US stocks were flat as a positive reading on the labour market was not enough to entice buyers even after a sharp decline in the previous session.]]> |||
New York - US stocks were flat on Thursday as a positive reading on the labour market was not enough to entice buyers even after a sharp decline in the previous session.
While momentum in markets have been weak of late - the S&P 500 closed under its 100-day moving average for the first time since August 7 on Wednesday - major indexes remain a few percentage points away from record levels.
The lack of follow-through to Wednesday's weakness could suggest traders will once again use the decline as a buying opportunity.
“A lot of people got freaked out yesterday, and it is natural to have a selloff, but I don't see any reason for why we'd continue to fall,” said James Altucher, managing director at Formula Capital in New York.
“In the long run, anyone holding the market now will win big.”
Stocks fell on Wednesday after a patient was diagnosed with Ebola in the United States, sparking a broad decline that hit airlines and transportation stocks especially hard.
“I would look for any stock that sold off on Ebola, because the market's reaction to the swine flu (in 2009) suggests some amazing opportunities are being created,” Altucher said.
The NYSE ARCA Airline index rose 1.7 percent while Delta Air Lines was up 3 percent to $35.93 (R403).
The company also reported a modest improvement in its September load factor on Thursday.
The Russell 2000 rose 0.4 percent and is now about 9.9 percent below a record closing high hit earlier this year.
On Wednesday the small cap index closed down more than 10 percent from its record, putting it into correction territory.
Investors continue to watch small-caps, considered a leading sector of the market.
Some market participants are concerned the weakness could spread throughout Wall Street.
However, the Russell also underwent a sharp pullback earlier this year, which didn't lead to similar losses in the S&P as investors continued a trend of buying on market declines.
The Dow Jones industrial average was falling 6.97 points, or 0.04 percent, to 16,797.74, the S&P 500 was gaining 1.26 points, or 0.06 percent, to 1,947.42 and the Nasdaq Composite was adding 7.70 points, or 0.17 percent, to 4,429.78.
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, a sign the labour market may be tightening.
Advancing issues were outnumbering declining ones on the NYSE by 1,602 to 1,101, for a 1.46-to-1 ratio on the upside; on the Nasdaq, 1,500 issues were rising and 720 falling for a 2.08-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 1 new 52-week highs and 21 new lows; the Nasdaq Composite was recording 8 new highs and 47 new lows. - Reuters]]>
Tesla Motors was one of the biggest premarket session movers, after the company's chief executive hinted at a new product that would be unveiled next week.]]> |||
New York - Tesla Motors was one of the biggest movers of Thursday's premarket session, after the company's chief executive hinted at a new product that would be unveiled next week.
Elon Musk, chief executive of the electric car company, wrote on Twitter that it was “about time to unveil the D and something else.”
An image that accompanied the tweet suggested the unveiling might include a new vehicle model.
Shares were up 3 percent to $247.50 (R2,774) before the bell.
The stock has rallied about 60 percent in the year to date, building on last year's surge of more than 340 percent.
Twitter also advanced in the premarket session, up 2.4 percent to $51.28 after JPMorgan upgraded the social network to “overweight” from “neutral” and raised its price target on the stock by $10 to $64.
“Twitter is a primary beneficiary of the shift toward mobile advertising ... and we are increasingly confident in the company's ability to grow users over time,” the firm wrote in a note to clients.
Futures snapshot at 14:41 SA time:
* S&P 500 e-minis were up 3 points, or 0.15 percent, with 183,648 contracts changing hands.
* Nasdaq 100 e-minis were gaining 6.25 points, or 0.16 percent, in volume of 29,829 contracts.
* Dow e-minis were up 11 points, or 0.07 percent, with 24,397 contracts changing hands. - Reuters]]>
US stock index futures were little changed, following a sharp drop in the previous session as investors looked to upcoming economic data for trading incentives.]]> |||
New York - US stock index futures were little changed on Thursday, following a sharp drop in the previous session as investors looked to upcoming economic data for trading incentives.
* Equities have been weak of late, with the S&P 500 down for seven of the past nine sessions, and closing under its 100-day moving average for the first time since August 7 on Wednesday.
* While the benchmark index is only 3.2 percent away from its record close, the Russell 2000 on Wednesday ended more than 10 percent below its own record, putting the small-cap index in correction territory.
