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Aug 12, 2014

RTTNews| Evening Market Wrap - August 12, 2014: Stocks Close Modestly Lower Amid Geopolitical Concerns.


Stocks Close Modestly Lower Amid Geopolitical Concerns - U.S. Commentary

Stocks Close Modestly Lower Amid Geopolitical Concerns - U.S. Commentary
8/12/2014 4:27 PM ET
While selling pressure remained relatively subdued, stocks moved modestly lower over the course of the trading day on Tuesday. The losses on the day partly offset the strength that was seen in the previous session.
The major averages ended the day in negative territory but well off their lows for the session. The Dow edged down 9.44 points or 0.1 percent to 16,560.54, the Nasdaq fell 12.08 points or 0.3 percent to 4,389.25 and the S&P 500 slipped 3.17 points or 0.2 percent to 1,933.75.
The weakness on Wall Street partly reflected lingering geopolitical concerns amid a focus on developments in Ukraine.
The latest reports have indicated that Russia is sending a convoy of 280 trucks carrying humanitarian aid to eastern Ukraine.
Officials from the Ukrainian government have suggested that the convoy will not be allowed to cross the border due to concerns that the aid may be used as a pretense for launching a military intervention.
Nonetheless, trading activity remained somewhat subdued amid another quiet day on the U.S. economic front, with traders looking ahead to the release of some key data in the coming days.
The Commerce Department is scheduled to release its closely watched retail sales report on Wednesday, while reports on weekly jobless claims, producer prices and industrial production may attract attention later in the week.
Among individual stocks, shares of Nuance Communications (NUAN) came under pressure after the speech recognition software maker provided disappointing guidance.
Cloud-based hosting services provider Rackspace (RAX) also posted a notable loss despite reporting second quarter earnings that came in line with analyst estimates.
On the other hand, shares of Intercept Pharmaceuticals (ICPT) moved sharply higher after the biopharmaceutical company released positive data on its liver disease drug.
Molecular diagnostics company Exact Sciences (EXAS) also moved to the upside after the FDA approved its non-invasive colon cancer screening test.
Sector News
A majority of the major sector indices ended the day in the red, although most showed only modest moves to the downside.
However, significant weakness was visible among electronic storage stocks, as reflected by the 1.4 percent loss posted by the NYSE Arca Disk Drive Index. Hutchinson Technology (HTCH) and Western Digital (WDC) posted notable losses.
Natural gas stocks also came under pressure on the day, dragging, the NYSE Arca Natural Gas Index down by 1.1 percent. The weakness in the sector came despite an increase by the price of natural gas.
Networking, oil, and airline stocks saw more moderate weakness, while gold stocks bucked the downtrend. The NYSE Arca Gold Bugs Index surged up by 1.9 percent to a five-month closing high.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index crept up by 0.2 percent, while China's Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets all ended the day in the red. While the U.K.'s FTSE 100 Index closed just below the unchanged line, the French CAC 40 Index fell by 0.9 percent and the German DAX Index tumbled by 1.2 percent.
In the bond market, treasuries moved modestly lower after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.2 basis points to 2.442 percent.
Looking Ahead
Trading on Wednesday may be driven by reaction to the retail sales report, but traders are also likely to keep an eye on developments overseas.

GATA | THE GATA DISPATCH - August 12, 2014: JPMorgan joins Goldman in designing derivatives for a new generation.

