US & World Daily Markets Financial Briefing 18-03-2010

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

Stocks Seeing Another Lackluster Outing Following Data Deluge

Stocks are mixed in mid-morning trading on Thursday, as the markets are digesting a slew of economic data that continues to paint an unclear economic outlook. The major averages are on opposite sides of the unchanged mark, looking for direction following two days of solid gains.

A short time ago, the Federal Reserve Bank of Philadelphia said its index of regional activity in the manufacturing sector rose to 18.9 in March from 17.6 in February, with a positive reading indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 18.0.

At the same time, the Conference Board released a report showing that its leading economic indicators index edged up by 0.1 percent in February following a 0.3 percent increase in January. The modest increase came in line with economist estimates.

Ahead of the opening bell on Wall Street, the markets received additional reassurance that inflation remains docile, as the Labor Department said that its consumer price index was unchanged in February after increasing by 0.2 percent in each of the five previous months. Economists had been expecting consumer prices to edge up by 0.1 percent.

The data also showed that the core consumer price index, which excludes food and energy prices, rose by 0.1 percent in February following a 0.1 percent decrease in January. The modest increase by the core index came in line with economist estimates.

In a separate report, the Labor Department revealed that initial jobless claims edged down to 457,000 from the previous week's unrevised figure of 462,000. Economists had been expecting a slightly steeper drop in jobless claims to 455,000.

At the same time, the Labor Department said that continuing claims, a reading on the number of people receiving ongoing unemployment help, rose to 4.579 million in the week ended March 6th from the preceding week's revised level of 4.567 million.

In corporate news, FedEx Corp. (FDX) reported third- quarter net income of $0.76 per share, topping expectations of $0.72 per share for the quarter. Total revenues for the quarter were $8.70 billion, also beating forecasts, which called for revenues of $8.37 billion for the period.

The major averages have seen choppy movement in recent dealing, lingering near the unchanged mark. While the Dow is up 10.05 points or 0.1 percent at 10,743.72, the Nasdaq is down 3.31 points or 0.1 percent at 2,385.78 and the S&P 500 is down 2.21 points or 0.2 percent at 1,164.00.

Sector News

Despite the lackluster performance by the broader markets, health insurance stocks are seeing strength in mid-morning trading, with the Morgan Stanley Healthcare Payor Index up by 1.3 percent. With the upward move, the index has reached its best intraday level in nearly two months.

Airline, telecommunications and railroad stocks are also moving higher, while banking stocks have come under pressure, pulling the Kbw Bank Index down by 1 percent. The drop is dragging the index down from yesterday's sixteen-month closing high.

Semiconductor, oil service and natural gas stocks are also sliding, offsetting the gains in other market segments.

Stocks Driven By Analyst Comments

Medcath (MDTH) has shot higher after being upgraded at Deutsche Bank from Hold to Buy. The stock is currently up by 13.6 percent after reaching its best intraday level in over seven months in earlier trading.

Burger King (BKC) is also moving higher following an upgrade from Deutsche Bank, which raised its rating on the stock to Buy from Hold. Shares have advanced by 2.1 percent, breaking out to their best intraday price in just over eleven months earlier.

On the other hand, Nationwide Health (NHP) was downgraded by Robert W. Baird from Neutral to Underperform. The stock has slipped by 1.3 percent, retreating from the eighteen-month closing high set at the end of Wednesday's session.

TSX May Trim Gains On Easing Commodities, Profit Taking

Canadian stocks may open lower Thursday on easing commodities prices and worries resurfaced over Greece debt situation. Moreover, the main index ended at its best level in 17 months, which could prompt profit taking at higher levels.

Earlier, markets in Europe and the euro were under pressure on lack of clarity about the Greece's future after reports said the country could seek aid from the International Monetary Fund if European Union failed to support.

On Wednesday, the S&P/TSX Composite Index edged up 11.26 points or 0.09% to finish at 12,100.66, its highest closing since September 2008. The index gained around 4% so far this month.

The price of oil moved down $0.64 to $82.29 a barrel on concerns over demand growth. Meanwhile, bullion was almost flat after gaining over 2% so far this week.

In corporate news, oil and natural gas explorer Cequence Energy reported narrower loss of C$0.41per share for the full year 2009, compared to C$0.84 per share in the prior year.