* Small-cap stocks are considered a leading sector of the market, and some market participants are concerned the weakness could spread throughout Wall Street.
However, the Russell also underwent a sharp pullback earlier this year, which didn't lead to similar losses in the S&P.
* Wednesday's losses followed the first diagnosis of a patient with Ebola in the United States, news that pressured equities broadly but had an outsized impact on airline and transportation companies.
* Weekly jobless claims will be released at 8:30 a.m. EDT(14:30 SA time) and are seen rising by 4,000 to 297,000 in the latest week.
It follows Wednesday's read on private-sector employment, which showed more jobs added in September than expected.
The claims data will be the last read on the labour market before Friday's jobs report, which is seen recovering sharply from August's weak report.
* After the market opens, data on durable goods and factory orders, both for August, will be released, as will the Institute for Supply Management's read on New York economic activity.
Futures snapshot at 07:09 EDT (13:09 SA time):
* S&P 500 e-minis were up 1.5 points, or 0.1 percent, with 160,000 contracts changing hands.
* Nasdaq 100 e-minis were up 2.5 points, or 0.1 percent, in volume of 25,800 contracts.
* Dow e-minis were up 2 points, nearly unchanged, with 22,200 contracts changing hands. - Reuters]]>
Oil prices hit their lowest level since June 2012, dropping below $93 (R1,040) a barrel.]]> |||
London - Oil prices hit their lowest level since June 2012 on Thursday, dropping below $93 (R1,040) a barrel, as official oil price cuts from top producer Saudi Arabia added to supply glut worries and weak global economic data.
Oil declined together with European stocks ahead of a European Central Bank meeting on Thursday, as investors are waiting to see if Bank chief Mario Draghi's asset purchase plan can inject confidence into the euro zone economy.
Sharp cuts in official selling prices from state producer Saudi Aramco to Asian customers on Wednesday came as the clearest sign yet that the world's largest exporter is trying to compete for crude market share, amplified supply concerns.
“This is a structural change in the oil market, with Saudi Arabia explicitly stating that they are willing to compete on price,” said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo.
“I think Brent will fall below $88 before we see the bottom of the market.”
Brent oil for November delivery lost $1.30 at $92.86 a barrel by 10:17 SA time.
It went as low as $92.57 a barrel in early trade, a fresh low from June 2012.
US November crude lost $1.10 to reach $89.63 per barrel, a 17-month low.
Oil production in Russia increased by almost 0.9 percent month-on-month in September to 10.61 million barrels per day (bpd), Energy Ministry data showed, adding to a glut from growing US and OPEC production that has held Brent crude prices below $100 a barrel for more than three weeks.
Data on Wednesday showed disappointing European factory data, and China's manufacturing sector in September remained subdued.
US economic strength, a rare bright spot for global markets, showed signs of caution following worries of an Ebola outbreak.
With oil prices continuing to slide, the pressure is building on the Organization of the Petroleum Exporting Countries (OPEC) to reduce output at its meeting next month.
While analysts expect OPEC to adjust the group's output target of 30 million barrels per day (bpd) for 2015, the actual cut may not be big enough to spur a bounce in oil prices.
SEB's Schieldrop said OPEC would need to cut around 1-1.5 million barrels a day in production in order to balance the markets in 2015. - Reuters]]>
World stocks were knocked hard after global manufacturing data and an Ebola health scare in the United States spooked markets, sending investors scurrying to the safety of US bonds, the yen and gold.]]> |||
London - World stocks were knocked hard on Thursday after global manufacturing data and an Ebola health scare in the United States spooked markets, sending investors scurrying to the safety of US bonds, the yen and gold.
European markets were sucked into the storm before the European Central Bank's monthly policy meeting where pressure is intensifying on it to launch an aggressive government bond purchase programme.
Investors warmed to the yen and safe-haven bonds after a slew of surveys on Wednesday showed German factory activity shrinking for the first time in 15 months, China's manufacturing sector barely growing and the United States slowing more than expected.
All that pushed MSCI's 45-country world stock index to a five-month low and Britain's FTSE, Germany's DAX and France's CAX fell 0.3-0.6 percent in early deals as the sell-off continued.
“The market is quite nervous,” said Alvin Tan, a strategist at Societe Generale in London.
