US & World Daily Markets Financial Briefing 20-09-2010

Download your free copy of the WSR Global Renewable Energy Report and
learn the facts about the red hot biomass industry.
This months featured company is Clenergen (OTCBB: CRGE). Click here

Stocks Seeing Notable Upside In Mid-Morning Trading

Stocks are up by notable margins in mid-morning trading on Monday, as the markets are optimistically awaiting economic commentary from President Barack Obama while shrugging off an unchanged homebuilder confidence number.

The major averages have all seen substantial gains in recent dealing, rising to fresh highs on the session. The Dow is currently up 90.14 points or 0.9 percent at 10,697.99, the Nasdaq is up 24.92 points or 1.1 percent at 2,340.53 and the S&P 500 is up 9.74 points or 0.9 percent at 1,135.33.

Homebuilder confidence saw continued weakness in the month of September, according to a report released by the National Association of Home Builders, with homebuilders expressing continued uncertainty following the expiration of the homebuyer tax credit.

The report showed that the NAHB/Wells Fargo Housing Market Index came in at 13 in September, unchanged from the reading seen in the previous month. Economists had been expecting the index to edge up to a reading of 14.

Later today, the markets may also look for some clarity and reassurance on the economy from President Barack Obama at a special CNBC town hall meeting scheduled to take place at noon.

In corporate news, BP Plc may be in focus after the British oil giant announced on Sunday that it has successfully completed the "Bottom Kill" procedure to permanently seal the blown-out oil well in the Gulf of Mexico.

The company confirmed the cement seal, and it will now go ahead to complete the abandonment of the well.

Sector News

Gold stocks are among the best market performers in the early going, resulting in a 1.7 percent advance by the NYSE Arca Gold Bugs Index. With the advance, the index is on pace for a fresh nine-month closing high as the price of the precious metal has risen $2.40 to $1,623.30 an ounce.

Transportation stocks are also seeing notable upside, with the NYSE Arca Airline Index and the Dow Jones Railroads Index up by 1.6 percent and 1.4 percent, respectively. The airline index has set a six-week intraday high, while the railroads index has risen to a four and a half month intraday high.

Oil, healthcare provider and defense stocks are also seeing strong gains, along with most other major sector, reflective of the day's diversified buying interest.

Stocks Driven By Analyst Comments

Family Dollar (FDO) is trading higher after being upgraded at Goldman Sachs to Neutral from Sell. The stock has gained 2.1 percent and is on pace for an all-time closing high.

Carmax (KMX) is also on the upside after Wells Fargo raised its rating on the stock from Market Weight to Outperform. The stock is up by 1.9 percent and on target for a four-month closing high.

Other Markets

Overseas, stock markets in the Asia-Pacific region ended on a mixed note. Hong Kong's Hang Seng Index gained less than one tenth of a percent, while the Shanghai Composite Index slid by 0.4 percent. The Japanese market was closed on the day.

Meanwhile, the major European markets are seeing notable gains. The U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 1.3 percent and 1 percent, respectively, while the German DAX Index is up by 0.4 percent.

In the bond markets, treasuries are little changed after giving up early gains. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 2.739 percent, posting a loss of less than one basis point.

Click Here

TSX Poised For A Mixed Open - Canadian Commentary

Toronto stocks are poised for a lackluster session Monday amid flat energy prices and lack of first tier economic data. While gold stocks may be in play amid rising bullion prices, traders might prefer the 'wait-and-watch' game ahead of a host of economic data due out tomorrow from the U.S., and the Federal Reserve's interest rate decision.

On Friday, the S&P/TSX Composite Index edged down 8.79 points or 0.07% to 12,164.56. The price of crude oil continued to trade weak for a fourth session even as global equities were firm. Crude for November edged down $0.05 to $74.87 a barrel.

Meanwhile, the price of gold was holding on to its recent gains amid speculation that the Federal Reserve will hold its key rates at record low at its meeting this week. Gold fro December was up $3.20 to $1,280.70 an ounce.

In the M&A patch, China's state owned Sinochem has proposed as much as $60 billion for the Canadian fertilizer maker Potash Corp. to avert a $39 billion bid from the Australian miner BHP Billiton, the Globe and Mail reported. The news provider added that China National Offshore Oil Corp., through its division - China Blue Chemicals Ltd - is another contender for Potash.

In corporate news from Canada, insurance services provider Fairfax Financial Holdings Ltd will buy a 39.2% stake in Gulf Insurance company from The Kuwait Projects Co. for $208.6 million or $3.14 per share.

E-commerce services provider Tucows Inc. commenced a modified Dutch auction tender offer to repurchase up to 2.90 million of its shares within the range of $0.61 to $0.70 per share.

Oil and gas explorer Compton Petroleum said it obtained necessary approvals for exchanging all of the outstanding $450 million of 7 5/8% senior notes due 2013 for a combination of cash and 10% senior notes due 2017 of Compton Finance.

