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Stocks Seeing Notable Strength In Mid-Morning Trading
Stocks are posting strong gains in mid-morning trading on Friday, as a smaller than expected drop in February's headline jobs figure has helped to drive buying interest. The major averages are all in positive territory, looking for a strong close to the week.
Ahead of the opening bell this morning, the Labor Department reported that non-farm payroll employment fell by 36,000 jobs in February following a revised decrease of 26,000 jobs in January. Economists had expected a more substantial loss of about 68,000 jobs.
The relatively modest decrease in the headline employment figure came despite the impact of severe winter weather in parts of the country.
Additionally, the Labor Department said that the unemployment rate in February remained unchanged from the previous month at 9.7 percent. The unemployment rate had been expected to tick up to 9.8 percent.
Rob Carnell, chief international economist at ING, said, "Overall, this was a positive set of labor market data, and aside from the fact that the headline numbers are heavily distorted, they should provide some comfort about the U.S. economic recovery."
Later today, the Federal Reserve will release its monthly consumer credit report for January. Economists expect that consumer credit declined $4.5 billion during the month after sliding by $1.7 billion in December.
In earnings news, chipmaker Marvell Technology (MRVL) said that it swung to a fourth quarter profit, helped by higher revenue and improved margins. The company's quarterly earnings per share, excluding items, also came in above analysts' expectation.
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is currently up 84.87 points or 0.8 percent at 10,529.01, the Nasdaq is up 24.34 points or 1.1 percent at 2,316.65 and the S&P 500 is up 11.14 points or 1 percent at 1,134.11.
Sector News
Biotechnology stocks are some of the morning's strongest performers, driving the NYSE Arca Biotechnology Index up by 3.6 percent to another historic intraday high.
InterMune (ITMN) is leading the biotech sector higher, surging up by 57.6 percent after the company said it will meet with a FDA panel next Tuesday to discuss its drug candidate Pirfenidone. The stock reached its best price in roughly two and a half years in earlier dealing.
Steel and gold stocks are also posting notable gains, reflecting strength in metals. The NYSE Arca Steel Index and the NYSE Arca Gold Bugs Index are up by 2.4 percent and 1.8 percent, respectively. Notably, the steel index has risen to its best intraday level in nearly six weeks.
Networking, housing, oil and transportation stocks are also advancing by significant margins, further indicative of the day's widespread buying interest.
Stocks Driven By Analyst Comments
Coldwater Creek (CWTR) is on the rise in mid-morning trading after Barclays Capital upgraded its rating on the stock from Equal Weight to Overweight and boosted the price target to $10 from $5. The stock is up by 9.3 percent, rising to a more than four-month intraday high.
Constellation Energy (CEG) is also moving higher after an upgrade at Jefferies & Co. from Hold to Buy. The broker also raised its target price on the stock from $37 to $41. Shares are currently up by 1.3 percent after reaching an eighteen-month intraday high in earlier trading.
On the other hand, Tyson Foods (TSN) is headed lower following a downgrade at BB&T Capital Markets from Buy to Hold. The stock has lost 1.1 percent, pulling back off of yesterday's twenty-one-month closing high. |
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TSX Poised For A Positive Opening Friday
Canadian stocks are poised to open higher Friday after pausing in the previous session. Encouraging jobs numbers from the U.S., Canada's largest trading partner, will likely to help lift sentiment. A host of earnings results released after the markets close yesterday may also trigger stock specific action in the last trading day of the week.
However, easing gold prices may weigh on gold stocks, while energy stocks may lend support on higher oil prices.
On Thursday, the S&P/TSX Composite Index edged down 27.88 points or 0.24% to 11,824.97. The main index gained in three of the four sessions.
The price of oil moved up $$0.95 to $81.16 an ounce, while bullion eased $4.60 to $1,128 an ounce just after the release of job numbers from the U.S.
In corporate news Barrick Gold will be reportedly raising $978 million by offering shares of its African unit through and initial public offering in London.
Precious metals explorer NovaGold Resources announced plans to issue 18.18 million common shares at $5.50 per common share for gross proceeds of $100 million.
Silver explorer Silver Standard Resources reported a narrower fourth quarter net loss of $0.13 per share, compared to a loss of $0.23 per share in the previous year quarter.
