US & World Daily Markets Financial Briefing 12-05-2008

Welcome to the Investors Hub World Daily Markets Bulletin; your daily e-mail guide to important Domestic, European and Global market events. Market Briefing is here to keep you informed and up-to-date on key financial developments.

If you have forgotten your password, click here.

Stocks fluctuate as oil falls, dollar advances

NEW YORK - Wall Street fluctuated in a narrow range Monday, giving up a modest early advance as oil prices ticked lower and the dollar rose.

The market's concerns about rising inflation and its effect on consumer spending receded somewhat as light, sweet crude fell 65 cents to $125.31 per barrel on the New York Mercantile Exchange. Oil prices surged nearly $10 last week, touching off concerns about rising prices and their effect on businesses and consumers.

The dollar's gains also appeared to help ease some concerns about inflation. A weak dollar can exacerbate price increases, especially since hard commodities like oil become more attractive to investors seeking a hedge against inflation.

The market also got some encouraging news about the credit crisis from London-based HSBC Holdings PLC, which said its first-quarter profits were up from a year ago although the global banking company took a $3.2 billion write-down on subprime mortgage assets in the United States. The company did echo other assessments that the U.S. was likely to fall into recession this year.

Still, the day's news wasn't enough of an incentive for anxious investors to do much buying. The major indexes all fell last week as worries about the impact of inflation eroded some of the market's recent optimism, and investors remained cautious while they waited for more data about the economy's direction.

In the first hour of trading, the Dow Jones industrial average rose 13.84, or 0.11 percent, to 12,759.72. Broader stock indicators were mixed. The Standard & Poor's 500 index slipped 0.94, or 0.07 percent, to 1,387.34, and the Nasdaq composite index rose 2.18, or 0.09 percent, to 2,447.70.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.76 percent from 3.78 percent late Friday. The dollar was higher against most other major currencies, while gold prices fell.

In corporate news, FedEx Corp. fell $1.10 to $89.27 after lowering its fiscal fourth-quarter earnings forecast, citing rising fuel costs. MBIA Inc. posted a $2.41 billion first-quarter loss, as the struggling bond insurer took heavy charges to write down the value of liabilities amid continued deterioration in the credit markets. The stock rose 57 cents, or 6.2 percent, to $10.

Investors will be looking to other readings on consumers this week to determine the toll rising energy costs might be having. Government figures are due on retail sales in April. And retailers including Wal-Mart Stores Inc., Macy's Inc., JCPenney Co. and Kohls Corp. are due to report first-quarter results.

Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume came to 151.8 million shares.

The Russell 2000 index of smaller companies rose 0.50, or 0.07 percent, to 720.56. Overseas, Japan's Nikkei stock average rose 0.64 percent. In afternoon trading, Britain's FTSE 100 was up 0.30 percent, Germany's DAX index rose 0.51 percent, and France's CAC-40 rose 0.15 percent.

Gain a trading edge by learning to interpret the most common chart patterns for identifying market direction and target prices. With information on trendlines, channels, and more, the Intro to Technical Analysis Guide from RJO Futures can help you apply this valuable technique to your futures trading. Click here.

Forex - Pound consolidates gains on record producer prices, dollar slips

LONDON - The pound consolidated its earlier gains, triggered by figures showing UK producer prices rose at their fastest pace on record during April.

Input prices rose 2.4 percent, well above analyst forecasts of a 2.0 percent rate, for a big 23.0 percent annual gain. Output prices were up 1.4 percent on the month, double expectations for just 0.7 percent. All the figures were the highest since records began in 1986.

The figures boosted the pound as it prompted speculation the Monetary Policy Committee will be reluctant to make a much anticipated interest rate next month while pricing pressures are so high. "Today's data does suggest the MPC will unlikely take comfort in such results ... the Committee will need to see more evidence of slowing activity in order to continue cutting interest rates," said Benedikt Germanier, currency strategist at UBS.

Meanwhile, the trade data was better than expected, with the deficit narrowing to 7.4 billion pounds in March from 7.6 billion in February. The data comes ahead of key consumer price inflation figures on Tuesday, all of which will have fed into the Bank of England's Inflation Report, due on Wednesday. Analysts expect the report to signal that interest rates will be cut only gradually because of price pressures.

Meanwhile the dollar undid most of its earlier gains against the euro following some hawkish comments from European officials. European Central Bank governing council member Jose Manuel Gonzalez-Paramo said that price stability remains the central bank's key priority and that there are only isolated areas of liquidity trouble in markets.

