US & World Daily Markets Financial Briefing 07-10-2010

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

Stocks Seeing Choppy Movement In Mid-Morning Trading

Stocks have bounced back and forth across the flat line in the early going and are little changed in mid-morning trading on Thursday. The early volatility comes as the markets are digesting the lowest jobless claims number in three months and upbeat retails sales figures, while apprehension ahead of tomorrow's monthly jobs report may be limiting movement.

The major averages have seen some upside in recent dealing, with the Nasdaq climbing back near its high for the session. The Nasdaq is up 10.16 points or 0.4 percent at 2,390.82, while the Dow is up 7.04 points or 0.1 percent at 10,974.69 and the S&P 500 is up 1.02 points or 0.1 percent at 1,160.99.

Before the start of trading, the Labor Department released a report showing that initial jobless claims in the week ended October 2nd fell to 445,000 from the previous week's revised figure of 456,000. Economists had expected jobless claims to edge up to 455,000 from the 453,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since coming in at 427,000 in the week ended July 10th.

"That July level was influenced by the July 4th holiday and disregarding that distortion, today's figure is the lowest since late March," noted Peter Boockvar, equity strategist at Miller Tabak.

Some optimism ahead of the open also came amid a set of upbeat retail sales figures. Thomson Reuters (TRI) reported that its index of 28 major retailers posted an increase in sales of 2.8 percent in September, toping expectations for an increase of 2.1 percent.

Later in the session, the Federal Reserve will release a separate report on consumer credit for August at 3:00 p.m. ET. Economists expect consumer credit to show a decline of $3 billion for the month, following a $3.6 billion drop in July.

Overseas, the Bank of England left its key interest rate unchanged at a record low of 0.5 percent for the 20th straight month and maintained the size of its quantitative easing at 200 billion pounds. The European Central Bank also held rates steady at 1 percent.

In corporate news, PepsiCo Inc. posted third-quarter earnings of $1.19 per share on revenues of $15.51 billion. The company fell short of estimates for earnings of $1.22 per share but topped expectations for revenues of $15.37 billion.

For fiscal 2010, PepsiCo is targeting 11 to 12 percent earnings growth compared to its previous guidance range of 11 to 13 percent growth.

Sector News

Electronic storage and software stocks are among the day's leading gainers thus far, helping the Nasdaq to a modest gain. The NYSE Arca Disk Drive Index and the NYSE Arca Software Index are up by 2 percent and 1.3 percent, respectively, offsetting a portion of yesterday's pullback.

Health insurance, internet and pharmaceutical stocks are also on the upside, while a steep pullback by gold stocks is offsetting some of the gains. The NYSE Arca Gold Bugs Index is down by 2.3 percent as the price of gold is down by $1.10 at $1,346.60 an ounce.

Steel, oil service and telecom stocks are also seeing modest weakness, helping to keep the Dow and the S&P 500 near the flat line.

Stocks Driven By Analyst Comments

Restaurant operator Texas Roadhouse is trading higher after Robert W. Baird raised its rating on the stock from Neutral to Outperform. The broker also raised its target on the stock from $16 to $19. The stock is up by 4.1 percent, setting a four-month intraday high.

Meanwhile, Medicines Co. is trading lower after RBC Capital Markets downgraded the stock from Outperform to Sector Perform. Shares are currently down by 2.1 percent, slipping to a one-month intraday low.

Other Markets

Overseas, stock markets in the Asia-Pacific region turned in a mixed performance on Thursday. Japan's benchmark Nikkei 225 Index fell by 0.1 percent, while Hong Kong's Hang Seng Index inched up by less than a tenth of a percent.

The major European markets are also mixed. The U.K.'s FTSE 100 Index is down by 0.1 percent, while the German DAX Index and the French CAC 40 Index are up by 0.2 percent and 0.3 percent, respectively.

In the bond markets, treasuries are modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.385 percent, posting a loss of 1.4 basis points.

Open an account with CMS Forex with at least $500 and you will receive a 100% deposit bonus.  Every time you trade 10 lots you will get $50 until you have received all 100% of your deposit.  There is no maximum - deposit $100,000 and you can earn up to $100,000. Already have a CMS account?  You can still get the 100% bonus on your next deposit. Click here

TSX Poised For Cautious Start Ahead Of Jobs Data

Toronto stocks may edge up at open Thursday amid firm commodities prices and encouraging weekly jobs data from south of the border.

However, traders might play the "wait-and-watch" game ahead of the monthly jobs data from both sides of the border, due out Friday.

On Wednesday, the S&P/TSX Composite Index edged up 3.72 points or 0.03% to 12,501.72. The price of crude oil moved up to a fresh 5-month high, with crude for November adding $0.51 to $83.74 a barrel.

Gold stocks may be in play amid soaring bullion prices. The price of gold continued to hit fresh record highs for a third session amid continued weakness in the U.S. dollar. The greenback resumed its losses after the Bank of England and the European Central Bank left their interest rates unchanged. Gold for December was up $14.00 to $1,361.10 an ounce.

