Psei down in morning trade as investors digest Luzon quake aftermath

MANILA, Philippines — Philippine shares were in the red at the end of the morning trade Tuesday as investors digest the aftermath of a magnitude 6.1 earthquake that struck Luzon on Monday.

As of market recess Tuesday, the bellwether Philippine Stock Exchange index was down 0.72% or 55.97 points to 7,776.46. The broader All Shares index was also in the negative territory, down 0.41% or 19.75 points to 4,814.93.

“Investors may remain on the sidelines as they gather more information regarding the aftermath of last night's earthquake. If there's any indication, Philippine iShares were slightly down -0.61% to 34.46,” Luis Limlingan of Regina Capital said in a market commentary.


Authorities say that as of mid-morning on Monday, 11 people have been confirmed dead in the aftermath of the earthquake.

The quake — which was tectonic in origin — hit Castillejos, Zambales at around 5:11 p.m. Monday. The Philippine Institute of Volcanology and Seismology earlier recorded a magnitude 5.7 quake before revising it to magnitude 6.1.

A total of 447 aftershocks were recorded as of 10 a.m. Tuesday following the tremor that hit Luzon and swayed buildings in Metro Manila.

‘Cautious’

Stocks were generally lower in Asian trade on Tuesday as investors move cautiously ahead of a deluge of corporate results later in the week.

Tokyo stocks were trading down with profit-taking before 10 days of holidays in Japan weighing on the market.

With many markets opening after an extended Easter break, Hong Kong Shanghai, Taiwan, Singapore were all down, while Australia and Seoul were trading up.

"Some of the world's biggest technology companies are reporting earnings this week as well as a raft of the big European banks," Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note to clients.

"Investors will be hoping for some better-than-expected results from both groups to keep the topside momentum in global equities, however if the data starts to show a significant slowing across these key industries then expect both stocks and risk trades to start to come under some heavy pressure."

Major earnings releases expected this week include Amazon, Facebook, Microsoft, Exxon Mobil and auto maker Tesla.

Aerospace giant Boeing will report earnings on Wednesday for the first time since a deadly March 10 plane crash plunged the company into crisis-mode. — Ian Nicolas Cigaral with AFP

source: philstar.com

Asian stocks rise as solid US performance lifts spirits

SINGAPORE — Asian markets climbed higher on Wednesday as a sweep of positive news from Wall Street and beyond boosted confidence in the U.S. economy.

KEEPING SCORE: Japan's benchmark Nikkei 225 gained 1.0 percent to 22,921.20 and South Korea's Kospi added 0.3 percent to 2,304.64. Hong Kong's Hang Seng gained 0.6 percent to 28,351.53. The Shanghai Composite index added 0.4 percent to 2,808.24. Australia's S&P/ASX 200 climbed 0.8 percent to 6,254.20. Shares rose in Taiwan and Southeast Asia.

WALL STREET: U.S indexes rebounded after a weak start on solid gains for retailers, technology and household goods companies. Prescription drug business Johnson & Johnson and financial services company Charles Schwab posted bullish earnings, adding to the largely positive corporate earnings season. The S&P 500 index rose 0.4 percent to 2,809.55. The Dow Jones Industrial Average gained 0.2 percent to 25,119.89. The Nasdaq composite jumped 0.6 percent to 7,855.12, surpassing the record high it set last week. The Russell 2000 index of smaller-company stocks climbed 0.5 percent to 1,687.26.

UPBEAT FED COMMENT: Delivering his twice-a-year report on monetary policy to Congress, Federal Reserve Chairman Jerome Powell said he expects the job market to remain robust and inflation to hover around the Fed's 2 percent target for the next few years. Stocks have fallen after Powell's previous major addresses, but not on Tuesday.

U.S. INDUSTRIAL PRODUCTION: The Fed said U.S. industrial production, including output at factories, mines and utilities, climbed 0.6 percent in June. It fell 0.5 percent in May after a fire disrupted production of Ford Motor's F-series pickup trucks, America's bestselling vehicle. U.S. manufacturing still looks healthy despite trade conflicts with China, Europe and Canada and a rising dollar that makes U.S. products more expensive abroad.

ANALYST VIEWPOINT: "While earnings and the highly-watched testimony to Senate by Fed chair Powell played a part, movements remained largely muted with the likes of the Dow and the S&P 500 index clocking only moderate gains overnight," Jingyi Pan of IG said in a commentary.

ENERGY: Benchmark U.S. crude dropped 34 cents to $67.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract was relatively unchanged at $68.08 in New York on Tuesday. Brent crude, used to price international oils, shed 30 cents to $71.86 per barrel.
CURRENCIES: The dollar rose to 112.95 yen from 112.83 yen late Tuesday. The euro eased to $1.1654 from $1.1664.

source: philstar.com

Asian stocks dip as trade tensions weigh on US tech sector

SINGAPORE — Asian markets were mostly lower on Tuesday, as moves by the U.S to gain an upper hand on trade with China weighed on the technology sector. Tech stocks have been the pillar of the Wall Street's long-running bull market.

KEEPING SCORE: Japan's benchmark Nikkei 225 index dropped 0.5 percent to 22,221.33 and South Korea's Kospi lost 0.9 percent to 2,337.60. Hong Kong's Hang Seng shed 1.2 percent to 28,619.21 and the Shanghai Composite in mainland China slipped 0.6 percent to 2,842.22. Australia's S&P/ASX 200 dipped 0.4 percent to 6,186.40. Taiwan's benchmark fell and Southeast Asian indexes were mostly lower.

