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US Market Reports |
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After moving sharply higher at the open, stocks have seen some further upside over the course of morning trading on Monday. The markets continue to recovery from the sell-off seen early last week, with the major averages bouncing well off last Wednesday's lows.
The major averages have pulled back off their highs for the session in recent trading but remain firmly positive. The Dow is currently up 199.35 points or 1.7 percent at 12,057.87, the Nasdaq is up 48.14 points or 1.8 percent at 2,691.81 and the S&P 500is up 19.84 points or 1.6 percent at 1,299.04.
The strength in the markets is partly due to easing concerns about the nuclear crisis inJapan, as officials said progress is being made on efforts to restore power and cooling systems at the earthquake-crippled Fukushima nuclear plant.
Billionaire investor Warren Buffett said that the situation in Japan actually creates a buying opportunity and said that he would not be selling any Japanese stocks because of the recent developments.
News on the merger-and-acquisition front is also contributing to the positive sentiment onWall Street, with telecom giant AT&T (T) reaching an agreement to acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction valued at approximately $39 billion.
The purchase price will include a cash payment of $25 billion, with the balance to be paid using AT&T common stock, subject to adjustment.
Additionally, shares of Verigy (VRGY) have moved sharply higher after the company said its board has determined that a takeover offer from Advantest (ATE) valuing Verigy at $15 per share is superior to a proposed merger with LTX-Credence (LTXC).
The news on the economic front was not as encouraging, however, with a report from theNational Association of Realtors showing that existing home sales fell by much more than anticipated in February.
NAR said existing home sales fell 9.6 percent to an annual rate of 4.88 million in February from an upwardly revised 5.40 million in January. Economists had expected sales to drop to 5.15 million from the 5.36 million originally reported for the previous month.
Traders are also likely to keep an eye on the situation in Libya, where coalition forces have launched air strikes against the regime of longtime Libyan leader Moammar Qadhafi.
Sector News
With the price of crude oil moving sharply higher on the news out of Libya, oil service stocks are turning in some of the market's best performances. The Philadelphia Oil Service Index is currently up by 2.8 percent, moving further off the one-month closing low it set last Wednesday.
The strength among oil service stocks comes as crude for April delivery is currently up by $1.13 at $102.20 a barrel after reaching a high of $103.35 a barrel.
Significant strength has also emerged among electronic storage stocks, as reflected by the 2.3 percent gain currently being shown by the NYSE Arca Disk Drive Index. EMC Corp. (EMC) is leading the sector higher after being added to Conviction List at Goldman.
Gold stocks are also seeing considerable strength, benefiting from a sharp rise by the price of gold. With gold for April delivery climbing $14.30 to $1,430.40 an ounce, theNYSE Arca Gold Bugs Index is currently up by 2.1 percent.
Most of the other major sectors have also moved to the upside, reflecting broad based buying interest. Natural gas, defense, semiconductor, and software stocks are posting notable gains.
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European Market Reports |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
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European Markets Rally On Telecom Deal
The European markets are notably higher on Monday, as sentiment was boosted by the news of Deutsche Telekom selling the T-Mobile USA unit. Sentiment was also influenced by markets in Asia/Pacific that mostly ended in the green and the rising U.S. index futures.
The Euro Stoxx 50 index of euro zone blue chippers is advancing 1.95 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 1.78 percent. Switzerland's SMI is jumping 1.87 percent.
The DAX index started trading at 6,782, up from the prior close of 6,664 and has been moving in positive territory. The index is currently adding 2.19 percent.
Deutsche Telekom is leading the gainers by adding 12.2 percent, on the news of the sale of T-Mobile USA to AT&T Inc. for $39 billion. A broker told dpa-AFX that the sale solves an important problem in the telecom and that T-Mobile USA receives an attractive price.
Meanwhile, UBS upgraded Deutsche Telekom to "Neutral" from "Sell" based on the deal announced, dpa-AFX added. The brokerage also increased the price target on the stock to 10 euros from 8.40 euros.
Truckmaker MAN is surging 2.7 percent after turning to a full-year profit. The group's total order intake increased 53 percent to 15.1 billion euros, reflecting market recovery within and outside Germany. The company also increased its dividend to 2 euros per share from last year's 0.25 euros.
A dealer described to dpa-AFX that the truckmaker's orders are encouraging, and also pointed to the better than expected dividend.
Daimler, Volkswagen and BMW are gaining between 2.3 percent and 1.1 percent.
The French CAC 40 index opened at 3,808, compared to the prior close of 3,810, and has been in positive territory. The index is currently rising 1.86 percent.
France Telecom is rising 2.8 percent. Among banks, Societe Generale, Natixis,Credit Agricole and BNP Paribas are climbing between 2.6 percent and 1.8 percent.
The FTSE 100 index opened at 5,718 and has been in positive territory. The index is rising 1.27 percent.
