US & World Daily Markets Financial Briefing 18-02-2011

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Wall Street lacks direction

Wall Street is edging higher following three weeks of gains.

Investors have their eyes on a G20 meeting in Paris, where global imbalances will be discussed and the situation in the Middle East, which has been pushing up oil prices.

The Dow Jones is up 16 at 12,334, while the S&P 500 is barely changed at 1,340 and NASDAQ is less than one point higher at 2,832.

Campbell’s Soup reported net earnings of $239m for the quarter ended January 30, down from $259m a year earlier. The company “maintained strong levels” of advertising to cope with the competitive environment. It has cut its 2011 earnings and sales forecasts.

Chemicals group DuPont has extended its $6.1bn offer for Danish food and enzymes group Danisco to April in the hope of gaining more acceptances.

Department store Nordstrom’s quarterly earnings beat expectations.

Solar modules manufacturer SunPower comfortably beat full year earnings estimates. First Solar rose on the back of this news.


S&P 500 - Risers
Intuit Inc. (INTU) $53.44 +5.95%
Eog Resources Inc. (EOG) $108.24 +3.86%
Zimmer Holdings Inc. (ZMH) $64.48 +3.58%
Stryker Corp. (SYK) $62.81 +3.34%
Apollo Group Inc. (APOL) $44.97 +3.05%
Ecolab Inc. (ECL) $48.24 +2.38%
VF Corp. (VFC) $89.44 +2.09%
Rockwell Collins Inc. (COL) $66.94 +2.06%
Boston Scientific Corp. (BSX) $7.55 +2.03%
Becton, Dickinson & Company (BDX) $81.67 +1.76%

S&P 500 - Fallers
Patterson Companies Inc. (PDCO) $32.13 -6.49%
JDS Uniphase Corp. (JDSU) $25.17 -5.45%
Campbell Soup Co. (CPB) $33.36 -4.52%
Tesoro Corp. (TSO) $24.84 -3.83%
Western Digital Corp. (WDC) $32.64 -3.00%
Windstream Corp. (WIN) $12.90 -2.49%
Valero Energy Corp. (VLO) $29.62 -2.22%
Sears Holdings Corp. (SHLD) $91.00 -2.01%
International Paper Co. (IP) $29.72 -1.88%
PepsiCo Inc (PEP) $63.56 -1.76%

Dow Jones I.A - Risers
Cisco Systems Inc. (CSCO) $18.97 +1.55%
Caterpillar Inc. (CAT) $104.34 +0.95%
Intel Corp. (INTC) $22.09 +0.55%
Chevron Corp. (CVX) $97.62 +0.46%
Travelers Company Inc. (TRV) $60.05 +0.45%
United Technologies Corp. (UTX) $84.92 +0.45%
Johnson & Johnson (JNJ) $61.06 +0.44%
Boeing Co. (BA) $72.55 +0.43%
Wal-Mart Stores Inc. (WMT) $54.89 +0.26%
Procter & Gamble Co. (PG) $64.14 +0.22%

Dow Jones I.A - Fallers
General Electric Co. (GE) $21.35 -0.79%
Pfizer Inc. (PFE) $19.23 -0.72%
Alcoa Inc. (AA) $17.42 -0.60%
American Express Co. (AXP) $45.51 -0.59%
Microsoft Corp. (MSFT) $27.06 -0.55%
Walt Disney Co. (DIS) $43.49 -0.48%
AT&T Inc. (T) $28.36 -0.48%
Coca-Cola Co. (KO) $64.33 -0.34%
Kraft Foods Inc. (KFT) $30.74 -0.32%
3M Co. (MMM) $92.46 -0.29%

Nasdaq 100 - Risers
Intuit Inc. (INTU) $53.44 +5.95%
Apollo Group Inc. (APOL) $44.97 +3.05%
Cisco Systems Inc. (CSCO) $18.97 +1.55%
Qiagen N.V. (QGEN) $20.22 +1.10%
Maxim Integrated Products Inc. (MXIM) $27.78 +0.98%
Adobe Systems Inc. (ADBE) $35.32 +0.98%
Hologic Inc. (HOLX) $20.64 +0.90%
Cintas Corp. (CTAS) $29.53 +0.72%
Gilead Sciences Inc. (GILD) $39.57 +0.71%
Google Inc. (GOOG) $629.07 +0.61%