WALL STREET: Major U.S. benchmarks finished broadly lower. The S&P 500 index dropped 1.4 percent to 2,717.07, its worst loss since April 6. The Dow Jones industrial average fell for the ninth time in 10 days, losing 1.3 percent to 24,252.80. The Nasdaq composite shed 2.1 percent to 7,532.01. The Russell 2000 index of smaller-company stocks slid 1.7 percent to 1,657.51.


TECH DOWNTURN: Stocks tumbled on reports that the Trump administration plans to limit exports of some high-tech products to China, and also limit investment in technology firms by companies with substantial Chinese ownership. Treasury Secretary Steven Mnuchin's suggestion that the investment restrictions wouldn't be limited to China caused stocks to slide further. The market recovered when Peter Navarro, one of President Donald Trump's top trade advisors, told CNBC that there was no plan for investment restrictions and that the administration's probe into alleged technology theft is limited to China. All but one of the 72 technology companies listed on the S&P 500 index closed lower on Monday.

TRADE TENSIONS: U.S. efforts to secure a pole position in trade are seeing some hit back. Iconic American motorcycle maker Harley-Davidson said it would move some production overseas to avoid tariffs the European Union is placing on motorcycles made in the U.S. Those tariffs were a response to taxes the U.S. placed on steel and aluminum from Europe. In less than two weeks, a 25 percent tariff will be imposed by the U.S. on billions of dollars of Chinese products. China will also raise import duties on $34 billion worth of American goods. China and the European Union agreed on Monday to launch a group that will, among other things, preserve support for international trade amid U.S. threats of import controls.

ANALYST'S TAKE: "Fears that China may pull investments in U.S. tech firms have caused a broad drawback. There is a sense that trade tensions could be long drawn and somewhat more antagonistic going forward," said Vishnu Varathan, head of economics and macro strategy at Mizuho Bank.
ENERGY: OPEC countries have agreed to raise the supply of crude oil by 1 million barrels a day. But investors aren't sure if the cartel will carry it out. Benchmark U.S. crude gained 7 cents to $68.15 per barrel in New York. It dipped 0.7 percent to settle at $68.08 per barrel on Monday. Brent crude, used to price international oils, rose 5 cents to $74.60 per barrel in London.

CURRENCIES: The dollar remained at 109.45 yen from late trading Monday. The euro strengthened to $1.1718 from $1.1704.

source: philstar.com

Asian stocks take a breather from trade tensions; markets up

SINGAPORE — Asian markets were mostly higher on Wednesday as traders sidelined tariffs that the U.S. and China have threatened to impose on one another, focusing on positive housing data instead.

KEEPING SCORE: Japan's benchmark Nikkei 225 index rose 1.2 percent to 22,540.07 and South Korea's Kospi gained 1.4 percent to 2,373.50. Hong Kong's Hang Seng rebounded 1.5 percent to 29,908.50 and the Shanghai Composite in mainland China increased 0.4 percent to 2,918.60. Australia's S&P/ASX 200 climbed 1.1 percent to 6,166.40. Taiwan's benchmark rose but Southeast Asian indexes were mixed.

U.S-CHINA TARIFFS: A burgeoning trade war between the U.S. and China is showing no signs of abating. On Tuesday, China's government called President Donald Trump's threat of new tariffs on $200 billion of Chinese goods "blackmail" and warned to retaliate with measures of its own. Trump has already announced a 25 percent tariff on up to $50 billion of Chinese products starting July 6. China retaliated by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey.


POSITIVE HOUSING DATA: The solid U.S. job market has helped to boost demand for new homes. The Commerce Department said housing starts rose to a seasonally adjusted annual rate of 1.35 million in May, the strongest pace since July 2007. All of May's construction gains came from a 62 percent jump in the Midwest, while building slumped in the Northeast, South and West.


QUOTEWORTHY: "Trade tension is going to dominate market sentiment in the weeks to come. The market is waiting for Beijing to come out with counter measurements to offload more chips," said Margaret Yang, market analyst at CMC Markets Singapore.

WALL STREET: Major U.S. benchmarks finished lower. The S&P 500 index dropped 0.4 percent to 2,762.57 and the Dow Jones industrial average lost 1.1 percent to 24,700.21. The Nasdaq composite dipped 0.3 percent to 7,725.59.

ENERGY: Oil futures recovered losses from the previous day ahead of an OPEC meeting on Friday. Saudi Arabia and Russia are seeking to raise production by 1.5 million barrels per day, but they may not get their way. Benchmark U.S. crude rose 38 cents to $65.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $64.90 per barrel on Tuesday. Brent crude, used to price international oils, gained 32 cents to $75.40 in London.
CURRENCIES: The dollar rose to 110.19 yen from 110.07 yen in late trading Tuesday. The euro ticked up to $1.1579 from $1.1575.

source: philstar.com

Malaysia, Indonesia markets roiled as investors scramble for hedge on Trump

JAKARTA -- Emerging markets in Southeast Asia were slammed on Friday as the stunning upset of Donald Trump's presidential win in the United States reverberated around the world, with Malaysia and Indonesian central banks intervening to try to stem the flow of money out of stocks and bonds.

The latest selloff was triggered by markets recalibrating their expectations of a Trump presidency on broad economic policy, with a growing consensus that his policies will be inflationary and push US rates up driving investors out of emerging markets and into dollar-based assets.

Yields on benchmark 10-year Treasuries have spiked 41 basis points in the past two days as investors scrambled to readjust their positions.

Emerging markets in Asia are particularly vulnerable to hot money outflows, and deep uncertainty over how broad US and international policy will ultimately play out under Trump has unsettled investors.

