Stocks Moving Moderately Lower In Early Trading
Stocks have
moved modestly lower in early trading on Friday after ending each of
the two previous sessions roughly flat. The major averages have slipped
into negative territory, although selling pressure has remained subdued.
The major averages are currently posting moderate losses, near their lows for the young session. The Dow is down 61.57 points or 0.5 percent at 13,103.62, the Nasdaq is down 14.39 points or 0.5 percent at 3,004.25 and the S&P 500 is down 6.19 points or 0.4 percent at 1,396.61.
The
early weakness on Wall Street is partly due to disappointing Chinese
trade data, which has led to renewed concerns about the outlook for the
global economy.
A report released by China's General
Administration of Customs showed that Chinese exports grew by just 1
percent year-over-year in July, decelerating from the 11.3 percent
growth reported for June. Economists had forecast an 8 percent increase.
Chinese imports
also rose at a slower rate in July, up 4.7 percent compared to the 6.3
percent increase in June. Economists had expected import growth to pick
up to a 7 percent pace.
In U.S. economic news, the Labor Department recently released a report showing an unexpected decrease in import prices in the month of July.
The
report showed that import prices fell by 0.6 percent in July after
tumbling by 2.4 percent in June. The continued drop surprised
economists, who had expected import prices to increase by 0.2 percent.
Meanwhile, export prices
rose by 0.5 percent in July following a 1.7 percent decrease in the
previous month. Economists had expected export prices to edge down by
0.1 percent.
Natural gas stocks have shown a notable move to the downside, dragging the NYSE Arca Natural Gas Index down by 1.5 percent. With the loss, the index is pulling back off the three-month closing high that it set on Thursday.
Steel, networking, and oil stocks have also come under pressure, moving lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index fell by 1 percent, while Hong Kong's Hang Seng Index ended the day down by 0.7 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has edged down by 0.3 percent, the German DAX Index and the French CAC 40 Index are both down by 0.9 percent.
In the bond market, treasuries are moving back to the upside after coming under pressure in recent sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.6 basis points at 1.642 percent.
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TSX Dips At Open Friday
Bay street stocks
moved down at open Friday amid selling in commodities, with the
S&P/TSX Composite Index slipping 40.75 points or 0.34 percent to
11,817.38.
Among gold stocks, Detour Gold was down 2
percent. Precious metals miner Osisko Mining Corp. lost close to 5
percent even after it swung to profit in second-quarter.
In the oil patch, Niko Resources and Crescent Point Energy were down over 3 percent each.
Oil and natural gas firm Legacy Oil + Gas Inc. lost close to 3 percent despite reporting higher second-quarter funds from operations.
Meanwhile, smartphone maker Research In Motion jumped 8 percent amid reports that IBM is eying its enterprise unit.
Automotive supplier Magna International Inc. gained about 4 percent after reporting a 24 percent increase in profit for the second quarter.
Wood products company Stella-Jones Inc. edged up 1 percent after reporting improved second-quarter net income.
The
price of crude oil was moving lower Friday morning amid demand concerns
after today's data revealed China's economy continued to shrink amid
declining import and exports.
Earlier today the IEA trimmed its
2013 oil demand growth forecast by 0.40 mbd to 90.50 mbd from the
earlier 90.90 mbd, on weaker economic growth assumptions. For the year
2012, the IEA now forecasts oil demand growth of 0.90 mbd to 89.60 mbd.
Crude for September was down $1.56 to $91.80 a barrel.
The price
of gold was ticking lower Friday morning amid a firm U.S. dollar, with
stimulus expectations from global central banks supporting gold price.
Gold for December was down $10.30 to $1,609.90 an ounce.
In corporate news from Canada, Brookfield Asset Management
reported a sharply lower second-quarter net profit at $138 million or
$0.17 per share, from $838 million or $1.26 per share a year ago.
Analysts were expecting the company to report earnings of $0.37 per
share this quarter.
Software solutions provider Open Text
Corp. reported a sharp slump in its fourth-quarter net income at $7.97
million or $0.14 per share compared to $28.59 million or $0.49 per share
in the same quarter last year. However, non-GAAP earnings rose to $1.17
per share from $1.05 per share in the year ago quarter, missing
consensus estimates at $1.16 per share for the quarter.
Precious metals miner Osisko Mining Corp. swung
to profit in second-quarter, reporting net income of C$13.3 million or
C$0.03 per share, compared to a net loss of C$23.8 million or C$0.06 per
share in the comparable quarter last year. Analysts were expecting the
company to report earnings of $0.07 per share this quarter.
Wood products company Stella-Jones Inc.
said second-quarter net income grew to C$20.84 million or C$1.30 per
share, from C$17.27 million or C$1.08 per share a year before. Analysts
were expecting the company to report earnings per share of C$1.22 for
the quarter.
Global energy services company Shawcor Ltd.
Thursday reported second-quarter net income of C$21.40 million or C$0.30
per share, compared to C$15.70 million or C$0.21 per share in the
previous year quarter.