Exploration services provider Open Range Energy reported a lower funds from operations of C$0.14 per share for the fourth quarter, compared to C$0.23 per share in the prior year quarter.
 
Oil and gas industry services provider Wenzel Downhole Tools slipped into the red in 2009, reporting a net loss of C$0.05 per share compared with a profit of C$0.41 per share a year ago.

Food products company Premium Brands Holdings reported fourth-quarter earnings of C$0.19 per share, up from C$0.18 reported in the prior-year quarter. However, earnings missed consensus estimates for a profit of C$0.32 per share.

Mineral explorer Almaden Minerals said it has closed a private placement of 350,000 units at $1.00 per unit.

Mineral explorer European Goldfields reported fourth-quarter net loss of $0.04 per share, compared with a profit of $0.04 per share last year.

Gold and silver explorer Starcore International Mines posted second-quarter net income of C$77 thousand compared with a net loss of C$22 thousand in the previous-year period.

Silver producer Great Panther Silver reported fourth-quarter net income of C$0.01 per share, compared to a loss of C$0.02 per share during the same quarter last year.

Water treatment company BioteQ Environmental Technologies reported a net loss of C$0.08 per share for fiscal 2009, compared to a loss of C$0.09 per share a year ago.

Gaming software developer Chartwell Technology reported a net loss of C$0.8 million or C$0.04 per share for the first quarter, compared to a net loss of C$0.7 million or C$0.04 per share in the same quarter of last year.

Management technology services provider Solium Capital reported net earnings for the fourth quarter at C$0.012, flat with last-year quarter.

Insurance services provider Intact Financial announced plans to issue medium term notes for $100 million. Canadian Helicopters Income Fund reported fourth-quarter net earnings of C$0.20 per unit, compared to a loss of C$0.03 per unit in the prior-year quarter.
 
In economic news, Statistics Canada said foreign investments in Canadian securities continued to grow, hitting $11.8 billion in January, with more growth seen in debt instruments. Meanwhile, Canadians withdrew $5.8 billion from their holdings of foreign securities in the same period.

From the U.S., the Labor Department said consumer price index was unchanged in February after increasing by 0.2% in each of the five previous months. Economists were expecting consumer prices to edge up 0.1%.

In other report, the Labor Department said initial jobless claims edged down to 457,000 from the previous week's unrevised figure of 462,000. Economists were expecting claims to come in at 455,000. The report added that continuing claims, a reading on the number of people receiving ongoing unemployment help, rose to 4.579 million in the week ended March 6th from the preceding week's revised level of 4.567 million.

Watch us trade “Live”! Watch our Top Tier Traders make ($500 - $2000) a day
in “real time” and learn how to easily duplicate the process!  Click Here for more information

Indian Market Ends Lackluster Session Modestly Higher

Late buying helped the Indian market end a lackluster session modestly higher on Thursday. While global cues offered little support, highly stock-specific buying and sustained foreign fund inflows helped the market end higher for a third straight session.

Standard & Poor's Ratings Services today raised its rating outlook on India to stable from negative, taking note of the government's efforts to contain its fiscal deficit in the next financial year starting April 1. The ratings agency also affirmed the country's long-term and short-term sovereign credit ratings.

After moving in a narrow range of 17,548-17,418, the 30-share BSE Sensex finished at 17,519, up 29 points or 0.17% and the Nifty rose by 14 points or 0.27% to 5,246. Second-line stocks also received modest buying support and decliners outpaced gainers by 1566 to 1259 on the BSE.

Rate-sensitive banking stocks outperformed after data showed India's annual food inflation eased to 16.30% in the week to March 6 from 17.81% a week before, continuing the downward trend for the second straight week.

SBI edged up 0.18%, ICICI Bank gained 1.19%, Axis Bank added 1.68% and United Bank of India gained over 4% on its debut, while HDFC Bank ended down 0.23%.

In the telecom sector, Bharti Airtel, which submitted its bid for 3G spectrum on Thursday, ended up 0.69%. Reliance Communication rose over 2% after partnering with Polycom for video conferencing services.
 
