US & World Daily Markets Financial Briefing 22-02-2011

Lowest Spreads, 0.9 EUR/USD, No Dealing Desk, STP ECN Forex Broker

10% Deposit bonus with mention of this ad

Click Here for Loyalforex.com

Stocks Seeing Early Weakness Amid Geopolitical Concerns

With geopolitical concerns generating considerable selling pressure, stocks have shown a notable move to the downside in early trading on Tuesday. The major averages have all fallen into negative territory, pulling back off last Friday's multi-year closing highs.

The early weakness is due in large part to civil unrest in Libya, which has added to recent concerns about oil supplies and contributed to a significant advance by the price of crude oil.

Oil-sensitive airline stocks are posting particularly steep losses in early trading in reaction to the sharp rise by the price of crude. Networking, semiconductor, and housing stocks are also seeing significant weakness, while gold stocks are bucking the downtrend.

On the economic front, a report released by Standard & Poor's signaled continued weakness in the housing market at the end of 2010.

The S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 2.4 percent in December compared to a 1.6 percent drop in January. The decrease in December came in line with economist estimates.

Also this morning, the Conference Board is scheduled to release its consumer confidence report for February at 10:00 a.m. ET.

The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index rose to 65.0 for the month from the reading of 60.6 posted for January.

In earnings news, Wal-Mart (WMT) posted adjusted fourth-quarter net income of $1.34 per share, better than the $1.31 per share forecast on Wall Street. Revenues grew to $116.36 billion from $113.62 billion in the prior-year quarter but still failed to meet expectations for $117.68 billion.

Home Depot's (HD) fourth-quarter net earnings came in at $0.36 per share, above forecasts for $0.31 per share for the quarter. The company reported sales of $15.13 billion, topping projections for $14.80 billion.

The major averages have moved off their lows for the young session but currently remain firmly in the red. The Dow is down 96.53 points or 0.8 percent at 12,294.72, the Nasdaq is down 48.79 points or 1.7 percent at 2,785.16 and the S&P 500 is down 15.66 points or 1.2 percent at 1,327.35.

Click Here

TSX Looks To Open Lower Amid Weak Global Cues

Bay Street stocks are poised for a lower open Tuesday amid rising tensions in the Middle East that prompted sell-offs in equities across the globe. However, energy stocks may provide some lift to the main index, with the crude oil prices surging to a 30-month peak.

While most Asian markets ended down, European stocks were lingering deep in the red. Elsewhere, the markets in the Gulf Arab region declined for a third session amid uprising in Libya

U.S. stock futures were pointing to a sharply lower open.

On Friday, the S&P/TSX Composite Index edged down 13.05 points or 0.09 percent to 14,123.11, after 13,910 and 14,136 during the week. The market remained closed on Monday for Family Day.

The price of crude oil advanced to 30-month high Tuesday morning as turmoil in the Middle East escalated. Concerns that the revolt in Libya could spread to other major oil producers in the Middle East and North Africa helped oil prices higher. Fighting has spread to the capital Tripoli amid reports that African mercenaries are being used to crack down on protesters. Crude for April delivery surged $6.96 to $96.67 a barrel.

The price of gold moved up over $1,400 amid concerns over inflation. Gold for April was up $14.90 to $1,403.50 an ounce.

In corporate news from Canada, grain distributor Viterra Inc. said Friday it has signed Memoranda of Understanding with Canadian National Railway and Canadian Pacific Railway,  aimed at improving logistical efficiencies in Western Canada's grain handling system.

Enterprise content management firm Viterra Inc. Friday said it has completed the acquisition of global business process management company Metastorm.

Gold miner Richmont Mines reported higher fourth quarter net income of C$4.6 million or C$0.15 per share compared to net income of C$0.1 million or break-even per share recorded a year ago. The company plans to complete a total of 90,500 metres of exploration drilling during 2011 with a total approximate budget of C$12 million.

Global specialty health science company Nordion Inc. said it would divest its Belgian operations, excluding the TheraSphere business, to Best Medical Belgium.

Green packaging and tissue paper maker Cascades Inc. said it would sell its Norampac Avot-Vallée mill to private equity firm OpenGate Capital.

Energy company TransAtlantic Petroleum said it has completed the acquisition of ownership interests in Direct Petroleum Bulgaria EOOD, Direct Petroleum Morocco, Inc. and Anschutz Morocco Corp., for 8.92 million common and C$2 million in cash.

