US & World Daily Markets Financial Briefing 11-01-2010

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Stocks moved higher at the start of trading on Monday, with the major averages adding to the gains posted last week. Buying interest remained subdued, however, and the major averages have pulled back near the unchanged line in early trading.

The choppy trading comes amid a lack of significant news, with no major economic reports on tap to be released today. Some traders may also be staying on the sidelines ahead of the release of quarterly results from Alcoa (AA), which is seen as the unofficial start of the earnings season.

Alcoa is due to release its results after the close of trading, with the aluminum giant expected to report fourth quarter earnings of $0.05 per share compared to a year-ago loss of $0.28 per share.

Most analysts have forecast better than expected corporate earnings for the fourth quarter, especially in comparison with the same period last year, which witnessed below-par results amid weak economic conditions.

Despite the lack of direction being shown by the broader markets, significant strength has emerged among gold stocks, which are moving higher along with the price of the precious metal. Oil, real estate, and healthcare provider stocks are also seeing some early strength.

The major averages are currently posting modest gains, well off their highs for the young session. The Dow is currently up 11.72 at 10,629.91, the Nasdaq is up 1.95 at 2,319.12 and the S&P 500 is up 2.50 at 1,147.48.

Toronto stocks are likely to open higher on Monday, holding on to their previous session's gains on higher oil and commodity prices. Canadian stocks have posted gains in five of the last six sessions, gaining over 2% to hit a new 15-month high. The S&P/TSX Composite Index closed Friday at 11,953.83, gaining 66.32 points or 0.56%. The U.S. stock futures also point to a higher opening.

Energy stocks may be in play today after the price of oil moved past the $83-mark on Monday on an encouraging trade report from China, the second largest user of this energy product. NYMEX Light Sweet Crude Oil (WTI) futures for February 2010 were at $83.82, up $1.07 a barrel. The price of bullion also moved higher after a weakness in the U.S. dollar. Gold edged up at $1,155.44, up $17.2 an ounce.

In corporate news, C.A Bancorp (BKP.TO) advised shareholders not to tender to Maxam Acquisiton Corp's C$1.22 per share offer, before its board explore all available alternatives.

Petro- Canada, a unit of Suncor Energy (SU.TO) and partners discovered an estimated 7 to 40 million cubic meters of oil near the Snorre field in the North Sea.

SouthGopi Energy (SGQ.TO) may raise as much as C$459 million in a Hong Kong share sale.

Talisman Energy Inc. (TLM.TO) announced its capital spending plans of C$5.2 billion for 2010, up 10% over 2009.

TransAlta Corp. (TA.TO) announced winning a 25-year power purchase agreement from New Brunswick power.

Fertilizer maker Agrium (AGU.TO) said it would move into Western Canada with 33 more outlets.

Bringing an end to the takeover tussle, Brazil based Minera Penmont, said it will not take any further action regarding its proposal to acquire the outstanding common shares of Canplats Resources (CPQ.V) and has advised the Canplats board accordingly. Since last month, Gold Corp (G.TO) and Penmont have been competing to acquire Canplats.

In brokerage updates, RBC ups Niko Resources (NKO.TO) price target by 20% to C$120 from C$100. UBS hikes Precision Drilling Trust (PD_U.TO) price target to C$10.50 from C$10.00.

In economic news, Canada Mortgage and Housing Corporation said country's housing starts edged up in December. The seasonally adjusted annual rate of housing starts reached 174,500 units from 164,800 units in November. On the other hand, Statistics Canada said overall Canadian building permits fell sharply by 4.6% in November.

Commodities: Crude firms after jobs data

US crude oil futures ended the week higher, after a choppy session, following disappointing jobs data.

The latest Labor Department report showed employers cut 85,000 jobs in December despite expectations of a slight increase in payrolls.

Meanwhile the unemployment rate, as predicted, remained steady at 10%. There was some good news in November’s figure. The decline of 11,000 was revised to an increase of 4,000, the first gain in nearly two years, a sign that the jobs market is headed in the right direction.

However overall the data put pressure on the dollar and reduced expectations of an interest rate hike any time soon.