Tata Teleservices soared 4.67% after it sold its tower business to Quippo-Wireless TT Info Services for an enterprise value of Rs 1,318 crore. Idea Cellular, which received a clean chit from government-appointed auditors, rallied 4.66%.

Metal stocks gained despite lower commodity prices. JSW Steel and SAIL rose over 2% each, Hindalco gained 1.56%, NALCO added 1.27% and Tata Steel ended up 0.90%.

Software exporter TCS, which touched its all-time high on Wednesday, ended down 1.64% on profit taking, while Infosys closed at a record high, adding 1.66%. Wipro fell 1.47%, HCL Technologies declined 1.56% and Tech Mahindra lost 1%.

Mortgage lender HDFC rose 0.27% on a brokerage upgrade. Oil explorer Reliance Industries advanced 0.80%. Jaiprakash Associates (up 2.53%), Reliance Infrastructure (up 1.42%), DLF (up 1.12%), Hindustan Unilever (up 0.71%), Hero Honda Motors (up 0.58%) and ACC (up 0.51%) also closed notably higher, while Tata Motors and BHEL closed unchanged with a positive bias.

Engineering and construction giant Larsen & Toubro slipped 0.40% on profit taking following an over 4% gain in the past two sessions. Iron ore producer NMDC eased 1.46%. ONGC fell almost 2%, Mahindra & Mahindra shed over 3%, Tata Power lost 1.27%, NTPC declined 1.25%, Sterlite Industries slipped 0.92%, ITC gave off 0.89% and Maruti Suzuki ended down 0.89%.

Bajaj Electricals gained 3.41% on the back of multiple bulk deals. McNally Bharat Engineering Company edged up 0.13% on bagging a Rs.173.29-crore contract from Mahanadi Coalfields. Fedders Lloyd rallied 4.29% and Nitin Fire Protection Industries rose 0.74% on winning new orders.

Kovai Medical Center & Hospital (up 11%), Piramal Life Sciences (up 11.5%) and Shasun Chemicals & Drugs (up 10%) soared on heavy volumes.

Elsewhere, Asian stocks ended on a mixed note, taking cues from lower commodity prices and the strong U.S dollar, while European stocks edged lower on Thursday as investors paused for breath after a two-day rally.

Trading in the U.S index futures suggested that the Dow could drop 8 points at the opening bell on Thursday as investors await consumer inflation and weekly jobless claims data for further clues on the health of the world's largest economy.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

After trading notably lower early in Thursday’s session, the major European averages have cut their losses and are trading slightly higher. The French CAC 40 Index and the German DAX Index are moving up 0.01% and 0.11%, respectively, while the U.K.’s FTSE 100 Index is gaining 0.24%.

U.S. Economic Reports

Kansas City Federal Reserve Bank President Thomas Hoenig, Richmond Federal Reserve Bank President Jeffrey Lacker and Cleveland Federal Reserve Bank President Sandra Pianalto are all scheduled to speak on a panel about the role of banking in local economic growth at the American Bankers Association conference at 8:30 AM ET.

The Labor Department’s consumer price inflation report showed that consumer prices remained unchanged compared to the previous month in February. The core consumer price index was up 0.1%. The consensus estimates had called for a 0.1% increase in the headline consumer price index as well as the core consumer price index that excludes food and energy.

Food prices rose 0.1%, with the cost of eating at home and eating away from home increasing in the month. Energy prices were down 0.5%, reflecting a 1.3% decline in prices of energy commodities. Shelter costs, which have a significant weighing in the headline number, were unchanged. Annually, on an unadjusted basis, consumer prices rose 2.1% in February.

First-time claims for unemployment benefits showed another modest decrease in the week ended March 13th, according to a report released by the Labor Department on Thursday, although the report also showed another increase in continuing claims.

The report showed that initial jobless claims edged down to 457,000 from the previous week's unrevised figure of 462,000. Economists had been expecting a slightly steeper drop in jobless claims to 455,000.

At the same time, the Labor Department said that continuing claims, a reading on the number of people receiving ongoing unemployment help, rose to 4.579 million in the week ended March 6th from the preceding week's revised level of 4.567 million.

The Conference Board is scheduled to release a report on its leading economic indicators index for February at 10 AM ET. The consensus estimate calls for a 0.1% increase in the leading indicators index for the month.

