US & World Daily Markets Financial Briefing 16-05-2008

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 slip as oil prices push to fresh records

NEW YORK - Stocks slipped Friday as investors' nervousness over a fresh record for oil prices dented enthusiasm over a surprising jump in new home construction.

Wall Street, hoping for an economic rebound in the second half of 2008, has been searching for signs that the housing market, while weak, is perhaps bottoming out. The market got some reassurance when the government said construction of new homes rose 8.2 percent in April. The jump -- the largest monthly advance in more than two years -- was largely due to an increase in apartment construction, and compared to forecasts of a 0.7 percent decline.

Investors seemed unfazed by the Reuters/University of Michigan consumer sentiment reading, which fell in May to its lowest level in 28 years. The reading came in at 59.5, down from 62.6 a month earlier.

Energy worries continued to plague investors. Light, sweet crude oil surged above $127 a barrel for the first time Friday, touching off further concerns about rising prices and their effect on consumers. Light, sweet crude recently changed hands at $126.88, an increase of $2.76 a barrel on the New York Mercantile Exchange.

Investors have been tracking energy prices closely, with the average U.S. retail price of gasoline around $3.77 per gallon and the average price of diesel fuel near $4.46 a gallon. Consumers and businesses alike are struggling with high commodities costs, despite mild overall readings on inflation, so Wall Street remains concerned about spending on discretionary items.

In the first hour of trading, the Dow Jones industrial average fell 30.37, or 0.23 percent, to 12,962.29. Broader stock indicators also declined. The Standard & Poor's 500 index fell 2.95, or 0.21 percent, to 1,420.62, and the Nasdaq composite index dropped 12.58, or 0.50 percent, to 2,521.15.

The stock market rose Thursday for the second day in a row, driving the S&P 500 and Nasdaq to five-month highs, as oil prices reversed gains to trade lower and as data on jobless claims and Philadelphia-area manufacturing came in better than expected.

Government bond prices were little-changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.82 percent.

Gold prices rose, while the dollar fell against other major currencies. Overseas, Japan's Nikkei stock average rose 0.39 percent. In afternoon trading, Britain's FTSE 100 rose 1.27 percent, Germany's DAX index rose 1.61 percent, and France's CAC-40 rose 0.67 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 - Dollar dented by weak data

LONDON - The dollar was dented by a weak set of U.S. numbers which suggested once again that the worst may not be over for the world's biggest economy.

Drooping business sentiment and shaky home starts numbers were seen as evidence that the some of the recent belief that the U.S. has turned the corner may have been built on poor foundations. The preliminary University of Michigan consumer sentiment index slumped to 59.5 in May from 62.6 in April. A far more modest drop to 62.5 had been predicted.

Also out today, seemingly sturdy headline U.S. housing starts data masked underlying weakness. While U.S. builders broke ground on more homes than expected this April, all of the additional building took place on multi-family homes. New construction of single-family homes, a better and more stable indicator of new home trends, fell 1.7 percent to a 692,00 unit rate, the lowest level since January 1991.

The data was just the tonic the euro needed to push above $1.55. The single currency was also underpinned by hawkish comments from European Central Bankers who continue to sound worried about inflation. ECB president Jean-Claude Trichet said the central bank must be "extraordinarily attentive" to inflation and that it "is paying particularly close attention to wage negotiations in the euro area".

Along with separate comments from individual ECB rate-setters, the tone indicates that the euro zone's interest rates will likely remain unchanged for months to come, despite a widening economic slowdown.

Elsewhere, the Icelandic crown was sharply higher after three Scandinavian central banks intervened to support the currency. The central banks of Sweden, Norway and Denmark agreed to swap up to 500 million euros each with Iceland's central bank, Sedlabanki Islands.

Stefan Ingves, governor of Sweden's Riksbank, said the swap agreement is "aimed at supporting Sedlabanki Islands in its task of safeguarding macroeconomic and financial stability." The Icelandic bank described the move as "a precautionary measure", but said it intends to "further bolster its external liquidity in the period ahead".

Iceland's economy has over recent years experienced a volatile mix of high growth and soaring inflation and the central bank has hiked interest rates aggressively to address massive macroeconomic imbalances. All of this has made the country's currency fragile, and Sedlabank has recently accused speculative traders of attempting to destabilise the krona further in the pursuit of quick profits.