Lithium, rare earth and uranium exploration company Aben Resources said it entered into an agreement with Eagle Plains Resources Ltd. to earn the 100 percent interest in the Rusty Springs property for $500,000 in cash and 1.5 million common shares over 5 years.

Automotive finance company RIFCO Inc. reported third-quarter net income of C$0.73 million or C$0.04 per share, up from C$0.35 million or $0.02 per share a year ago.

Network marketing company Immunotec Inc. reported a narrower fiscal year 2010 net loss of C$1.39 million or C$0.020 per share, compared to a loss of C$4.55 million or C$0.065 per share a year-ago.

Employment services provider Wanted Technologies reported a narrower second quarter net loss of C$122,376 or C$0.005 per share, compared to a net loss of C$177,925 or C$0.007 per share for the year-ago quarter.

In economic news, Statistics Canada said retail sales edged down 0.2 percent in December to C$37.3 billion, following a revised 1.4 percent increase in November.. This slight decline comes on the heels of six consecutive months of gains. Economists were expecting no change from the previous month.

Click Here

Banks, Construction Stocks Drag French Market Down

The French market is notably lower in afternoon trading Tuesday, as protests continue in Libya seeking the resignation of president Moammar Gadhafi. Banks and construction stocks are declining as investors try to keep away from risk.

Crude for March delivery is adding $6.30 to $92.50 amid fears that Libya's crude exports of 1.0 million barrels a day could be affected. With investors turning to less risky investments, gold is advancing $9.7 to $1398.3 a troy ounce.

In economic news, housing starts in France increased a seasonally adjusted 1.6 percent month-on-month in January, slower than 2.4 percent in the previous month, data released by the housing ministry revealed. In November, starts rose 2.8 percent.

Meanwhile, German consumer sentiment continued its upward trend in February, a survey conducted by the GfK Group showed. The consumer sentiment index for March rose to 6.0 from a revised 5.8 points in February and came above the expected score of 5.8 points.

After opening lower at 4,075, compared to the prior close of 4,097, the CAC 40 index is currently losing 1.34 percent.

Lender Societe Generale is leading the losers by falling 3.4 percent. BNP Paribas, Credit Agricole, and Natixis are slipping between 3.2 percent and 2.4 percent.

Building materials maker Saint-Gobain is retreating 3.2 percent and cement giant Lafarge is down 2.6 percent. Builders Vinci and Bouygues are declining 2.5 percent and 0.2 percent, respectively.

Carmaker Renault is falling 1 percent and Peugeot is down 0.6 percent.

Those making notable losses include rail-equipment maker Alstom, media group Vivendi, cosmetics giant Loreal, insurer Axa and drugmaker Sanofi-Aventis.

Elsewhere in Europe, the UK's FTSE 100 is losing 0.86 percent and the German DAX is declining 0.08 percent.

Across Asia/Pacific, major markets ended lower. Australia's All ordinaries lost 0.87 percent, China's Shanghai Composite Index lost 2.60 percent and Hong Kong's Hang Seng retreated 2.11 percent. Japan's Nikkei 225 lost 1.78 percent and India's BSE Sensex dropped 0.77 percent.

In the U.S., futures point to a lower open on Wall Street. The Dow futures are down 90 points, the S&P 500 futures are lower by 15.80 points, and the Nasdaq 100 futures are losing 33.50 points.

Click Here

Indian Market Ends Lower On Middle East Worries

The Indian market fell notably to end off the day's low on Tuesday, weighed by weak global cues amid escalating political tensions in West Asia, particularly in Libya. After remaining relatively unchanged early in the session, the benchmark 30-share Sensex witnessed fresh selling in the afternoon that dragged the index down about 250 points to a low of 18,187.

However, the Sensex saw considerable recovery from these levels before ending down 142 points or 0.77 percent at 18,296, with 25 of its components declining. With rising oil prices fueling inflation worries, the 50-share Nifty ended down 50 points or 0.90 percent at 5,469, while the BSE mid-cap and small-cap indexes lost 0.85 percent and 0.73 percent, respectively.

Auto stocks such as Bajaj Auto, Mahindra & Mahindra, Tata Motors and Hero Honda Motors fell by 0.56-3.36 percent in anticipation of a hike in excise duty in the upcoming budget. Car maker Maruti Suzuki lost 2.38 percent after launching a diesel variant of its SX4 sedan.