JPMorgan joins Goldman in designing derivatives for a new generation

Submitted by cpowell on 09:01AM ET Tuesday, August 12, 2014. Section: Daily Dispatches
By Sridhar Natarajan and Alastair Marsh
Bloomberg News
Tuesday, August 12, 2014
Derivatives that helped inflate the 2007 credit bubble are being remade for a new generation.
JPMorgan Chase & Co. is offering a swap contract tied to a speculative-grade loan index that makes it easier for investors to wager on the debt.
Goldman Sachs Group Inc. is planning as much as 10 billion euros ($13.4 billion) of structured investments that bundle debt into top-rated securities, while ProShares last week started offering exchange-traded funds backed by credit-default swaps on company debt.
Wall Street is starting to return to the financial innovation that helped extend the debt rally seven years ago before exacerbating the worst financial crisis since the Great Depression. The instruments are springing back to life as investors seek new ways to boost returns that are being suppressed by central bank stimulus. At the same time, they're allowing hedge funds and other investors to bet more cheaply on a plunge after a 145 percent rally in junk bonds since 2008.
"The true sign of a top is when you have these new structures piling up," said Lawrence McDonald, a chief strategist at Newedge USA LLC, and author of the book "A Colossal Failure of Common Sense" about the 2008 demise of Lehman Brothers Holdings Inc. "At the top of the market in 2007, there were these types of innovation and many investors didn't realize about it at that time. These products are a clear risk indicator."
JPMorgan is marketing total-return swaps that are tied to Markit's iBoxx USD Liquid Leverage Loan index, a benchmark for the $750 billion leveraged loan market, according to a July 11 Morgan Stanley report. The swaps allow an investor to pay a fee in exchange for receiving the total return on the index at the expiration of the trade. If the measure posts a loss, the investor compensates the counter-party to the trade.
Total-return swaps allow investors to amplify gains because they can wager on a large pool of debt while setting aside a relatively smaller amount of collateral to back the trade. While the derivatives have been around for years, these are the first to be tied to the index, providing investors a benchmark that can fuel faster and easier trading similar to how the credit-default swaps market ballooned in the years before the financial crisis.
Jessica Francisco, a spokeswoman for JPMorgan, declined to comment.
"Some funds have to use more leverage to get the sort of returns that their investors expect, Peter Tchir, Brean Capital LLC's head of macro strategy in New York, said in a telephone interview. "We are moving into a phase where there will be more esoteric products. It does start setting up more problems for the future."
The Federal Reserve's extraordinary stimulus measures unleashed after the credit crisis to spur growth, have pushed investors to sacrifice safeguards in their search for returns as benchmark interest rates remain close to zero for a sixth year. Pacific Investment Management Co. popularized the term "new normal" to describe an era of below-average economic growth and low interest rates following the financial crisis.
The new swaps will also feed a growing appetite to hedge against losses in leveraged loans, Sivan Mahadevan, a strategist at Morgan Stanley, wrote in the report.
Investors withdrew $1.5 billion from U.S. funds that buy leveraged loans in the week ended Aug. 6, the largest weekly outflow in about three years, according to data provider Lipper.
Goldman Sachs plans to sell its first structured bonds with a 1 billion euros offering, according to a June 24 report from Standard & Poor's. The notes, which may be sold in September, are backed by a revolving pool of fixed-income assets, including asset-backed securities.
The proposed financings have been compared by analysts at Societe Generale SA to collateralized debt obligations, that fueled the housing boom by packaging risky loans into securities that were sold to investors, often with top AAA ratings.
The securities, the first of their kind, also use a total return swap and have features similar to covered bonds, a type of secured note backed by mortgages and public sector borrowings. The financing, backed by Goldman Sachs and Japan's Mitsui Sumitomo Insurance Co., would be rated AAA, according to to S&P.
"The current state of play where yields are very low and there are more redemptions than issuance in certain assets, such as covered bonds, leave investors looking for innovative investment opportunities, so long as they pay up," said Cristina Costa, a senior covered bond analyst at Societe Generale in Paris.
Sophie Ramsay, a spokeswoman for Goldman Sachs in London, declined to comment on the notes.
ProShares started trading an exchange-traded fund last week that allows individual investors to bet against junk bonds with credit-default swaps. Credit-default swaps allow buyers to wager on the credit market or hedge their exposure.
The ProShares CDS Short North American High Yield Credit ETF, which is listed on BATS Exchange Inc. under the ticker WYDE, will invest at least 80 percent of its assets in credit swaps tied to a benchmark index, according to a July 23 filing.
Intercontinental Exchange Group Inc. was pitching derivatives contracts that would allow investors to wager on U.S. homeowner defaults, Bloomberg News reported in May.
The emergence of new derivatives is reminiscent to the period leading up to the crisis, said Stephen Blumenthal, the chief executive officer of investment firm CMG Capital Management.
"Wall Street has always had a habit of piling on products when there's an appetite for the asset class," Blumenthal, who oversees $600 million in assets, said in a telephone interview. "That's under the Code Red category."
The riskiest kind of derivatives added to losses for investors during the credit crisis. The investments included so-called synthetic CDOs that during 2006 and 2007 loaded their holdings with credit swaps linked to the debt of financial companies including Lehman, Washington Mutual Inc. and bond insurer Ambac Financial Group Inc., all of which collapsed amid the 2008 market seizure.
"You didn't know the depths of the risk you really had," Blumenthal said of the subprime paper rolled up into AAA-rated products. "We might not be there yet but we are in a frothy environment today."
Former Fed Chairman Paul Volcker has blamed credit swaps and CDOs for taking the financial system "to the brink of disaster."
"You can be near certain that some big funds are going to a bank right now and saying I want to go short and how can we create a vehicle that allows us to put on a big-sized trade," Newedge's McDonald said. "The genesis of the next crisis will not be on the sell side. Likely, it will come at us from where there's not enough liquidity, for many parts of the buy side."