Construction contractor Seacliff Construction said it's net earnings improved in fourth quarter to C$0.49 per share from C$0.18 per share in the previous year quarter.
Food products maker Sun-Rype Products said it swung to profit in the fourth quarter reporting a net income of C$0.08 per share, compared to a loss of C$0.15 per share in the year-ago quarter.
Restaurants operator Tim Hortons said it plans to open as much as new coffee shops in Canada
Silver Wheaton reported net earnings of $0.15 per share for the fourth quarter, compared to a net loss of $0.22 per share in the prior year quarter.
Real estate investment trust Chartwell Seniors Housing Real Estate Investment Trust said it's fourth quarter net loss narrowed to C$0.06 per share from a loss of C$0.81 per share in the same period last year.
Renewable energy generator Algonquin Power & Utilities reported a fourth quarter net loss of C$0.03 per share, compared to a loss of C$0.28 per share in the same period last year.
Oil and gas industry service provider Trican Well Service swung to profit in fourth quarter reporting net income of C$0.12 per share, compared to a loss of C$0.77 per share in the prior year quarter.
Yesterday in its budget statement the Canadian government said it forecasts C$49.2 billion deficit in 2101-11 up from the C$45.3 predicted earlier and noted that it would be in surplus by 2015-16.
From across the border, the U.S. Labor Department said non-farm payroll employment fell by a less than expected 36,000 jobs in February following a revised decrease of 26,000 jobs in January. This was despite cold weather in some parts of the country. Economists were expecting loss of about 68,000 jobs. The rate of unemployment was steady at 9.7%. |
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Asian Markets End In Positive Territory
The markets across Asia ended in positive territory on Friday, taking cues from Wall Street where the major averages ended higher in the previous session on increasing optimism that economic recovery will be sustained. Speculation that Bank of Japan might ease monetary policy to fight deflation weakened the yen against the dollar, lifting market sentiment.
In Japan, the benchmark Nikkei 225 Index advanced 223.24 points, or 2.20% to 10,369, while the broader Topix index of all First Section issues rose 13.17 points, or 1.47%, to 911.
On the economic front, a statement released by the Ministry of Finance revealed that official reserve assets in the country totaled $1.051 trillion by the end of February, down $1.99 billion from January. The statement further noted that as of February 28, foreign currency reserves amounted to $0.999 trillion, while reserves with the International Monetary Fund stood at $4.19 billion. Gold reserves totaled $27.27 billion, while SDRs were worth $20.50 billion.
Reports in the press revealed that the apex bank, Bank of Japan, has begun examining plans to further ease its already ultra-loose monetary policy and may make a decision on such a move as early as this month. Speculation is rife that the central bank's policy board is expected to discuss further measures to tackle deflation at a two-day meeting starting from March 16.
Light sweet crude oil futures for April delivery ended at $80.69 a barrel in electronic trading, up $0.48 per barrel from previous close at $80.21 a barrel in New York on Thursday.
Almost all the stocks across the sectors ended in positive territory amid speculation that BOJ will step in to fight deflation in the country.
Real estate stocks ended in positive territory. Sumitomo Realty & Development surged up 4.55%, Mitsubishi Estate rose 2.92%, Mitsui Fudosan gained 2.68%, Heiwa Real Estate climbed 3.65% and Tokyu Land Corp. increased 2.52%.
Shipping stocks also ended higher on optimism about recovery. Mitsui OSK Lines climbed 3.95%, Kawasaki Kisen Kaisha surged up 4.89% and Nippon Yusen rose 2.75%.
Among automotive stocks, Suzuki Motor Corp. gained 2.95%, Honda Motor advanced 0.97%, Toyota Motor added 0.59% and Nippon Motor Co., rose 0.86%.
Trading companies also advanced on weaker local currency. Toyota Tsusho Corp. climbed 3.85%, Sumitomo Corp. added 0.62%, Mitsubishi Corp. rose 1.33%, Marubeni Corp. gained 2.44% and Itochu Corp. increased 2.21%.
In Australia, the benchmark S&P/ASX 200 Index added 16.70 points, or 0.35% to close at 4,767, while the All-Ordinaries Index ended at 4,773, representing a gain of 15.80 points, or 0.33%.