The leading economic indicators index continued to show improvement for the 10th straight month in January. The leading indicators index rose 0.3% month-over-month in January, although this represented the slowest increase in the 10-month winning streak.

Out of the 10 components, 5 contributed positively to growth, with treasury yield and vendor performance being the biggest contributors. On the other hand, money supply, building permits and initial jobless claims were among the biggest negative contributors.

The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10 AM ET. Economists expect the diffusion index of current activity to show a reading of 18 for March.

In February, the headline-manufacturing index rose to 17.6 from 15.2 in January. The new orders surged up 19 points to 22.7 and the shipment index rose 8 points to 18.7.

The employment indices in the Philly Fed report were mixed. The number of employees index rose 1.3 points to 7.4, but the average work index slipped to 1.9 from the month-ago's 4.2. The outlook index showed some pessimism about the future, slipping to 35.8 in February from 43.3 in January.

Watch us trade “Live”! Watch our Top Tier Traders make ($500 - $2000) a day
in “real time” and learn how to easily duplicate the process!  Click Here for more information

Nike (NKE) shares rose in Wednesday’s after hours session after the company reported that its third quarter revenues rose 7% year-over-year to $4.7 billion. The company’s earnings were $1.01 per share compared to 50 cents per share last year. The year-ago results included a charge amounting to $241 million. Analysts estimated earnings of 89 cents per share on revenues of $4.60 billion. The company reported that worldwide future orders for NIKE Brand footwear and apparel scheduled for delivery from March through July 2010 were up 9% year-over-year.

FedEx (FDX) is moving lower in pre-market trading despite its third quarter revenues rising 7% to $8.70 billion. The company’s earnings rose to 76 cents per share from the year-ago’s 31 cents per share. Analysts estimated earnings of 72 cents per share on revenues of $8.37 billion. The company expects earnings of $1.17-$1.37 per share for the fourth quarter and $3.60-$3.80 per share for the year. The consensus estimates call for earnings of $1.26 per share for the quarter and $3.64 per share for the year.

Clarcor (CLC) could also be in focus after it reported first quarter net sales that edged up 0.7% to $215.13 million. The company’s earnings rose 71% to 29 cents per share. Analysts estimated earnings of 31 cents per share on revenues of $222.83 million. The company reaffirmed its full year 2010 sales growth guidance of 6%-8% and its earnings estimate of $1.55-$1.70. For the full year, analysts estimate earnings of $1.70 per share on revenues of $956.60 million, up 5.4% year-over-year.

XL Capital (XL) is likely to see some activity after it said it estimates a preliminary loss of $140 million to $205 million related to the Chilean earthquake and a loss of $20 million to $25 million related to windstorm Xynthia, which hit Europe.

CA, Inc. (CA) may also be in focus after it said it has completed its previously announced acquisition of Nimsoft for $350 million in an all cash deal.

Commerica Inc. (CMA) is also likely to move in reaction to its announcement that it has repaid $2.25 billion in TARP funding it received from the U.S. Treasury. The company noted that it has redeemed the preferred stock issued to the Treasury, five days after completing the issuance of $880 million worth of its common stock. The repayment helps the company to eliminate the annual $134 million negative impact to net income to common shareholders related to the preferred stock.

Guess? Inc. (GES) may gain ground after it reported that its fourth quarter earnings rose to 93 cents per share from 51 cents per share last year. On an adjusted basis, the company reported earnings of 96 cents per share, higher than the 66 cents per share last year. Net revenues climbed 14.4% to $642 million. Analysts estimated earnings of 81 cents per share on revenues of $601.67 million. For the full year 2010, the company estimates earnings per share of $2.87-$2.95 and net revenues of $2.30 billion to $2.35 billion. The consensus estimates call for earnings of $2.92 per share on revenues of $2.29 billion. The company also raised its quarterly dividend by 28% to 16 cents per share.

Herman Miller (MLHR) could also see activity after it reported that its third quarter net sales fell 7% to $329.6 million. On an adjusted basis, the company reported earnings of 15 cents per share, lower than 18 cents per share in the year-ago period. The results were below the consensus estimates. While orders rose 3.8%, backlogs fell 6.4%.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

Investors Hub Services