“What we are most concerned by is the risk backdrop. The S&P 500 appears to be in the process of breaking below the 100-day
moving average and on top of that we see volatility picking up in not only equities but also currencies.”
Confirmation of a case of Ebola in the United States has joined a growing list of bearish news stories with geo-political tensions in Ukraine and Hong Kong, and growth concerns around China and the euro zone sapping risk appetite.
After a 1 percent drop on Wall Street, Japanese equities had led the selloff in Asia as a rebound in the yen added to the backdrop of a sputtering domestic economy to push Tokyo's Nikkei down a sharp 2.1 percent to three-week lows.
The risk-averse mood also pushed US Treasury yields into their biggest drop in just over a year, while gold rallied.
The dollar subsequently slipped back below 110 yen - a threshold breached for the first time since 2008 this week - and was last down 0.2 percent at 108.83 yen.
TRILLION EURO QUESTION
The euro steadied in early European trading at $1.2623 having crawled away from a two-year low of $1.2571 hit earlier in the week.
German government bond yields sagged near their August all-time lows.
Traders were focused on the European Central Bank meeting later in the session with the divergence of US monetary policy with those of Europe and Japan now an established market theme.
The US Federal Reserve is trying to normalise monetary policy after yers of pumping out cheap funds, while the ECB and Bank of Japan are seen stuck with their very easy policies for the foreseeable future.
ECB head Mario Draghi is set to give details at the bank's 14:30 SA time post-meeting news conference of a new plan to buy asset-backed securities and covered bonds, hoping this will finally revive the euro zone economy.
It is under pressure, however, to launch a super-sized round of government bond purchases.
It plans to add another trillion euros to its balance sheet, but poor demand for a new round of cheap loans last month has raised doubts.
“In the longer term people are still hoping for full-scale quantitative easing,” said Robert Kuenzel, euro area economist at Daiwa Securities in London.
“But it is unlikely to come in the near future. I think the first line of defence is the TLTRO (cheap long-term loans to banks) and the covered bond and ABS purchase programmes, but there is a risk that both of those components disappoint.”
In commodities, Brent crude oil fell past $93 a barrel, extending a three-month losing stretch as weak economic signals from China and Europe and ample global supply continue to weigh.
US crude slumped $1 to $89.60 a barrel.
Gold added to small gains, buoyed by risk-averse sentiment.
Spot gold rose 0.5 percent to $1,219.27 an ounce.
Markets in both China and Hong Kong had been closed for public holidays but sustained civil unrest in Hong Kong is also weighing on investor confidence, although the city's streets were calm early on Thursday. - Reuters]]>
UK shares fell, extending steep falls seen in the previous session and following a drop on Wall Street.]]> |||
London - UK shares fell on Thursday, extending steep falls seen in the previous session and following a drop on Wall Street, as investors awaited details of the European Central Bank's plan to buy asset-backed debt.
Engineering contractor Babcock International was a big loser, with traders citing reports that index compiler MSCI was capping weights in indexes due to foreign ownership limit.
The stock fell 2.7 percent even though Babcock had announced a 2.6 billion pound (R47 billion) contract win on Wednesday.
Trading volume in Babcock was solid, at almost 1-1/2 times its 90-day daily average, against the FTSE 100 on just 17 percent.
The UK benchmark was down 25.26 points, or 0.4 percent, at 6,532.26 points by 10:24 SA time.
It tracked losses on Wall Street, where stocks fell more than 1 percent on Wednesday after the first diagnosis of Ebola in a patient in the United States spooked investors.
Investors were reluctant to place any big bets at least before the ECB, later on Thursday, unveils details of its ABS purchase plan, aimed at propping up inflation and reviving growth in the euro zone - Britain's biggest trading partner.
The ECB plans to buy asset-backed securities - packages of reparcelled loans - with a view to spurring the market for such credit and supporting lending to the small and mid-sized firms that form the backbone of the euro zone economy.
“We are not really expecting any surprises. We will sit on the sidelines for now but be looking to pick up some bargains later on,” Mark Ward, head of trading at Sanlam Securities
The FTSE 100 index has endured a torrid week - down almost 2 percent so far - pressured by a slump in supermarket shares.
Sainsbury suffered fresh falls, down 0.8 percent, as Nomura cut its target price on the stock to 270 pence from 305 pence.
It had dropped 7 percent on Wednesday when it cut its annual sales forecast and put its dividend under review.