Nasdaq 100 - Fallers
Patterson Companies Inc. (PDCO) $32.13 -6.49%
Garmin Ltd. (GRMN) $32.52 -2.72%
Seagate Technology Plc (STX) $13.52 -2.45%
Sears Holdings Corp. (SHLD) $91.00 -2.01%
Logitech International S.A. (LOGI) $19.36 -1.83%
Henry Schein Inc. (HSIC) $68.15 -1.65%
Liberty Media Corp. Interactive Class A (LINTA) $17.18 -1.49%
Foster Wheeler AG (FWLT) $39.04 -1.49%
Citrix Systems Inc. (CTXS) $71.47 -1.28%
CA Inc. (CA) $25.19 -1.22%

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TSX Poised For Mixed Open Amid Tame Inflation

Bay Street stocks are poised for a mixed open Friday as traders digest tame inflation data from Canada that leaves some room for the Bank of Canada to hold its rates steady. Meanwhile, commodities were trading flat amid lack of fresh triggers.

U.S. stock futures were pointing to a flat open.

On Thursday, the S&P/TSX Composite Index advanced to a fresh 2-year peak, gaining 76.97 or 0.55 percent to 14,136.15.

The price of crude oil edged up amid escalating tensions in Bahrain and Libya that could fuel concern over supply disruptions. Crude for March was up $0.44 to 86.80 a barrel.

The price of gold was steady above $1,380 amid inflation concerns. Gold for April edged up $0.80 to $1,385.90

In corporate news from Canada, Cenovus Energy reported lower fourth quarter operating earnings of C$140 million or C$0.19 per share compared to C$169 million or C$0.23 per share last year. The company declared a dividend of C$0.20 per share for the quarter.

Dairy and grocery products company Saputo Inc. said it would buy Fairmount Cheese Holdings Inc., the parent company of DCI Cheese Co. Inc. for $270.5 million.

Financial services holding company Fairfax Financial Holdings slipped into the red in fourth quarter, reporting net loss of $364.6 million or $18.43 per share compared to net earnings of $79.4 million or 1.65 per share in the prior year quarter.

Brookfield Asset Management reported improved fourth-quarter net income of $1.09 billion, up from $215 million last year. Earnings per share were $1.80, up from $0.35 in the same quarter last year. The company declared a dividend of $0.13 per Class A Common Share.

Industrial equipment distribution services provider Strongco Corp. said it has completed the acquisition of 100 percent of the shares of Chadwick-BaRoss, Inc. for $11.6 million.

Eldorado Gold said its fourth-quarter consolidated net income increased to $43.6 million from $33.3 million in the prior year. However, earnings per share remained flat at $0.08 per share. Analysts were expecting the gold miner to report earnings of $0.10 per share this quarter

In economic news, Statistics Canada said consumer prices rose 2.3 percent in the 12 months to January, following the 2.4 percent increase posted in December 2010. On a seasonally adjusted monthly basis, consumer prices rose 0.3 percent from December 2010 to January 2011, the seventh consecutive monthly increase. Meanwhile, the Bank of Canada's closely-watched core index advanced 1.4 percent annually in January, following a 1.5 percent rise in December.

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French Market Slightly Up

The French market is slightly up in afternoon trading Friday, as finance chiefs from G20 group of nations meet for a two-day summit in Paris. Construction stocks are rising, following upbeat results from cement giant Lafarge, while banks are falling.

In economic news, French manufacturers' sentiment decreased in February, but continued to stay above its long-term average suggesting relatively favorable conditions. The sentiment indicator fell to 106 from 108 recorded in January, the highest score since March 2008. Economists had forecast an increase in the index to 109. Confidence declined for for the first time in three months.

