US & World Daily Markets Financial Briefing 23-12-2009

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

This is the last World Daily Publication for year 2009. Normal service will resume 4th January 2010, best wishes for the holidays and New Year.

US Markets

Data Could Decide Market Course Even as Profit Taking Threatens Rally

The major U.S. index futures are pointing to a modestly higher opening on Wednesday. Stocks have been moving up nicely in the past two sessions and this introduces an element of risk associated with overbought levels. That said, the movement in today’s session largely hinges on the housing and consumer sentiment data to be released shortly after the markets open.

Earlier, a Commerce Department report showed that personal income rose at its fastest rate since May, when it rose 1.5%. That said, the increase trailed expectations. At the same time, holiday sales spurred consumer spending, which rose at a decent 0.5% clip. Technology earnings released after the markets closed yesterday continue to vouch for the strong recovery in the sector.

U.S. stocks opened Tuesday’s session higher and rose further in early trading, aided by positive housing data. Thereafter, the major averages moved sideways to close moderately higher.

The Dow Industrials ended up 50.79 points or 0.49% at 10,465, the Nasdaq Composite Index rose 15.01 points or 0.67% to 2,253 and the S&P 500 Index closed at 1,118, up 3.97 or 0.36%.

Twenty-two of the thirty Dow components closed higher, with Boeing (BA), DuPont (DD), Home Depot (HD), Kraft Foods (KFT), IBM (IBM) and American Express (AXP) among the top gainers in the session.

Among the sector indexes, the NYSE Arca Airline Index rallied 4.6% compared to a 1.73% advance by the NYSE Arca Biotechnology Index. The NYSE Arca Securities Broker/Dealer Index rose 1.17%, while the Philadelphia Housing Sector Index advanced 2.8%.

On the economic front, the National Association of Realtors reported that existing home sales rose to a seasonally adjusted annual rate of 6.54 million units in November, with the upside coming from an increase in sales of single-family homes. Existing home sales reached their highest level in about 3 years. Economists had expected sales of 6.25 million units. Inventories measured on the basis of months of supply declined to 6.5 months from 7 in the previous month. The median sales price of an existing home declined 4.3% year-over-year.

Meanwhile, the third estimate of third quarter GDP showed 2.2% growth, revised down from the previous estimate of 2.8%. The downward revision reflected a bigger-than-expected draw down in inventories, smaller than expected spending on national defense, lesser-than-expected state and local government spending. Spending on equipment and software was also downwardly revised.

Toronto Stocks Look To Extend Winning Streak

Bay Street stocks could struggle to find direction in the early morning on Wednesday, following the lead of foreign markets. Traders will continue to mull data showing the Canadian economy grew less than expected in October, but energy stocks could receive a spark from rising oil prices.

Canada's economy expanded 0.2% in October, according to Statistics Canada. An increase of 0.3% was forecast, compared to an 0.4% rise in September.

Crude oil has gained 43 cents to $74.36 per barrel as traders await the release of the Energy Information Administration's weekly inventory report at 10:40 a.m. ET.

American Petroleum Institute data released last night showed crude oil supplies fell 3.71 million barrels in the week ended December 18. A decline of 2 million barrels was predicted by analysts.

Gasoline inventories dropped 1.1 million barrels, surprising analysts who were looking for a build of 1.3 million barrels. In other commodity trading, gold edged down $2.10 to $1,085.60, while copper added 2.2 cents to $3.162.
 
In corporate news, Bombardier said it has signed a deal with Swedish railway company AB Transitio to deliver 11 three-car Contessa trains, valued at about EUR 96 million, or US$137 million.

Nortel Networks Corp. said it entered into a "stalking horse" asset sale deal with Genband Inc. for the sale of its Carrier VoIP and Application Solutions business for US$282 million.

FNX Mining expects its production in 2010 is expected to total 891,000 tons of ore shipped, a 31% increase over the 2009 production plan. The total payable metal forecast for 2010 consists of 48.1 million lbs of copper, 7.7 million lbs of nickel and 74,500 oz of combined platinum, palladium and gold.

Research in Motion worked to fix email service problems after a widespread outage on Tuesday.

On Tuesday, the S&P/TSX Composite Index finished up 73.26 points or 0.63% to close the session at 11,627.98. The market padded its gains with a rise in the final hour.

Commodity, Currency Markets

Crude oil futures are trading up $0.57 at $74.40 a barrel after advancing $0.75 to $74.47 a barrel in Tuesday’s session. Gold futures are trading down $0.20 at $1,086.50 an ounce. In the previous session, the precious metal fell $9.30 to $1,086.70 an ounce.

Among currencies, the U.S. dollar is trading at 91.662 yen, weaker than the 91.8352 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.4285, slightly stronger than the previous session’s $1.4250.