Crude oil for February delivery rose 9 cents to settle at $82.75 a barrel. Earlier in the session crude fell as low as $81.80 and over the week crude rose 4.3%.

Among precious metals gold for February delivery ended $5.20 higher at $1,138.90 an ounce on Friday. The contract settled the week almost 4% higher.

The yellow metal found support in the weaker dollar after the mostly disappointing US jobs data.

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Asian Markets End In Positive Territory

The markets across Asia, excluding Japan which is closed for a national holiday, ended in positive territory on Monday, but well-off the highs, as traders preferred to lock in gains and move to the sidelines ahead of the unofficial start of earnings season in the U.S with Alcoa's results.

The market in Japan is closed for a holiday.
SHO
In Australia, the benchmark S&P/ASX Index rose 38.60 points, or 0.79% to close at 4,951, while the All-Ordinaries Index ended at 4,981, representing a gain of 39.00 points, or 0.79%.

On the economic front, results of a survey from ANZ Bank revealed that the total number of job advertisements in the country during December jumped 6% from the previous month, coming in at 149,063 advertisements. The results further noted that the number of job advertisements in major metropolitan newspapers grew by a seasonally adjusted 11.6% in December to an average of 10,631 per week after the 8.3% rise in November.

Mining and metal stocks ended higher on speculation that commodity prices will continue to rise on higher demand. BHP Billiton climbed 1.95%, Fortescue Metals surged up 4.55%, Gindalbie Metals rose 4.05%, Macarthur Coal advanced 1.33%, Minara Resources soared 5.33%, Oz Minerals gained 1.61% and Rio Tinto increased 1.25%.

Among gold stocks, Lihir Gold surged up 2.98% and Newcrest Mining remained climbed 1.71%..

Mixed trading was witnessed among oil stocks. Woodside Petroleum gained 1.19%, Santos advanced 0.77% and Origin Energy added 0.40% However, Oil Search Ltd bucked the trend and ended in negative territory with a loss of 0.16%.

Bank stocks ended in positive territory. ANZ Bank advanced 0.63%, Commonwealth Bank of Australia gained 0.73%, National Australia Bank rose 1.30% and Westpac Banking edged up 0.12%.

Retail stocks ended in negative territory. David Jones lost 1.93%, Harvey Norman shed 0.52%, JB Hi-Fi Ltd lost 1.85% and Woolworths slipped 0.32%. However, Wesfarmers bucked the trend and managed to end in positive territory with a gain of 0.29%.

In Hong Kong, the Hang Seng Index ended in positive territory with a gain of 114.77 points or 0.51%, at 22,412. China-related resource stocks ended higher following record export data for December that lifted China to become numero uno in the world in terms of exports. Aluminum Corp of China or CHALCO surged up 7.15% and China Merchants Holdings climbed 5.30%. However, the gains were limited by profit taking in later session amid caution ahead of beginning of earnings season in the U.S. Brokerage houses gained following grant of approval for stock index futures and margin trading by the Chinese Government.

In South Korea, the KOSPI Index ended in negative territory with a marginal loss of 1.14 points, or 0.07% at 1,684, dragged down by auto stocks and technology stocks as the local currency appreciated against the US dollar. Technology stocks led by Samsung and LG ended in negative territory as investors offloaded stock on concern their profits might be negatively impacted from lower export earnings on stronger local currency. Caution ahead of unofficial kick start of earnings season in the U.S also kept traders in the sidelines.

The Indian market finished Monday's volatile session almost flat, off the day's high, as investors looked ahead to Q3 numbers of Infosys tomorrow for clues on market direction in the short - term. A report on factory output due for release tomorrow also generated some caution. However, the broader market continued to witness significant activity. While the benchmark BSE Sensex slipped into red with a loss of 14 points or 0.08%, at 17,527, the Nifty moved choppily before closing at 5,249, up 5 points or 0.09%.

