Bitcoin notches record high, day after US ETF debut

Bitcoin climbed to a record high on Wednesday, and the first US bitcoin futures-based exchange-traded fund (ETF) built on gains after a solid debut on Tuesday.

The world's leading cryptocurrency was up 3.30 percent at $66,364.72, after reaching a record of $67,016.50, topping the $64,895.22 hit on April 14 this year.

Tuesday was the first day of trading for the ProShares Bitcoin Strategy ETF - a development market participants say is likely to drive investment into the digital asset.

The ETF closed up 2.59 percent at $41.94 from its opening price of $40.88 on Tuesday and continued its ascent on Wednesday, last up 3.76 percent at $43.52.

The Valkyrie Bitcoin Strategy ETF, expected to debut on the Nasdaq Wednesday, appeared to be delayed after its prospectus was amended in a filing with the Securities and Exchange Commission. A person familiar with the matter said the Nasdaq expects the ETF to launch on Thursday, but that has not been confirmed yet.

Trading appeared to be dominated by smaller investors and high-frequency trading firms, analysts said, noting the absence of large block trades indicated that institutions were likely staying on the sidelines.

James Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private wealth manager, said the launch of the new product was "meaningful" for bitcoin.

Theoretically, any licensed brokerage firm in the United States that wants to take on this ETF can do so as easily as any other ETF, which "should make it available to a lot of folks," said Quinn.

While the ETF is based on bitcoin futures, Quinn said the trades and hedges underpinning the ETF mean activity will flow into the spot market and the bitcoin price.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck is also among fund managers pursuing US-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

Ether, the world's No. 2 cryptocurrency, was up 3.63 percent on the day at $4,018.75, after hitting a high of $4,080, nearing its record high of $4,380 reached on May 12.

-reuters

US stocks edge down on virus woes, slowing economy

NEW YORK - The S&P 500 Index closed slightly lower on Monday after erasing early gains as worries about the Delta variant of the coronavirus and a slowing US economy overshadowed optimism around more fiscal stimulus and a strong second-quarter earnings season.

Federal Reserve Governor Christopher Waller said on CNBC late in the session that the Fed could start to reduce its support for the economy by October if the next two monthly jobs reports each show employment rising by 800,000 to 1 million, as he expects. 

He also suggested the Fed could announce in September it would start to reduce its monthly bond purchases, which could lift yields again - not the best news for the stock market. 

Data earlier in the day showed that although US manufacturing grew in July, its pace slowed for a second straight month as spending rotated back to services from goods, and shortages of raw materials persisted. 

The softer-than-expected data also sent US bond yields to their lowest since July 20 and knocked the blue-chip Dow off an intra-day record high hit in early trading. 

“An issue for the market... is the rise of the growth scare", said Rob Haworth, senior investment strategist at US Bank, "Whether it's more restrictions in China with infections rising in 14 provinces now, or questions about how far is the US going to have to go with mask mandates.”

Only four of the 11 S&P sectors traded higher by market close, among them utilities and real estate generally considered safe bets at a time of uncertainty.

The Dow Jones Industrial Average fell 97.31 points, or 0.28 percent, to 34,838.16, the S&P 500 lost 8.1 points, or 0.18 percent, to 4,387.16 and the Nasdaq Composite added 8.39 points, or 0.06 percent, to 14,681.07. Square Inc, the payments firm of Twitter Inc co-founder Jack Dorsey, jumped after it said it would purchase Australian buy now, pay later pioneer Afterpay Ltd for $29 billion. 

With manufacturing activity data coming in weaker than expected, investor focus now turns to services sector data on Wednesday and the Labor Department's monthly jobs report on Friday.

After mixed quarterly reports from technology behemoths last week, all eyes this week are on earnings from companies including Eli Lilly and Co, CVS Health Corp and General Motors Co.

Volume on US exchanges was 8.80 billion shares, compared with the 9.77 billion average for the full session over the last 20 trading days. 

Declining issues outnumbered advancing ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favored advancers.

The S&P 500 posted 76 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 98 new highs and 67 new lows.

-reuters

Asian shares near all-time peak, oil heads to $60 on economic revival hopes

SYDNEY - Asian shares hovered near record highs on Monday while oil edged closer to $60 a barrel on hopes a $1.9 trillion COVID-19 aid package will be passed by US lawmakers as soon as this month just as coronavirus vaccines are being rolled out globally.

MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.2 percent at 717.2, not far from last week’s record high of 730.6.

Japan’s Nikkei climbed 0.3 percent while Australian shares advanced 0.5 percent led by technology and mining shares.

E-mini futures for the S&P 500 rose 0.3 percent in early Asian trading.

Hopes of a quicker economic revival and supply curbs by producer group OPEC and its allies pushed oil to its highest level in a year as it edged near $60 a barrel.

Global equity markets have scaled record highs in recent days on hopes of faster economic revival led by successful vaccine rollouts and expectations of a large US pandemic relief package.

On Friday, the Nasdaq and S&P 500 hit all-time highs on stronger-than-expected corporate results in the fourth quarter and as companies were on track to post earnings growth for the first quarter instead of a decline.

The rallies came even as US data painted a dour picture of the country’s labor market with payrolls rising by 49,000, half of what economists were expecting.

The weak report spurred the push for more stimulus, underscoring the need for lawmakers to act on President Joe Biden’s $1.9 trillion COVID-19 relief package.

Biden and his Democratic allies in Congress forged ahead with their stimulus plan on Friday as lawmakers approved a budget outline that will allow them to muscle through in the coming weeks without Republican support.

US Treasury Secretary Janet Yellen predicted the United States would hit full employment next year if Congress can pass its support package.

“That’s a big call given full employment is 4.1 percent, but one that will sit well with the market at a time when the vaccination program is being rolled out efficiently in a number of countries,” said Chris Weston, Melbourne-based chief strategist at Pepperstone.

In currencies, the US dollar came off a four-month high against the Japanese yen to be last at 105.39 following the weak jobs report.

The euro edged up slightly after rising 0.7 percent on Friday to a one-week high of $1.2054. It was last at $1.2044.

The risk-sensitive Australian dollar held near a one-week high at $0.7678.

In commodities, Brent crude and US crude climbed 52 cents each to $59.86 and $0.57.37 respectively.

US gold futures were up 0.2 percent at $1,817 an ounce.

-reuters

Dow sinks 1,500 as virus cases rise, deflating optimism

Stocks are falling sharply on Wall Street as coronavirus cases increase again, deflating recent optimism that economy could recover quickly as lockdowns ease. The Dow fell more than 1,500 points and the S&P 500 was on track for its worst day in nearly three months. Many market watchers have been saying that a scorching comeback in the market since late March was overdone and didn’t reflect the dire state of the economy. A day earlier, the Federal Reserve said the road back to recovery would be long. Bond yields fell sharply, a sign of increasing caution among investors.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:


Stocks are down sharply on Wall Street Thursday, pulling the Dow Jones Industrial Average more than 1,500 points lower and placing the S&P 500 on track for its worst day in nearly three months.

The S&P 500 was down 4.7% in afternoon trading, extending its losses into a third straight day. The benchmark index is now on track for its first weekly drop in four weeks.

The selling, which gained momentum as the day went on, comes as recent optimism that the reopening of businesses would drive a relatively quick economic recovery fades amid rising coronavirus cases in many U.S. states and countries.