On Friday's Asian session, the differential between the onshore spot rate in the Malaysian ringgit and the offshore NDF rate spread hit its widest since 2009.

Ringgit one-month non-deliverable forwards plunged to 4.5280 per dollar, while spot ringgit stood at 4.2670. As a result, the dollar/ringgit's NDFs premium over the dollar/ringgit spot widened to 0.2610, the widest since at least April 2008, according to Reuters data.

The subdued spot rate belied the drama because Bank Negara Malaysia was acting to stem any panic, traders said.

Malaysia's central bank governor Muhammad Ibrahim told reporters on Friday the ringgit should not be priced out of sync with fundamentals, and that it has a responsibility to tell banks to take temporary measures to calm the market

"We don't want to be dictated by factors that have nothing to do with the country's fundamentals," Ibrahim said.

Traders in Kuala Lumpur said the central bank had told them not to quote offshore rates and was approving large ringgits sell orders on a one-off basis in a bid to keep a lid on things. The tactic seemed to work with onshore trade reportedly very thin.

Hot money headache

However, yields on Malaysian government bonds told another story. Yields on 10-years have widened 22 basis points since Wednesday, while those on 20-year and 30 year bonds have widened 21 basis points and 10 basis points respectively over the same period.

Almost 40 percent of Malaysian government bonds are in foreign hands.

Malaysian stocks were down almost one percent.

Indonesian markets also dived in early trade. Indonesia has enjoyed relatively high inflows into stocks and bonds markets in the past few months, making it vulnerable to hot money outflows at times of uncertainty.

The rupiah  fell as much as 2.7 percent, while Jakarta Composite Index fell as much as 3.2 percent to its lowest since Sept 16.

Bank Indonesia sold dollars to stabilize the currency, traders said, but it still fell to a four-month low.

Nanang Hendarsah, an official at BI, said the rupiah's sharp drop was caused by sudden hedging activity in the NDF market, but noted outflows from Indonesian markets were contained so far.

Yield of Indonesia's 10-year government bonds jumped on Friday to 7.462 percent from 7.417 percent. Foreigners own 38.4 percent of outstanding Indonesian government bonds.

Philippine stocks were also caught in the selloff with the main index tumbling more than 2.5 percent. The Philippines peso, however, was steady at 48.99.

The short term might prove a head-spinning affair for investors, especially for those in emerging markets.

"With the market now pricing in low expectations of further US Federal Reserve rate hikes beyond the one expected in December, Mr. Trump’s economic policies present an upside risk to rates," said Khoon Goh, head of Asia research at ANZ.

"This, coupled with the depreciation pressure on Asian currencies, has put serious pressure on Asia’s carry trades."

source: interaksyon.com

China fears, global growth doubts grip markets

MADRID - Markets are watching for China's next move as signs of a slowdown in the world's second-largest economy stack up, raising expectations it will act to stoke growth.

A looming snap election in Greece and a closely watched conference hosted by the Federal Reserve in the United States are also likely to keep investors on their toes in the coming week, in particular as they look for hints on when the U.S. will raise interest rates.

Fears that Chinese growth is weakening, dragging down the global economy with it, are hammering commodities and stocks.

Alarm bells rang out across world markets on Monday as a 9 percent dive in Chinese shares and a sharp drop in the dollar and major commodities panicked investors.

On Friday, a survey showed Chinese manufacturing slowed the most since the global financial crisis in 2009 - adding to other worrying clues about the country's health, including its falling exports.

China devalued the yuan earlier in August by pushing its official guidance rate down 2 percent. The central bank has said there was no reason for the currency to fall further, but investors are also bracing for further interest rate cuts.

"It will be all eyes on the Chinese authorities for any further policy support steps, alongside the People's Bank of China yuan fixings and trading swings," analysts at Investec Economics said in a note to clients.

China is also widely expected to relax reserve requirements ratios for its banks again in the coming months, a measure intended to spur lending by reducing the cash they need to hold. It is trying to keep its economy on course to grow 7 percent in 2015 - its slowest pace in a quarter of a century.

"We continue to expect a total of 100 basis points of reserve requirement ratio cuts by end-2015, with the first cut likely to take place within the next two weeks," economists at Standard Chartered said.

The cash reserves ratio has already been cut three times this year.

Eyes on Fed, Greece

By the end of the coming week, attention may shift away to the Rocky Mountains, where policymakers are due to gather from Aug. 27-29 for the Fed's conference of central bankers, finance ministers, academics and financial market participants in Jackson Hole.

Fed chair Janet Yellen is not expected to attend, raising the prospect that other Fed officials may be more tight-lipped about the likelihood of the first rate increase in almost a decade, some analysts said.

The prospect of an increase as soon as September is receding, however.

Last week the Fed released minutes of its July meeting, giving no clear signals as to the timing of such a move - which would affect markets across the world and could cause more pain for emerging market assets, already being hit by China's woes.

Though they were more confident about U.S. growth prospects, the minutes showed, Fed policymakers are concerned about weakness in the global economy - fears likely to have been heightened by Monday's market rout in which the dollar also fell sharply.

Further clues on both matters should be gleaned from data releases in the coming week, including second-quarter U.S. gross domestic product figures due on Thursday.

Quarter-on-quarter growth in the period is expected to be revised upwards to 3.2 percent from 2.3 percent, according to a Reuters poll.

In the euro zone, investors will be looking at an German economic sentiment survey due on Tuesday for a better idea of the scope of the bloc's recovery.

Preliminary August consumer price readings for Germany and Spain on Friday will provide further insight into how effective the European Central Bank's bond-buying efforts have been at warding off deflation.