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DealBook P.M. Edition - August 12, 2014: Big Bond Insurer Syncora Files Objection to Detroit's Bankruptcy Plan

For the latest updates, go to dealbook.nytimes.com »
TUESDAY, AUGUST 12, 2014
TOP STORY
Gerald E. Rosen, the federal judge who is mediating the bankruptcy case, at the Detroit Institute of Arts.
Big Bond Insurer Syncora Files Objection to Detroit's Bankruptcy Plan Syncora Guarantee, which could face millions of dollars in losses, said in a court filing on Tuesday that the city's exit strategy had been tainted by the biases of its chief mediator, whose job it was to impartially negotiate out-of-court settlements for as many of the city's outstanding debts as possible.

For the latest updates, go to dealbook.nytimes.com »
DEALBOOK HIGHLIGHTS
Winfried Bischoff, when he was named acting chief executive of Citigroup in 2007.
Winfried Bischoff Joins Board of JPMorgan in EuropeThe appointment of Mr. Bischoff, who stepped down as chairman of Lloyds Banking Group in April, comes as JPMorgan and other banks seek to strengthen their international governance and put a greater emphasis on culture.
The Buffalo Bills have been up for sale after Ralph Wilson, the founder and longtime owner of the team, died in March.
Buffalo Bills Are Said to Draw Jeffrey Gundlach as a Bidder The bond investor Jeffrey Gundlach is reported to be interested in a bid for the Buffalo Bills, inspiring several corny finance jokes on Twitter suggesting new names for the football team.
The failure of the Revel resort comes a little over two years since it opened in a bid to reinvigorate the long-declining gambling industry in Atlantic City.
Revel Resort in Atlantic City, Already Abandoned by Morgan Stanley, to Close The decision to shut down the Revel resort in Atlantic City also comes more than four years after Morgan Stanley, the original backer, walked away from what was even then a costly folly.
Kinder Morgan's power facility in Jackson, Mich. The company will consolidate four related pipeline companies into one.
After Kinder Morgan Deal, What's Next for Master Limited Partnerships? The pace of companies reincorporating as master limited partnerships has slowed since the I.R.S. has halted so-called private letter rulings on such deals.
Ganji.com is an operator of online and mobile-based classifieds in China.
Carlyle Invests in Chinese Classified Ad Site Ganji.comLike its rivals in private equity, the Carlyle Group has been searching for unusual investment opportunities and has shown a new willingness to take smaller stakes in companies.
Treasury Wine Estates, based in Australia, owns Penfolds and other global wine labels.
Reuters Breakingviews: Private Equity Battle for Treasury Wine Could Signal Its End as a Public Company A fragmented market and low brand loyalty suggests the Treasury Wine Estates, which operates Penfolds and other brands, may not be suitable for public company treatment, Una Galani writes in Reuters Breakingviews.
LOOKING AHEAD