The pullback marks a reversal for the market, which rallied 44.5% between late March and Monday, a scorching rate that many skeptics said was unsustainable and didn’t reflect the dire condition of the economy. Only a day ago the Nasdaq closed above the 10,000-point mark for the first time.

The Federal Reserve dimmed some of the optimism investors have had about a swift economic rebound Wednesday, warning that the road to recovery from the worst downturn in decades would be long. The central bank also said it doesn’t foresee a rate hike through 2022.

That, coupled with the recent run-up in stock prices, set the stage for the wave of selling Thursday, said Sal Bruno, chief investment officer at IndexIQ.

“It’s not surprising to see a bit of a sell-off, given the furious rally we’ve had coming out of the lows, despite the fact that the economy was not doing great,” Bruno said. “The fact that (the Fed) is talking about keeping interest rates this low through 2022 is a little eye-opening for a lot of folks.”

The Dow was down 1,512 points, or 5.6%, to 25,477. The Nasdaq composite, which was coming off an all-time high, slid 4%. Small company stocks continued to bear the brunt of the selling. The Russell 2000 index was down 5.9%. European and Asian markets also fell.


Nearly all of the companies in the S&P 500 were down. Technology, financial, industrial and health care stocks accounted for much of the market’s broad slide. Energy stocks were the biggest losers as crude oil prices fell sharply. Bond yields fell and the price of gold surged as worried investors shifted money into the traditional safe-haven assets.

Delta Air Lines, Boeing and MGM Resorts International were among the biggest decliners in the S&P 500. Each was down more than 11%.

Emergency rescue efforts by the Fed and Congress helped arrest the market’s staggering 34% skid in February and March. Since then, the market had been riding a wave of investor optimism that the economy will bounce back by the end of the year, if not sooner, as businesses reopen and people go back to work. But confidence in that scenario is waning as infections and fatalities continue to climb in the U.S. and elsewhere.

In the U.S., Texas and Florida were among the states reporting jumps in the number of coronavirus cases after precautions were relaxed last month. The total number of U.S. cases has now surpassed 2 million.

Still, investors are waiting for more data to see whether the spike in COVID-19 cases are a sign of a possible second wave of the infection, said Charlie Ripley, senior investment strategist for Allianz Investment Management.

He’s focusing on updates to job numbers and consumer spending to gauge how well the economy is recovering.

“We think the recovery is largely underway, but there is still some considerable uncertainty on the path we have ahead,” Ripley said. “If we see some more follow-on of people coming back to work and consumer sentiment picking up, that will be a positive sign for a faster recovery.”

Anxious investors shifted more money into government bonds Thursday, sending yields broadly lower. The yield on the 10-year Treasury yield slid to 0.67% from 0.74% late Wednesday, a big move. Last Friday it briefly moved above 0.90%.

Gold for August delivery climbed 1.2% to $1,740.60 an ounce.

Oil prices fell sharply. Benchmark U.S. crude oil for July delivery was down 8.4% at $36.26 a barrel. Brent crude oil for August delivery was off 7.8% at $38.48 a barrel.

Markets in Europe were broadly lower. France’s CAC 40 slid 4.7% and Germany’s DAX dropped 4.5%. Britain’s FTSE 100 fell 4%. Stock markets in Asia closed lower.

The Labor Department said Thursday that about 1.5 million people applied for U.S. unemployment benefits last week, another sign that many Americans are still losing their jobs even as the economy begins to gradually reopen. The latest figure marked the 10th straight weekly decline in applications for jobless aid since they peaked in mid-March when the coronavirus hit hard. Still, the pace of layoffs remains historically high.

Other jobs data have been more encouraging. A report on Friday showed that the U.S. job market surprisingly strengthened last month as employers added 2.5 million workers to their payrolls. Economists had been expecting them instead to slash another 8 million jobs.

That report helped stoke optimism among investors that the economy can climb out of its current hole faster than forecast. But the Fed estimated Wednesday that the economy will shrink 6.5% this year, in line with other forecasts, before expanding 5% in 2021. It also expects the unemployment rate at 9.3%, near the peak of the last recession, by the end of this year. The rate is now 13.3%.

The central bank said it would keep providing support to the economy by buying bonds to maintain low borrowing rates and forecast no rate hike through 2022, which could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.

The Associated Press 

Most Asian markets up but trade fears stalk investors

HONG KONG — Asian markets mostly rose Wednesday, building on a positive start to the week as investors are cheered by healthy earnings but uncertainty caused by the US-China trade row is keeping optimism in check.

Wall Street provided another strong lead with the Nasdaq approaching a record high, while energy firms in Asia pressed on with their rally following more gains in oil prices.

Hong Kong was 0.1 percent higher in early trade while Tokyo ended the morning session 0.4 percent up and Sydney edged 0.3 percent ahead. Seoul, Wellington and Taipei all posted gains but Shanghai dipped 0.6 percent.

While the gains are welcome, traders remain on edge for any new developments in the trade saga between the world's top two economies.

On Tuesday the US said Donald Trump's 25 percent tariffs on a further $16 billion of Chinese goods will kick in on August 23. That is on top of the measures imposed on $34 billion of imports last month.

The move had been widely expected but with China lining up retaliatory measures it reinforced worries that the two sides are heading for an all-out trade war that could hammer the global economy. The White House has also lined up another $200 billion to target in future.

The yuan got some support after a Bloomberg News report said the Chinese central bank had emphasised the need for currency stability to the country's lenders as it looks to halt a slide in recent months.

It said officials called on bosses to prevent "herd behaviour" and momentum-chasing moves in the forex markets, fearing a run on the yuan similar to 2015-16, which hammered the unit and sent global markets into a tailspin.

The report comes after Friday's move by the People's Bank of China to make it harder to bet against the currency.

"This move is consistent with what the PBoC did earlier -- it can be considered as preemptive efforts made to slow the yuan’s depreciation, prevent one-sided bets on weakness and avoid a sense of panic," Eddie Cheung, Asia foreign-exchange strategist at Standard Chartered in Hong Kong, told Bloomberg.

Energy firms remain popular as oil prices rise on the back of worries about the trade row and a drop in Saudi Arabian output.

Both main contracts were flat in Asia after clocking up big gains on Tuesday.

Prices also got support from the US reimposing a first round of sanctions on Tehran after leaving the nuclear deal, with an embargo on the country's crude exports in November.

Trump warned other countries against doing business with Iran in the face of the sanctions, saying they would be refused from trading with the United States.

"The entreaty of the Americans that anyone who will do business with them (Iran) won't be able to do business in the US is something to watch," said Greg McKenna, chief markets strategist at AxiTrader.

Key figures at 0230 GMT

Tokyo - Nikkei 225: UP 0.4 percent at 22,750.48 (break)

Hong Kong - Hang Seng: UP 0.1 percent at 28,282.28

Shanghai - Composite: DOWN 0.5 percent at 2,764.45

Euro/dollar: UP at $1.1602 from $1.1597 at 2130 GMT

Pound/dollar: DOWN at $1.2936 from $1.2938

Dollar/yen: UP at 111.40 yen from 111.37 yen

Oil - West Texas Intermediate: UP five cents at $69.22 per barrel

Oil - Brent Crude: DOWN seven cents at $74.58 per barrel

New York - Dow Jones: UP 0.5 percent at 25,628.91 (close)

London - FTSE 100: UP 0.7 percent at 7,718.48 (close)

source: philstar.com

US stocks plunge after global rout

NEW YORK - US stocks slumped Monday, the first trading day of 2016, as heavy sell-offs in global markets and geopolitical tensions between Iran and Saudi Arabia rattled nervous investors.

