US & World Daily Markets Financial Briefing 22-12-2009

HCEI: One of the Most Xplosive Stocks This Year! - Click Here

Hopes of Sustaining Growth Momentum Could Support Stocks

The major U.S. index futures are pointing to a modestly higher opening on Tuesday, with futures paring some of their gains following the release of the final third quarter GDP report, showing downward revision to growth. However, traders are likely to be comforted by positive growth signals emerging from the global economies. U.K. upwardly revised its GDP estimate for the third quarter, while a tamer than expected downgrade of Greece’s sovereign rating by Moody’s should reduce some of the anxiety of traders.

Trading direction in today’s session also depend on the duo of housing reports to be released after the markets open. That said, trading volume could be light ahead of the Christmas holidays, suggesting very little significance to the movement.

U.S. stocks opened Monday’s session higher on optimism over deal announcements, and after the initial surge, the major averages consolidated their gains. Consequently, the major averages closed higher, although slightly off their highs.

The Dow Industrials advanced 85.25 points or 0.83% to 10,414, the S&P 500 Index rose 25.97 points or 1.17% to 2,238 and the Nasdaq Composite Index ended up 11.58 points or 1.05% at 1,114.

Twenty-five of the thirty Dow components closed the session higher, with Alcoa (AA) leading the gains with an advance of about 8%. Other notable gainers included Intel (INTC), JP Morgan Chase (JPM), Pfizer (PFE), Boeing (BA) and Bank of America (BAC).

Among the sector indexes, the Dow Jones U.S. Basic Materials Average gained 1.24%, the NYSE Arca Oil Index rallied 1.53% and the Philadelphia Oil Service Index rose 1.27%. On the other hand, the NYSE Arca Gold Bugs Index receded 1.84%. The NYSE Arca Biotechnology Index gained 1.05% compared to a 1.69% advance by the S&P Retail Index and a 1.80% rise by the Philadelphia Housing Sector Index.

In the technology space, the Philadelphia Semiconductor Index surged up 2.27%, the NYSE Arca Disk Drive Index gained 2.76%, the NYSE Arca Computer Hardware Index moved up 1.45% and the NYSE Arca Internet Index advanced 1.69%.

Toronto Stocks Look To Continue Rally

Canadian Stock will look to extend recently-seen gains on Tuesday as markets around the world showed traders in a holiday mood. Oil prices could also provide a boost to the energy sector.

Crude oil prices rose 57 cents to $73.30 per barrel. The Organization of Petroleum Exporting Countries announced it will leave production unchanged, as expected, following its meeting in Angola.

In metals, gold has dipped $3.70 to $1,092.60 per ounce, silver is down 4 cents to $1.6995 and copper has lost 1.7 cents to $3.129 per pound. Yamana Gold said that it increased its revolving credit facility capacity to US$680 million from US$500 million.

Iamgold was upgraded to Buy from Neutral at UBS. C.A. Bancorp Inc. said that its board urged shareholders to reject the hostile take-over bid by Maxam Acquisition Corporation of C$1.22 per share.
 
National Bank Financial Group said that its securities dealer subsidiary, National Bank Financial, has agreed to pay C$75 million for the settlement with the Autorite des marches financiers.

Orleans Energy was downgraded to Outperform from Top Pick at Royal Bank of Canada. Bankers Petroleum said it will increase its 2010 production to 15,000 barrels per day, up 15%.

On the economic front, the number of people on Employment Insurance benefits fell 0.5% to 809,600 in October, according to Statistics Canada.

Across the border, a Commerce Department report showed GDP increased at a revised rate of 2.2 percent in the third quarter compared to the 2.8 percent growth that was reported last month. The downward revision came as a surprise to economists, who expected the pace of growth to be unrevised at 2.8 percent.

Yesterday, the S&P/TSX Composite Index rose 91.32 points or 0.79% to close at 11,554.72. The increase added to modest gains from last week.