But peers Morrisons and Tesco recovered some of their poise, up 1.4 percent and 0.8 percent respectively.
Some traders were bullish on the sector.
“They offer value in the long term but you're going to have to take some pain in the middle,” said Joe Rundle, head of trading at ETX Capital.
While the recent weakness on the FTSE 100 has left it more “oversold” on its 14-day Relative Strength Index, a technical momentum indicator, than it has since February, analysts saw little scope for a short-term rebound.
Bill McNamara, technical analyst at Charles Stanley, highlighted that a 1 percent drop seen on Wednesday took the index through its August closing low and “more worryingly perhaps, through the uptrend that has been in place for the last eleven months”.
He said the chart is now pointing to a drop back to around 6,450 - around 1 percent from current levels - before buyers are tempted back in, “but the overall impression is that sentiment has shifted to a more negative bias”.
On a brighter note, tour operator TUI Travel firmed 0.6 percent after saying it would deliver full-year underlying operating profit growth of at least 9 percent, in line with its target, after selling at higher-than-average prices over the summer 2014 trading period. - Reuters]]>
Tokyo stocks suffered a 2.61 percent drop on Thursday as a stronger yen and worries about the world economy dragged the Japanese market into the red.]]> |||
Tokyo - Tokyo stocks suffered a 2.61 percent drop on Thursday as a stronger yen and worries about the world economy dragged the Japanese market into the red.
The benchmark Nikkei 225 index closed down 420.26 points at 15,661.99, while the Topix index of all first-section shares fell 2.89 percent, or 38.06 points, to 1,280.15.
Tokyo's fall gained pace as the dollar weakened against the yen - a negative for Japanese exporters' profitability - after Wall Street tumbled following data showing construction spending in August fell unexpectedly.
A separate report indicated manufacturing activity slowed in September, while poor eurozone data added to the woes of investors who were also spooked by news of the first confirmed Ebola case in the United States.
Markets are warily eyeing a pro-democracy campaign in Hong Kong, where protest leaders have called for the leader of the financial hub to stand down by the end of the day or they will step up their demonstration, which has so far been largely peaceful.
“Japanese stocks will not be immune to the global selloff, especially as most of the buying seen over the last several weeks has been solely due to the weaker yen, and not anything fundamental,” said Eiji Kinouchi, chief technical strategist at Daiwa Securities.
The dollar backed off after breaking the 110 yen barrier for the first time in more than six years on Wednesday.
It was changing hands at 108.76 yen in Tokyo Thursday, down from 108.91 yen late in New York.
In Tokyo share trading, Toyota dropped 3.46 percent to 6,275.0 yen, Sony was down 3.25 percent at 1,904.5 yen and All Nippon Airways plunged 4.76 percent to 242.0 yen.
However, Skymark Airlines rallied 3.57 percent to 203.0 yen.
The stock had jumped more than 10 percent in early trade on reports it is renegotiating with Boeing over a penalty for the cancellation of a $2.2 billion (R25 billion) jet order.
On Wall Street, the Dow tumbled 1.40 percent, the S&P 500 fell 1.32 percent and the Nasdaq lost 1.59 percent.
European stocks also fell following another round of disappointing data ahead of the European Central Bank's policy meeting later Thursday. (Dow Jones Newswires contributed to this article) - Sapa-AFP]]>
The rand strengthened against the US dollar, extending its gains into a second session as the greenback slid on weaker-than-expected manufacturing activity.]]> |||
Johannesburg - The rand strengthened against the US dollar on Thursday, extending its gains into a second session as the greenback slid on weaker-than-expected manufacturing activity.
At 08:24 SA time the rand was 0.49 percent stronger vs the US dollar, its firmest in five days, trading at 11.2055 off a New York close of 11.2650.
The local unit carried over its positive momentum from the previous session, strengthening after the dollar fell against major currencies as the world's largest economy reported that factory activity in September had slowed.
The rand remains vulnerable to further labour tensions after a 280,000-member public servant union announced demands on Wednesday for a 15 percent pay increase, far above inflation.
Africa's most developed economy is still reeling from a six-month platinum strike earlier this year.
Earlier this month, central bank Governor Gill Marcus reiterated her concern that recent wage demands and some settlements have not matched inflation and productivity.