Among other major markets open for trading in the region, Taiwan's Weighted Index advanced 42.92 points, or 0.52% to close at 8,324 Straits Times Index in Singapore rose 10.77 points, or 0.37%, to close at 2,934, Indonesia's Jakarta Composite Index gained 17.83 points, or 0.68% to close at 2,632, and China's Shanghai Composite Index added 16.75 points, or 0.52%, to close at 3,213.

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Shares remain positive

Europe’s top stocks have given back some of this morning’s gains but are still in positive territory, with banks, carmakers and energy companies among the main risers.

Economic news from China also boosted investor sentiment. Data out Sunday showed China's exports and imports last month came in sharply ahead of forecasts, giving investors fresh hope about the economic outlook. China said exports climbed 17.7% while Chinese imports surged 55.9% in December.

Over here, Societe Generale, Commerzbank, Deutsche Bank and UBS are leading the banking sector higher.

On the company news front, Santander has started rebranding hundreds of branches of Abbey and Bradford & Bingley. The Spanish bank said around 300 branches in London and the South East will be renamed today. Another 700 across the UK will undergo the name change by the end of January.

Across the markets, the German DAX is up 35 points at 6,072 with the French CAC 40 points higher at 4,085. The Swiss market has added 8 point at 6,626.

Peugeot and Renault are in demand after Morgan Stanley upped its price target on the two carmakers. German rivals Daimler, BMW and Volkswagen are also on the rise.

Energy companies, including Royal Dutch Shell, Eni and Total, are up in line with rising crude oil prices.

Dutch brewery giant Heineken has agreed to buy the beer division of Mexico's FEMSA for €3.8bn.

Including net debt and pension obligations, the total implied enterprise value for FEMSA is approximately €5.3bn. Under the terms of the deal, FEMSA will hold a 20% economic interest in Heineken and will get the right to appoint two non-executive members to the supervisory board.

Heineken forecast annual cost synergies of €150m by 2013 and expects the deal to add to earnings per share within two years.


CAC 40 - Risers
Michelin (ML) € 59.72 +3.77%
PPR (PP) € 90.05 +2.73%
Peugeot (UG) € 27.00 +1.87%
Alstom (ALO) € 54.06 +1.71%
Sanofi-Aventis (SAN) € 56.58 +1.67%
Alcatel-Lucent (ALU) € 2.66 +1.60%
Lafarge (LG) € 60.95 +1.31%
Total (FP) € 46.61 +1.30%
Vinci (DG) € 41.97 +1.29%
Bouygues (EN) € 37.62 +1.20%

CAC 40 - Fallers
Carrefour (CA) € 34.22 -0.78%
France Telecom (FTE) € 17.23 -0.58%
ST Microelectronics (STM) € 6.41 -0.57%
Saint Gobain (SGO) € 38.69 -0.54%
BNP Paribas (BNP) € 59.41 -0.32%
Lagardere SCA (MMB) € 28.25 -0.19%
Credit Agricole (ACA) € 13.44 -0.19%
Cap Gemini (CAP) € 34.17 -0.13%
Suez Environnement Company (SEV) € 17.05 -0.12%
Accor (AC) € 37.79 -0.08%

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Response Biomedical Sees Revenues Nearly Doubling In 2009

On-site diagnostic tests maker Response Biomedical Corp. forecast revenues of $10 million for 2009, nearly double the $5.876 million the company reported in 2008, attributing the revenue growth to mainly its partners, Roche Diagnostics, 3M Health Care and Shionogi Ltd., as well as its own efforts in China.

Response Biomedical makes and sells rapid on-site diagnostic tests for use with its RAMP Platform for clinical and environmental applications.

The RAMP system has the potential to be adapted to more than 250 medical and non-medical tests currently performed in laboratories.

In the clinical market, RAMP tests are commercially available for the early detection of heart attack, congestive heart failure, influenza and RSV through the company's commercial partners, Roche and 3M Health Care respectively.

In the non-clinical market, RAMP Tests are currently provided for the environmental detection of West Nile Virus, and Biodefense applications including the rapid on-site detection of anthrax, smallpox, ricin and botulinum toxin.

Looking ahead, the company anticipates another near-doubling of revenues in 2010 and becoming cash flow positive during the fourth quarter of 2010.

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