The Dow Jones Industrial Average tumbled 276.09 points, or 1.58 percent, to 17,148.94. The S&P 500 dropped 31.28 points, or 1.53 percent, to 2,012.66. The Nasdaq Composite Index shed 104.32 points, or 2.08 percent, to 4,903.09.

China's shares tumbled 7 percent Monday, triggering the new "circuit breaker" mechanism. The decline is generally being attributed to downbeat market sentiment stemming from weaker than expected manufacturing activity in December and a steep fall in the yuan exchange rate on the day.

The Caixin General China Manufacturing Purchasing Managers' Index (PMI), released Monday, edged down to 48.2 in December from 48.6 in November. The December reading, the 10th monthly figure in a row below the 50-point level, suggests a contraction.

Tokyo stocks plunged on the first trading day of the New Year as below-par manufacturing data from China compounded a dour market mood, with sentiment initially dashed by Wall Street's slump at the end of last year.

European equities also suffered big losses following Asian stocks' sharp decline Monday, with Germany's benchmark DAX index at Frankfurt Stock Exchange diving 4.28 percent.

Meanwhile, Saudi Arabia cut off diplomatic ties with Iran over the weekend and asked all Iranian diplomats to leave the country within 48 hours.

Analysts said the heightened geopolitical tensions in the Middle East sent traders scurrying from stocks to safe haven assets.

On the economic front, the US December ISM Manufacturing Index moved down from November's 48.6 to 48.2, missing market expectations of 49.2, said the Institute Supply Management Monday.

"That the manufacturing sector was weak in 2015 is not news, but a weaker-than-expected reading to close the year raises concerns the slowdown may continue well into 2016," said Jay Morelock, an economist at FTN Financial.

US construction spending data also came out disappointing. The Commerce Department announced Monday that construction spending during November 2015 was estimated at a seasonally adjusted annual rate of US$1,122.5 billion, 0.4 percent below the revised October estimate.

source: interaksyon.com

Wall St. drops as China data rattles investors

NEW YORK - US stocks fell sharply in afternoon trading on Monday and were set for their worst third-quarter performance in four years as investors worried about the health of China's economy and its potential impact on the timing of a U.S. interest rate increase.

The Nasdaq composite and S&P 500 both dropped more than 2 percent.

Much of the damage came from pharmaceutical and biotech stocks, including Allergan and Gilead Sciences, with the sector still bleeding a week after Democratic presidential candidate Hillary Clinton criticized drug pricing.

The Nasdaq biotechnology index fell 6 percent following its worst week in seven years. Among the S&P sectors, the health care index was the deepest decliner, down 3.66 percent.

"The broad healthcare sector and China are hurting the market. It's time for risk-off and there's no place to hide," said Richard Weeks, managing director at HighTower Advisors in Vienna, Virginia.

Profits at Chinese industrial companies fell 8.8 percent, fresh data showed, pushing down shares of raw material producers and energy companies. Oil prices fell more than 2 percent.

U.S. consumer spending rose more than expected in August, data showed on Monday, appearing to add to the case for an interest rate increase this year.

However, contracts to buy previously owned U.S. homes decreased, indicating the robust housing market could be losing some steam.

The Federal Reserve held off from raising rates at its September meeting, citing concerns about the global economy, notably China, among other factors.

New York Federal Reserve President William Dudley on Monday added to expectations for a rate increase, suggesting the central bank could pull the trigger as soon as October.

Several other Fed officials are scheduled to speak during the week, including Chair Janet Yellen on Wednesday.

Investors will also scrutinize September non-farm payrolls data set for release on Friday.

At 2:41 pm, the Dow Jones industrial average was down 1.65 percent at 16,045.25. The S&P 500 lost 2.23 percent, to 1,888.26 and the Nasdaq Composite dropped 2.72 percent to 4,559.05.

Billionaire investor Carl Icahn said the U.S. Federal Reserve's low interest rates are creating bubbles in markets for art, property and high-yield "junk" bonds, in a video to be released on Tuesday.

The CBOE Volatility index, known as Wall Street's "fear gauge", jumped 16 percent to 27.37, well above its long-term average of 20.

Alcoa's shares jumped 2.70 percent after the aluminum producer said it would split into two publicly-traded companies.

Apple fell 1.53 percent despite reporting that it sold a record number of its new iPhones in their first weekend.

Declining issues outnumbered advancing ones on the NYSE by 2,744 to 337. On the Nasdaq, 2,323 issues fell and 509 advanced.

source: interaksyon.com

Google propels Nasdaq to another record high close

NEW YORK - A major rally in Google pushed the Nasdaq to a second straight record high on Friday while weak energy stocks weighed on the Dow and S&P 500.

Google surged 16.26 percent to end at an all-time high of $699.62, a day after reporting strong ad revenue growth. It was Google's largest one-day percentage gain since April 2008.

Facebook rose 4.53 percent to a record high of $94.97 on hopes that it could mirror Google's ad growth. Etsy spiked 30 percent thanks to a nod from Google during its conference call.

But a drop in oil prices limited gains on the broader stock market, with the S&P 500 energy index down 1.07 percent to its lowest level since January 2013. Chevron lost 1.4 percent. The utilities index dropped 1.06 percent.

Wall Street insiders were cautiously optimistic about upcoming quarterly reports after some results this week came in above expectations.

“It’s going to be better than what the consensus numbers were pointing to,” said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia. “Our economy is doing okay. We’re not growing at 5 percent but we have slow, steady growth and I think that continues.”

The Nasdaq Composite added 46.96 points, or 0.91 percent, to end at 5,210.14, its second straight record high close.

The S&P 500 gained 2.35 points, or 0.11 percent, to end at 2,126.64, just shy of its record high of 2,130.82.

The Dow Jones industrial average fell 33.8 points, or 0.19 percent, to end at 18,086.45.

Boeing fell 1.11 percent and was the biggest drag on the Dow after it said it will take a second-quarter charge related to problems with its KC-46 aerial refueling tanker aircraft program.

General Electric shares rose 0.74 percent after raising its 2015 outlook for its industrial manufacturing businesses.

The technology index was the sole gainer among the 10 major S&P 500 indexes, up 1.75 percent, mostly because of Google.

For the week, the Dow gained 1.8 percent, the S&P added 2.4 percent and the Nasdaq rose 4.3 percent, its largest weekly gain since October 2014.

The dollar saw its biggest weekly gain in two months due to expectations of a Federal Reserve rate hike this year. However, a strong dollar reduces the value of U.S. companies' overseas income.

U.S. companies have been expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar. Profit is expected to have fallen 2.9 percent, according to Thomson Reuters estimates.

Declining issues outnumbered advancing ones on the NYSE by 2,000 to 1,076, for a 1.86-to-1 ratio; on the Nasdaq, 1,676 issues fell and 1,115 advanced for a 1.50-to-1 ratio favoring decliners.

The S&P 500 posted 21 new 52-week highs and 25 new lows; the Nasdaq saw 107 new highs and 87 new lows.

Volume was a bit light, with about 6.1 billion shares traded on U.S. exchanges, below the 6.6 billion average so far this month, according to BATS Global Markets.

source: interaksyon.com

Japan shares clear 18-year peak, dollar firm

SYDNEY - Asia shares were trying to score a sixth session of gains on Wednesday as investors chose to be optimistic on the chances of a Greek debt deal, while the dollar held firm as the prospect of U.S. rate rises came back into view.