But the spotlight will mainly fall once again on Greece, where Prime Minister Alexis Tsipras has resigned. That opens the way for early elections after he secured much-needed funds in the country's third international bailout program.

The current Greek government aims to strengthen its position in the election after accepting a rescue deal it once opposed. But that creates more uncertainty for markets already on edge over whether Greece will deliver on promised reforms and get its economy and banks back on track.

source: interaksyon.com

Asian shares, dollar cheered by upbeat U.S. data

TOKYO - Asian stocks started the week on a brighter note on Monday, after solid U.S. data and earnings calmed tumult in global financial markets and reassured investors worried about the health of the world economy.

The Thomson Reuters/University of Michigan index of consumer sentiment was surprisingly strong in early October, rising to more than a seven-year high. Other data also showed new housing starts rose more than expected last month, suggesting U.S. economic growth was solid.

The upbeat U.S. data has brought some calm to markets after a week of turbulence as signs of softening global growth rattled investors, sending volatility spiking to levels not seen in years.

"Sentiment has seemingly been unaffected by the market volatility," strategists at Barclays said in a note to clients.

MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.6 percent in early trade, and Japan's Nikkei stock average surged about 2.6 percent, retaking some of the 5 percent it shed in the previous week.

On Wall Street on Friday, all major stock indexes climbed more than 1 percent, though the S&P 500 posted its fourth straight weekly decline, its longest streak in more than three years.

U.S. earnings will remain in the spotlight this week, with results due from 128 S&P 500 companies, including six Dow components.

Out of the 81 S&P 500 component companies that have already reported 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.

Asian investors will also pay attention to developments in Hong Kong, where pro-democracy protests entered their fourth week and demonstrators appeared increasingly willing to confront police.

U.S. Treasuries posted their second straight day of declines on Friday, and their rising yields added to the dollar's appeal.

The yield on benchmark 10-year notes stood at 2.198 percent in Asian trade, steady from Friday's U.S. close of 2.199 percent and well above 17-month lows plumbed last week.

Speculators boosted their bullish bets on the dollar in the week ended Oct. 14 to their largest since late May last year, still showing optimism for U.S. economic prospects, data from the Commodity Futures Trading Commission showed on Friday.

The value of the dollar's net long position increased to $43.04 billion from $40.91 billion the previous week. Net dollar-long positions notched their fourth straight week of rises, and totaled at least $30 billion for the ninth straight week.

The euro was last down about 0.1 percent at $1.2748, while the dollar added 0.2 percent against the yen to 107.12 yen.

The yen's drop to a six-year low against the dollar of 110.09 on Oct. 1 followed a rapid decline of 8 percent over three months, and sparked fears at some Japanese companies. Nearly half of Japanese firms think the government should start defending the yen at this month's dollar high of 110, according to a Reuters survey released on Monday.

In commodities trading, Brent crude rose about 0.3 percent to $86.44 a barrel, bouncing from last week's nearly four-year lows as investors bought back into a market they said was oversold. U.S. crude rose about 0.8 percent after logging its third weekly decline.

Spot gold inched down abut 0.1 percent to $1,235.90 an ounce, after marking its second straight weekly gain.

source: interaksyon.com

Bonds rally, stocks fall as global economy fears mount

NEW YORK - Stocks took a pounding on Wednesday, although Wall Street managed to peddle back from its steepest lows, and safe-haven government debt prices rose after U.S. and Chinese inflation data fanned worries about a global slowdown.

A key gauge of Wall Street anxiety hit its highest level since November 2011 as investors rushed to buy protection against further losses, and options activity surged as investors reevaluated their strategies in light of the latest signs that the global economy may be losing its footing.

The S&P 500 fell as much as 3 percent, briefly turning negative for the year, while European equities finished 3.2 percent lower and marked their biggest one-day slide in almost four years.

Popular trades that have worked for most of the year, including heavy bets on the dollar, more gains in stocks, and on an eventual rise in yields, are unraveling.

A fall in China's inflation rate to a five-year low and a decline in U.S. producer prices for the first time in over a year were worrisome signs to investors already skittish about the path of the global economy and caused them to reassess their views on when the U.S. Federal Reserve might hike interest rates.

"There's concern about an absence of aggregate demand in the world, and that's really what's weakening the market. The big fear out right now is we're not immune from that," said David Joy, chief market strategist at Ameriprise Financial in Boston.

"If you look at the lows of the day, maybe we've put in a little bit of a trading bottom here. But I don't think it makes these concerns go away."

The latest news on the spread of Ebola added to a climate of fear, with Texas officials reporting that another healthcare worker in Dallas tested positive for the deadly virus. Almost 4,500 people have died of the disease, mostly in West Africa.

An MSCI gauge of stocks in major markets was down 1 percent. The CBOE Volatility Index closed at 26.25, up 15.2 percent, after earlier hitting 31.06, the highest level since November 2011.

The Dow Jones industrial average fell 173.45 points, or 1.06 percent, to 16,141.74, the S&P 500 lost 15.21 points, or 0.81 percent, to 1,862.49, and the Nasdaq Composite dropped 11.85 points, or 0.28 percent, to 4,215.32.

Trading volume in the options market was the busiest of the year, according to Trade Alert data, while equities volume on Wall Street was near 12 billion shares, a nearly 50 percent increase from the average daily volume so far this month.

It was also the heaviest trading day for on-the-run 10-year Treasury note contracts since May 2008.

Bonds rally, oil falls further

Flight from risk resulted in a massive rally in U.S. Treasuries, pushing the benchmark 10-year note's yield as low as 1.865 percent, its lowest level since May 2013.