On the economic front, a report released by the Australian Industry Group revealed that the AIG/Housing Industry Association performance of construction index stood at a seasonally adjusted 52.8 in February, down from 57.7 in the previous month. A reading above 50 indicates expansion, while one below suggests contraction.
In a separate statement, the Reserve Bank of Australia stated that the country's official reserve assets totaled A$44.34 billion by the end of February, down from A$46.59 billion in January. The statement further noted that foreign currency reserves decreased to A$34.62 billion from A$36.85 billion, while reserves with the International Monetary Fund stood at A$1.20 billion. Gold reserves totaled A$3.20 billion while SDRs were worth A$5.32 billion.
The Australian Bureau of Statistics revealed that short-term visitor arrivals into the country decreased a seasonally adjusted 1% month-on-month in January following the 2.5% gain in the previous month. The report noted that a total of 480,900 arrivals were registered in January, down from 485,800 in December.
Light sweet crude oil futures for April delivery ended at $80.69 a barrel in electronic trading, up $0.48 per barrel from previous close at $80.21 a barrel in New York on Thursday.
Most of the traders exercised caution ahead of key jobs report in the U.S later in the day despite positive closing on Wall Street in the previous session. Mining stocks continued to rally on optimism about sustaining global economic recovery and higher demand in the near future. BHP Billiton added 0.52%, Rio Tinto advanced 0.82%, Macarthur Coal climbed 3.00%, Minara Resources rose 0.64%, Murchison Metals gained 1.19% and Oz Minerals increased 2.27%. However, Fortescue Metals declined 2.05%, Gindalbie Metals lost 2.31%, Iluka Resources slipped 1.07% and Mincor Resources edged down 0.30%.
Mixed trading was witnessed among gold stocks. While Newcrest Mining managed to end in positive territory with a gain of 1.40%, Lihir Gold, on the other hand, ended in negative territory with a loss of 1.02%.
Oil stocks also ended mixed. Woodside Petroleum added 0.52%, Santos edged up 0.22% and Origin Energy rose 0.72%. However, Oil Search bucked the trend and ended in negative territory with a loss of 0.76%.
Mixed trading was witnessed among banking stocks as well. ANZ Bank gained 0.68% and Commonwealth Bank of Australia added 0.24%. However, National Australia Bank slipped 0.56% and Westpac Banking shed 0.71%.
In Hong Kong, the Hang Seng Index ended snapped 3-day losses and ended in positive territory with a gain of 212.19 points, or 1.03%, at 20,788, on increasing optimism that the global economic recovery will be sustained. Positive closing on Wall Street in the previous session, speculation about BOJ's monetary easing to fight deflation and positive trading across other markets in the region lifted market sentiment.
In South Korea, the KOSPI Index ended in positive territory with a gain of 16.37 points, or 1.01%, at 1,635, lifted by positive close on Wall Street in the previous session on improving optimism that the global economic recovery will be sustained. Reports that Bank of Japan is considering easing monetary policy to fight deflation in the economy also lifted market sentiment. However, volume was relatively lower as traders preferred to adopt a wait-and-watch attitude ahead of key US jobs report.
The Indian market ended a volatile session modestly higher on Friday, encouraged by gains on Wall Street overnight and positive sentiment across Asia after data on U.S first-time jobless claims and retail sales beat estimates and the yen weakened on speculation the Bank of Japan is considering a further easing of monetary policy. While the Sensex finished at 16,994, up 23 points or 0.13%, the Nifty rose by 8 points or 0.17% to 5,089.
Among the other major markets, Singapore's Strait Times added 21.59 points, or 0.78% to close at 2,790, China's Shanghai Composite Index edged up 7.69 points, or 0.25%, to close at 3,031, Taiwan' s Weighted Index gained 96.46 points, or 1.27%, to close at 7,666, and Indonesia's Jakarta Composite Index rose 13.13 points , or 0.51%, to close at 2,579. |
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The major European markets are trading higher on Friday, with the French CAC 40 Index and the German DAX Index rising 1.24% and 0.45%, respectively, while the U.K.’s FTSE 100 Index is moving up 0.38%.