Mineral properties explorer Pacific Metals reported a fourth quarter net loss of C$463 thousand, wider than C$409 thousand in the same quarter last year. Loss per share for the quarter was C$0.01, same as last year.

Precious metals explorer Richfield Ventures said it had completed non-brokered private placement of 7.5 million units at C$1.95 per unit for gross proceeds of C$14.62 million, placed primarily with institutional investors.

Gold mining company Adamus Resources said it privately placed 29 million share at A$0.55 per share and plans to use the proceeds for developing its Nzema Gold Project in Ghana. The stocks ended the last session at C$0.44.

In economic news, Statistics Canada said wholesale sales edged down 0.1% in July to C$43.9 billion, following 0.3% decline in June, as motor vehicle sales dropped for the first time since April.

Economists were expecting wholesale sales to rise 0.5%. Excluding the motor vehicle and parts sub sector, wholesale sales rose 0.6%.

Separately, the agency said Canadians sold $3.0 billion of foreign securities in July, mainly US federal government bonds, while non-residents added $5.5 billion of Canadian securities to their portfolios in July.

Open an account with CMS Forex with at least $500 and you will receive a 100% deposit bonus.  Every time you trade 10 lots you will get $50 until you have received all 100% of your deposit.  There is no maximum - deposit $100,000 and you can earn up to $100,000. Already have a CMS account?  You can still get the 100% bonus on your next deposit. Click here

Asian Markets End Mixed Ahead Of US Economic Data

Mixed trading was witnessed among the Asian markets open for trading on Monday, the first day of the trading week. The Japanese market is closed for a public holiday. The markets in Australia, China, and Indonesia ended in negative territory, while the markets in India, Singapore, South Korea and Taiwan ended in positive territory. Optimism that the global markets will not witness double-dip recession and economic recovery will be sustained impacted market sentiment, even as traders opted to lock-in gains awaiting more economic data from the world's largest economy, the US, during the course of the week.

In Japan, the market was closed for a public holiday.

In Australia, the benchmark S&P/ASX200 Index slipped 7.60 points, or 0.16%, and closed at 4,631 points, while the All-Ordinaries Index ended at 4,677, representing a loss of 8.00 points, or 0.17%.

On the economic front, Glenn Stevens, Governor of the Reserve Bank of Australia said that Australian economy is likely to see above trend growth next year and interest rates may have to go up in the coming quarters to contain a "robust upswing". Speaking at an event in Shepparton, Victoria,Glenn Stevens said, "We think Australia's terms of trade, after reaching a 60-year high in the current quarter, will probably decline a bit, but remain high. We expect that this high level of relative export prices will add to incomes and spending, even as ths stimulative effects of earlier low interest rates and budgetary measures continue to unwind".

Mixed trading was witnessed among the mining and metal stocks. BHP Billiton slipped 0.31%, Rio Tinto shed 0.73%, Gindalbie Metals fell 2.15%, Macarthur Coal lost 1.67%, and Murchison Metals was down 1.11%. Minara Resources and Mincor Resources remained unchanged from previous close. On the other hand, Fortescue Metals advanced 0.83%, Iluka Resources added 0.50% and Oz Minerals edged higher by 0.34%.

Oil related stocks also ended mixed. Woodside Petroleum slipped 0.39%, Santos Ltd lost 1.30% and Oil Search Ltd was down 1.32%. However, Origin Energy bucked the trend and ended in positive territory with a modest gain of 0.31% and ROC Oil Ltd gained 2.50%.

Banks also witnessed mixed trading with late buying offsetting some of the early losses on profit taking. Westpac Banking Corp. edged up 0.09% and ANZ Bank advanced 0.55%. However, Commonwealth Bank of Australia slipped 0.25% and National Australia Bank shed 0.42%. Investment banking company Macquarie Group also ended in negative territory with a loss of 0.49%.

Among gold - related stocks, Newcrest Mining ended in negative territory with a marginal loss of 0.27%, despite surge in bullion prices to a fresh highs, on profit taking.

The Indian market extended its bull run on Monday, with stocks like Reliance Communication, ITC, Hero Honda Motors, Hindustan Unilever, HDFC and DLF leading the gains. FMCG stocks rallied, as investors foresee a strong revival in rural consumption. India is likely to harvest a bumper food-grain crop this year due to one of the best monsoon spells in recent years, food and agriculture minister Sharad Pawar said on Friday. Tata Global Beverages, Dabur India, Nestle India, Hindustan Unilever, Colgate Palmolive and ITC rose by 1.5%-5%. The 30-share BSE Sensex opened at 19,445 and rose to an intra-day high of 19,927 before finally ending up 311 points or 1.59% at 19,906, while the broader Nifty rose by 96 points or 1.62% to 5,980. The broader market, however, remained quiet, with the BSE mid-cap index rising 0.66% and the small-cap index edging higher by 0.74%. The market breadth was positive, with 1772 stocks advancing compared to 1,212 declines, while 121 others closed unchanged.

