US & World Daily Markets Financial Briefing 02-12-2009

XplosiveStocks.com is a leading stock website that provides free daily alerts on OTC Stocks, such as PGCX - Click Here To Find Out More

Buying Momentum Faces Risk of Profit Taking

The major U.S. index futures are pointing to a lower opening on Wednesday, with sentiment souring following the release of a private non-farm payroll employment survey, which showed that the sector lost jobs at a faster pace than had been anticipated. That said, the report revealed that job losses continued to slow down. The price of oil is seeing modest weakness ahead of the release of the EIA weekly oil inventory report.

The markets may also closely watch the Fed’s Beige Book to gain insight into how the economic environment is panning out in the federal reserve districts. Some traders may choose to take money off the tables, as they anxiously look forward to the Labor Department’s monthly non-farm payroll report to be released on Friday.

U.S. stocks opened Tuesday’s session higher and showed a steady modest advance over the course of trading to end with notable gains. The buying spree came about as traders grew out of the fear of a backlash from the Dubai World credit crisis, reconciling to the idea that it could be an isolated event that is unlikely to hurt the rest of the global economy. The Dow Industrials ended at a fresh 1-year high of 10,472, representing a gain of 126.74 points or 1.23%.

While the Nasdaq Composite rose 31.21 points or 1.46% to 2,176, the S&P 500 Index jumped 13.23 points or 1.21% to 1,109.

Twenty-seven of the thirty Dow components ended the session higher, with Alcoa (AA), Boeing (BA), Caterpillar (CAT), Cisco Systems (CSCO), Home Depot (HD), Intel (INTC), Microsoft (MSFT), Pfizer (PFE) and Verizon Communication (VZ) among the leading advancers. However, American Express (AXP) fell 1.27%.

Among the sector indexes, the NYSE Arca Airline Index climbed 3%, while the Dow Jones Transportation Average, the Dow Jones Utility Average and the Dow Jones U.S. Basic Materials average all ended up with gains of about 1.50%. While the S&P Retail Index rose 1.81%, the Philadelphia Housing Sector Index gained 2.06%. In the resource space, the NYSE Arca Oil Index and the Philadelphia Oil Service Index advanced 1.94% and 1.47%, respectively, while the NYSE Arca Gold Bugs Index rallied 5.45%.

Among technology indexes, the Philadelphia Semiconductor Index jumped 3.06%, the NYSE Arca Disk Drive Index moved up 2.65% and the NYSE Arca Software Index rose 1.78%.

On the economic front, the ISM’s national manufacturing survey released yesterday revealed that the sector expanded at a slower pace in November. The manufacturing index fell to 53.6 in November from 55.7 in October, while economists had expected a more modest decline to 55. The production index fell to 59.9 from October’s 63.3, but the new orders index rose 1.8 points to 60.3.

Although the employment index fell 2.3 points to 50.8, it remained in expansion zone for the second straight month. The inventories index continued to decline, showing that there was no respite from destocking.

The National Association of Realtors reported that its pending home sales index rose 3.7% month-over-month in October to its highest level in about three and a half years. Economists had estimated a 1% drop. Barring the West, where the index fell 11.2%, the remaining three regions saw strong gains. Annually, the index was up 28.6%.

Meanwhile, the construction spending report was not very upbeat, with spending remaining unchanged in October from the previous month. A 0.3% increase in private construction spending was offset by a the 0.4% slippage in public construction spending. In the private category, spending on residential construction climbed 4.4% compared to a 2.5% drop in spending on non-residential construction.

Toronto Stocks Looking At Flat Open

Bay Street stocks could be looking at lackluster open on Wednesday as traders mull over the first of several key employment reports from the U.S. The market is looking to hold yesterday's sharp gains.

The Automatic Data Processing report showed that non-farm private employment fell by 169,000 jobs in November following a revised decrease of 195,000 jobs in October. Economists had been expecting a decrease of about 150,000 jobs.

More U.S. employment reports and Canadian jobs data are expected later in the week.

In commodities, crude oil has lost 41 cents to $77.87 per barrel ahead of the Energy Information Administration's weekly inventory report at 10:30 a.m. ET. On the other hand, gold extended its record high to as much as $1,218.40.