On the economic front, the U.K. Office for National Statistics reported that the U.K.’s output price inflation rate came in at 4.1% annually in February compared to 3.8% in the previous month. The inflation rate was the highest since December 2008. On a monthly basis, the inflation rate was 0.3% compared to the 0.2% growth expected by economists. At the same time, the input price index rose 2.9%, faster than the 2.6% growth in January and the 2.8% increase expected by economists.
A separate report released by the U.K. Office for National Statistics showed that total volume of construction output fell 1% in the fourth quarter compared with the previous quarter, when output grew by a revised 0.44%.
Germany's Federal Ministry of Economics and Technology said industrial new orders rose 4.3% month-over-month in January. Economists had forecast a more modest 1.3% rise. On an annual basis, factory orders climbed 19.6% in January, topping expectations for a 15.4% rise.
U.S. Economic Reports
The Labor Department reported that the U.S. non-farm payroll employment fell by 36,000 in February compared to a loss of 26,000 jobs in the previous month. Economists had expected job losses to widen to 68,000 from 20,000 estimated initially for January.
Goods producing sector lost 60,000 jobs, with the decline mainly due to a loss of 64,000 jobs in the construction sector, while the manufacturing sector added 1,000 jobs. While government reduced payrolls by 18,000, the private service providing sector added 42,000 jobs.
Average hourly earnings rose 0.13% to $22.46, with the annual rate of change in the average hourly earnings at 1.9%. The unemployment rate based on the household survey remained unchanged at 9.7%.
The U.S. Federal Reserve is expected to release its monthly consumer credit report at 3 PM ET. Consumer credit for January is likely to show a decline of $4.5 billion.
In December, consumer credit outstanding fell 0.8% or $1.8 billion to $2.46 trillion. Non-revolving credit tied to auto loans rose 5.2%, helping to offset to some extent the 11.7% drop in revolving credit associated with credit card loans. |
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Diamond Foods could see some weakness after it announced that it has priced an offering of 4.5 million shares at $37 per share. The offering is scheduled to close on March 10, 2010. The company said it intends to use the net proceeds of the offering to pay a portion of the purchase price for its previously announced acquisition of Kettle Foods from Lion Capital.
51job, Inc. could rally after it reported fourth quarter revenues of $33.1 million, up 15.2% year-over-year. The company’s non-GAAP earnings were 0.95 yuan or 28 cents per ADS. For the first quarter, the company expects revenues of $33.7 million to $35.2 million and non-GAAP earnings of 20-23 cents per share.
Depomed is also likely to see buying interest after it reported fourth quarter revenues of $18.23 million, up from $8.72 million last year. The company’s loss narrowed to 7 cents per share compared to a loss of 22 cents per share last year. Analysts expected a loss of 13 cents per share on revenues of $13.33 million.
American Greetings could react to its announcement that it has announced a 17% increase in its quarterly cash dividend to 14 cents per share.
Equity One may see some activity after it reported fourth quarter funds flow from operations of 28 cents per share compared to 19 cents per share last year. Revenues rose to $68.26 million from the year-ago’s $57.72 million. Analysts estimated earnings of 26 cents per share on revenues of $67.21 million. For 2010, the company expects funds from operation of $1.02-$1.10 per share, while analysts estimate funds from operations of $1.10 per share.
Cooper Companies receded in Thursday’s after hours session after it announced that its first quarter revenues rose 4% year-over-year to $260.3 million. The company reported non-GAAP earnings of 49 cents per share. Analysts estimated earnings of 52 cents per share on revenues of $262.21 million. For 2010, the company expects non-GAAP earnings of $2.45-$2.55 per share on revenues of $1.11 billion to $1.17 billion. Analysts estimate earnings of $2.55 per share on revenues of $1.14 billion.
Marvel Technology also fell sharply in Thursday’s after hours session despite reporting fourth quarter net revenues of $843 million, up 64% year-over-year. On a non-GAAP basis, the company reported earnings of 40 cents per share compared to 5 cents per share last year. The consensus estimates called for earnings of 37 cents per share on revenues of $841.82 million.
Cache may also be in focus after it reported that its fourth quarter net sales fell 1.4% to $65 million. The company reported adjusted net income of 3 cents per share compared to an adjusted loss of 32 cents per share last year. Analysts estimated earnings of 2 cents per share on revenues of $64.78 million. |