Eurozone to Release 2nd-Quarter G.D.P. Data Just how fragile the eurozone economic recovery has been will become clearer on Thursday when Eurostat, the European Union statistics agency, releases its second-quarter estimate for gross domestic product. The economy of the 18-nation currency union grew an anemic 0.2 percent in the first quarter, compared with the previous quarter. Data from Italy last week showed that the nation's economy fell back into recession, with G.D.P. unexpectedly shrinking in the second quarter after contracting the previous quarter. And many economists expect that the German economy, the region's largest, shrank in the second quarter after growing for a year.
Energy Bills Come Due in Struggling Puerto Rico Thursday is the latest deadline for Puerto Rico's struggling electric power authority to make overdue payments on two lines of credit that it uses to buy fuel for its power plants. The power authority, known as Prepa, ran short of cash earlier this summer, but its lenders gave it a breather, rather than forcing what bondholders fear could be a messy restructuring that could send ripples through Puerto Rico's heavily indebted economy. Citigroup provides a line of credit for roughly $250 million and a bank syndicate provides a $550 million line.
Modest Gains Expected in U.S. Producer Prices On Friday, the Labor Department will release Producer Price Index data for July. Although the drop in the unemployment rate and accelerating economic growth in the second quarter have prompted fears of renewed inflation, most experts expect this report to be tame. The consensus calls for a 0.2 percent rise in the index, which is below the 0.4 percent gain for June.
For the latest updates, go to dealbook.nytimes.com »

Forex Contracts Daily News Info | CMI Spot Prices as of close of Trading in New York August 12, 2014.



Spot Prices as of close of trading in New York

Tuesday, August 12, 2014

GOLD

TODAYCHANGEWEEK AGOMONTH AGOYEAR AGO
$1,310.95+$0.10$1,285.35$1,337.55$1,322.45

SILVER

TODAYCHANGEWEEK AGOMONTH AGOYEAR AGO
$19.93-$0.17$19.85$21.49$21.42

PLATINUM

TODAYCHANGEWEEK AGOMONTH AGOYEAR AGO
$1,476.30+$1.50$1,458.00$1,515.90$1,501.90

PALLADIUM

TODAYCHANGEWEEK AGOMONTH AGOYEAR AGO
$881.50+$3.80$852.40$876.40$741.90

GOLD/SILVER RATIO

65.78

WSJ | Biggest Decliners Closing August 12, 2014.

Biggest Decliners Closing
Biggest Decliners
4:32 pm ET 08/12/2014
NYSE
ISSUEVOLUMEPRICECHG% CHG
Kate Spade (KATE)52,598,872$29.00-9.87-25.39
Millennial Media (MM)10,507,5072.52-0.43-14.58
OCI Partners (OCIP)539,05818.00-2.45-11.98
Continental Building Products (CBPX)204,15013.39-1.27-8.66
Forest Oil (FST)2,551,3981.83-0.17-8.50
ReneSola ADS (SOL)4,282,1842.60-0.24-8.45
Textura (TXTR)371,57227.65-2.52-8.35
Phoenix New Media Cl A ADS (FENG)1,803,66510.28-0.92-8.21
Pulse Electronics (PULS)9,6522.31-0.19-7.56
Matador Resources (MTDR)1,257,53325.15-1.76-6.54
USEC (USU)274,3684.68-0.31-6.21
FutureFuel (FF)489,36614.23-0.92-6.07
Alpha Natural Resources (ANR)7,570,2043.77-0.24-5.99
Endeavour Silver (EXK)2,650,2935.88-0.37-5.92
Nimble Storage (NMBL)580,98126.39-1.66-5.92
Goodrich Petroleum (GDP)1,294,20818.55-1.16-5.89
Noranda Aluminum Holding (NOR)1,463,3544.16-0.26-5.88
Rackspace Hosting (RAX)12,594,38529.50-1.81-5.78
New Home (NWHM)90,68413.31-0.81-5.74
Molycorp (MCP)7,243,1312.19-0.13-5.60
Resolute Energy (REN)1,410,5747.43-0.44-5.59
CHC Group (HELI)194,4146.30-0.37-5.55
Trina Solar ADS (TSL)5,056,26911.27-0.62-5.21
GAIN Capital Holdings (GCAP)922,4426.31-0.34-5.11
Gray Television (GTN)585,08811.25-0.60-5.06
 