Silver streaming company Silver Wheaton Corp.
reported a lower second quarter net income at $141.4 million or $0.40
per share compared to $148.1 million or $0.42 per share in the same
period last year. Analysts expected the company to earn $0.37 per share
this quarter.
Crude oil and natural gas transporter Pembina Pipeline Corp.
reported improved second quarter net profit of C$80.4 million compared
to C$48.0 million last year. On a per-share basis, earnings declined to
C$0.28 from C$0.29 on higher share count.
Renewable energy company Algonquin Power & Utilities Corp.
reported lower second-quarter net earnings of $6.1 million or $0.04 per
share compared to $7.3 million or $0.07 per share last year. Adjusted
net earnings were $6.9 million or $0.05 per share compared to $8.2
million or $0.07 per share last year. Analysts were expecting the
company to report earnings of $0.04 per share for the quarter.
Gaming and entertainment company Great Canadian Gaming Corp.
reported a decline in its second quarter profit at C$2.7 million or
C$0.03 per share, compared to C$10.3 million or C$0.12 per share last
year. Analysts predicted the company to earn C$0.15 per share for the
quarter.
Automotive supplier Magna International Inc. on Thursday reported a 24 percent increase in profit for the second quarter and affirmed its sales outlook for fiscal 2012.
In economic news, Statistics Canada
said employment in July declined by 30,000, resulting in a 0.1
percentage points rise in unemployment, which now stands at 7.3 percent.
However, on a yearly basis employment increased 0.8 percent or 139,000.
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European Markets In Negative Territory After China Data
The European markets
are in negative territory in afternoon trading Friday, after data from
China showed that export and import growth slowed more than expected in
July. The Asian markets also closed lower on the Chinese data.
Exports grew
just 1 percent year-on-year in July, decelerating from the 11.3 percent
growth reported for June, the latest figures from China's General
Administration of Customs showed. Overseas purchases increased at a pace
of 4.7 percent year-on-year compared to a 6.3 percent rise in June.
Closer
home, the U.K.'s output price inflation eased to 1.7 percent in July
from a revised 2 percent in June, the latest figures from the Office for
National Statistics showed.
A report released by French
statistical office INSEE showed that French industrial output remained
unchanged in June from the previous month. Manufacturing output was up
merely 0.1 percent.
The Euro Stoxx 50 index of eurozone
bluechip stocks is falling 0.84 percent, while the Stoxx Europe 50
index, which includes some major U.K. companies, is losing 0.49 percent.
The German DAX is falling 0.88 percent and the French CAC 40 is losing 1.02 percent. The UK's FTSE 100 is dropping 0.38 percent and Switzerland's SMI is down 0.41 percent.
In Frankfurt, Commerzbank is losing 2.4 percent after Deutsche Bank cut its rating on the stock. Deutsche Bank is falling 0.2 percent.
Hannover Re reported a marginal increase in second-quarter operating profit that missed analysts' consensus estimates. The stock is falling 3.5 percent.
Fraport is falling 1.3 percent. The owner and operator of Frankfurt Airport reported growth in passenger traffic at all its airports.
Steel giant ThyssenKrupp reported a decline in its third-quarter earnings, but profit and sales beat analysts' estimates. The stock is surging 6 percent.
Deutz is gaining 1.3 percent. UBS raised the stock to "Neutral" from "Sell."
SMA Solar
is advancing 1.5 percent on a positive recommendation from UBS. In
Paris, Peugeot is down 1.1 percent while Renault is losing 0.6 percent.
Alcatel Lucent is climbing 3.6 percent, thus leading the gainers. Societe Generale is gaining 1.5 percent and Credit Agricole is up 0.5 percent. BNP Paribas is losing modestly.
In London, Bunzl is
declining 3.7 percent, reportedly on a broker downgrade. Prudential is
losing around 1 percent after reporting first-half results.
Barclays is climbing 3.4 percent after announcing a new chairman. Standard Chartered is falling 1.4 percent even though HSBC raised its rating on the stock.
Aspo
is falling 3.3 percent in Helsinki. The logistics firm said its
operating profit for the year would fall significantly and earnings per
share would fall slightly from 2011. Schibsted is surging 12 percent in
Oslo after the media group reported second-quarter results.
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Asian Stocks Mixed On Growth Worries
Asian stocks
ended on a subdued note Friday, as weak Chinese trade data heightened
economic concerns. With exports rising just 1 percent year-over-year
against an expected 8 percent growth, Chinese trade surplus narrowed
sharply to $25.1 billion in July compared to a forecast $35.2 billion,
increasing worries that the world's second-largest economy may suffer a
hard landing.
Anticipation of policy action out of China and the
prospect of ECB action to lower borrowing costs in the peripheral
countries helped to limit the downside across Asia to some extent.
Tokyo stocks
retreated as concerns about a slowdown in the Chinese economy prompted
investors to book some profits after a four-day rally. Futures-led
selling due to position-squaring ahead of the weekend and next week's
holiday season in Japan also weighed on markets. The benchmark Nikkei average lost a percent, while the broader Topix index ended 0.7 percent lower.