Benchmark yields retraced a large part of the downward move in late trading, but ended lower on the day, with prices up 22/32 to yield 2.1288 percent, compared with 2.206 percent in late trading on Tuesday.

Ten-year Bund yields hit a record low of 0.719 percent before edging up to 0.757 percent.

Rate futures now show the market does not expect the Fed to raise rates until early 2016, a dramatic change from a few weeks ago, which could keep downward pressure on yields.

"Everyone's animal spirit is dead. This is a pretty dramatic move when everyone was expecting higher rates," said George Goncalves, head of U.S. interest rates strategy at Nomura Securities International in New York. "It's all about capital preservation at this point. All the crowded trades are being tested, which is why I’m not sure this is over."

The spread of high-yield corporate bond spreads over the benchmark U.S. Treasuries, which represents the premium paid to investors to compensate for the risky corporate debt, rose to match the high hit in September 2013, at 483 basis points. The spread had bottomed at 335 bps in June.

A repricing of Fed expectations fueled a selloff in the dollar, which has been rising recently on bets on policy tightening at the Fed while other central banks continue easing.

The soft data "paired with the decline in Treasury yields and declines in energy prices, are all raising concern regarding the timing of the Fed's next move," said Sireen Harajli, currency strategist at Mizuho Corporate Bank in New York.

Although U.S. September retail sales had been expected to decline, the weakness was surprising because it was broad-based.

The euro rose 1.4 percent against the dollar at $1.2836, just below a three-week high of $1.2885 hit earlier. The greenback lost 1 percent against the yen at 105.93.

Spot gold prices rose 0.7 percent, up for the sixth time in the last eight sessions with the help of the weaker dollar, but copper prices tumbled 2.3 percent.

The crude trampling

Brent and U.S. crude futures fell, a day after posting their biggest daily drop in years, with more production, less demand and deflation expectations weighing heavily.

Brent lost 2 percent to $83.36 a barrel while U.S. crude fell 1 percent to $81.02.

Emerging markets were also hit with a fall in Russia's rouble to its weakest level on record, while Russian government 10-year yields hovered near a five-year high, and shares in Moscow closed near a seven-month low hit last week.

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

Wall Street falls as China data trigger selloff in risky assets

NEW YORK - U.S. stocks fell on Thursday, with the Dow Jones industrial average recording its third consecutive day of losses, as risky assets sold off in wake of disappointing manufacturing data in China.

Financials and materials stocks were the day's biggest losers while telecom services was the only positive sector as investors sold growth-oriented stocks and bought defensive ones. Trading volume was heavier than in recent sessions.

The market sentiment was dented by a report on manufacturing in China which showed a mild slowdown at the end of 2013 in the world's second-largest economy had continued into the new year.

U.S.-traded Chinese stocks were down sharply after a U.S. Securities and Exchange Commission judge ruled that the Chinese units of the world's top accounting firms should be suspended from auditing those companies.

Among the biggest losers were Internet services provider Baidu Inc, down 6.2 percent, and SINA Corp, down 5.9 percent, on heavier-than-usual volume. The U.S. shares of Petrochina, the country's largest stock by market value, fell 3.1 percent.

The CBOE Volatility index VIX often used as a fear gauge on Wall Street, closed up 7.2 percent at 13.77 after rising more than 11 percent earlier.

"The day's panic was largely associated with China and I think it's a temporary reaction," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas.

"If we have good corporate earnings from a couple of big names or good economic reports, I think we will be right back up to where we were a couple days ago."

The Dow Jones industrial average fell 175.99 points or 1.07 percent, to 16,197.35, the S&P 500 lost 16.4 points or 0.89 percent, to 1,828.46 and the Nasdaq Composite dropped 24.126 points or 0.57 percent, to 4,218.875.

Trading volume was higher than usual with 7.4 billion shares traded on all U.S. platforms compared to a five-day average of 6.7 billion shares, according to BATS exchange data. Both on the NYSE and Nasdaq, decliners beat advancers by a ratio of about 2 to 1.

After the bell, Microsoft Corp said fiscal second-quarter profit rose 3 percent, as strong sales of its Office software to businesses offset another weak quarter for its flagship Windows system, and as consumers increasingly favor tablets over personal computers. The stock rose 3.7 percent in extended trade.

Starbucks Corp's sales at established stores in its U.S.-dominated Americas region cooled more than analysts expected in its latest quarter as consumers spent more time holiday shopping online than at physical stores. The stock rose 1 percent in extended trade.

Apple Inc rose 0.8 percent to $556.18. Activist investor Carl Icahn picked up another $500 million of Apple shares, taking the billionaire's total investment in the iPhone maker to $3.6 billion.

In other earnings, McDonald's Corp reported weaker-than-expected revenue as fewer customers ate at its restaurants. Shares rebounded from earlier losses to close up 0.5 percent to $95.32.

Netflix Inc shares surged 16.5 percent to $388.72 as the best performer on the S&P 500. The world's largest video-streaming company said Wednesday it added more than 2.3 million U.S. customers in the fourth quarter.

Shares of Herbalife fell 10.3 percent to $65.92 in heavy volume after Massachusetts Senator Edward Markey asked for more information about its business practices. The nutrition company has been accused by prominent hedge fund manager William Ackman of running a pyramid scheme.

Thomson Reuters data through Thursday morning shows earnings for the fourth quarter are expected to grow 7 percent. Of the 102 companies in the benchmark that have reported, 63 percent beat expectations, in line with the long-term average.

source: interaksyon.com

With Fed out of the way, what's next on Wall Street?