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

Euroshares open higher on more Dow gains; Sanofi gains on Multaq news

At 9.24 a.m., the DJ STOXX 50 was up 17.49 points, or 0.53 percent, at 3288.99 and the DJ STOXX 600 was up 2.06 points, or 0.63 percent, at 330.47 points after gains in the United States and in Asia overnight.

Sanofi-Aventis was among the top gainers, up 3.08 percent, after positive findings from its ATHENA study on the drug Multaq's effects in the treatment of atrial fibrillation. "The existing treatment options for this very large market are limited and have significant negative side effects -- a well tolerated drug with a proven clinical benefit will very quickly gain large marketshare," said one trader.

And France's Schneider Electric added 3.26 percent as its U.S. roadshow continues and ahead of Monday's Electrical Products Group conference in Florida, with Natixis pointing out the share is currently seriously under-valued compared to its peers -- despite there being few clouds on the horizon.

And Philips added 0.75 percent after saying it expects its healthcare operations to outperform the market, anticipating the division to report 6 percent to 8 percent annual sales growth in the 2009 to 2010 period.

Philips also reiterated its EBITA margin target for the healthcare operations of 15 percent to 17 percent, targeted in 2010. Baloise Holdings rose in morning deals after the Swiss insurance group issued a strong first-quarter business update.

And Banco Popolare stormed 5.49 percent higher as anaysts cheered its first quarter numbers, with Keefe, Bruyette & Woods lifting its rating to 'outperform' from 'market perform' and Credit Suisse upgrading its rating to 'neutral' from 'underperform', while lifting its target to 14.3 euros from 13.0 euros.

British Energy added 5.66 percent after it confirmed it has received more than one offer. There had been reports that only EDF had expressed any interest in buying a stake in the U.K. nuclear group. British Airways were 4.35 percent higher in early trade after the company posted a reassuring 44.5 percent rise in its full-year pretax profit on higher revenue and said it would pay a dividend of 5 pence, the first since 2001.

Among the few fallers on the DJ STOXX 50, Deutsche Telekom fell back 4.97 percent as it trades ex dividend Friday. Elsewhere, Carlsberg fell 3.26 percent after it announced the launch of a 30.5 billion crowns rights issue to repay part of the debt financing used to buy Scottish & Newcastle plc.

Shares in Belgacom fell 1.26 percent after recent gains as the group showed a mixed first quarter performance with sales which fell short of market estimates.

But Dexia analyst Rob Goyens said falls present "an interesting buying opportunity". He pointed out that the group's new reporting structure, which was implemented for the first time Friday, complicated the task of forecasting figures for this quarter.

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

Asian stocks end mixed as Nikkei retreats, BHP lifts Sydney market

The Nikkei closed Friday's session down 0.2 percent at 14,219.48, after investors locked in profits following the market's strong opening gains and the benchmark index's previous rally to a four-month high.

The broader Topix index gained 0.2 percent to 1,395.87. Japan's Cabinet Office said Friday gross domestic product expanded a better-than-expected 0.8 percent in real terms in the first quarter and at an annualized rate of 3.3 percent, also faster than anticipated, on brisk exports and solid household spending.

Ten economists polled by Thomson Financial News were expecting 0.4 percent growth for the quarter and an annualized pace of 1.5 percent, on average. The GDP data showed solid growth in consumption, said Yumi Nishimura, manager for equity marketing at Daiwa Securities SMBC, which should support the equity market "for a week or two."

But some economists said Japan's economy may contract in the April-June quarter, with export growth to Asia and Europe slowing down. "The January-March GDP turned out to be good, but the April-June outlook does not look favorable," Shinko Securities market analyst Yutaka Miura said. Buy-in talk lifts BHP

In Sydney, the S&P/ASX 200 was up 0.7 percent at 5,931.0 while the All Ordinaries index rose 0.7 percent at 6,006.1.

BHP Billiton gained 1.5 percent to A$48.70 after hitting a record $50.00 in the morning session. The rise took the value of the group's 3.4-for-1 offer for the world's third-largest miner, Rio Tinto to A$165.58, putting it ahead of Rio Tinto's share price, which closed up 1.9 percent at A$155.35.