Commodity, Currency Markets

Crude oil futures for February delivery, in their first day of trading as the front-month futures, are receding $0.46 at $73.26 a barrel, as the market looks ahead to the OPEC meeting. The January futures expired at $72.47, down $0.89 a barrel on Monday.

After receding $15.50 to $1,096 an ounce in the previous session, gold futures are edging down $3.60 to $1,092.40 an ounce.

Among the currencies, the U.S. dollar is trading at 91.357 yen compared to the 91.17 yen it fetched at the close of New York trading on Monday. Against the euro, the greenback is valued at $1.4324 versus yesterday’s $1.4276.

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

Asian Markets End Higher On Wall Street Gains

The markets across Asia, except China, ended in positive territory on Tuesday, taking cues from Wall Street where the major averages ended in positive territory with modest gains on positive corporate news and health care reforms. Banks, and resource stocks led the gains in the markets though the volume was relatively lesser than normal.

In Japan, the benchmark Nikkei 225 gained 194.56 points, or 1.91%, to 10,378, while the broader Topix index of all First Section issues was up 11.58 points, or 1.30 percent, to 903.

Automotive stocks ended in positive territory on increasing confidence about US demand and weaker local currency. Toyota Motor Corp. gained 2.15%, Honda Motor rose 1.99%, Suzuki Motor climbed 2.10%, Nissan Motor surged up 6.07%, Isuzu Motors soared 6.83% and Mitsubishi Motors added 0.78%.

Exporters also ended higher. Canon Inc. advanced 1.88%, Sharp Corp. rose 2.88%, and Sony Corp. gained 2.71%.

Trading companies also advanced. Mitsubishi Corp. gained 2.11%, Toyota Tsusho Corp. rose 2.63%, Marubeni Corp. added 1.02%, Sumitomo Corp. climbed 1.97% and Itochu Corp. advanced 1.07%.
 
Banking stocks witnessed mixed trading. Sumitomo Mitsui Financial slipped 0.18% and Resona Holdings edged down 0.10%. Mitsubishi UFJ Financial and Mizuho Financial remained unchanged from previous close. However, volumes in these banking stocks were relatively much higher.

Mixed trading was witnessed among shipping stocks. While Kawasaki Kisen Kaisha added 0.77% and Mitsui OSK Lines edged up 0.21%, Nippon Yusen slipped 0.69%.

In Australia, the benchmark S&P/ASX200 Index advanced 69.10 points, or 1.49% to close at 4,704, while the All-Ordinaries Index ended at 4,724, representing a gain of 64.90 points, or 1.39%.

On the economic front, the Conference Board revealed that the leading economic index for the country decreased 0.3% month-on-month in October, after remaining unchanged in the previous month, marking the first decline in the index in the past five months. The report further noted that four of the seven components of the leading index decreased in October, including sales to inventories ratio, money supply, share prices and rural goods exports, while yield spread, building approvals and gross operating surplus contributed positively.

Light sweet crude oil futures for February delivery ended at $73.80 a barrel in electronic trading, down $0.08 per barrel from previous close at $73.72 a barrel in New York on Monday.

Banking stocks led the gains taking the cues from Wall Street. ANZ Bank advanced 2.48%, Commonwealth Bank of Australia added 0.84%, National Australia Bank gained 1.19% and Westpac Banking Corp. climbed 3.43%. Investment banker Macquarie Group also rose 1.94%.

Mining and metal stocks also ended in positive territory. BHP Billiton rose 1.71%, Rio Tinto climbed 3.09%, Fortescue Metals added 0.92%, Gindalbie Metals gained 2.06%, Minara Resources soared 10.20%, Murchison Metals surged up 5.61% and Oz Minerals advanced 0.89%.

Oil stocks also ended higher. Woodside Petroleum added 0.25%, Santos advanced 0.72%, Oil Search gained 0.51% and Origin Energy gained 1.85%.