According to media reports, China's state owned fertilizer company Sinochem is struggling to get state financial backing for making a rival offer to BHP Billiton's $39 billion hostile bid to Canadian fertilizer maker Potash Corp.

In corporate news from Canada, gold miner Alamos Gold reported decline in the third quarter gold production but projected a significant increase in gold production in the fourth quarter and maintained its annual production guidance of 160,000 - 175,000 ounces.

South African gold producer AngloGold Ashanti said it remains bullish on the outlook of gold and would eliminate all its hedge contracts with low committed gold price at a cost of nearly $4 billion. This would enable the company to sell the gold it produces at market prices and therefore expects to enhance cash flow and profit margins.

Precious metals miner GlobeStar Mining  said it would be acquired by Australian miner Perilya Ltd for C$1.65 per share, which represents nearly 30% premium to its latest closing price.

Gold producer Avion Gold announced that it closed the acquisition of a 100% interest in the Hounde Group concessions in Burkina Faso.

Broadband and internet services provider Sandvine Corp. swung to profit in third quarter, reporting net profit of $2.2 million or $1.60 per share, compared to a loss of $4.4 million or $3.2 per share a year ago. Bio-pharmaceuticals company Tekmira Pharmaceuticals said that the United States Patent & Trademark Office has issued three key patents covering portions of Tekmira's technology.

In economic news, Statistics Canada said the value of building permits were down 9.2% to C$5.7 billion in August from the previous month, mainly due to a decrease in non-residential sector. Analysts were expecting the building permits to ease only by 2.0%. However, the permits in August were 11.4% higher than a year ago period.

From south of the border, the U.S. Labor Department said initial jobless claims fell to 445,000 from the previous week's revised figured of 456,000. Economists were expecting the claims to edge up to 455,000 from the 453,000 originally reported for the previous week.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

French Market Turns Positive

The French market is moderately up in afternoon trading Thursday, as better-than-expected economic data and European Central Bank's decision on key rate boosted sentiment.

Crude for November delivery is rising $0.47 at $83.70 per barrel and gold is advancing $8.4at $1356.1 an ounce.

In economic news, German industrial production rose 1.7% month-on-month in August, the Federal Ministry of Economics and Technology said. Economists had forecast an increase of 0.5%. It followed a 0.1% rise in July.

UK manufacturing output grew by 0.3% in August from July, data from the Office for National Statistics showed. This was larger than the expected 0.2% growth. Meanwhile, house prices in Britain plunged in September, survey data released by Lloyds Banking Group Plc's Halifax division showed. Prices dropped 3.6% month-on-month, following a 0.2% gain in August. Economists were looking for a modest decline of 0.2%.

In the U.S., the Labor Department released a report showing an unexpected decrease in first-time claims for unemployment benefits in the week ended October 2nd. Initial jobless claims fell to 445,000 from the previous week's revised figured of 456,000. Economists had expected jobless claims to edge up to 455,000 from the 453,000 originally reported for the previous week.

Meanwhile, Bank of England and European Central Bank maintained their key interest rates. The CAC 40 opened above the flat line at 3,769 and reversed early losses. The index is currently adding 0.36%.

Renault is surging 6.2% after stating that it is selling a 14.9% stake in the Class B shares of Swedish truck maker AB Volvo to institutional investors. Peugeot is up 1.7%.

Steel producer ArcelorMittal is gaining 2.5% and insurer Axa is advancing 2.1%.

Among banks, Societe Generale is rising 2.4% and BNP Paribas is adding 1.9%. Credit Agricole is gaining 0.5%, while Natixis is losing 0.7%.

Real estate investment trust Unibail-Rodamco is losing 10.2% and cement giant Lafarge is declining 3.2%. Schenider Electric is slipping 1.2% and oil and gas services provider Technip is sliding 0.9%.

Elsewhere in Europe, the UK's FTSE 100 is gaining 0.18% and the German DAX is adding 0.52%.

Open an account with CMS Forex with at least $500 and you will receive a 100% deposit bonus.  Every time you trade 10 lots you will get $50 until you have received all 100% of your deposit.  There is no maximum - deposit $100,000 and you can earn up to $100,000. Already have a CMS account?  You can still get the 100% bonus on your next deposit. Click here

Asian Markets End Mixed Ahead Of Data

Mixed trading was witnessed among the Asian markets open for trading on Thursday. The Chinese market was closed for a holiday. The markets in Australia and Hong Kong managed to end in positive territory with modest gains, while the markets in India, Japan, South Korea, Indonesia, Singapore and Taiwan ended in negative territory on profit taking and caution ahead of key economic data in the US over the next two days including today's session. The Australian Bureau of Statistics revealed that the unemployment rate remained unchanged at 5.1% for September, same as in August.

