-4 percent. Auckland International Airport and Sky Network Television gained 4-5 percent, heavyweight Telecom rallied 3.4 percent and Fletcher Building, the nation's largest construction company, closed up 2.6 percent. OceanaGold plummeted 11 percent to its lowest level since September 2009.
Elsewhere, India's Sensex was up 0.1 percent, Indonesia's Jakarta Composite index was gaining a whopping 4.5 percent, Malaysia's KLSE Composite rose 0.7 percent, Singapore's Straits Times was moving up half a percent and the Taiwan Weighted average rallied 1.6 percent.
Singapore's industrial production grew more than expected in May, mainly led by biomedical manufacturing, the latest figures from Economic Development Board showed. Output increased 2.1 percent in May from a year earlier, beating estimates for a 0.1 percent increase.

Commodities
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Crude Slips Below $95

The price of crude oil was moving lower Wednesday morning as the US dollar strengthened after the recent batch of upbeat economic data.

Light Sweet Crude Oil futures for August delivery, slipped $0.40 to $94.92 a barrel. Yesterday oil extended gains for a second session ahead of the weekly supply data, on a slew of upbeat economic data out of the U.S. with an uptick in durable goods orders and home sales in May, which also renewed concerns the Fed Reserve may soon taper its bond buying program. As well, concerns over supply disruption from Canada due to floods impacting oil pipelines helped prop oil prices. Tuesday after the market hours, the API said crude oil inventories were unchanged, while gasoline inventories rose 1.3 million barrels in the weekended June 21.
This morning the U.S. dollar was advancing toward its one-month high versus the euro, sterling and the Swiss franc, while trading flat versus the yen.
In economic news from the euro zone, German consumer confidence is set to improve in July, reports said citing results of a survey published by market research group GfK. The forward-looking consumer confidence index for July was at 6.8 compared with 6.5 in June. Economists had forecast the index to stay unchanged at the June level.
Traders will look to the final GDP estimate for the first quarter from the Commerce Department, due out at 8:30 am ET. Economists expect GDP growth to be left unrevised at 2.4 percent. Today during trading hours, the EIA will release its crude oil inventories report for the weekended June 21.
Gold Dips To 3-year Low

The price of gold dipped to a fresh three-year low Wednesday morning after recent batch of upbeat economic data strengthened views that the US Federal Reserve would scale down its stimulus program. A number of brokers have also slashed their forecast for the gold price this week.

Gold for August delivery, the most actively traded contract, lost $45.20 to $1,229.90 an ounce. Yesterday, gold settled lower near a three-year low on a slew of upbeat economic data out of the U.S. with an uptick in durable goods orders and home sales in May, refueling concerns the Fed Reserve may soon make a move to cut its bond buying program. Meanwhile, the dollar strengthened against a basket of major currencies on cues from the encouraging macroeconomic data. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down from 985.73 tons to 969.50 tons, the lowest since February 2009.
Elsewhere, the prices of silver and platinum were trading lower in morning deals.
From the U.S., the Commerce Department will release its final GDP estimate for the first quarter at 8.30 am ET. Economists expect GDP growth to be left unrevised at 2.4 percent.