Gold stocks, however, ended in negative territory following drop in bullion prices. Lihir Gold slipped 0.94% and Newcrest Mining lost 2.07%.

Mixed trading was witnessed among retail stocks. David Jones added 0.38%, JB Hi-Fi gained 1.30%, Wesfarmers advanced 0.80% and Woolworths rose 1.69%. However, Harvey Norman bucked the trend and slipped 0.48%.
 
In Hong Kong, the Hang Seng Index ended in positive territory for the first time in six days, snapping off the 5-day losses, with a gain of 143.94 points, or 0.69%, at 21,092. Positive closing on Wall Street in the previous session, higher oil prices and positive trading cues from other markets in the region, excluding China, lifted the market sentiment. Banks led the gains in the market followed by insurance stocks and resource stocks. Volume was relatively less as traders stayed in the sidelines ahead of Christmas holidays.

In South Korea, the KOSPI Index ended in positive territory with a gain of 11.31 points, or 0.69% at 1,656, taking cues from Wall Street where the major averages ended with modest gains on corporate news and increasing confidence about US economic recovery. Institutional investors, both foreign and domestic, evinced fresh buying interest in technology stocks and automotive stocks. Positive trading across other markets in the region also lifted market sentiment.

Positive global cues and higher corporate advance-tax payments for the October-December quarter helped the Indian market snap a three-day losing streak on Tuesday. However, intermittent profit taking and fears over potential capital outflows capped big gains. The BSE Sensex finished at 16,692, up 91 points or 0.55% and the S&P CNX Nifty rose 33 points or 0.67% to 4,986.

Among other major markets in the region, China's Shanghai Composite Index slumped 72.45 points, or 2.32%, to close at 3,050. However, Taiwan's Weighted Index gained 68.73 points, or 0.88%, to close at 7,856, Singapore's Strait Times Index climbed 37.01 points, or 1.33%, to close at 2824, and Indonesia's Jakarta Composite Index gained 36.25 points, or 1.49%, to close at 2,468.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

After opening Tuesday’s session modestly higher, the major European averages are advancing further. Currently, the French CAC 40 Index and the German DAX Index are rising 0.59% and 0.44%, respectively, while the U.K.’s FTSE 100 Index is moving up 1.10%.

On the economic front, the U.K. Office for National Statistics released its revised report on third quarter GDP report showing that the U.K.’s GDP fell less than estimated. The British economy contracted 0.2% in the third quarter compared to the previous quarter. Earlier, the statistical agency has estimated a 0.3% contraction. The year-over-year contraction was left unrevised at 5.1%.

Meanwhile, the Nuremberg-based GfK Group’s consumer confidence survey showed that its consumer confidence index fell for the third straight month in January, with the forward looking indicator dropping to 3.3 points from a revised reading of 3.6 points in the previous month. Economists estimated a reading of 3.5.

French statistical agency INSEE reported that French producer prices rose 0.2% month-on-month in November, adding to the 0.7% gain in the previous month. Economists had expected producer prices to rise 0.1%.

U.S. Economic Reports

On the economic front, the Bureau of Economic Analysis downwardly revised its third quarter GDP estimate to show 2.2% growth. Economists had expected the growth to be maintained unchanged at the agency’s earlier estimate of 2.8% growth.

The downward revision to the third estimate reflects downward revisions made to non-residential fixed investment, to private inventory investment and to personal conumption.

The National Association of Realtors is scheduled to release its report on existing home sales for November at 10 AM ET. Economists estimate existing home sales of 6.25 million for the month.

In October, existing home sales rose to a seasonally adjusted annual rate of 6.1 million units, up 10% from the previous month and marking their highest level since February 2007. The bulk of the increase was in single-family home sales. Home inventories, as measured by the months of supply fell to 7 months from 8 months in September. The median sales price of an existing home declined 7.1% year-over-year and fell 1.6% month-over-month to $173,100.

