US & World Daily Markets Financial Briefing 11-10-2010

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

Stocks Showing Slightly Positive Bias In Mid-Morning Trading

Stocks are turning in a lackluster performance in morning trading on Monday, although the markets have a modestly positive bias amid continued optimism about additional quantitative easing measures from the U.S. Federal Reserve.

The major averages have moved to the upside in recent trading and are currently posting modest gains. The Dow is up 17.66 points or 0.2 percent at 11,024.03, the Nasdaq is up 7.97 points or 0.3 percent at 2,409.88 and the S&P 500 is up 2.82 points or 0.2 percent at 1,167.97.

The markets continue to benefit from indications that the Federal Reserve will enact further stimulative measures following its meeting on interest rates early next month. Most expect the Fed to announce a new round of asset purchases.

Nonetheless, traders seem reluctant to make any significant moves ahead of the release of a slew of economic data later in the week, including reports on retail sales, consumer and producer prices, and consumer sentiment.

Some positive sentiment has been generated by continued activity on the merger-and-acquisition front, with shares of Gymboree (GYMB) moving sharply higher on news that the children's apparel retailer has agreed to be acquired by Bain Capital for $1.8 billion.

Under the terms of the agreement, Gymboree shareholders will receive $65.40 in cash for each share of Gymboree common stock they own. The offer represents a 23.5 percent premium to Gymboree's closing price last Friday.

Shares of Chesapeake Energy (CHK) are also seeing notable strength in morning trading after the company announced that it has agreed to sell a one-third stake in its Eagle Ford shale project in Texas to CNOOC Ltd. for $1.1 billion.

Chesapeake noted that CNOOC has also agreed to fund 75 percent of Chesapeake's share of drilling and completion costs until an additional $1.1 billion has been paid. The transaction is expected to close in the fourth quarter of 2010.

Additionally, LDK Solar (LDK) has shown a strong upward move after the solar wafer maker raised its third quarter revenue guidance. The company said it now expects revenues of $610 to $640 million compared to its prior guidance for revenues of $570 to $600 million.

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

Most of the major sectors are showing only modest moves, although notable strength is visible among electronic storage stocks. The NYSE Arca Disk Drive Index is currently up by 1 percent, rising to its best intraday level in almost three months.

STEC, Inc. (STEC) is turning in one of the storage sector's best performances, with the producer of solid-state drives currently up by 4 percent after reaching a two-month intraday high. Shares of STEC have recently benefited from takeover rumors.

Considerable strength is also visible among semiconductor stocks, as reflected by the 1.4 percent gain currently being shown by the Philadelphia Semiconductor Index. Communications chip makers Atheros (ATHR) and Broadcom (BRCM) are helping to lead the way higher.

Health insurance, natural gas, and metal stocks are also seeing moderate strength in morning trading, while modest weakness is visible among brokerage and housing stocks.

Stocks Driven By Analyst Comments

Shares of Magnum Hunter Resources (MHR) have shown a strong upward move in morning trading, with the oil and gas firm currently up by 4 percent. At its high for the session, Magnum Hunter was at its best intraday level in two months.

The gain by Magnum Hunter comes after Jefferies raised its rating on the company's stock to Buy from Hold with a price target of $4.80.

Abercrombie & Fitch (ANF) is also turning in a strong performance after Argus upgraded its rating on the apparel retailer to Buy from Hold. Shares of Abercrombie & Fitch are currently up by 3.3 percent after reaching a five-month intraday high.

On the other hand, shares of MGM Resorts (MGM) are currently down by 2.7 percent after Hudson Securities downgraded its rating on the casino operator to Hold from Buy. With the loss, MGM Resorts is pulling back off the nearly five-month closing high it set last Friday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, as traders reacted positively to speculation that the U.S. Federal Reserve will enact additional quantitative easing measures. However, the Japanese markets were closed for a public holiday.

The major European markets are also seeing modest strength on the day. The U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.4 percent, while the French CAC 40 Index is up by 0.3 percent.

The bond markets are closed on the day due to the Columbus Day holiday.

Click Here

French Market Sees Upside

The French market is rising in afternoon trading Monday, led by construction stocks, as firm cues from Asia and the previous session on Wall Street boosted sentiment.

Crude for November delivery is lower by $0.50 at $82.16 a barrel and December gold is losing $3.5 at $1341.8 an ounce.

In economic news, the country's manufacturing output remained stable in August on a monthly comparison after increasing 1.2% in July, the statistical office Insee said. The expected increase for August was 0.3%. At the same time, industrial output also remained flat, following a 0.8% rise in July. The latest figure was weaker than the expected 0.4% increase.

The CAC 40 opened at 3,763 and has remained in positive territory. The index is currently adding 0.16%.

Telecom equipment maker Alcatel Lucent is leading the gainers by adding 2.1%. Metal fabrication firm Vallourec is rising 1.8%.

Building materials maker Saint-Gobain is rising 1.6%. Heavy construction firms Bouygues and Vinci are rising about 1.6% each.

Those witnessing notable upside include chipmaker STMicroelectronics, Schneider Electric, grocery retailer Carrefour and luxury conglomerate LVMH.

Among banks, Natixis is adding 1.8% and Credit Agricole is rising 0.8%. Societe Generale and BNP Paribas are losing 0.25% and 0.33%, respectively.