Nasdaq
ISSUEVOLUMEPRICECHG% CHG
Dendreon (DNDN)21,436,951$1.40-0.72-33.96
UBIC ADS (UBIC)29,87419.97-3.53-15.02
Turtle Beach (HEAR)561,2667.17-1.12-13.51
Intersections (INTX)704,0643.62-0.54-12.98
Acorn Energy (ACFN)288,0161.88-0.27-12.56
MannKind (MNKD)44,178,7147.48-1.05-12.31
Spanish Broadcasting System Cl A (SBSA)10,9344.74-0.66-12.22
Egalet (EGLT)27,4319.01-1.15-11.32
Cellular Dynamics International (ICEL)109,39811.37-1.45-11.31
Lo-Jack (LOJN)190,0774.58-0.57-11.07
Marchex Cl B (MCHX)844,9859.11-1.08-10.60
Kandi Technologies Group (KNDI)4,483,24317.21-1.88-9.85
Nuance Communications (NUAN)12,117,74516.47-1.63-9.01
Black Diamond (BDE)905,8668.09-0.78-8.79
51job ADS (JOBS)653,05234.89-3.36-8.78
Geron (GERN)4,279,9792.32-0.22-8.66
P&F Industries Cl A (PFIN)33,4387.31-0.66-8.28
SCYNEXIS (SCYX)3,9006.33-0.57-8.23
Novadaq Technologies (NVDQ)434,39712.72-1.13-8.16
Teletech Holdings (TTEC)283,13826.41-2.33-8.11
Applied Genetic Technologies (AGTC)54,38819.28-1.70-8.10
Repligen (RGEN)561,83220.53-1.81-8.10
Omeros (OMER)730,00112.90-1.04-7.46
Applied Optoelectronics (AAOI)306,74716.98-1.27-6.96
Virco Manufacturing (VIRC)14,5452.69-0.20-6.92
 