In corporate news, Agrium announced that it intends to nominate a slate of directors to stand for election at CF Industries Holdings (CF) 2010 annual stockholder meeting.

Rival Potash will resume operation at a Sussex-area mine on Sunday, following a temporary shutdown, according to the Canadian Press.
 
Logistics services provider Descartes Systems Group reported its third quarter net income declined to $988,000 or $0.02 per share from $2.32 million or $0.04 per share in the previous year.

Canadian National Railway made a new offer to the Teamsters Canada Rail Conference or TCRC, in an effort to break the impasse with the TCRC and end the strike.

Later in the week, employment data will be unveiled on both sides of the border.

Traders also awaited earnings reports from the financial sector later this week. Toronto Dominion, CIBC and National Bank are expected to report on Thursday with Royal Bank on Friday's agenda.

The S&P/TSX Composite Index surged 260.12 points or 2.27% to close at 11,707.32 on Tuesday.

Currency, Commodity Futures

Crude oil futures are moving down $0.51 to $77.86 a barrel after advancing $1.09 to $78.37 a barrel on Tuesday. Gold futures, which climbed $17.90 to $1,200.20 an ounce in the previous session, are currently advancing an incremental $10.10 to $1,210.30 an ounce.

On the currency front, the U.S. dollar is trading at 87.055 yen compared to the 86.6822 yen it fetched at the close of New York trading on Tuesday. Against the euro, the greenback is currently valued at $1.5083 compared to yesterday’s $1.5081.

You can now manage your positions directly from your web browser, whether you use PC or Mac.  Test-drive VT Trader™ Web with your free practice account! Click Here

The major Asian markets closed Wednesday’s session higher, helped by the upside in the commodity space. However, amid trepidation over the impending data releases from U.S. and Europe, most averages pared their gains and ended off the highs of the session.

Japan’s Nikkei 225 average opened lower, but it recovered in early trading, hitting an intra-day high in the morning. Thereafter, stocks showed volatility before closing higher for the session. The Nikkei ended up 36.74 points or 0.38% at 9,609.

Fujitsu rallied 4.84%, Hino Motors jumped 5.49% and NTT Data Corp. soared 4.87%. Furukawa, Honda Motor, JFE Holdings, JGC Corp., KDDI, Mitsubishi Heavy, Nippon Express, Taiheiyo Cement, Taiyo Yuden, TDK Corp., Toho Zinc and Tokyo Gas also showed some strength. On the other hand, Fujikura, Fukuoka Financial, Clarion, Dentsu, GS Yuasa, Inpex, Isetan Mitsukosh, Mitsui Chemicals, NITTO Boseki, Odakyu Electric Rail, Shinshei Bank, Sumco, Sumitomo Chemicals and Tobu Railway were among the worst decliners.

Hong Kong’s Hang Seng Index opened higher and moved sideways in the morning. Thereafter, the index declined slightly, yet it still closed up 176.42 points or 0.80% at 22,290, marking its third straight session of gains.

Thirty-one of the forty-two index components ended the session higher, with Shopping Property, Swire Pacific, China Mercantile Holding, China Overseas, FIH and Bank of China Hong Kong leading the gains. On the other hand, Bank of East Asia fell by over 2%.

Australia’s All Ordinaries rose sharply in early trading, but it gave back some ground over the course of the session. Yet, the index ended up 43.60 points or 0.92% at 4,777.’

Energy and material stocks pushed the markets higher with handsome gains, while most other sector stocks, barring real estate and consumer staple stocks, also rallied. Miners BHP Billiton, Rio Tinto, Newcrest Mining and Lihir Gold all ended higher, while oil stocks Santos, Woodside Petroleum and Oil Search also gained ground in the session. The four major banks also advanced in the session.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

The major European averages are showing indecision in Wednesday’s session, with the French CAC 40 Index receding 0.05%, while the German DAX Index and the U.K.’s FTSE 100 Index are moving down 0.08% and 0.11%, respectively.

On the economic front, Eurostat reported that the euro area’s producer price index declined 6.7% year-over-year in October compared to the 7.6% drop in the previous month. Economists had estimated a 6.8% decline. On a monthly basis, the rate of decline in producer prices slowed to 0.2% in October compared to September’s 0.4% rate, while the economists expected prices to have remained unchanged.