Among telecom stocks, Vodafone is climbing 3.7 percent and BT Group is rising about 2 percent.
Engineering firm Weir Group and engine manufacturer Rolls-Royce are up 3.8 percent and 2.7 percent reportedly on broker upgrades.
Drugmaker Novartis, which received EU approval for multiple sclerosis drug Gilenya, is up about 1 percent in Zurich.
Swiss re is rising 2.3 percent. The world's second-largest reinsurer said it sees claims related to the Japan earthquake to be about $1.2 billion. According to dpa-AFX, some analysts had expected a higher burden of claims.
In a day of light economic events, British house prices increased for the third straight month in March underpinned by robust demand. Average asking prices rose 0.8 percent month-over-month in March to 231,790 pounds, property website Rightmove said in a report.
Meanwhile, Bank of England Chief Economist Spencer Dale said the British economic recovery is likely to continue, but Eurozone fiscal challenges and political tensions in North African and Middle East nations raise threats.
Across Asia/Pacific, most major markets ended in positive territory. Australia's All Ordinaries settled higher by 0.39 percent and China's Shanghai Composite Index added 0.10 percent. The Japanese market is closed for the day.
In the U.S., futures point to a higher open on Wall Street. In the previous session, theDow rose 0.7 percent, the Nasdaq edged up 0.3 percent and the S&P 500 climbed 0.4 percent.
In commodities, crude for April delivery is rising $1.79 to $102.86 per barrel and gold is advancing $12.7 to $1428.8 a troy ounce.
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Asia Market Reports |
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Indian Market Ends Lower Despite Strong Global Cues
A rally in crude prices following the launch of air strikes by Western forces on crude exporter Libya over the weekend weighed on the Indian market Monday. Notwithstanding positive global cues, the 30-share BSE Sensex showed lackluster movement before ending the day 40 points or 0.22 percent lower at 17,839.
London Brent prices inched closer to the $116 a barrel mark on Monday owing to the political unrest in Libya and other oil-producing countries. India is vulnerable to the mounting oil prices, as it imports over 70 percent of its oil requirements.
The 50-share Nifty index eased 9 points or 0.17 percent to 5,365, while the BSE mid-cap and small-cap indexes ended down about 0.3 percent each. The market breadth was negative, with decliners outpacing gainers by 1687 to 1176 shares. While IT andrealty stocks fell sharply, healthcare, banking, FMCG and metal stocks closed little changed.
Among the prominent losers, TCS, Hindustan Unilever, Reliance Communication,Wipro, Cipla, Maruti Suzuki, Hero Honda Motors and Hindalco ended down by 1-3 percent.
Ranbaxy plunged nearly 7 percent after U.S.-based Mylan Laboratories sued the U.S. health regulator, seeking to block Ranbaxy's attempt to launch a generic drug.
Telecom stocks such as Bharti Airtel (down 0.17 percent), Idea Cellular (up 0.58 percent) and Reliance Communication (down 1.53 percent) ended on a mixed note after data revealed rival Vodafone gained the most, adding 192,761 new subscribers, since the launch of mobile number portability on January 20.
Lanco Infratech rose nearly 2 percent on saying that it would earn full-fledged revenue from Griffin Coal's acquisition from next year. State-run Rural Electrification Corporation added 0.61 percent on reports that it will raise around $1-billion in 2011-12 via a corporate bond issue.
Tata Steel added 0.87 percent after it raised Rs.1,500 crore by issuing perpetual bonds. Bafna Pharmaceuticals gained 1.19 percent on the buzz that it is buying haemoglobin drug Raricap from Johnson & Johnson.
Sugar stocks advanced after agriculture minister Sharad Pawar reportedly sought permission to allow sugar exports immediately to help the industry to pay cane growers.Bajaj Hindusthan posted a modest 0.22 percent gain, Dhampur Sugar added 1.42 percent and Shree Renuka rose 1.82 percent.
United Spirits slipped 0.20 percent after it reportedly proposed to invest about Rs. 600 crore to set up glass manufacturing plants. Reliance Industries lost half a percent after the company said its estimates of a further drop in gas production are purely provisional and could change.
Ashok Leyland shed a percent on reports that its joint venture with Nissan will invest around Rs 2500 crore to set up a light-commercial vehicle manufacturing unit near Chennai. Hero Honda Motors fell 2.74 percent on a PTI report that Hero Group will raise Rs.3,650 crore by selling a 29 percent stake in Hero Investments.
Voltas shed 1.78 percent after it signed a JV pact with Germany's Kion Group to develop and service industrial trucks and warehousing equipments. Power Finance Corporation tumbled 3.74 percent on equity dilution worries.
Sadbhav Engineering lost 0.65 percent despite winning new orders. ABG Infralogistics fell 2.72 percent on turning ex-dividend. Pipavav Shipyard declined 0.32 percent after about 3.56 crore shares changed hands in a block deal.