Japan's Nikkei led the way as a rise of 0.5 percent cleared a peak from 2000 to reach ground last trod in late 1996.

MSCI's index of Asia-Pacific shares outside Japan edged up 0.13 percent to bring its gains over the past six sessions to about 2.9 percent.

In China, official efforts to calm jittery investors seem to have steadied sentiment after steep losses last week. Shanghai stocks were up 1.6 percent but trade remained volatile.

Gains on Wall Street had been minor, though still enough to see the Nasdaq to a record peak. The Dow ended Tuesday up 0.13 percent, while the S&P 500 added 0.06 percent and the Nasdaq 0.12 percent.

Risk appetites were whetted after Greece's leftwing government expressed confidence that parliament would approve a debt deal with lenders, despite an angry reaction from some of its own lawmakers.

EU finance ministers meet on Wednesday to discuss whether or not to put the plan to euro zone state heads. If it goes ahead, the Greek parliament could vote as early as this weekend.

Bond investors were encouraged enough to push down yields on Greek 10-year debt by 60 basis points, with yields in Italy and Portugal following.

Yields went the other way in the United States following a string of generally upbeat economic data and comments from Fed Governor Jerome Powell that the economy could be ready for interest rate increases in both September and December.

That was unwelcome news for debt markets which are priced for only one hike this year. Yields on 10-year Treasury notes duly rose to their highest in 1-1/2 weeks at 2.43 percent.

"Markets appear to have interpreted the prospect of a deal between Greece and its creditors as removing a source of uncertainty, which may allow the Fed to commence hiking interest rates in September," said analysts at ANZ.

All of which helped give the U.S. dollar index its biggest daily gain since late May.

The greenback was particularly strong against the euro, which had peeled off to $1.1176 from a $1.1410 top at the start of the week. Against the yen, the euro was down at 138.34, having fallen from 140.

The dollar was also firm at 124.86 yen and well above the recent trough of 122.46.

In commodity markets, oil prices rebounding ahead of U.S. inventory data expected to show strong demand for gasoline.

U.S. crude futures added 11 cents to $61.12 a barrel, while Brent rose 10 cents to $64.55.

Gold slipped on the firmer dollar to reach $1,176.90 an ounce.

source: interaksyon.com

U.S. shares drop on Greece uncertainty, rate hike anticipation

NEW YORK - A setback in Greek debt talks pushed U.S. and European shares lower on Friday, along with investor views that positive U.S. data may accelerate the timing for a hike in interest rates.

Oil prices fell on concerns production may rise further.

The International Monetary Fund delegation left Greek debt negotiations on Friday because of "major differences" with Athens on the same day that EU officials held their first formal talks on the possibility of Greece defaulting.

"It's largely the Greek situation again, and that's been played out on a day-to-day basis where you had a huge rally followed by a decline predicated on whether they are coming closer or moving further from a resolution," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

However, the darkening Greek outlook failed to fluster Prime Minister Alexis Tsipras, who holed up with his negotiators after proclaiming optimism at an open air concert.

The euro inched higher against the dollar after Tsipras'comments even though equity and bond investors were skeptical.

"You have to question whether (the Greeks are) looking at reality," said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

U.S. Treasuries prices ended little changed, with longer-dated yields holding below seven-month highs as concerns about a Greek default supported safety demand for bonds ahead of a Federal Reserve policy meeting next week.

A U.S. consumer sentiment survey and production data, after strong retail sales data on Thursday, gave a rosy view of the U.S. economy ahead of the Federal Reserve's June 17 policy statement, which may provide clues on timing for the first U.S. rate hike in nearly a decade.

"Both of these led the market, coupled with yesterday's report, to think that the first hike from the Fed could be closer," said OakBrook's Sampson, adding that lift-off could be in the fall, ahead of her previous expectation.

The Dow Jones industrial average fell 140.53 points, or 0.78 percent, to 17,898.84, the S&P 500 lost 14.75 points, or 0.7 percent, to 2,094.11 and the Nasdaq Composite dropped 31.41 points, or 0.62 percent, to 5,051.10.

The S&P and the Dow showed slight gains for the week while the Nasdaq fell slightly.

Oil fell for a second straight day as investors took profits after Saudi Arabia said it was ready to raise production to record highs, adding to worries over global oversupply.

Brent crude settled down $1.24, or 2 percent, at $63.87. For the week, Brent ended up 0.7 percent. U.S. crude fell 81 cents, or 1.3 percent, to $59.96. It rose 1.5 percent on the week.

In the late afternoon, the dollar index was unchanged after a day of choppy trading against a basket of major currencies while the euro was essentially flat after rising earlier in the day.

MSCI's all-world country index fell 0.4 percent but was on track for its first weekly gain in four, while the pan-European FTSEurofirst 300 index fell 0.8 percent.

source: interaksyon.com

Asia shares edge up, Greece uncertainty lingers

SYDNEY - Most Asian share markets were fractionally higher on Monday following a record close on Wall Street, with investors cautiously optimistic the European Union would make progress this week on a debt deal with Greece.

Oil prices extended their bounce as Brent topped $62 a barrel, while the major currencies stayed locked in recent tight ranges.

Data from Japan showed the economy emerged from recession in the final quarter of last year, though growth of 0.6 percent was short of market forecasts.

Investors still seemed encouraged and the Nikkei firmed 0.6 percent in early trade.

MSCI's broadest index of Asia-Pacific shares outside Japan recouped a small initial loss to inch ahead.

The index boasted its highest close since late October on Friday but is bumping up against a major band of chart resistance in the 484 to 486 area.

Australia's main index eased 0.2 percent, while South Korean shares rose by a matching amount.

Holidays will be a feature this week with the United States off on Monday and much of Asia celebrating the Lunar New Year. China's markets are off from Feb. 18 right through to the 24th.

The Eurogroup of finance ministers meets in Brussels later Monday to try to find common ground with Greece' new government, in talks that could drag on for some time.

Greece said on Sunday it was confident of reaching agreement in negotiations with its euro zone partners, but reiterated it would not accept harsh austerity strings in any debt pact.

Markets have generally assumed a compromise would eventually be found, given the alternative might be a disastrous Greek exit from the euro.

The S&P 500 ended at a record high on Friday, as energy shares gained with oil prices, while the Nasdaq hit a 15-year high helped by technology stocks.

The Dow gained 0.26 percent, while the S&P 500 added 0.41 percent and the Nasdaq 0.75 percent. The FTSEuroFirst index of 300 leading shares closed up 0.64 percent, helped by upbeat growth data from Germany.

Without a clear outcome on Greece, there is little conviction to buy or sell the euro. As a result, the common currency has been drifting in a slim $1.1262-1.1534 range in the last few weeks. It was last flat at $1.1400.

Against the yen, the euro was a touch softer at 135.00, off a three-week peak of 136.70 reached last Thursday. The dollar slipped to 118.59 yen, recoiling from a one-month high of 120.48 set last Wednesday.

The main mover on Monday was sterling, which scaled a six-week peak following recent hawkish-sounding comments from the Bank of England. The pound climbed as far as $1.5435 in early trade, from around $1.5407 late on Friday.

In commodities, oil was supported by signs that deeper industry spending cuts may curb excess supply. Brent crude rose 42 cents to $61.94 per barrel, while U.S. crude added 34 cents to $53.12 per barrel.

source: interaksyon.com

Wall Street ends flat as hope for ECB move increases

NEW YORK - U.S. stocks closed little changed on Tuesday after the International Monetary Fund reduced its growth forecasts for 2015 and 2016, increasing speculation central banks would take more aggressive policy moves to spark economic improvement.