Ashraf Laidi, currency strategist at CMC Markets, said the dollar is unlikely to make a sustained climb higher against the euro until euro zone data starts coming in markedly weaker, forcing the ECB to consider rate cuts.

"We do not anticipate stronger than expected US data alone can trigger any prolonged euro selling due to the continued mixed signals emitted from the broader U.S. reports and the unambiguously hawkish ECB stance confirmed at last week's press conference," he said.

ECB president Jean-Claude Trichet is due to speak in Milan later this afternoon and analysts will be watching closely for any hints he is moving to a less hawkish stance.

For stock market quotes, company information, stock charts, historical quarterly reports and historical annual reports, click here

Euroshares higher midmorning, shrugging off Dow losses; miners, telecoms up

At 9.50 a.m., the DJ STOXX 50 was up 25.35 points, or 0.79 percent, at 3,253.93 and the DJ STOXX 600 was up 2.48 points, or 0.76 percent, at 327.33. 

Back in Europe, Xstrata added 1.29 percent, thanks to a bullish note from Deutsche Bank, in which the broker lifted its rating to 4,700 pence from 4,140 pence. The broker also lifted its target for Anglo American to 4,000 pence from 3,870 pence.

Kazakhmys remains in focus as investors weigh its future prospects after the group rejected an offer of around 1,550 pence per share from ENRC just before the close on Friday.

Under the terms of this proposal, Kazakhmys said its shareholders would have received 1,022 pence in cash and 0.413 ENRC shares.

The Telegraph suggests this might lead to the Kazakh group selling its stake in ENRC. Shares added 0.67 percent. ENRC shares, though, slipped back 0.38 percent.

In other M&A talk, Hermes shares soared 9.76 percent amid vague stakebuilding rumours. One source said he had heard talk that LVMH had been buying shares at 130 euros per share, but others dismissed the rumours, pointing out Hermes is still family owned and therefore is an unlikely target.

Shares in Chloride Group Plc. soared 25 percent in early deals after media reports said the company has received a takeover approach from an undisclosed party.

Analysts say most likely acquirers are Eaton Corporation or Emerson Electric, while other bidders could include Schneider Electric. Arbuthnot repeated its 'buy' stance.

Telecom Italia led gains in the telecom's sector as Deutsche Bank upgraded the shares to 'buy' from 'hold'. Shares added 3 percent.

In earnings news, Lundin Petroleum shares amoved 3.55 percent higher after the group said first quarter pretax profit increased 49 percent to 678 million Swedish crowns, buoyed by foreign exchange gains and a 113 million gain from the sale of its Lundin Latina de Petroleos S.A. subsidiary.

The net result including minority interests was 389 million crowns, ahead of market forecasts of 245 million, as recorded by SME Direkt.

Fast-loading, feature-rich and highly customizable interfaces for reading and posting messages. click here

Asian shares pare losses as Japan rebounds; Australia lifted by bank deal

After tfrading in the red through the morning, the Nikkei closed up 0.6 percent at 13,743.36. The broader Topix finished up 0.1 percent to 1,342.79 after earlier touching a low of 1,327.21. Big export stocks were bid higher as the yen lost ground against the dollar, with the greenback trading at 103.69 yen, up 0.8 percent from late Friday.

"A recent short-covering rally appeared to be over after the Nikkei index climbed above 14,200 points," said Morningstar Japan analyst Hideyuki Suzuki. "But because investors found little cue to sell, losses were limited. Then they moved to cover shorts."

Semiconductor company Elpida Memory closed up 4.4 percent to 4,040 yen. Magnetic head maker TDK rose 2.3 percent to 7,120 yen. The Shanghai Composite closed up 0.4 percent at 3,626.98, recovering from a low of 3,521.88, as agricultural stocks gained after data showed food prices continued their sharp rise in April.

The index pared its gains after state media reported an earthquake with a 7.6 magnitude had hit  western China. There were initial reports of damage to buildings in the region but no details on casualties.

The S&P/ASX 200 ended up 1 percent to 5,828.5 and the All Ordinaries rose 0.9 percent to 5,894.1. Financials led the advance after the country's fourth-biggest bank Westpac said it's in merger talks with St. George, the fifth largest, in a deal that would create Australia's biggest financial services company.

National Australia Bank, currently the nation's largest bank, ended up 5.9 percent at A$34.13, Commonwealth Bank gained 4.4 percent to A$45.86 and ANZ was 3 percent higher at A$23.70. Suncorp-Metway, a Brisbane-based banking and insurance group which ranks behind St. George in the bank line-up, closed up 6.9 percent at A$16.25.