BHP's rally followed a report in national daily The Australian that Chinese interests were teaming up with a major Australian investment fund to buy a 9 percent stake in the miner. The report did not identify sources or the parties involved. "BHP hasn't made any comment but the market is fired up by rumour and speculation," said Michael Heffernan, a senior analyst at Austock.

Heffernan also said confidence has returned to the market this week, propelling the key indices to the highest levels since January and making a 16.6 percent gain since the market's low point this year of 5,087 points touched on March 17.

Hong Kong's Hang Seng closed up 0.4 percent to 25,618.86, as investors picked up large caps like Cheung Kong (Holdings) Ltd. and PetroChina Co Ltd. on hopes of upbeat earnings despite the global economic uncertainty. Cheung Kong rose 3.3 percent to HK$128.40 after Citigroup raised its target and the stock remained on the 'buy' list of several brokers.

Asia's largest oil firm PetroChina rose 3.41 percent to close at HK$11.52. The official Xinhua news agency quoted PetroChina Chairman Jiang Jiemin as saying that the government plans to raise the threshold for windfall taxes charged on domestic crude production.

South Korea's Kospi ended 0.2 percent higher at 1,888.88 The Kuala Lumpur Composite was up 0.5 percent at 1,300.67. Financial markets in Singapore and Malaysia will be closed on Monday for public holidays.

The Taiwanese Taiex climbed 0.4 percent to 9,197.41 but the Shanghai Composite closed down 0.36 percent at 3,624.23 0.4. The Philippine Composite finished up 0.1 percent at 2,879.95 and the Jakarta Composite rose 0.8 percent to close at 2,468.84.

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 edges higher as supply fears outweigh worries over softer demand

LONDON - Copper prices edged higher, in line with the majority of the other base metals, as ongoing supply fears outweighed concerns over weakness in Chinese demand as prices hold over $8,000 per tonne.
   
The red metal moved higher in Asian trade overnight after yesterday's gains on the London Metal Exchange. Buying tailed off in early trade, but the red metal has since managed to move a touch higher, helped by a weaker dollar.
   
The metal remains tightly balanced, however, with a tightening in supply counterbalanced by fears over slowing consumption. "What we have got on the downside are concerns about falling Chinese demand.Until we see that pick up, it is unlikely we are going to see a significant push higher," said Barclays Capital analyst Gayle Berry.
   
However, she said, "what prevents (copper) from falling too far is still these supply-side concerns".  At 10:33 a.m., London Metal Exchange copper for three-month delivery was trading at $8,358 per tonne against $8,297 per tonne at the close on Thursday.

Supply from major producers Chile and Peru has been disrupted this year by strike action among miners. Stockpiles of the red metal monitored by the LME have dipped by more than a third since the beginning of the year.
   
Chinese demand has also been seen to soften, as high prices discourage buying. Copper users are running down their existing stocks of the red metal rather than buying fresh supplies at today's elevated prices.
   
Nonetheless, analysts say they are hopeful Chinese buying will pick up in the medium term, as use of copper by the construction and manufacturing industries is likely to remain widespread.
  
"We do think that China will return to the market as a buyer as soon as economic growth remains robust, and now there is likely to be even more demand for metal as fabricators gear up for the reconstruction that will be needed following (this week's) tragic earthquake," said BaseMetals.com's William Adams.
   
Analysts are also concerned that U.S. demand will be soft this year as the economy, and particularly the housebuilding sector, continues to languish. The construction industry is a major consumer of copper for pipes and wiring.
  
As a result, analysts will be closely eyeing U.S. residential construction figures for April due out later today, amid hopes an uptick in housebuilding could show firmer U.S. copper demand is around the corner.
   
Among other metals traded on the LME, tin bucked the upward trend to slip lower, as investors took profits after recent gains. The grey metal has hit a series of record highs this year amid fears supply from major producers China and Indonesia is set to fall.
   
Tin was trading at $25,200 against $25,300.  Elsewhere, lead rose to $2,300 per tonne from $2,276 per tonne at the close Wednesday, while zinc was trading at $2,325 against $2,318. Aluminium was higher at $3,028 per tonne against $3,011, and nickel climbed to $26,400 from $26,310.

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