Car manufacturer Renault is advancing 1.1%, while Peugeot is losing 0.7%.

EADS, the maker of Airbus, is retreating 2.2% and electric utility EDF is slipping 1.5%. Dairy products maker Danone is losing about 1%.

Elsewhere in Europe, the UK's FTSE 100 is rising 0.32% and the German DAX is adding 0.24%.

Click Here

Asian Markets End Mostly Higher

Most of the Asian markets open for trading on Monday, except Japanese market which is closed for a holiday, ended in positive territory amid hopes of fresh quantitative measures from the US Federal Reserve after jobs report for September came in worse than expected with more than 95,000 jobs lost as against expectations of no job losses for the month. Positive closing on Wall Street in the previous session and higher commodity prices in the international market amid weaker dollar also impacted market sentiment.

In Australia, the benchmark S&P/ASX200 Index gained 16.10 points, or 0.34%, and closed at 4,697 points, while the All-Ordinaries Index ended at 4,762, representing a gain of 21.60 points, or 0.46%.

On the economic front, a report released by the Australian Bureau of Statistics revealed that the total value of dwelling finance commitments excluding alterations and additions fell a seasonally adjusted 1.3% from a month ago to A$20.1 billion. The report further revealed that the value of finance commitments for owner occupied housing was unchanged at A$13.6 billion, while that for investment housing fell 3.9% to A$6.5 billion. In volume terms, the number of owner occupied dwelling commitments rose 1% to a little over 47,500.

Light sweet crude oil futures for November delivery ended at $83.15 a barrel in electronic trading, up $0.49 per barrel from previous close at $82.66 a barrel in New York on Friday.

Resource related stocks led the gains on higher commodity prices as well as strengthening local currency against the US dollar. BHP Billiton advanced 1.10%, Rio Tinto added 0.68%, Fortescue Metals surged up 7.76%, Gindalbie Metals climbed 3.54%, Iluka Resources was up 0.93%, Mincor Resources gained 1.49%, Minara Resources rose 0.50% and Oz Minerals was up 3.82%.

Oil related stocks also ended in positive territory. Woodside Petroleum gained 1.15%, Santos Ltd advanced 1.10%, ROC Oil Ltd surged up 5.00% and Origin Energy was up 0.61%. However, Oil Search Ltd bucked the trend and ended in negative territory with a loss of 0.32%.

In Japan, the stock market was closed for a public holiday.

The Indian market ended a range-bound session modestly higher on Monday, tracking positive global cues. The benchmark Sensex rose to a high of 20,461 in early trading but failed to maintain early gains as investors booked profits at higher levels.

However, second-line stocks received good support, as investors indulged in stock-specific activity ahead of the upcoming second-quarter earnings season. The BSE mid-cap index rose 0.79% and the small-cap index added 1.30%. In the broader market, gaining shares outpaced declining ones by 1840 to 1073 shares.

The 30-share Sensex ended off the day's high at 20,340, up 90 points or 0.44%, with 18 of its components edging higher. The broader Nifty ended up 32 points or 0.53% at 6,134.

Among the other markets in the region, China's Shanghai Composite Index gained 68.20 points, or 2.49% to close at 2,807, Jakarta Composite Index in Indonesia edged higher by 1.79 points, or 0.05%, to 3,589, and the Strait Times Index in Singapore added 10.07 points, or 0.32%, to close at 3,163. However, Taiwan Weighted Index ended in negative territory with a loss of 67.43 points or 0.82% at 8,177.

"Is your Retirement Account Government Proof?" Click Here

Battered Dollar Hits Another 15-Year Low Versus Yen

The dollar continued to struggle versus other major currencies on Monday, unable to rally after hitting its lowest since 1995 against the surging yen. There was little movement against the euro and sterling, leaving the buck near last week's lowest in eight months.

Friday's mixed jobs report did little to alleviate fears about the employment situation in the United States. With the world's largest economy still mired by joblessness and a weak housing sector, most expect the Federal Reserve will take another shot at quantitative easing next month.

The buck was at $1.3950 versus the euro, a modest improvement from an 8-month low of 1.4028. Against the sterling, the dollar held its ground near $1.5950.

Meanwhile, the dollar was stuck near Y82 versus the yen after hitting a new 15-year low of 81.36 last night. A move below 79.80 would take the buck to its lowest ever compared to the Japanese currency.

The Japanese have been frantically trying to weaken the yen in order to prop up its export-driven economy, but with interest rate gaps narrowing and the Fed's QE 2.0 set to dwarf anything that Tokyo does, the yen keeps on rising.

The dollar was little changed against the Swiss franc, not far from last week's record low of CHF 0.9554.

A summit of global finance ministers at International Monetary Fund headquarters in Washington over the weekend has failed to ease speculation of an international "currency war."

At a closing press conference at the end of the summit, Youssef Boutros-Ghali, chairman of the International Monetary and Financial Committee said there are "a number of points of friction" between nations regarding issues such as structural reforms and exchange rate management.

Trading is expected to be quiet on Monday, with many away from their desks on Columbus Day in the U.S.

Later this week, traders will focus on retail sales, inflation data, trade balance and the minutes of the recent FOMC meeting, along with a slew of corporate earnings results.

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

Click Here To Find Out More

Investors Hub Services