Among the other major markets open for trading, China's Shanghai Composite Index ended in negative territory with a loss of 9.98 points or 0.38%, at 2,589, and Indonesia's Jakarta Composite Index slipped 13.67 points or 0.40% to close at 3,371. However, Taiwan's Weighted Index gained 28.63 points, or 0.35%, to close at 8,187, and Singapore's Strait Times Index was up 4.61 points, or 0.15% to close at 3,081.

DO YOU OWN THE RIGHT STOCKS?

Analyze Your Stocks FREE! – Click Here

The major European markets opened Monday’s session higher after three straight sessions of losses. After moving more or less sideways, the French CAC 40 Index and the German DAX Index are rising 0.60% and 0.48%, respectively, while the U.K.’s FTSE 100 Index is advancing 1.11%.

In corporate news, BP (BP) could see some reprieve, as National Incident Commissioner of the Unified Command for the Deepwater Horizon oil spill, Thad Allen announced Sunday that the leakage at BP’s ruptured oil well in the Gulf of Mexico has finally been sealed for good.

Property website Rightmove’s survey showed that the average asking price for a house in England and Wales dropped for the third straight month in September. The fall was due to supply continuing to outstrip demand. Rightmove said asking prices for English and Welsh homes fell 1.1% month-over-month in the four weeks to September 11, following a 1.7% decrease in the previous month. The average price of a home was now just under 229,800 pounds.

U.S. Economic Reports

The focus shifts to the housing market in the unfolding week, as a slew of housing reports, including the Commerce Department's housing starts report for August, the existing and new home sales reports for August, the National Association of Home Builders' housing market index for September and the Federal Housing Finance Agency's house price index for July are due for release. The one-day FOMC meeting scheduled for the week is also likely to be on the radar.

Traders may also pay attention to the Labor Department's weekly jobless claims report, the Commerce Department's durable goods orders report, the leading economic indicators index for August and a few Fed speeches scheduled to be delivered during the week. Announcements concerning Treasury auctions of 2-year, 5-year and 7-year notes may also create some stir in the markets.

The housing reports are likely to show the fading tax credit payback-related weakness. Existing home sales could recover from the declines witnessed in May, June and July, given the 5.2% month-over-month increase in the pending home sales index for July and the improvement in the mortgage applications volumes since mid-July. However, the revival isn't a sign of strengthening of the underlying trend.

Meanwhile, the September housing market index is expected to stabilize around the previous month's depressed levels, in line with the recent uptick by the mortgage applications purchase index.

Against the backdrop of a confounding economic environment, the Fed is expected to hold policy rates unchanged at its upcoming FOMC meeting. MF Global expects the central bank to more explicitly signal a bias towards easing than it did in August, although it does not expect the statement to include any specificity on what additional measures might be taken. The "extended period" phrase is most likely to be retained.

A drop in civilian aircraft orders may weigh down on the durable goods orders for August. In August, Boeing reported 10 aircraft orders compared to 130 for July. Confirming the softening of the underlying trend, the new orders index of the Institute for Supply Management's manufacturing survey fell to 53.1 in August from 53.5 in July.

The National Association of Homebuilders is scheduled to release the results of its September survey on homebuilders' confidence at 10 AM ET. The index is widely expected to increase to 14.

In August, the housing market index slipped 1 point to 13, while economists had expected the index to stay put at 14. The current sales conditions index and the sales expectations index declined 1 point and 3 points, respectively to 14 and 18, while the index measuring prospective buyer traffic remained unchanged.

We Have Two Picks for September Premium Newsletter Free to join! Click here

 Yahoo (YHOO) rose concurrent with its announcement after the markets closed on Friday that it has no operational control over Alibaba in which it holds a strategic stake. The company also clarified that it would not comment on any private discussions it may or may not have with its strategic partners.

L-1 Identity Solutions (ID) may see some activity after it announced an agreement to be acquired by France-based Safran for $12 per share or an aggregate value of $1.6 billion. In the run up to the deal, L-1 agreed to sell its intelligence services businesses to BAE Systems.

Lennar (LEN) is also expected to be in focus after it reported a profit of 16 cents per share for its third quarter compared to a loss of 97 cents per share last year. Revenues rose 14% to $825 million, ahead of the consensus estimate of $782.14 million.

Boston Scientific (BSX) is expected to be in focus after it announced a deal to buy privately held Ashthmatx for an upfront payment of $193.5 million and additional payments of up to $250 million contingent upon achievement of specified revenue-based criteria through 2019.

In more deal news, Internet Brands (INET) said it has entered a definitive merger agreement to be acquired by an affiliate of Hellman & Friedman Capital Partners VI L.P. in a deal valued at $640 million.

Our "Value Packed" online trading seminar will show you how you can.

Click Here To Find Out More

Investors Hub Services