NEW YORK - With the U.S. Federal Reserve finally announcing it will start tapering its stimulus, removing a big uncertainty in the market, can Wall Street expect a stronger finish to the year? Not really.

The "Santa Claus rally" is a seasonal anomaly that describes a rise in stock prices in December, generally over the final week of trading prior to the new year.

The benchmark S&P 500's average gain during the last five days of December and the first two of January is about 1.5 percent since 1950, according to Stock Trader's Almanac. The equities market has gone up in December about 80 percent of the time for the past 20 years.

Although the S&P 500 is up just about 1 percent so far this month, the index is up about 27 percent for the year and is on track for its biggest gain since 1997.

"It's been a strong year, and I wouldn't be surprised if investors closed out their year today," said Doug Foreman, co-chief investment officer of Kayne Anderson Rudnick Investment Management.

"There isn't much room or news to move higher from here until next year."

Stocks rallied sharply this week, with the Dow and the S&P 500 closing at records on Friday, following the Fed's mid-week announcement it will reduce its $85 billion monthly bond purchases by $10 billion.

For the week, the Dow gained 3.1 percent, the S&P 500 was up 2.5 percent and the Nasdaq added 2.6 percent.

Trading volume this week was also below average as many investors had already locked in their gains for the year ahead of the holidays.

"There's a lot of transparency in the market, but most of the noise has already been made. We should expect to continue seeing light volume and not much selling as we go into next week," said Mark Martiak, senior wealth strategist Premier Wealth/First Allied Securities in New York.

"We're selling our winners and looking to see what sectors could be the ones to be in next year. I like cyclical and industrials. I want to see the news post-holiday season before I start to recommend defensive names."

With Christmas and New Year's holidays in the middle of the week, trading volume is likely to be lower than previous years. The New York Stock Exchange will close early at 1 p.m. ET on Tuesday and will remain closed for Christmas day.

Analysts say next week will be a start of investors finally shifting focus to the fundamentals of the economy, like economic reports and corporate earnings.

"With the Fed out of the way now, the market is going to move back to making more rational decisions and focus on what really matters in the economy," said Scott Clemons, chief investment strategist at Brown Brothers Harriman Wealth Management.

"Fourth-quarter earnings will start coming in January and the market's full focus will be on those numbers and outlooks."

Economic data due next week include personal income and outlays at 8:30 a.m. ET on Monday. Tuesday's data include durable goods orders at 8:30 a.m. ET and new home sales at 10:00 a.m. ET. On Thursday, weekly jobless claims will be released at 8:30 a.m. ET.

source: interaksyon.com

Discovery World dives on stock market debut after 'Yolanda' triggers cancellations

Shares of Discovery World Corp fell sharply on its trading debut today, mirroring the weakness in the broader market.

Shares of the luxury resort developer dropped 11.59 percent to a session low of P2.90 per share from its listing price of P3.28 apiece. The stock price did not break past its listing price throughout the session.

"I guess it's a case of bad timing. People were cutting exposure on equities. Discovery World was no exception," said Jose Vistan of AB Capital Securities Inc.

The Philippine Stock Exchange index was down 32.45 points or 0.53 percent to close at 6,122.89 today.

On the sidelines of its listing ceremony, Discovery World president John Y. Tiu told reporters that the company expects the onslaught of Typhoon 'Yolanda' to make a slight dent on sales and profit.

"Calamities will always happen. We believe strongly in the growth of the Philippine tourism industry. While the country is currently experiencing some slowness in growth because of the typhoon, we believe moving forward, the prospects for the tourism industry is extremely bright," Tiu said.

Discovery Shores Boracay experienced "minimal" cancellations at the peak of the typhoon's onslaught, but its waiting list of clients can "more than absorb" the cancellations, Tiu said.

Discovery World was forced to shut down operations of newly acquired Club Paradise in Coron, Palawan. The renovation of the resort will be finished in a month just in time for the peak season, Tiu said.

"There might be a slight reduction in revenues. We expect some cancellations from guests because of the initial impact of ‘Yolanda.’ In the medium term, we don't see any effect as long as we get the generators online," he said, adding that facilities at Club Paradise are insured.

Discovery World is purchasing more generator sets to support the close to 1-megawatt requirement of Discovery Shores Boracay. The firm's reliance on gensets will hike its power costs by about 15-20 percent, Tiu said.

"In Boracay, the main issue there is the power situation. We have over 150 percent back-up power and we're purchasing generators to make sure we have continuous power that's why we're fully operational," he said.

"About 12-15 hours would be tapped to the grid then we use the gensets for the balance of 12 or 19 hours that's left," he said.

Discovery World may spend as much as P1 billion to expand Club Paradise and Discovery Shores. It plans to start developing the beach properties owned by Palawan Cove Corp in San Vicente, Palawan next year -- a venture that has been delayed following the acquisition of Club Paradise.

Discovery World, the eighth company to go public this year, raised P551 million from the public offering of 168 million shares.

Net proceeds of P516.46 million from the share sale will be used to retire debts incurred for the acquisition of Club Paradise and to bankroll investments in Palawan Cove and in Discovery Fleet Corp, which offers full diving and non-diving programs.

The company plans to start the development of the San Vicente property next year. It has been delayed following the acquisition of Club Paradise.

Discovery World doubled its net income to P30.53 million in the first half from P15.59 billion in the same period last year following a slight uptick in revenues and lower operating expenses.

source: interaksyon.com

Wall Street edges up in choppy trade

NEW YORK - U.S. stocks ended higher on Monday in light trading volume as investors were reluctant to make big bets with S&P 500 index just below the all-time closing high.