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 Extend Gains On Recovery Hopes

The markets across Asia, excluding Japan, ended in positive territory on Wednesday, taking cues from Wall Street where the major averages ended with modest gains on better-than-expected home sales data. Banks, and resource stocks led the gains in the markets amid thin trading volumes. The market in Japan was closed for a holiday on the eve of Emperor's Birthday.

In Australia, the benchmark S&P/ASX200 Index rose 35.10 points, or 0.75% to close at 4,739, while the All-Ordinaries Index ended at 4,756, representing a gain of 31.70 points, or 0.67%.

The last full trading day before the Christmas saw very light trading volumes as most of the traders stayed away from the markets. The holiday in Japanese market on the eve of Emperor's birthday also impacted sentiment. However, positive closing on Wall Street in the previous session lifted the positive mood in the market, with mining stocks leading the gains.

BHP Billiton added 0.65%, Rio Tinto advanced 0.73%, Fortescue Metals edged up 0.23%, Iluka Resources climbed 1.95%, and Oz Minerals rose 1.77%.

Gold stocks also ended in positive territory. Lihir Gold gained 0.63% and Newcrest Mining climbed 2.64%.
 
Among oil stocks, Woodside Petroleum added 0.19% and Santos advanced 0.86%. However, Oil Search shed 0.34% and Origin Energy lost 1.33%.

Bank stocks ended in positive territory. ANZ Bank gained 1.12%, Commonwealth Bank of Australia advanced 0.78%, National Australia Bank edged up 0.23% and Westpac Banking climbed 2.19%.

Retail stocks also ended higher. David Jones gained 0.56%, Harvey Norman advanced 0.72%, Wesfarmers climbed 3.26% and Woolworths gained 0.77%. However, JB Hi-Fi bucked the trend and ended in negative territory with a loss of 0.89%.

In Hong Kong, the Hang Seng Index ended in positive territory with a gain of 1.06% or 236.70 points, at 21,329, taking cues from Wall Street where the major averages ended in positive territory on better-than-expected economic data related to home sales. Positive trading across the other markets, except Japan, which is closed for holiday, also lifted market sentiment. Property stocks led the gains on speculation that proposed land auction next week will yield better results. Insurance and Chinese resource stocks also ended higher. As many as 37 out of 42 components in the index ended in positive territory.

In South Korea, the KOSPI Index ended higher with a modest gain of 5.81 points, or 0.35% at 1,661, taking cues from other markets in the region, except Japan, trading in positive territory. Positive closing on Wall Street in the previous session as well as strengthening oil prices ahead of inventory data also lifted market sentiment. Foreign institutional investors and domestic investors evinced interest in select technology stocks, thereby lifting the overall index.

The Indian market soared on Wednesday, led by hectic buying in frontline stocks reportedly by domestic institutions and mutual funds. A sustained rise in global markets over the past 2-3 sessions, reassuring U.S economic data and the lack of an early rate tightening by the Reserve Bank of India (RBI) underpinned overall market sentiment. The benchmark Sensex surged up by 539 points or 3.23% to 17,231, and the S&P CNX Nifty rose over 3% to 5,145.

Among other major markets in the region, China's Shanghai Composite Index advanced 23.26 points, or 0.76%, to close at 3,074, Taiwan's Weighted Index gained 45.50 points, or 0.58%, to close at 7,901 Singapore's Strait Times Index advanced 17.74 points, or 0.63%, to close at 2842, and Indonesia's Jakarta Composite Index added 7.25 points, or 0.29%, to close at 2,475.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

Encouraged by the positive cues from the rest of the markets, the major European markets opened higher and rose modestly in early trading. Thereafter, stocks are mostly seen consolidating.

The French CAC 40 Index and the German DAX Index are rising 0.47% and 0.41%, respectively, while the U.K.’s FTSE 100 Index is rallying over 0.92%.

On the economic front, French statistical agency INSEE reported that consumer spending fell 0.1% month-over-month in November following a 1% rise in October. Economists had estimated a 0.5% increase for November.

Meanwhile, service output in the U.K. rose 0.1% month-over-month in October, slower than the 0.4% increase in the previous month. Annually, services sector output fell a steeper 3.7%.

The minutes of the Bank of England’s December meeting revealed that all nine policy makers of the Monetary Policy Committee of the Bank of England unanimously decided in December to continue the bank's quantitative easing measures and to retain the bank rate. The committee also voted to continue the asset purchase program totaling 200 billion pounds using central bank reserves.

U.S. Economic Reports

On the economic front, the Bureau of Economic Analysis reported that personal income rose 0.4% month-over-month in November, slighter a slower rate of increase than the 0.5% gain expected by economists. In October, personal income had risen by 0.3%. Compensation, which accounts for the bulk of the personal income, was up 0.3%, faster than the 0.1% growth in October. Personal current taxes, which is a deduction, fell 0.4% compared to a steeper 1.5% decline in the previous month.