The Federal House Finance Agency-FHFA is set to release its house price index for October at 10 AM ET. The index is a weighted, repeat-sales index, which measures average price changes of single-family houses in repeat sales or refinancings on the same properties.

Watch us trade “Live”! Watch our Top Tier Traders make ($500 - $2000) a day
in “real time” and learn how to easily duplicate the process!  Click Here for more information

Jabil Circuit (JBL) may see buying interest after it reported a profit of 13 cents per share for its first quarter compared to a loss of $1.34 per share last year. On an adjusted basis, the company reported earnings of 32 cents per share. Revenues declined 9% year-over-year to $3.1 billion. Analysts, on average, estimated earnings of 29 cents per share on revenues of $3.1 billion. For the second quarter, the company expects adjusted earnings of 20-42 cents per share on revenues of $2.9 billion to $3.1 billion. The consensus estimates call for earnings of 19 cents per share on revenues of $2.9 billion.

Amkor Technology (AMKR) could gain ground after it said it expects fourth quarter sales to be up 6% from the previous quarter. Earlier, the company had estimated flat to plus or minus 2% growth in net sales. The upside was attributed to higher than expected customer demand across its product lines. The company also raised its gross margin estimate to about 26% from its earlier estimate of 23%-25%.

Northrop Grumman (NOC) could also move to the upside after it said the U.S. Navy has awarded a subsidiary of the company a contract for the maintenance, repair and modernization of submarines home-ported or transient through Pearl Harbor, Hawaii. Northrop’s subsidiary AMSEC was one of the 6 contractors awarded the 5-year contract that has a combined value of $140.4 million to all contractors involved.

Prudential Financial (PRU) is also likely to see some activity after rating agency Fitch raised its outlook on the company to ‘stable’ from ‘negative.’ Fitch attributed the improved outlook to the improvements in the company’s insurance and investment capital position. The long-term issuer default and senior debt ratings were affirmed at ‘BBB+ and BBB respectively.

Cephalon (CEPH) could be in focus after it said the FDA has extended the action date for the review of the company’s supplemental NDA for NUVIGIL tablets to March 29th, 2010 from the originally intended date of December 29th, 2009. The extension was due to the FDA seeking more time for a full review of the submission. The sNDA was filed for the indication of improved wakefulness in patients with excessive sleepiness associated with jet lag disorder due to eastbound travel.

PDL BioPharma (PDLI) is also likely to react to its announcement that it has entered into a non-exclusive license agreement with Eli Lilly (LLY) under the former’s Queen et al patents related to its humanized anti-CD3 monoclonal antibody as well as other potential next generation anti-CD3 molecules. The antibody is currently being tested for the treatment of individuals with newly diagnosed type 1 diabetes.

Jones Soda (JSDA) could move to the upside after it said it has received written indication of interest from Big Red, Inc. in buying Jones Soda for $0.30 per share in cash.

Take-Two (TTWO) may also be in focus after it said it has signed a definitive asset purchase agreement to sell its Jack of All Games distribution business to SYNNEX Corp. (SNX). The company said the deal is valued at $43.25 million, including $36.50 in cash and up to an additional $6.75 million based on the achievement of certain items. Take-Two said it expects to record a small after-tax loss from the sale of the business. The company also downwardly revised its guidance for the first quarter and the fiscal year to reflect the transaction.

Boeing (BA) is likely to move in reaction to its announcement that it has received an order for five 777-200ER and five 767-300ER jetliners from All Nippon Airways. The orders are valued at about $2 billion at list prices.

Moneygram (MGI) could move in reaction to its announcement that its EVP and CFO Jeffrey Woods will be leaving the company on January 15th, 2010 due to personal reasons. Separately, the company said it would make an optional $40 million prepayment on its tranche B term loan under its senior secured credit facility.

Bristol-Myers Squibb (BMY) may gain ground after it announced a 3.2% increase in its quarterly dividend, beginning in the first quarter of 2010.

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