The day's lackluster activity was partly due to the Dow and S&P 500 indexes' four consecutive week of gains. Investors were also awaiting the all-important non-farm payrolls report due Friday for further clues on when the Federal Reserve may begin to start tapering its stimulus.

Among individual stocks, U.S.-listed shares of BlackBerry ended down 16.4 percent to $6.50 after hitting a 52-week low of $6.40. The smartphone maker said it was abandoning a plan to sell itself. With Monday's drop, the stock is at levels unseen since October 2003.

Twitter IPO-TWTR.N, meanwhile, raised the upper end of the projected price range for its initial public offering later in the week, an encouraging sign for the social media company.

The otherwise quiet start to the week follows a week of record highs for U.S. stocks. It remains to be seen whether the market can push higher, with much dependent on the steps the Federal Reserve will take in the months ahead in response to economic data. The Fed's massive bond purchases have helped prop up the economy and the equity market for much of the year.

"The rebound in the U.S. stock market in late October pushed the S&P 500 index up to a 24 percent gain since the start of the year. As a result, we believe this is probably a good time for investors to rebalance their portfolios which may now have equity holdings exceeding their recommended allocations," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in New York.

"We remain longer-term positive on U.S. equities but would recommend taking some profits in stocks at this time."

The benchmark S&P index has risen 4.3 percent over the past four weeks as the partial U.S. government shutdown in October pushed back expectations for the Fed to begin curtailing its stimulus into the first quarter of next year.

The Dow Jones industrial average was up 23.57 points, or 0.15 percent, at 15,639.12. The Standard & Poor's 500 Index was up 6.29 points, or 0.36 percent, at 1,767.93. The Nasdaq Composite Index was up 14.55 points, or 0.37 percent, at 3,936.59.

St. Louis Federal Reserve President James Bullard told CNBC television the Fed should not rush a decision to scale back its asset purchases because of low inflation.

Recent manufacturing data have been stronger than expected, lending weight to the argument that the economy may be sturdy enough to handle an earlier-than-expected reduction in the central bank's bond-buying program.

All key S&P sectors were higher, led by telecoms and energy stocks. The S&P energy index .SPNY rose 1.3 percent and the telecoms sector index .SPLRCL gained 0.8 percent.

In earnings, Kellogg Co advanced 0.7 percent to $62.72 after the cereal maker reported a 3 percent rise in quarterly profit, and said it would slash 7 percent of its workforce by 2017.

With about 75 percent of S&P 500 companies having reported results so far, 69 percent have topped Wall Street's expectations, above the long-term average of 63 percent. Just 53 percent have topped revenue forecasts, below the 61 percent average since 2002, Thomson Reuters data showed.

Volume totaled about 5.1 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.2 billion this year.

On the New York Stock Exchange, around two stocks fell for every five that rose, while on the Nasdaq, advancing stocks beat declining ones by a ratio of 3 to 2.

source: interaksyon.com

Wall Street ends down as Caterpillar falls, Boeing rallies

NEW YORK - U.S. stocks fell on Wednesday as shares of heavy-equipment maker Caterpillar and semiconductor companies tumbled after they reported earnings, ending the S&P 500's four-session streak of record high finishes.



Results from Caterpillar Inc and Boeing Co, two Dow components, illustrated the quarter's mixed picture of corporate results and outlooks, which have some investors worried.



Caterpillar was one of the biggest decliners on the S&P, slumping 6.2 percent to $83.62 after the manufacturer cut its full-year outlook for a third time and its profit missed expectations. That sent shares tumbling by the most in a day since September 2011.



"There's not a lot of room for error as earnings are growing at such a slow pace, particularly for a globally focused company like Caterpillar, which has been a proxy for global GDP in global markets," said Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank. "It's no secret the rest of the world has suffered, so therefore a company like Caterpillar is going to suffer."



On the upside, Boeing surged 5.3 percent to $129.02 after airplane maker reported a rise in adjusted profit and raising its full-year forecast.



After the market closed, both AT&T and TripAdvisor reported revenue that was slightly below Wall Street's estimates. AT&T's revenue grew from the previous quarter to $32.16 billion compared with Wall Street estimates for $32.19 billion, according to Thomson Reuters I/B/E/S data.



TripAdvisor's revenue rose 20 percent to $255.1 million in the third quarter, below analysts' expectations of $255.9 million. TripAdvisor shares in extended-hours trading were up 5 percent to $79.25 after closing down 0.3 percent at $75.21 in the regular session. AT&T shares were flat.



About one-third of S&P 500 companies have reported thus far, with 66.3 percent topping profit expectations, a rate that is slightly higher than the historical average. Roughly 54 percent have beaten on revenue, below the 61 percent long-term average. Investors worry that much of the growth in earnings has not been generated by revenue.



"Finally the markets are focused on earnings after having been focused on many other things," Davidson, who called third quarter results released so far "tepid."



The semiconductor sector .SOX dropped 3.4 percent a day after Broadcom, Altera and RF Micro Devices  joined Intel and Texas Instruments in lowering their forecasts.



Broadcom shares fell 2.9 percent to $26.36, Altera lost 13.5 percent to $32.30 and RF Micro lost 8.6 percent to $5.63.



The Dow Jones industrial average was down 54.40 points, or 0.35 percent, at 15,413.26. The Standard & Poor's 500 Index was down 8.31 points, or 0.47 percent, at 1,746.36. The Nasdaq Composite Index was down 22.49 points, or 0.57 percent, at 3,907.07.



The S&P 500 closed at an all-time high on Tuesday, its fourth-straight record finish. The index is up 22 percent for the year up to Tuesday, not far from the 23.5 percent advance in 2009.