In November, personal spending rose at a slightly slower rate of 0.5% compared to a 0.6% increase in October. Economists had expected a 0.7% increase in personal spending. The PCEI, excluding food and energy, rose 1.4% from a year-ago in November, the same rate as in the previous month.

The Reuters/University of Michigan's final report on the consumer sentiment index for December is scheduled to be released at 9:55 AM ET. The consumer sentiment index is expected to be revised up to 73.8 from the mid-month of reading of 73.4.

The Commerce Department is also due to release its new home sales report for November at 10 AM ET. The consensus estimate calls for an increase in new homes sales to 438,000.

New home sales totaled 430,000 in October compared to an upwardly revised reading of 405,000 in September. Geographically, only the South showed gains. Inventories as measured in months of supply fell to 6.7 from the previous month's 7.4, with the October reading marking the lowest level since December 2006. The median price of a new home rose 0.71% month-over-month to $212,000.

The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended December 18th at 10:30 AM ET.

Crude oil inventories fell by 3.7 million barrels to 332.4 million barrels in the week ended December 11th. Despite the decline, inventory levels remained above the upper limit of the average range.

While gasoline stockpiles rose by 0.9 million barrels, remaining above the upper limit of the average range, distillate inventories declined by 2.9 million barrels. Nonetheless, distillate inventories also remained above the upper boundary of the average range. Refinery capacity averaged 80.2% over the four weeks ended December 11th compared to 80.1% in the previous week.

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

Ford (F) could be in focus after it confirmed that all substantive commercial terms relating to the potential sale of Volvo Car Corp. to Zhejiang Geely Holding Company have been settled. Both companies expect a definitive sale agreement to be signed in the first quarter of 2010. Post-sale, Ford does not intend to retain a stake in the business.

Harris Corp. (HRS) may gain ground after it announced that it has received a $228 million order from the U.S. Marine Corp. to provide Falcon II AN/VRC-104 high frequency radio systems for use in the Defense Department’s MRAP-All Terrain Vehicles.

THQ, Inc. (THQI) could see some activity after it announced that it has entered into an agreement with World Wrestling Entertainment (WWE), granting THQ the exclusive rights to develop and publish video games based on WWE’s content effective January 1, 2010. Separately, THQ announced settlement agreements with JAKKS Pacific (JAKK) with respect to WWE video game and toy licenses and the THW/JAKKS Pacific joint venture. According to the agreement, THQ will pay $13.2 million to WWE.

JDA Software (JDAS) is likely to react to its announcement that the SEC has concluded its review of the Registration Statement on Form S-4 in connection with the company’s acquisition of i2 Technologies. The company added that a special meeting of i2 stockholders has been convened on January 28, 2010 to approve the transaction.

Roper Industries (ROP) may also see some activity after it announced that it has priced its public offering of 2.3 million shares at $53.15 per share. The company expects to raise net proceeds of $121 million from the offering.

Finish Line (FINL) could gain ground after it reported a third quarter profit of 12 cents per share compared to a loss of 16 cents per share in the year-ago period. On an adjusted basis, the company reported break-even results, exceeding the loss of 9 cents expected by analysts. Revenues edged down 0.2% to $240.1 million, also above the mean analyst estimate of $234 million.

However, Cintas (CTAS) may see weakness after it reported that its second quarter earnings declined to 37 cents per share, below the 47 cents per share consensus estimate. Revenues fell 10% year-over-year to $884 million. The consensus estimates called for earnings of 43 cents per share on revenues of $890 million.

Micron Technology (MU) is likely to react to its announcement that its first quarter net income attributable to common shareholders was 23 cents per share. In the year-ago period, the company reported a loss of 93 cents per share. Net sales rose to $1.74 billion from $1.4 billion in the year-ago period. Analysts estimated earnings of 7 cents per share on revenues of $1.6 billion.

Tibco (TIBX) may also be in focus after it reported non-GAAP net income of 23 cents per share for its fourth quarter. Revenues climbed to $195.6 million, higher than the year-ago’s $185.5 million. Analysts estimated earnings of 11 cents per share on revenues of $144.82 million. For the full year, the company estimates non-GAAP earnings of 55 cents per share on revenues of $621.4 million. The consensus estimates call for earnings of 59 cents per share on revenues of $151.67 million.

Red Hat (RHT) could be in the spotlight after it reported that its third quarter adjusted earnings were 17 cents per share, lower than the year-ago’s 18 cents per share. Revenues rose 18% year-over-year to $194.3 million. Analysts estimated earnings of 16 cents per share on revenues of $188.3 million.

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