Elsewhere, the Singapore Straits Times index was flat at 3,169.78. The Malaysian KLSE rose 0.3 percent to 1,289.07, boosted by gains in plantation and oil-and-gas shares as the rising oil price pulled crude palm oil prices higher with it. The Philippines Composite closed up 0.9 percent at 2,803.49 and the Jakarta Composite was down 0.5 percent at 2,364.13.

Inflation remained a key theme in Asia Monday after China said consumer prices rose 8.5 percent in April from the same time a year ago, up from 8.3 percent in March and above economist forecasts. Food prices remained the key inflation driver with meat prices up 47.9 percent in April, pork prices up 68.3 percent and grain prices up 7.4 percent. Poly Real Estate lost 3.5 percent to 19.80 yuan and China Life was down 0.7 percent at 33.20 yuan. China Vanke, the nation's biggest listed developer, was down 1.6 percent at 21.54 yuan.

But agricultural stocks rallied on expectations they will benefit from higher food prices. Rice producer Yuan Longping High-Tech Agriculture, Gansu Mogao Industrial Development, a producer of malt, grapes, wine and licorice products, and Hunan Dongting Aquaculture, which breeds and sells freshwater fish, all rose by the 10 percent daily limit.

Dairy group Beijing Sanyuan Foods also rose 10 percent to 7.92 yuan, while Hunan New Wellful, which trades live pigs, gained 5.4 percent to 11.02 yuan. Roast duck supplier China Quanjude closed up 4.8 percent at 44.65. Brewer Kirin Holdings closed up 1.2 percent at 1,716 yen, and Sapporo Holdings rose 1.4 percent to 748 yen while JT rose 4.9 percent at 517,000 yen.

Konica Minolta Holdings surged 12.1 percent to 1,672 yen after the office equipment maker said  operating profit rose 15 percent in fiscal 2008, boosted by higher sales of its multi-function printers and optical devices.

Oil-related issues gained on expectations higher oil prices will boost their profit margins. Cosmo Oil advanced 4.6 percent to 384 yen, Nippon Oil rose 2.4 percent to 763 yen, while gas and oil field developer Inpex Holdings climbed 1.6 percent to 1.26 million yen.

Elsewhere, embattled Australian property group Centro Properties closed down 14.4 percent at A$0.065 after confirming a class action filed on behalf of shareholders seeking A$100 million in damages.

The most traded market in the world; 24 hr market platform with the latest news, prices and charts gives you the knowledge to invest in this exciting and fast moving market.
Click here

Metals - Copper reclaims some of Friday's loss but firm dollar caps gains

LONDON - Copper was higher in early trade after falling some $200 a tonne on Friday, but renewed strength in the U.S. dollar overnight and fears over softening demand have capped gains and are expected to pressure the red metal.

Prices dipped sharply last week on the back of a hefty rise in stockpiles of the metal monitored by the London Metal Exchange.

While copper has clawed back some of those losses this morning, it remains vulnerable to a correction amid fears demand will falter as the economy slows, analysts said.

At 11:18 a.m., London Metal Exchange copper for three-month delivery was trading at $8,175 per tonne against $8,100 per tonne at the close Friday.

The end of a 20-day contract workers' strike at the world's largest copper producer Codelco last week has also calmed fears of a supply shortfall for the red metal, taking some heat out of the market.

"Copper prices slipped following the conclusion of the subcontractors strike in Chile," said Deutsche Bank analyst Jude Brhanavan. "However industrial unrest moves to Peru this week with the potential to sustain price spike risks across the major industrial metals sector.

"This is occurring in an environment where inventory-to-consumption ratios remain at critically low," he added. Miners in Peru had been expected to strike from this morning for better pay and employment rights. However, the strike has been postponed to give the Chilean government more time to respond to miners' demands.

"Copper still has potential to spike higher, but it will take either the return of Chinese buying or major supply disruptions," said BaseMetals.com analyst William Adams. "However, for the moment it does look as though the path of least resistance is to the downside."

Among other metals on the LME, lead was trading at $2,235 per tonne against $2,195 per tonne at the close Friday, while zinc for delivery in three months was up at $2,182 per tonne against $2,155.

Lead prices briefly fell below those of zinc for the first time since August last year this morning. According to BaseMetals.com, the dip reflects a loosening of the supply and demand balance for lead, as the market moves towards surplus.

Elsewhere aluminium was higher at $2,907 per tonne against $2,885. Nickel rose to $26,900 from $26,700, while tin was trading at $24,560 per tonne against $24,600.

The latest streaming prices and news on major commodities from precious metals to crude oil, so you can keep up-to date and never miss a trading opportunity again.
Click here

Investors Hub Services