In Australia, the benchmark S&P/ASX200 Index added 4.50 points, or 0.10%, and closed at 4,691 points, while the All-Ordinaries Index ended at 4,746, representing a gain of 8.20 points, or 0.17%.

On the economic front, a report released by the Australian Bureau of Statistics revealed that the country posted a seasonally adjusted unemployment rate of 5.1% in September, in line with market expectations, and remained unchanged from the previous month. The report further noted that the employment change added 49,500 jobs - more than doubling expectations for an increase of 20,000 jobs following the addition of 30,900 jobs in the previous month. Full-time employment added 55,800 jobs, while part-time employment shed 6,300 jobs. The participation rate came in at 65.6%, slightly above forecasts for 65.5% after coming in at 65.4% in August.

Results of a new survey conducted by the Australian Industry Group revealed that the country's construction industry contracted for the fourth consecutive month in September with activity continuing to fall across all the sectors. The Australian Industry Group Performance of Construction Index fell to 40.8 from 43.2 in August. A reading above 50 indicates expansion, while one below suggests contraction. Commenting on the new results, Peter Burn, AIG policy director, said, "Construction companies continue to be plagued by weak market demand and on-going delays in project starts as private demand struggles to fill the gap left by the drying up of projects funded by fiscal stimulus measures."

Light sweet crude oil futures for November delivery ended at $83.70 a barrel in electronic trading, up $0.47 per barrel from previous close at $83.70 a barrel in New York on Wednesday.

Resource related stocks ended in positive territory. BHP Billiton advanced 1.04%, Rio Tinto added 0.70%, Fortescue Metals gained 1.47%, Iluka Resources rose 0.77%, Macarthur Coal surged up 4.44%, Mincor Resources edged up 0.50%, Murchison Metals climbed 3.53%, Minara Resources increased 2.45% and Oz Minerals was up by 1.30%.

We Have Two Picks for September Premium Newsletter Free to join! Click here

Mixed trading was witnessed among the oil related stocks. Woodside Petroleum declined 0.36%. ROC Oil Ltd remained unchanged from previous close. However, Santos Ltd advanced 0.79%, Oil Search Ltd climbed 2.11% and Origin Energy gained 1.06%.

Banks, however, ended in negative territory limiting the overall gains following surprise employment data. Commonwealth Bank of Australia slipped 0.66%, National Australia Bank edged down 0.15% and Westpac Banking shed 0.51%. Investment banker Macquarie Group declined 0.11%. However, ANZ Bank bucked the trend and ended in positive territory with a gain of 0.29%

In Japan, the benchmark Nikkei 225 Index ended down 6.62 points, or 0.07% at 9,685,while the broader Topix index of all First Section issues gained 1.56 points, or 0.18%, to 846.

On the economic front, preliminary data released by the Cabinet Office in Japan revealed that the country's leading index dropped to 99.1 in August from 100 in July,in line with economists' expectations. The data further revealed that the coincident index came in at 103.5, up from 103 in the previous month. The coincident index reading also matched consensus forecast. At the same time, the lagging index climbed to 87.8 in August from 87.4 last month.

Light sweet crude oil futures for November delivery ended at $83.70 a barrel in electronic trading, up $0.47 per barrel from previous close at $83.70 a barrel in New York on Wednesday.

Impex Corp, the country's leading oil exploration and mining company, climbed 2.17% on higher crude oil prices.

Real estate stocks also advanced into positive territory. Mitsubishi Estate Co., climbed 2.17%, Sumitomo Realty & Development rose 1.74%, Mitsui Fudosan gained 1.41%, Heiwa Real Estate surged up 4.74% and Tokyo Takemono Ltd was higher by 2.31%. Tokyu Land Corp remained unchanged from previous close.

All Nippon Airways was the major loser having declined 1.67%.

Exporters and trading companies also ended in negative territory as the local currency continued to gain strength despite efforts by the Bank of Japan to arrest its strength through quantitative measures.

Late-session profit taking amid lackluster global cues dragged the Indian market sharply lower on Thursday, as investors looked ahead to Friday's U.S. jobs report for clues as to whether the Fed will go ahead with another round of quantitative easing. Additionally, with the Bank of Japan's surprise move to stimulate the economy fading away, investors keenly awaited interest rate decisions and comments on the economy from both the Bank of England and the European Central Bank. After trading in a range-bound manner till the mid-session, the 30-share Sensex fell sharply in the final hour of trading to end down 228 points or 1.11% at 20,315, with 22 of its components edging lower. The broader Nifty fell by 66 points or 1.07% to 6,120

The market in China was closed for a holiday.

Among the other markets in the region, Jakarta Composite Index in Indonesia declined 17.22 points, or 0.48%, to 3,586, the Strait Times Index in Singapore fell 23.42 points, or 0.73%, to close at 3,167, and the Taiwan Weighted Index ended flat with a modest loss of 0.11 points at 8,284.

Our "Value Packed" online trading seminar will show you how you can.

Click Here To Find Out More

Investors Hub Services