The Conference Board said its leading index for Germany rose 0.4 percent to 106.2 in December from the preceding month. The coincident index, a measure of current economic activity, climbed by 0.2 percent month-on-month to 104.7.

UK retail sales including automotive fuel grew 1.9 percent month-on-month in January, following a 1.4 percent fall in December, the Office for National Statistics said. Economists had expected a 0.5 percent rise. Meanwhile, UK mortgage lending declined 13 percent month-on-month in January to 9.2 billion pounds, up 5 percent from the same month a year earlier, the Council of Mortgage Lenders said on Friday.

The CAC 40 index opened higher at 4,165 from the prior close of 4,152, and dipped into negative territory in early trade and remained there for most of the session. The index is currently up 0.05 percent.

Cement giant Lafarge is leading the gainers by adding 4.1 percent, reporting a profit for the fourth quarter. Building materials maker Saint-Gobain is rising about 1 percent and builders Vinci and Bouygues are up 0.7 percent and 0.2 percent, respectively.

Machinery & equipment maker Alstom is gaining 2.6 percent. Grocery retailer Carrefour, hotel group Accor and telecom equipment maker Alcatel Lucent are notably higher.

Oil and gas services provider Technip is declining 2.2 percent, followed by IT services firm Cap Gemini, which is down 1.6 percent. Tire firm Michelin and drugmaker Sanofi-Aventis are notably lower.

Among banks, BNP Paribas is falling 1.3 percent and Natixis is down 0.6 percent. Credit Agricole and Societe Generale are sliding 0.5 percent and 0.3 percent, respectively.

Car maker Renault is dropping about 1 percent and Peugeot is down 0.2 percent as the People's Bank of China increased the reserve rate ratio by 50 basis points at the conclusion of the Asian markets to control economic growth and inflation.

Elsewhere in Europe, the UK's FTSE 100 is losing 0.46 percent and the German DAX is adding 0.19 percent.

Across Asia/Pacific, major markets had a mixed outing. Hong Kong's Hang Seng climbed 1.3 percent and Japan's Nikkei 225 rose 0.06 percent, while Australia's All Ordinaries ended flat. China's Shanghai Composite Index slipped 0.92 percent and India's BSE Sensex declined 1.6 percent.

In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dow gained 0.2 percent, the Nasdaq moved up 0.2 percent and the S&P 500 rose 0.3 percent.

In commodities, crude for March delivery is sliding $0.40 to $86.76 per barrel and gold is advancing $0.3 to $1385.4 a troy ounce.

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Indian Market Snaps Five-day Rally

Profit taking following five days of consecutive gains and worries of political stability at the Centre amid reports of a CBI raid at the offices of DMK-run Kalaignar TV and those of its top brass in Tamil Nadu, as part of a probe in connection with the 2G scam, dragged the Indian market sharply lower on Friday.

Heavy selling in several bluechip stocks such as Reliance Communication, Reliance Infrastructure, Jaiprakash Associates, Tata Motors, ONGC, Larsen & Toubro and ICICI Bank dragged the benchmark 30-share Sensex down by about 300 points or 1.60 percent to 18,212.

Likewise, the 50-share Nifty, which rose to a three-week high early in the session, erased all its gains to end down about 90 points or 1.58 percent at 5,459.

The broader indexes such as the BSE mid-cap and small-cap also followed suit, ending down around 2 percent each, and the market breadth was extremely negative, with 2085 decliners versus 773 gainers on the BSE. Realty, auto, oil/gas, capital goods, consumer durable and banking stocks bore the burnt of the selling.

Reliance ADA group shares fell sharply amid the ongoing CBI probe into the 2G spectrum allocation scam. Reliance Communication, Reliance Capital, Reliance Infrastructure and Reliance Power plunged between 6 percent and 7 percent.