On Wednesday, 53 percent of total shares traded were declining.



Global equity markets weakened as China's primary short-term money rates rose on concerns the People's Bank of China may tighten its cash supply to counter inflation risks, which could hurt growth in the world's second-largest economy.



Also weighing on sentiment, the European Central Bank said it would put major euro zone banks through rigorous tests next year to build confidence in the sector. Some analysts said that if the review reveals unexpected problems, investor confidence could be undermined.



Netflix shares were up 2.4 percent to $330.24 following a large selloff on Tuesday when billionaire investor Carl Icahn cut his stake in the company.

source: interaksyon.com

Wall Street rises as jobs data supports US Fed policy

NEW YORK - U.S. stocks climbed on Tuesday, pushing the S&P 500 to yet another record high, after weaker-than-expected job creation last month reinforced expectations the Federal Reserve will hold the course on its economic stimulus into next year.



U.S. employers added 148,000 workers last month, well below the 180,000 economists had expected. The data was seen as supporting the Fed's decision to maintain its $85 billion in monthly bond purchases, which has been a major factor in the S&P 500's 2013 rally of 23 percent.



Many economists now think the Fed will refrain from scaling back its easy money policy, which has kept borrowing costs low, until next year. The central bank surprised market participants in September when it held off on any plans to trim its stimulus.



"Another soft report on the employment numbers just continues to lead us to believe the Fed will be with us at the holiday table this year with their full $85 billion and ringing in the New Year probably at that rate as well, which the markets like," said Darrell Cronk, regional chief investment officer at Wells Fargo Private Bank in New York.



But gains were limited on the Nasdaq after some of the year's biggest winners, including Netflix Inc, reversed course to move lower.



"This is a horrible one-day reversal, taking out yesterday's action. We saw both higher highs and lower lows today, which is proof the stock is exhausted," said Frank Gretz, market analyst and technician for brokerage Shields & Co in New York.



Netflix shares fell 9 percent to $323.12, giving back gains that followed the release of the company's earnings report on Monday. With more than 17 million shares traded, volume was nearly eight times the average over the last 50 days.



Apple edged down 0.3 percent to $519.87, though losses ebbed after the company unveiled a new line of iPads.



The Dow Jones industrial average rose 75.46 points or 0.49 percent, to 15,467.66, the S&P 500 gained 10.01 points or 0.57 percent, to 1,754.67 and the Nasdaq Composite  added 9.517 points or 0.24 percent, to 3,929.566.



The gains marked the fourth straight record close for the benchmark S&P index.



Consumer staples, up 1.4 percent, was among the best performing S&P sectors, boosted by a 4.2 gain in Kimberly-Clark Corp to $102.97 after the maker of Kleenex tissues posted bigger-than-anticipated quarterly profit.



Transocean shares rose 6 percent to $49.35 after S&P Dow Jones Indices announced the drilling services company will replace Dell on the S&P 500 index after the close of trading next Monday.



Shares of cloud software maker VMware Inc rose 2.8 percent to $85 a day after it reported a higher-than-expected profit.



According to Thomson Reuters data through Tuesday morning, of the 128 companies in the S&P 500 that have reported earnings, 63.3 percent have topped analysts' expectations, roughly in line with the beat rate since 1994 but below the 66 percent rate over the past four quarters.



On a revenue basis, 52.3 percent of companies in the S&P 500 that have reported results have beaten Wall Street expectations, short of the 61 percent beat rate since 2002 but slightly above the 49 percent rate over the past four quarters.



Advancing stocks outnumbered declining ones on the NYSE by 2,210 to 805, while on the Nasdaq, advancers beat decliners 1,397 to 1,148.

source: interaksyon.com

PH stock market takes cue from Wall Street, returns above 6,300-mark

MANILA - The Philippine benchmark index surged on Wednesday to return above the 6,300 mark on expectations that the US government shutdown will end soon and have a minimal impact on the world's biggest economy.

At the Philippine Stock Exchange, the bellwether index shot up 164.42 points or 2.65 percent to close at 6,362.26. All indices rallied by at least a percent led by the 3.09 percent advance of the holding firm counter.

Advancers outnumbered decliners, 99 to 46, while 40 issues were unchanged. A total of 1.3 billion stocks worth P8.23 billion changed hands.

Actively traded stocks were Universal Robina, Metrobank, Ayala Corp, PLDT and Alliance Global. Top gainers were Chemphil, TKC Steel and Bogo-Medellin, while the biggest losers were Maybank, A Brown and 2GO.

"There's some sort of relief in the Philippines after seeing the reaction of US markets overnight to the spending bill not being passed," said April Lee-Tan, head of research at COL Financial Group Inc.

"Given that in the US, the market did not react negatively, the perception is that this will not be a problem or the shutdown will not take a long time," she added.

Overnight, the Dow Jones industrial Average jumped 62.03 points, or 0.4 percent, to 15,191.70 despite the failure of US lawmakers to reach an agreement on a budget before the October 1 deadline. This triggered a government shutdown that left up to a million US federal employees on unpaid leave.

"Now that the US government has shut down, attention moves to the issue of raising the debt ceiling from $17 trillion," said Jun Calaycay of Accord Capital Equities Corporation.

"The alternative -- should the wrangling and finger-pointing continue through October 17 -- is more fear-inducing. The US will default on its loans and it may yet lose another notch off its credit rating," he said.

Earlier today, Manila-based Asian Development Bank hiked its Philippine economic growth forecast to seven percent from the original six percent estimate, while cutting its growth projection for other emerging Asian countries.

"In a way it's not surprising but any good news helps at this point," Tan said.

source: interaksyon.com