The lower forecasts implied less demand for fuel through 2016, contributing to another fall in crude oil, although some bullish results from major energy companies kept the sector afloat. The S&P energy index eked out a gain of 0.09 percent.

The IMF cut its forecasts for both years by 0.3 percentage points and advised advanced economies to maintain accommodative monetary policies to avoid increases in real interest rates as cheaper oil increases deflation risk.

The European Central Bank is expected to announce a bond buying program on Thursday to boost the region's flagging economy.

"Any sense at all that the ECB disappoints, you will see the markets correct rather harshly," said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York.

"You can speculate all you want and investors can take the market higher all they want, but until the ECB comes out and says it, you are not really going to know."

The Dow Jones industrial average rose 3.66 points, or 0.02 percent, to 17,515.23, the S&P 500 gained 3.12 points, or 0.15 percent, to 2,022.54 and the Nasdaq Composite added 20.46 points, or 0.44 percent, to 4,654.85.

U.S. crude settled down 4.7 percent to $46.39 per barrel, after hitting an intraday low of $45.89, while Brent settled down 1.8 percent at $47.99.

Halliburton Co and Baker Hughes Inc warned that a fall in drilling activity would hurt 2015 results, though the companies also reported better-than-expected fourth-quarter profits. Halliburton rose 1.8 percent to $39.83 while Baker gained 1.2 percent to $57.26.

Johnson & Johnson fell 2.6 percent to $101.29 as the biggest drag on both the Dow and S&P 500 after adjusted earnings beat expectations but revenue missed forecasts.

Morgan Stanley reported a drop of 81 percent in revenue from trading fixed-income securities, currencies and commodities, though earnings rose on a sharp drop in legal costs. Shares dipped 0.4 percent to $34.75.

FXCM Inc plummeted 87.3 percent to $1.60 on volume of over 91 million shares, its most active day ever. The retail foreign exchange laid out details of a rescue loan after $200 million of losses on last week's shock removal of the cap on the Swiss franc.

After the closing bell, Netflix shares surged 12.1 percent to $391 after posting a quarterly revenue increase of 26.3 percent, while IBM lost 1.6 percent to $154.51 after its results.

NYSE declining issues outnumbered advancers 1,894 to 1,207, for a 1.57-to-1 ratio; on the Nasdaq, 1,639 issues fell and 1,128 advanced, for a 1.45-to-1 ratio favoring decliners.

The S&P 500 posted 47 new 52-week highs and 17 new lows; the Nasdaq Composite recorded 70 new highs and 109 lows.

Volume was moderate, with about 7.2 billion shares traded on U.S. exchanges, roughly in line with the 7.29 billion average so far this month, according to BATS Global Markets.

source: interaksyon.com

Wall Street little changed but S&P hits record

NEW YORK - U.S. stocks were little changed in thin trading on Monday as the S&P 500 notched its latest record high, but gains were curbed when an early rally in energy prices lost momentum.

Equities have trended to the upside of late, buoyed by data showing an improving economy and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. After the S&P 500 gained nearly 6 percent over the prior eight sessions, it notched its 53rd record close of the year on Monday.

The S&P energy index advanced 0.3 percent, pulling back from a gain of more than 1 percent as Brent and U.S. crude oil turned lower. Brent settled down $1.57 at $57.88 and U.S. crude settled down $1.12 at $53.61 a barrel.

In contrast to the fall in oil prices, consumer discretionary names were among the day's best performers, up 0.7 percent. General Motors rose 2.6 percent to $34.60. The S&P 500 retail sector rose 0.8 percent as Macy's Inc advanced 1.8 percent to $65.22 and Amazon.com was up 1 percent to $312.04.

"The nearer-term picture is, consumers are enjoying lower gas prices, it’s almost as if it is an alleviation of taxes," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

"Someone is getting hurt in this while the consumer is benefiting, and at some point it could come back to bite the market and the economy."

The Dow Jones industrial average fell 15.48 points, or 0.09 percent, to 18,038.23, the S&P 500 gained 1.8 points, or 0.09 percent, to 2,090.57 and the Nasdaq Composite added 0.05 points to 4,806.91.

The speed and scale of the rally could cap further upside, especially in the final trading week of the year, when many market participants are out on holiday and catalysts are limited. Volume is expected to remain light, which could exacerbate volatility. The stock market will be closed on Thursday for New Year's Day.

About 4.78 billion shares traded on U.S. exchanges on Monday, well below the 7.18 billion average this month, according to BATS Global Markets.

Gilead Sciences Inc rose 3.7 percent to $97.30 as one of the S&P 500's biggest percentage gainers after Morgan Stanley upgraded the stock to "overweight" from "equal-weight."

LiveDeal Inc jumped 19.1 percent to $3.92 on volume of 13.6 million shares, to dwarf its 50-day average of about 455,000 shares, after the company reported 2014 results.

NYSE advancing issues outnumbered decliners 1,800 to 1,299, for a 1.39-to-1 ratio; on the Nasdaq, 1,438 issues rose and 1,320 fell for a 1.09-to-1 ratio favoring advancers.

The S&P 500 posted 68 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 160 new highs and 39 new lows.

source: interaksyon.com

Wall Street ends at record in second straight weekly gain

NEW YORK - U.S. stocks ended higher on Friday, with both the Dow and S&P 500 closing at records in a broad rally, though trading was light with many market participants still out for the Christmas holiday.

Major indexes closed out their second straight weekly gain, continuing an advance that has lifted the S&P 5.9 percent in seven sessions. The benchmark index hit its 52nd record close of the year on Friday, the most since 1995 and the fourth-best annual record ever, while the Dow rose for a seventh straight day, its longest streak since March 2013.

"The overall trend remains higher, but we're reaching a point where we're overbought. Six percent since last Tuesday is such a strong move in such a short period of time, even if bulls have the upper hand in the longer term," said Adam Sarhan, chief executive of Sarhan Capital in New York.

Recent gains have come on strong economic data, including a bullish read on economic growth earlier this week, as well as accommodative measures from central banks.

The day's gains were broad, with eight of the S&P 500's 10 primary sectors ending up on the day and no sector ending more than 0.1 percent lower. The utility sector was the day's strongest, up 1.2 percent, while healthcare rose 0.8 percent.

Healthcare stocks were boosted by biotechs, which jumped 2.3 percent. While the Nasdaq biotech index was one of the day's strongest sectors, it fell 3.2 percent in a week marked by heavy volatility. Celgene Corp rose 3.4 percent to $113.35 as the S&P 500's biggest percentage gainer, followed by Regeneron Pharmaceuticals, up 3.3 percent to $413.48.

The Dow Jones industrial average rose 23.5 points, or 0.13 percent, to 18,053.71, the S&P 500 gained 6.89 points, or 0.33 percent, to 2,088.77 and the Nasdaq Composite added 33.39 points, or 0.7 percent, to 4,806.86.

For the week, the Dow rose 1.4 percent, the S&P rose 0.9 percent and the Nasdaq rose 0.9 percent. It was the ninth positive week in the past ten for the Dow and S&P.

The S&P Retail index rose 0.5 percent in the first trading session after Christmas. Among notable names, Best Buy Co rose 0.6 percent to $39.14 while Macy's Inc dipped 0.3 percent to $64.05. Amazon.com Inc rose 2 percent to $309.18.