D B Realty, the company whose founder Shahid Balwa was arrested in the 2G scam case, ended down 6 percent. Unitech lost 7 percent after the CBI questioned its MD Sanjay Chandra in connection with the allocation of spectrum licenses during one time telecom minister A Raja's tenure. Sobha Developers fell 5.68 percent, Indiabulls Real Estate tumbled 4.83 percent, Orbit Corp. declined 3.69 percent and DLF ended down 2.04 percent.

Essar group firms such as Essar Oil and Essar Shipping Ports & Logistics lost over 5 percent each after the CBI questioned the group Prashant Ruia in connection with the alleged role of the company in conniving with Loop Telecom to get licences in 21 circles in January 2008.

Raymond pared early gains to end half a percent lower after the company denied reports that it has finalized a proposal to sell part of Thane land. Noida Toll Bridge Company shed 1.62 percent after it agreed to rollback the hike in tariff for using the Delhi-Noida-Delhi Flyway following mounting protests.

Thomas Cook India plunged 8 percent on posting disappointing quarterly results. GVK Power and Infrastructure, which is scouting for coal mines overseas, ended down 3.67 percent. Education services provider Everonn slumped 6.26 percent on profit taking after climbing over 17 percent a day before.

Metal stocks such as Hindalco, Sterlite and Tata Steel fell by 1-3 percent. State-run SBI lost 0.87 percent, private sector lender ICICI Bank fell over 3 percent and HDFC Bank ended down half a percent. Heavyweight Reliance Industries ended down 1.69 percent.

On the positive side, Hindustan Unilever and Jindal Steel rose around 2 percent each, Cipla gained 0.57 percent, BHEL added 0.56 percent and Wipro ended up 0.27 percent. Pratibha Industries advanced half a percent on bagging two orders worth Rs.297 crore.

City Union Bank rallied 3.86 percent after opening two new branches. Redington India added 2 percent after it entered into a distribution arrangement with Dell India to strengthen its foothold in the fast growing telecom vertical. Bank of Maharashtra climbed 5 percent, boosted by the government's decision to infuse Rs 352 crore capital into the public sector bank.

On the global front, most Asian stocks rose on Friday as signs of global economic growth spurred demand for emerging-market assets. However, China's Shanghai Composite average shed 0.92 percent amid worries over monetary tightening.

European stocks edged lower after a higher opening and the U.S. index futures were little changed, while the euro eased against the dollar and yen despite data showing rising producer prices in Germany.

Finance Ministers and central banker heads from the G-20 group are holding a two-day meet in Paris starting today, in which measures to reform the global financial system and address rising global food prices are set to be high on the agenda.

Federal Reserve chairman Ben Bernanke and the Bank of England Governor Mervyn King are slated to deliver separate speeches later in the global day.

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Dollar In The Dumps As China Tightens

The dollar was slightly weaker Friday morning in New York, amid mixed signals on inflation from some of the United States' largest trading partners.

It remains to be seen how most central banks will deal with the specter of rising prices, but China seems increasingly committed to a gradual tightening of policy.

China again raised its bank reserves to curb lending as the world's most robust economy tries to manage growth.

On the flip side, while most major economies are feeling deeper inflationary pressures, the pace of inflation in Canada slowed last month, according to official data released this morning.

Yesterday, the Commerce Department said U.S. consumer prices last month increased by 0.4 percent from December, However, underlying inflation, which excludes volatile energy and food prices, rose by only 0.2 percent.

With Federal Reserve policy likely to remain exceedingly accommodative through 2011, the dollar has been stuck in the mud versus major rivals.

This morning, the dollar eased slightly to $1.3618 from an overnight level near $1.3550.

There was little movement against the yen, with the dollar hovering near Y83.40.

Early losses took the dollar to $1.6215 against the sterling, and despite relatively tame inflation figures from Canada, the dollar was stuck near a two-year low of C$0.9825 against the loonie.

Stripping out volatile energy prices, Canada's Consumer Price Index (CPI) rose a tame 1.7 percent in the 12 months to January, identical to the increase in December.

The Bank of Canada's closely-watched core index advanced 1.4 percent annually in January, following a 1.5 percent rise in December.

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