Elsewhere, the MSCI Asia Pacific index excluding Japan rose about a percent today, led by energy shares, as investors lapped up beaten-down stocks after heavy losses last week and crude futures climbed about 2 percent to near $103 a barrel following the Western military action on Libya and the continuing unrest in a host of other countries in the oil-rich Middle East region.
China's Shanghai Composite posted a modest 0.10 percent gain, shrugging off a reserve rate hike announced over the weekend. The Japanese market was shut for a public holiday.
European stocks climbed as fears on Japan's nuclear crisis eased and Americanofficials said its allies have succeeded in scattering and isolating Libyan strongman Moammar Qadhafi's forces. The Dow futures were up 112 points.
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Forex Top Story |
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Dollar Unable To Fight Back Ahead Of Housing Figures
The dollar continued to struggle against other major currencies on Monday, as traders looked ahead to the latest clues about the condition of the global economy.
Last week's comments from the Federal Reserve indicated that unless there is dramatic upturn in inflationary pressures, the central bank will go through with its entire $600 billion asset purchase plan.
Conversely, central banks in the Euro zone and U.K. are primed to raise interest rates as early as April, in accordance with their lone mandate to head off inflation.
With the interest rate gap between the U.S. and other developed economies expected to widen, the dollar remains a less attractive alternative to other safe haven currencies such as the Swiss franc.
The dollar dropped to $1.6270 versus the sterling, its lowest sine March 7. The buckhas tumbled three cents during the past week, heading back toward a yearly low around $1.6325.
The British economic recovery is likely to continue, but Eurozone fiscal challenges and political tensions in North African and Middle East nations raise threats, Bank of England Chief Economist Spencer Dale said in a bulletin on Monday.
Further, he said financial markets now foresee monetary tightening to occur sooner than they previously expected. "Markets expected the pace of policy tightening, both in the United Kingdom and abroad, to be faster than at the time of the previous Bulletin."
The dollar was stuck at $1.4150 versus the euro, having touched a 4-month low of of $1.4192 late last week.
There was little movement versus the yen after a wild week that saw the dollar hit a new record low of Y76.30. The buck rallied back to Y82 late in the week, but has since settled in a range near Y81.
Last week's rally versus Canada's loonie has fizzled out. The dollar dropped a penny to C$0.9760 as the price of oil jumped back toward $103 a barrel. The dollar was last above par more than a month ago.
The U.S. housing market takes center stage today, as the National Association of Realtors is scheduled to release its report on existing home sales for February at 10.00 AM ET. Economists estimate existing home sales at an annual rate of of 5.15 million for the month.
Later this week: the Commerce Department's new home sales report, the Commerce Department's durable goods orders report for February, the weekly jobless claims report, the Reuters/University of Michigan's consumer sentiment index for March, the house price index of the Federal House Finance Agency, and the final fourth quarter GDP report.
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Canadian Market Reports |
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TSX May Open Higher On Commodities, Global Cues
Toronto stocks are poised to open higher Monday amid firm commodities prices and positive cues from the global equity markets.
Global equities moved up after Japan said it was making progress in its battle to control radiation leaks at a nuclear complex. While most Asian markets ended higher overnight, European stocks were in positive territory Monday morning.
In Europe, telecommunications stocks were under the buyers' radar after AT&T Incsaid it plans to pay $39 billion for Deutsche Telekom AG's T-Mobile USA.
U.S. stock futures were pointing to a higher open.
On Friday, the S&P/TSX Composite Index added 43.48 points or 0.32 percent to 13,789.63. Last week, the main index rose 115 points or nearly 1 percent, after falling in the first three sessions.
The price of crude oil moved back near $103 as traders closely follow the situation in Libya, where Western powers launched a second wave of air strikes early today. Crude for April was up $1.91 to $102.98 a barrel.
Gold stocks may be in play after the price of gold advanced near its record close on safe-haven appeal. Gold fro April gained $18.60 to $1,434.70 an ounce.
In corporate news from Canada, Lundin Mining said on Sunday that its board has unanimously recommended its shareholders to reject the C$4.8 billion unsolicited cash and stock acquisition offer from Australian mining company Equinox Minerals.
South America focused oil and gas explorer Petrolifera Petroleum said Gran Tierra Energy acquired all of the issued and outstanding common shares of Petrolifera.
Copper mining company Anvil Mining reported lower fourth quarter profit of $2.3 million or $0.01 per share, compared to $10.9 million or $0.09 per share a year ago.
Homburg Canada REIT said it acquired Carrefour Les Saules shopping centre in Quebec for $11.65 million.
Metal miner Rambler Metals and reported second-quarter loss of C$555 thousand or C$0.006 per share, narrower than C$591 thousand or C$0.007 per share last year.
Gem Diamonds Ltd. confirmed that it is in preliminary talks with Africa focused Lucara Diamond Corp. regarding a possible merger.
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