"Things are looking positive since the shopping season coincided with a big drop in crude oil, which means lower gas prices," Sarhan said. "That translates to more disposable income, which could mean stronger retail sales."

Advancing issues outnumbered declining ones on the NYSE by 2,032 to 1,011, for a 2.01-to-1 ratio on the upside; on the Nasdaq, 1,792 issues rose and 934 fell for a 1.92-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 70 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 133 new highs and 28 new lows.

About 3.06 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the month-to-date average of 7.39 billion.

source: interaksyon.com

Stocks rally as global selloff abates, bonds fall

NEW YORK - World equity markets rallied, with European stocks surging the most in more than two years, and bond prices slid on Friday as investors poured back into beaten-down markets on solid U.S. corporate earnings and rising consumer sentiment.

Wall Street followed Europe's lead, with all major stock indexes climbing more than 1 percent after earnings reports eased concerns about the impact of weak global demand on U.S. growth and businesses.

Expectations among some investors that the European Central Bank will increase stimulus also buoyed sentiment.

Results at General Electric, Honeywell International Inc and Morgan Stanley topped expectations. GE rose 2.4 percent, Honeywell gained 4.2 percent and Morgan Stanley advanced 2.1 percent.

With 81 companies in the S&P 500 already reporting third-quarter results, 64.2 percent have beaten expectations, a rate slightly below the average over the past four quarters but better than the past 20 years.

U.S. housing starts and permits rose in September, a sign the market's modest recovery is supporting a growing economy, while U.S. consumer sentiment rose in October to the highest in more than seven years.

Despite the rally, the S&P 500 posted a fourth straight weekly decline, its longest streak in more than three years. The U.S. benchmark is down more than 6 percent from a record high in September as concerns about the global economy, a resurgent European debt crisis and the Ebola virus sparked the downturn.

"The reaction the market has had over the past couple of weeks is a bit overdone," said David Lafferty, chief market strategist at Natixis Global Asset Management, which oversees $930 billion in assets.

"The overall trend of the market is to grind higher on earnings but the real flashpoint for risk assets is going to be the ECB," Lafferty said, referring to whether it can increase its stimulus.

MSCI's all-country world index rose 1.22 percent while the FTSEurofirst 300 index of top European shares closed up 2.76 percent at 1,280.17, its biggest single-day percentage gain since June 2012.

The Euro STOXX 50 index of 50 European companies rose 3.1 percent in the biggest jump in almost 18 months, shy two-hundredths of a percentage point of being the biggest single-day jump since September 2012.

The Dow Jones industrial average closed up 263.17 points, or 1.63 percent, to 16,380.41. The S&P 500 rose 24.00 points, or 1.29 percent, to 1,886.76 and the Nasdaq Composite added 41.05 points, or 0.97 percent, to 4,258.44.

For the week, the Dow and S&P 500 both fell 1 percent while the Nasdaq lost 0.4 percent.

The U.S. dollar edged higher. The euro was last down 0.37 percent at $1.2759, just off a session low of $1.2755. The dollar was up 0.54 percent against the yen at 106.89 yen.

Brent crude rose above $86 a barrel, bouncing from near four-year lows as investors bought back into a market they said was oversold, and as fighting in Iraq increased political risk.

Brent for December rose 34 cents to settle at $86.16 a barrel. U.S. November crude settled up 5 cents at $82.75, posting its third weekly decline.

U.S. Treasuries prices posted their second straight day of declines.

Benchmark 10-year notes, up as much as three points on Wednesday on fears over the global economy, were off 12/32 in price on Friday to yield 2.1971 percent.

source: interaksyon.com

Dow, S&P 500 end at record highs after data

NEW YORK - The Dow and the S&P 500 edged up to end at record highs on Friday, wrapping up four straight months of gains, after mixed economic data gave investors little reason to rush into stocks.

After the benchmark S&P 500's latest record closing high - its fourth in the last five sessions - gains may be harder to come by until the market's direction becomes more clear. Payrolls data and a European Central Bank meeting will be the major catalysts next week.

U.S. consumer spending fell for the first time in a year in April, but the decline probably will not change expectations for a rebound in growth this quarter. An inflation gauge rose at its quickest pace since November 2012 while business activity in the U.S. Midwest rose in May at its strongest pace since October 2013.




"Very mixed signals, which prevents bears from getting aggressive and keeps bulls in place. It’s effectively forestalled any real significant directional shift to what we’ve seen thus far," said Peter Kenny, chief executive officer of Clearpool Group in New York.

"This is an unusual time and place in the market, in that we are in a real holding pattern, and the markets are looking for more in the way of confirmation in the way of economic data that suggests our economic activity is accelerating."

Equity investors kept an eye on U.S. Treasury yields. The 10-year note's yield rose after the strong Chicago PMI data, but remained below 2.5 percent, near an 11-month low hit during Thursday's session.

The low yields helped to bolster dividend-paying stocks. High-yielding utilities ranked as the best-performing S&P sector on Friday, up 0.8 percent for the day.

The Dow Jones industrial average rose 18.43 points or 0.11 percent, to 16,717.17. The S&P 500 gained 3.54 points or 0.18 percent, to 1,923.57. The Nasdaq Composite fell 5.33 points or 0.13 percent, to 4,242.62.

Friday's gain lifted the Dow above its previous record close of 16,715.44 set on May 13.

For the week, the Dow rose 0.7 percent, the S&P 500 gained 1.2 percent, and the Nasdaq climbed 1.4 percent.

The Dow gained 0.8 percent for May and the S&P 500 rose 2.1 percent, marking the fourth straight month of gains for both indexes. The Nasdaq, up 3.1 percent, scored its first monthly gain in three.

Big Lots shares jumped 13.1 percent to $42.44 after the closeout retailer posted better-than-expected results and higher sales.

In contrast, shares of apparel retailers Express and Guess slumped a day after the companies forecast disappointing profits for the current quarter amid a sluggish revival in consumer spending. Express shares sank 7.5 percent to $12.61. Guess fell 5.1 percent to $25.50.

Volume was modest, with about 5.92 billion shares traded on U.S. exchanges, slightly above the 5.75 billion average for the month, according to data from BATS Global Markets.

Advancing stocks outnumbered declining ones on the New York Stock Exchange by 1,523 to 1,485. On the Nasdaq, decliners beat advancers by 1,594 to 1,018.

source: interaksyon.com

Twitter stock slumps 50% as Goldman, Deutsche Bank still say `buy’

Twitter Inc investors who heeded the advice of high-profile banks such as Goldman Sachs Group Inc and Deutsche Bank AG to buy the social media company’s shares might be kicking themselves.

Much more accurate calls were made by Wells Fargo, Atlantic Equities and Macquarie Research, whose analysts advised clients to get out of the high-flying stock about the time it peaked in December.

On Wednesday the stock fell as low as $37.24, 50 percent below its peak of $74.73 the day after Christmas, wiping almost $18 billion off Twitter’s market capitalization.

The downgrades, and the subsequent swoon by the stock, reflect concern about slowing growth in Twitter’s user base and the company’s ability to reverse the trend. Year-on-year growth in the number of Twitter users has fallen for five straight quarters, and the company said on Tuesday that its 255 million monthly users, on average, appeared to check the service less frequently than a year ago.