A report released by Markit Economics and the Chartered Institute of Purchasing & Supply showed that the construction purchasing managers’ index rose to 47 in November from 46.2 in October. The index indicated a contraction for the 21st straight month.

U.S. Economic News

The ADP National Employment report released earlier in the day showed that non-farm private employment declined 169,000 in November from the month-ago period. Economists expected a loss of 150,000 jobs for November. The estimated change of employment in October was revised to show a decline of 195,000 from a decline of 203,000.

The service providing sector lost 81,000 jobs compared to a loss of 88,000 jobs in the goods producing sector. In goods producing sector, manufacturing jobs contracted by 44,000, marking the smallest decline since May 2008.

The Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 AM ET.

Crude oil stockpiles rose by 1 million barrels to 337.8 million barrels in the week ended November 20th, with inventories remaining above the upper limit of the average range. Gasoline stockpiles moved up by 1 million and remained above the upper limit of the average range. However, distillate inventories fell by 0.5 million barrels, although they were above the upper boundary of the average range. Refinery capacity utilization averaged 80.1% over the four weeks ended November 20th compared to 80.4% in the previous week.

The Federal Reserve is due to release its Beige Book, which is a compilation of anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts, at 2 PM ET. The report is normally released about two weeks before the monetary policy meeting is held.

Do you want to trade the e-mini S%P profitably without the cumbersome technical analysis? Take the guess work of out of trading, and trade with automated Price Action method only. Proven and Consistent. Click here to find out more

Walgreen (WAG) could see some activity after it reported that its November same store sales rose by 3.9% compared to the year-ago period, while total sales climbed 8.7%.

Nokia (NOK) and other cell phone makers may move in reaction to an announcement from the Finnish mobile phone maker that it expects handset-industry volumes to rise 10% in 2010 from the year-ago period. The company also said it expects to maintain its mobile-device market in volume next year, while striving to maintain stability in selling prices.

Acuity Brands (AYI) is likely to be in focus after it said it has priced a previously announced $350 million note offering by its subsidiary Acuity Brands Lighting at 99.797% of their face value. The company noted that the notes would bear an interest rate of 6% per annum.

Continental Airlines (CAL) may react to its announcement that its November load factor was 80.5%, up 3.2 points from the year-ago period. Consolidated traffic increased 2.9%, while capacity fell by 1.2%.

Copart (CPRT) receded modestly in Tuesday’s after hours after it reported first quarter earnings of 42 cents per share, lower than 44 cents per share last year. Revenues fell 3.2% to $185.5 million. Analysts estimated earnings of 41 cents per share on revenues of $182.46 million.

PDL BioPharma (PDLI) could see weakness after it said it expects fourth quarter revenues of $57 million, lower than $69 million last year. The company clarified that the year-ago results included a $12.5 million payment from Alexion (ALXN) and a one-time payment of $1.8 million from Genentech (DNA). Analysts estimate revenues of $60.61 million for the quarter.

Gerber Scientific (GRB) is expected to see activity after it announced the acquisition of privately-held fashion industry-related software solutions provider Yunique Solutions. The company expects the deal to be accretive to its earnings beginning in the company’s fiscal fourth quarter 2010.

SWS Group (SWS) is likely to move to the downside after it announced that it has commenced an underwritten public offering of 4.1 million shares. The company said it intends to use the proceeds for general corporate purposes and to support continued growth and selective opportunistic acquisitions.

McDonald’s (MCD) could be in focus after it announced that Ralph Alvarez, its president and chief operating officer has decided to retire due to health-related reasons. Alvarez’ retirement is effective December 31, 2009.

Intuit (INTU) could also be in focus after it said it has signed an agreement to sell Intuit Real Estate Solutions to Vista Equity Partners for about $128 million in cash. The company said it does not expect any change in its 2010 non-GAAP earnings per share guidance as a result of the sale.

You can now manage your positions directly from your web browser, whether you use PC or Mac.  Test-drive VT Trader™ Web with your free practice account! Click Here

Investors Hub Services