Government bonds were flat in morning trade, with yields on the paper due in 2026 unmoved at 8.325 percent. - Reuters]]>
Asian stocks fell on Thursday as weak global manufacturing activity and an Ebola health scare in the US spooked world markets.]]> |||
Tokyo - Asian stocks fell on Thursday as weak global manufacturing activity and an Ebola health scare in the United States spooked world markets, sending investors scurrying to the safety of US bonds, the Japanese yen and gold.
Investors warmed to the yen after a slew of surveys showed German factory activity shrank for the first time in 15 months, China's manufacturing sector barely grew, while the United States slowed more than expected.
Japanese stocks led the selloff in Asia, with the backdrop of concerns over global growth and a sputtering domestic economy pushing Tokyo's Nikkei down a sharp 1.9 percent to three-week lows.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent, with the downturn potentially limited by market closures in both China and Hong Kong for public holidays.
“Recent days has seen a barrage of nerve inducing events converge to cast a shadow over the investment outlook,” Niall King, sales trader at CMC Markets in Sydney, wrote in report to clients.
“Confirmation of a case of Ebola in the US has joined a growing list of bad news stories with geo-political tensions in Ukraine and Hong Kong, and growth concerns around China and Europe sapping risk appetite,” he said.
The continued civil unrest in Hong Kong has sapped investor confidence, although the city's streets were calm early on Thursday.
On Wall Street, US stocks dropped more than 1 percent on Wednesday on the Ebola news and the unexpected slowdown in US manufacturing growth.
The risk-averse mood benefited the yen and sent US Treasury yields down. The dollar slipped back below 110 yen and was down 0.2 percent at 108.66 yen.
The euro rose 0.3 percent to $1.2662, crawling further away from a two-year low of $1.2571 hit earlier in the week.
Traders were also focused on the European Central Bank meeting later in the session with the divergence of US monetary policy with those of Europe and Japan now an established set market theme.
The US Federal Reserve is probing ways to normalise monetary policy, while the ECB and Bank of Japan are seen stuck with their very easy policies for the foreseeable future.
“The market interest is not in the rates decision, where the ECB insists the refinancing rate will not fall further from 0.05 percent, but in President Draghi's press conference,” Sean Callow, senior currency strategist at Westpac in Sydney, wrote in a note to clients.
The markets will focus on the expected size of the ECB's plan to buy asset-backed securities and euro-denominated covered bonds after Draghi promised to provide “detailed modalities” of the plans at the previous meeting in September, Callow said.
In commodities, Brent crude oil fell toward $94 a barrel, continuing a three-month losing stretch as weak economic signals from China and Europe and ample global supply continued to weigh.
Brent crude dipped 5 cents to $94.11 a barrel.
Gold added to small gains, buoyed by risk-averse sentiment as weak global manufacturing data in the United States unnerved equity markets.
Spot gold rose 0.1 percent to $1,215.02 an ounce. - Reuters]]>
Oil prices were mixed in Asia on Thursday, with gains capped by concerns about a global supply glut and a stronger dollar.]]> |||
Singapore - Oil prices were mixed in Asia on Thursday, with gains capped by concerns about a global supply glut and a stronger dollar, analysts said.
The US benchmark, West Texas Intermediate for November delivery, rose seven cents to $90.80 while Brent crude for November eased six cents to $94.10 in mid-morning trade.
Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy EY, said prices were pressured by the “strengthening US dollar, which is at a four-year high against major currencies”.
The US dollar held steady at 108.80 yen in Asian trading on Thursday, from 108.91 yen in New York late Wednesday after earlier breaching the 110 yen level for the first time since 2008.
A stronger greenback makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand and pushing prices lower.
Singapore's United Overseas Bank said dealers were also digesting “a clear manifestation of the over-supply environment” after Saudi Arabia on Wednesday lowered its official selling price for crude oil.
Media reports said the kingdom, a key member of the Opec oil producing cartel, reduced its November prices, marking the fourth straight month of cuts.
The move indicated that the world's top crude producer is more focused on maintaining market share, and is unlikely to cut output anytime soon to ease a global supply glut.
Saudi Arabia has 16 percent of the world's proved oil reserves and produces 11.6 million barrels a day, according to official US government data.
Gupta said dealers will next scrutinise US jobs figures to be released on Friday. “Sentiments for crude oil appears bearish in the short term,” he said. - Sapa-AFP]]>