NYSE Arca
ISSUEVOLUMEPRICECHG% CHG
Direxion Daily Natural Gas Related Bull 3x Shares (GASL)104,022$34.25-2.71-7.33
iPath Global Carbon ETN (GRN)2,7977.43-0.50-6.27
Direxion Daily Gold Miners Bear 3x Shares (DUST)8,130,34414.18-0.77-5.15
PowerShares S&P Emerging Markets High Beta Portfolio (EEHB)6,09823.10-0.79-3.30
UBS AG 1xMonthly Short E-TRACS for Alerian MLP Infrastructure Total Return Index 2040 (MLPS)6,95010.47-0.32-2.97
iPath Dow Jones UBS Livestock Subindex Total Return ETF (COW)27,08629.57-0.84-2.76
iPath Dow Jones -UBS Coffee Subindex Total return Coll ETN (CAFE)4,10623.48-0.63-2.62
iPath DJ-UBS Coffee Subindex Total Return ETN (JO)59,11735.66-0.95-2.59
RBS Gold Trendpilot ETN (TBAR)6,37625.58-0.65-2.46
First Trust ISE-Revere Natural Gas Index Fund (FCG)325,27720.06-0.50-2.43
ProShares UltraPro Russell2000 (URTY)253,13279.49-1.69-2.08
Direxion Daily Energy Bull 3x Shares (ERX)218,965113.21-2.39-2.07
Direxion Daily Small Cap Bull 3x Shares (TNA)8,710,53869.25-1.45-2.05
VelocityShares 3x Long Crude ETN (UWTI)5,81031.40-0.65-2.03
Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF)75,38864.15-1.30-1.99
E-TRACS UBS Bloomberg CMCI Livestock ETN (UBC)27,37522.78-0.45-1.94
AB Svensk Exportkredit ELEMENTS linked to MLCX Grain Index Total Return (GRU)29,7145.06-0.10-1.94
Market Vectors-Solar Energy ETF (KWT)2,73879.53-1.55-1.91
SPDR S&P Oil&Gas Exploration&Production ETF (XOP)5,657,71174.59-1.42-1.87
iPath DJ-UBS Cotton SubindexTotal Return ETN (BAL)4,40642.47-0.80-1.85
Guggenheim Solar ETF (TAN)146,83740.71-0.70-1.69
ProShares Ultra VIX Short-Term Futures ETF (UVXY)7,005,01131.39-0.53-1.66
PowerShares DB 3x Long 25+ Year Treasury Bond Exchange Traded Note (LBND)15,56342.72-0.72-1.66
PowerShares Exch-Tr Fund Trust Dynamic Energy Exploration&Production Portfolio (PXE)12,75035.67-0.58-1.59
E-TRACS UBS Bloomberg CMCI Agriculture ETN (UAG)45,87523.31-0.37-1.56
 
Composite
ISSUEVOLUMEPRICECHG% CHG
Dendreon (DNDN)21,436,951$1.40-0.72-33.96
Amedica (AMDA)216,2492.37-1.03-30.29
Kate Spade (KATE)52,598,87229.00-9.87-25.39
Tekmira Pharmaceuticals (TKMR)12,746,95818.61-5.19-21.81
Interphase (INPH)109,2462.65-0.63-19.21
UBIC ADS (UBIC)29,87419.97-3.53-15.02
Millennial Media (MM)10,507,5072.52-0.43-14.58
Turtle Beach (HEAR)561,2667.17-1.12-13.51
Intersections (INTX)704,0643.62-0.54-12.98
Acorn Energy (ACFN)288,0161.88-0.27-12.56
MannKind (MNKD)44,178,7147.48-1.05-12.31
Spanish Broadcasting System Cl A (SBSA)10,9344.74-0.66-12.22
OCI Partners (OCIP)539,05818.00-2.45-11.98
Egalet (EGLT)27,4319.01-1.15-11.32
Cellular Dynamics International (ICEL)109,39811.37-1.45-11.31
Lo-Jack (LOJN)190,0774.58-0.57-11.07
Real Goods Solar Cl A (RGSE)1,534,9022.05-0.25-10.87
Marchex Cl B (MCHX)844,9859.11-1.08-10.60
GreenHunter Resources (GRH)596,3341.99-0.23-10.36
Radio One Cl D (ROIAK)292,1692.91-0.32-9.91
Kandi Technologies Group (KNDI)4,483,24317.21-1.88-9.85
Galectin Therapeutics (GALT)1,029,5434.60-0.50-9.80
Radio One (ROIA)3,8982.94-0.29-9.01
Nuance Communications (NUAN)12,117,74516.47-1.63-9.01
Galena Biopharma (GALE)2,946,4812.79-0.27-8.82
 
See All Decliners
 
Footnotes
Includes common, closed end funds, ETFs, ETNs and REITS with prior day close of $2 a share or higher, with volume of at least 2,000.
x - stock is trading ex-dividend
Source: WSJ Market Data Group