That in turn has fueled doubts that Twitter could one day attract as many users as Facebook Inc’s 1.2 billion, or match its much larger rival’s power as an advertising vehicle. It’s also raised questions over whether it can sustain growth over the long term. While no one is suggesting Twitter will lose its consumer cachet as happened to companies such as MySpace or Orkut, neither can anyone guarantee that as tastes change newer rivals won’t usurp it.

“Can they become a mainstream company? That’s the open question,” said Ben Schachter, the Macquarie Securities analyst who downgraded Twitter’s stock to “underperform” on December 27 – the day after it peaked.

It’s a far cry from the enthusiasm that greeted the company when it debuted on the New York Stock Exchange on November 7 and its shares soared 73 percent over the offering price. There was no let-up for the next two months, as the stock scaled fresh highs with little or no news to justify the valuation.

That got some analysts worried. Schachter, speaking to Reuters on Thursday, recalls a “runaway momentum.”

Starting mid-December, seven brokerages downgraded the stock within a span of three weeks. Wells Fargo and SunTrust Robinson kicked off the first round of downgrades on December 16, followed by Atlantic Equities. Macquarie timed its downgrade to perfection.

In his downgrade note on December 16, Wells Fargo analyst Peter Stabler said investors were “underestimating the challenges facing the company”.

A common theme was that Twitter, though innovative, well-run and full of potential, simply did not warrant such a rich valuation, so soon.

“They are focusing on the right things. I only have positive things to say about the company. My quibble is with the stock,” said Brian Wieser, Pivotal Research Group analyst, who was among the first to urge clients to retreat.

He downgraded the stock to “sell” immediately after Twitter’s shares jumped on its opening day. At the time, he had a $30 target price on the stock and recommended selling after they breached the $45 level in their market debut.

The risks
Twitter said in 2010 that it aims one day to have 1 billion users. It did not specify a time frame.

Some of the analysts who downgraded the stock in December are not as confident in Twitter’s long-term outlook, much of which will hinge on the company’s ability to increase both the number of users and how much time they spend on the site.

A fast-growing and engaged user base would help Twitter rake in more advertiser dollars; however, those are issues over which management has limited control, Atlantic Equities analyst James Cordwell said in December.

Investor worries were reflected in the response to Twitter’s quarterly results this week, when the market overlooked higher-than-expected revenue to focus instead on the slow user and usage growth. Twitter’s shares fell 10 percent.

The expiration on May 5 of Twitter’s six-month “lockup” – the period after the initial public offering during which early investors are barred from selling their shares – could put the stock under more pressure. Restrictions on about 470 million shares will be removed.

Twitter’s co-founders, Jack Dorsey and Evan Williams, and Chief Executive Richard Costolo have said they do not plan to sell their shares after the post-IPO restrictions are lifted.

Only one other major investor, Benchmark Capital Management Co LLC, which owns 31.6 million shares, has publicly stated that it will not sell the stock when the lock-up expires.

“Despite some key investor and executive statements that they will not sell near term, we estimate that 50-70 percent of shares could be unlocked,” JPMorgan Chase & Co analyst Doug Anmuth said in a research note on April 30.

The other camp
Still, Goldman and Deutsche Bank, both underwriters of the high-profile IPO, maintain their positive views of the stock, in spite of the user trends, two consecutive quarters of disappointing results and the decline in its shares.

Twitter shares trade at 334.2 times forward earnings, far more than Facebook’s 38.1 times, according to StarMine, or the average of 17.95 for the Standard & Poor’s 500 Index, according to Thomson Reuters data.

“The company continues to execute near-flawlessly around items in its control like revenue and expenses,” Deutsche Bank analyst Ross Sandler wrote in a note on Thursday, a day after Twitter posted its second-quarter results. Sandler didn’t immediately return a phone call and an e-mail. Goldman Sachs analyst Heath Terry was traveling and not available for comment, his assistant said.

Sandler said market sentiment would eventually shift away from users toward revenue growth. Facebook, he argued, also struggled with slow user growth last year before regaining Wall Street’s favor thanks to its strong mobile ad business.

Schachter, the Macquarie analyst, says much will depend on how successful Twitter will be in revamping its site to attract mainstream users.

“They are executing well in terms of innovation, but the user growth is a bit of a concern,” he said. “The hope is that they can change the site, to make it more user-friendly.”

source: interaksyon.com

Asian shares on defensive, hoping for China stimulus plan

TOKYO - Asian shares were in a defensive mode on Tuesday after Wall Street fell overnight, though still-vague hopes of a new stimulus plan in China could improve investor sentiment.

U.S. Treasuries prices fell, with the benchmark two-year yield hitting a six-month high as investors grew nervous that the Federal Reserve may raise interest rates sooner than expected. Bond yields rise when prices fall.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent as Australian shares fell 0.5 percent, while Japan's Nikkei dropped 0.5 percent.

On Wall Street, the Nasdaq Composite Index led the losses with a fall of 1.2 percent to five-week low, as investors took some money off recent top performers such as biotech shares. The S&P500 Index fell 0.5 percent to 1,857.44.

Concerns over Ukraine and soft U.S. manufacturing were cited as possible catalyst, though market players noted the selling could also reflect unwinding of positions ahead of the quarter-end.

The survey on U.S. manufacturing by financial data firm Markit also showed U.S. manufacturing activity slowed in March.

U.S. President Barack Obama and major industrialized allies warned Russia on Monday it faces additional economic sanctions if President Vladimir Putin takes further action to destabilize Ukraine following the seizure of Crimea.

"In short, there's nowhere to put money at this point. Investors are generally upbeat on the U.S. but they want to see more evidence that the weakness in some of the recent data is due to a bad weather," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.

Yet short-term U.S. bond prices are under pressure after Federal Reserve Chair Janet Yellen said the Fed could raise rates six months after its current bond-buying program ends - potentially as soon as spring 2015.

Even as the U.S. 30-year yield fell to 3.56 percent, near this year's low of 3.525 percent, short-dated debt yields moved in the opposite direction, flattening the yield curve sharply.

The U.S. two-year yield shot to six-month high of 0.4655 percent also due in part to caution over the two-year debt sale on Tuesday, the first leg of U.S. government issuance this week totaling $96 billion.

Rising U.S. short-term rates were undermining the attraction of precious metals, with gold was fetching $1,308.91 per ounce, close to Monday's near one-month low of $1,307.54.

Silver tumbled to a six-week low of $19.84 and last stood at $19.89.

In contrast, emerging markets were generally resilient after weak Chinese manufacturing data on Monday sparked expectations the Chinese government could unveil stimulus measures following Monday's weak survey of manufacturing.

source: interaksyon.com

Wall Street Week Ahead: Stocks may face pain, though buyers remain

NEW YORK - Investors may crave a quiet market this coming week to digest the recent volatility in stocks and rehash Sunday's Super Bowl, but the prospect doesn't look likely.

The catalysts that drove the Dow and the S&P 500 to their worst monthly performances since May 2012 have not gone away. The retreat from emerging markets - and stocks in general - appears to have more room to run as the factors that helped propel the market to record highs in mid-January aren't providing enough support.

Calls for a market correction have become louder, with the S&P 500 down 3.6 percent from its all-time closing high and the Federal Reserve's announcement on Wednesday that it will keep trimming its monthly bond buying.

More than 80 S&P 500 components are set to report earnings next week, but the myriad issues surrounding emerging markets remain at the forefront for investors.