Olympus Corp.
fell 1.5 percent as the scandal-hit company posted a $57 million
quarterly loss, weighed down by losses at its camera business and the
stronger yen. Electronic parts maker Taiyo Yuden soared 10.3 percent and mobile gaming firm DeNA jumped
22 percent on strong earnings. Sony advanced 2.7 percent after it
announced a tender offer to purchase all remaining shares in its
subsidiary So-net.
China's Shanghai Composite index
snapped a five-day winning streak to end 0.2 percent lower, as
weaker-than-expected trade and credit data for July released Friday
coming on the heels of disappointing industrial production and retail
sales data dented hopes that the slowdown is bottoming out.
New yuan loans issued by Chinese financial institutions totaled 540 billion yuan in July versus expectations of 690 billion yuan, data from the People's Bank of China revealed.
Hong Kong's Hang Seng
index fell 0.7 percent, with speculation concerning an imminent Chinese
policy easing as early as over the weekend helping limit further
downside.
Australian shares fell notably after data showed
Chinese trade surplus unexpectedly narrowed in July. The benchmark
S&P/ASX 200 index fell 0.7 percent, while the broader All Ordinaries
index slid 0.6 percent. Miner BHP Billiton edged down 0.3 percent, Rio
Tinto slid 0.7 percent and smaller rival Fortescue lost 1.6 percent
after surveys showed Chinese manufacturing barely grew in July.
Banks ended mostly lower, with Commonwealth and Westpac retreating
about 2 percent each after the Reserve Bank of Australia slightly
lifted its forecast for the inflation rate this year to December 2012 by
a quarter of a percentage point. Alongside its outlook for inflation,
the central bank said it expects the economy to expand by an average
3.75 percent in 2012, faster than the 3 percent growth predicted in the
May statement.
The Australian dollar weakened after the
RBA cautioned against risks emanating from persistent strength of the
dollar. "In the domestic economy, important risks revolve around
exchange rate developments," the bank said in its latest quarterly
statement on monetary policy.
Seoul shares ended modestly
higher on continued hopes that major central banks will unveil more
monetary stimulus measures to bolster economic growth. The benchmark
Kospi average rose 6 points or 0.3 percent to 1,946, extending gains for
a fifth consecutive session on the back of renewed foreign buying.
Tech
shares and automakers led the gainers, while chemical makers and
builders lost ground. Among the prominent gainers, heavyweight Samsung
Electronics rose 0.6 percent, Hyundai Motor gained 1.2 percent and LG Display climbed 3 percent. Shares of Donbgu Steel tumbled 3.6 percent on equity dilution worries.
New Zealand shares
edged lower as investors awaited earnings results for directional cues.
The benchmark NZX-50 index fell by 6 points or 0.2 percent to 3,578. Heartland New Zealand, the would-be bank, tumbled 3.6 percent on saying it expects a decision on its application for a banking license by November. Steel & Tube
lost half a percent after the construction materials supplier reported a
23 percent fall in annual profit, as subdued construction activity and
stiff competition dented margins.
Fletcher Building, the
nation's largest construction company, fell 1.2 percent and
infrastructure investment firm Infratil lost a percent, while utility Contact Energy and phone company Telecom rose 0.6 percent and 1.1 percent, respectively.
Elsewhere, India's benchmark Sensex was down 0.1 percent on worries over weak monsoon rains and slowing domestic growth, while key benchmark indexes in Singapore, Malaysia and Taiwan rose between 0.1 percent and 0.3 percent.
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Crude Slips On Demand Worries
The price of crude oil
was moving lower Friday morning amid demand concerns after today's data
revealed China's economy continued to shrink amid declining import and
exports.
Earlier today the IEA trimmed its 2013 oil demand growth
forecast by 0.40 mbd to 90.50 mbd from the earlier 90.90 mbd, on weaker
economic growth assumptions. For the year 2012, the IEA now forecasts
oil demand growth of 0.90 mbd to 89.60 mbd.
Light Sweet Crude Oil
(WTI) futures for September delivery, were down $1.12 to $92.24 a
barrel. Yesterday oil settled flat mostly on expectation of further
monetary policy easing after data from China showed a drop in Chinese
consumer price inflation to a 30-month low in July.
Thursday, the
Organization of the Petroleum Exporting Countries maintained its 2012
world oil demand growth forecast at 0.90 mbd and said the summer driving
season, the summer heat, and the continued shutdown of most of Japan's
nuclear capacity supported demand growth.
This morning, the U.S. dollar
was hovering near a weekly high versus the euro and the Swiss franc,
while trading higher against sterling and little changed versus the yen.
In
economic news from the euro zone, Germany's EU harmonized inflation
came in below the preliminary estimates In July, final data released by
the Federal Statistical Office showed. The harmonized index of
consumer prices measured under the EU methodology, increased 1.9 percent
annually in July, slightly slower than the 2 percent gain estimated
earlier. In June, the inflation rate was 2 percent.
In economic news from the U.S., the export & import
price indexes for July are due out at 8:30 am ET. The consensus
estimates call for a 0.2 percent month-over-month decline in import
prices and a 0.1 percent decline in export prices. In June, import
prices and export prices were down 2.7 percent and 1.7 percent, respectively.
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