Engineering & construction giant Larsen & Toubro fell 2.65 percent, private sector HDFC Bank lost 2.59 percent, infrastructure firm Jaiprakash Associates declined 2.39 percent, steel maker Tata Steel slipped 2.13 percent, power plant equipment maker BHEL slipped 1.71 percent and property developer DLF ended down 1.66 percent. Jindal Steel, SBI, ONGC, Wipro, Tata Power, ITC and HDFC were the other prominent decliners.

Amara Raja Batteries fell 2 percent after it unveiled plans to set up an integrated electronics manufacturing park in Chittoor district of Andhra Pradesh state. Balrampur Chini eased a percent after it received board approval for a share buyback plan. Idea Cellular plunged nearly 5 percent on charges of alleged violation of merger and acquisition norms.

On the positive side, Reliance Industries which announced a $7.2 billion asset sale to British Petroleum, climbed 3 percent. Reliance Communication, India's second largest mobile phone operator, rose 1.49 percent after launching third generation (3G) services in Kashmir. Copper producer Sterlite Industries gained 1.42 percent, while Reliance Infrastructure and TCS closed unchanged with a positive bias.

Goodyear India climbed 5.75 percent on declaring a dividend of Rs.7 per share. NMDC, which is reportedly exploring the possibility of setting up a 2-mtpa steel plant along with Tata Steel, ended up 0.33 percent.

Meanwhile, with the Budget barely a week away, the prime minister's economic advisory council called for the withdrawal of some fiscal stimulus announced during the global economic downturn to boost tax revenues and put the economy back on track for fiscal consolidation.

Separately, Prime Minister Manmohan Singh today agreed to the opposition's demand for a Joint Parliamentary Committee probe into the 2G spectrum scam.

Elsewhere, the other Asian markets saw broad-based losses on Tuesday, with the key benchmark indexes in China, Hong Kong, Japan, Singapore, South Korea and Taiwan losing around 2 percent each, amid persistent worries that the unrest in Middle East and North Africa could stoke inflationary pressures and undermine the global economic recovery.

Japan's Nikkei fell 1.78 percent following a cut in the nation's rating outlook by Moody's Investors Service on Tuesday. China's Shanghai Composite index ended down 2.6 percent, its biggest single-day loss in a month, as rising oil and commodity prices sparked rate tightening worries.

European stocks fell for a third consecutive session and trading in the U.S. Index futures suggested that the Dow index could fall 118 points at the opening bell later in the global day, as Wall Street resumes trading after a long holiday weekend.

Crude prices climbed to clinch a 2.5 year high at $108.7 for Brent crude in Asian trading amid growing concerns that some of Libya's crude exports of 1.0 million barrels a day could be affected as violent protests continue calling for the resignation of Libyan leader Moammar Gadhafi.

 Premium Newsletter Free to join! Click here

Dollar Mixed Amid Libya Unrest, Higher Crude Prices

The dollar was mixed against other major currencies Tuesday morning in New York, giving back gains against the euro ahead of today's U.S. housing and consumer confidence figures.

Oil prices surged higher on concerns about supplies from Libya, where civil unrest stands to topple the longtime regime of Muammar el-Qaddafi. OPEC officials have assured that they will keep the market well supplied in the event of interruptions from Libya.

The buck was helped by its status as a safe haven currency. Even with U.S. crude rising to $93 a barrel, the dollar was steady near C$0.9850 versus its petro-linked Canadian counterpart.

The greenback hit a 2-month peak against New Zealand's dollar after earthquakes hit the nation's second biggest city.

Early gains were reversed against the euro, however. The buck tumbled back to $1.3675 from an overnight high of $1.3525.

The European Central Bank may need to adjust its monetary policy as prices pressures increase, the bank's Governing Council member Yves Mersch said. "I would not be surprised if we would have to adjust somewhat our language," Mersch told Bloomberg News in an interview on Monday.

"We are experiencing a new external shock, this is not only coming from oil prices, it's all kinds of commodity prices and on top we also have pressure on food prices," Mersch said.

The dollar also weakened against the yen, drifting down to Y82.80 from above Y83.

There was little movement against the sterling, with the buck holding at $1.6150.

On the economic front, the S&P/Case-Shiller home price index for December is scheduled to be released at 9 AM. Economists expect a 2.4 percent decline in the 20-city composite house price index for December.

The Conference Board is scheduled to release its consumer confidence report for February at 10 am ET. The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index rose to 65 in February.

Click Here

Investors Hub Services