"Bad news in any area of the globe is bound to make sentiment less positive in others. This isn't an issue of contagion, but there will be influence," said John Chisholm, chief investment officer of the Boston-based Acadian Asset Management, which has an emerging market equity fund with $1.2 billion in assets. "There's plenty more instability ahead."

While countries such as Turkey and South Africa have taken steps to stabilize their currencies, the trend has remained negative for those assets.

The CBOE Volatility Index, a measure of investor anxiety, rose 34.2 percent during January to end the month at 18.41, after wrapping up 2013 at 13.72. The VIX remains below the long-term average of 20, however, and has not traded above 19 since October.

For the month of January, the Dow fell 5.3 percent and the S&P 500 lost 3.6 percent - marking their worst monthly percentage declines since May 2012. The Nasdaq fell 1.7 percent in January, its worst month since October 2012.

It's tempting to believe that U.S. stocks are a salve for this pain. But the reality is that when emerging markets swoon, U.S. stocks decline as well, just not as much.

Goldman Sachs analysts wrote last week that when MSCI's emerging markets index falls at least 5 percent, the S&P 500 tends to fall by half of that. The MSCI index has dropped 11 percent since an October peak of 1,047.73.

"Our EM strategists believe some EM equity markets have further to fall, and that they require significant current account rebalancing before bottoming," Goldman Sachs analysts said in a note about their outlook on emerging markets.

The effect on U.S. companies is harder to discern. Goldman estimated that S&P 500 companies derive 5 percent of their profits from emerging markets, with some sectors more affected than others.

Among the companies with large emerging markets exposure set to report earnings next week are General Motors and Yum Brands Inc. Yum, in fact, gets more than half of its sales from the "BRIC" nations - Brazil, Russia, India and China. Yum's stock lost 11.2 percent in January, while GM shares dropped 11.7 percent.

Both stocks, along with the shares of other internationally exposed companies, have underperformed the S&P 500 since the Fed first said it would cut back on its stimulus on December 18.

Demand in China has been particularly sluggish, which affected Apple Inc's results, as the company's iPhone sales were worse than expected, and Wal-Mart Stores, which closed some locations in that country, as well as in Brazil.

Some are still looking to buy, though.

"We'd need to see more significant hits from overseas exposure before we start paring away our allocation to those names ... GM is doing well because of its EM exposure," Acadian's Chisholm said.

'Best house' in a poor neighborhood

With half of the S&P 500 companies having reported earnings so far, almost 70 percent have topped earnings expectations, above the long-term average of 63 percent, according to Thomson Reuters data. Two-thirds have exceeded estimates on revenue, above the historical average of 61 percent, though companies have generally been meeting or beating lowered expectations.

"While there are equity risks, there's very little risk from a bear market standpoint," said Jim Dunigan, chief investment officer of PNC Wealth Management in Philadelphia. "That markets have held on as well as they have shows that equity appetite still exists."

Whether there is conviction behind the buying is debatable. The three busiest days for the market in terms of the S&P's E-mini futures contract, the most heavily traded equity futures contract, were Wednesday, Monday, and last Friday, January 24 - all of which were selloffs.

Still, investors keep pouring money into stock market funds, with $10.24 billion added in the week ended January 29, according to Thomson Reuters' Lipper service. This marked the sixth straight week of net new cash.

The S&P 500 is about 0.5 percent above its 100-day moving average, a level that could provide support against further losses. According to the most recent Reuters poll of analysts, the benchmark index is expected to end the year at 1,925 - about 8 percent away from current levels.

Dunigan, who helps oversee $127 billion in assets, said that stocks remain "the best house in a bad neighborhood," especially with U.S. interest rates low.

"When you look at the alternatives, fixed income continues to look risky, and cash doesn't help you," he said. "Unlike other asset classes, equities will still get boosts from contributions like buybacks, merger activity and capital expenditures."

source: interaksyon.com

Wall Street sells off after Fed sticks with stimulus cuts

NEW YORK - U.S. stocks dropped more than 1 percent on Wednesday, hitting session lows after the Federal Reserve stuck with its plan to scale back stimulus even in the midst of emerging market turmoil.

With the day's decline, the S&P 500 is down 4 percent for the month - its worst monthly loss since May 2012. Some investors have been bracing for a correction, given the S&P 500's gain of 30 percent last year.

Trading was volatile after the Fed's move, which further reduces its monthly bond purchases by $10 billion a month. Declines were fairly broad-based, with nine of the 10 S&P 500 sector indexes ending lower. Shares of Boeing Co ranked among the biggest drags on both the Dow and the S&P 500.

Overall improvement in the U.S. economy suggested the central bank would continue to cut the purchases, but some investors had speculated in recent days that the Fed might rethink its plan because of the emerging market problems.

"I think investors had hoped that the Fed would somehow respond to the recent turbulence and show they had their back," said Jack Ablin, chief investment officer of BMO Private Bank in Chicago.

But the Fed really wants "to move to the sidelines here and get out of the QE business."

In its announcement, the Fed said it would buy $65 billion in bonds per month starting in February, down from $75 billion now. In what was Fed Chairman Ben Bernanke's last policy-setting meeting, the central bank also maintained its longer-term plan to keep U.S. interest rates low for some time to come.

The benchmark S&P 500 has lost ground in four of the past five sessions as fears over slowing growth in China and large capital outflows from developing markets prompted investors to seek safe-haven assets.

The Dow Jones industrial average fell 189.77 points or 1.19 percent, to end at 15,738.79. The S&P 500 ost 18.30 points or 1.02 percent, to finish at 1,774.20. The Nasdaq Composite dropped 46.53 points or 1.14 percent, to close at 4,051.43.

The CBOE Volatility Index or VIX, Wall Street's barometer of fear, jumped 9.81 percent to end at 17.35.

The Fed's quantitative easing program has supported not just the U.S. economy but overseas economies as well by increasing liquidity, so cutting the stimulus has been a big factor in the emerging markets' selloff.

Stocks were lower early in the session even after bold efforts by Turkey and South Africa to stabilize their currencies.

South Africa's central bank raised interest rates for the first time in six years. Its move followed a dramatic rate hike by Turkey's central bank late Tuesday, designed to defend its crumbling currency.

Boeing's stock fell 5.3 percent to close at $129.78, after the aerospace and defense company issued conservative forecasts for profit and cash flow. Investors focused on those projections, though the company reported a surge in quarterly profit.

Yahoo shares dropped 8.7 percent to end at $34.89, a day after the Internet company reported a drop in online ad prices that hurt its revenue for a fourth consecutive quarter.

Among other profit reports, Dow Chemical Co posted a quarterly profit that was well ahead of expectations. It also raised its dividend 15 percent and expanded its stock-buyback program. Dow Chemical's stock rose 3.9 percent to end at $44.73.

After the bell, shares of Facebook rose 9.2 percent to $58.45 after the world's largest social networking company reported quarterly revenue increased 63 percent.

Quarterly earnings expectations for the S&P 500 have improved as more companies have reported results. Growth is now estimated at 9 percent, compared with 7.6 percent at the start of the month, Thomson Reuters data showed.

As the stock market rallied last year, valuations rose for S&P 500 companies. The forward price-to-earnings ratio is at 14.9, compared with 13.1 at the start of 2013.

Volume was higher than average for the month. About 7.5 billion shares changed hands on U.S. exchanges, compared with the average of 6.8 billion so far this month, according to data from BATS Global Markets.

Decliners outnumbered advancers on the New York Stock Exchange and the Nasdaq by slightly more than 3 to 1.

source: interaksyon.com