June 28, 2017

Stocks Rise on Earnings Optimism

Stocks rose on Tuesday, putting Wall Street on pace for a fourth consecutive advance, after Alcoa reported higher-than-expected adjusted profit, which buoyed optimism about quarterly earnings reports to come.

In afternoon trading, the Standard Poor’s 500-stock index gained 0.7 percent, the Dow Jones industrial average rose 0.5 percent and the Nasdaq composite was 0.5 percent higher.

Global markets were also higher, with the FTSEurofirst 300 index of European shares closing 0.8 percent higher; Japan’s Nikkei average ended its session almost 2.6 percent higher, near a six-week high.

Alcoa, the first Dow component to report results for the second quarter, also said late on Monday that it anticipated solid growth in global demand for its products this year. Shares of Alcoa, the largest American aluminum producer, rose at the opening bell before falling 0.4 percent.

The earnings report bolstered confidence for an earnings season currently forecast to show lackluster growth.

“We’ve set the expectations bar extremely low, probably the lowest that we’ve seen in the last eight quarters, for this earnings season,” said Art Hogan, managing director at Lazard Capital Markets in New York. “So if we are going to get some upside surprises here, which I entirely expect that we will, the market may react positively.”

The earnings calendar remains fairly light this week until Friday, when JPMorgan Chase and Wells Fargo are scheduled to report.

The benchmark S.P. 500 has risen 1.6 percent over the last three sessions, as jobs and manufacturing data have helped ease concerns over the possible early pullback of stimulus measures by the Federal Reserve.

“What is more important here is that we’ve got a market that has transitioned in psychology – good news is actually good news, and that is a very important transition in the market psychology right now,” said Mr. Hogan.

The book retailer Barnes Noble gained 4 percent after the company’s chief executive, William Lynch Jr., resigned.

Tesla Motors, which makes electric cars, gained 2.4 percent after Nasdaq OMX Group said Tesla would replace Oracle on the Nasdaq 100 stock index, reflecting the company’s rising profile.

The grocery store operator Kroger Company said it would acquire Harris Teeter Supermarkets in a deal valued at $2.5 billion, including debt, to expand in Southeast and Middle Atlantic states. Kroger shares rose 2.5 percent, and Harris Teeter gained 1.6 percent.

Article source: http://www.nytimes.com/2013/07/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

Asian Stocks Still Shaky as Nikkei Slides 3 Percent

Last week’s shakeout of equity, bond and currency markets was triggered by doubts over how much weakness in the yen Japanese policymakers would tolerate, concerns the U.S. Federal Reserve would reduce monetary stimulus soon, and weakness in Chinese manufacturing data.

But U.S. equities ended off their lows on Friday while U.S. 10-year Treasury yields steadied near 2 percent, suggesting to investors the dollar will resume its rally against the yen and other markets will be calmer.

The dollar was last down 0.3 percent at 101.01, not far off a two-week trough of 100.66 hit on Friday.

“It is a little bit early to get too caught up in a bearish view,” said Adrian Mowat, chief emerging markets strategist at JPMorgan, based in Hong Kong.

“Nikkei’s still above the 50-day moving average and Japan was very overbought.”

The Nikkei average dropped 7.3 percent on Thursday, its largest single-day loss since the March 2011 earthquake and tsunami. It was 3.3 percent down at 14,128.58 at midday on Monday.

MSCI’s broadest index of Asia-Pacific shares outside Japan has risen 6.5 percent in a little over a year. It edged down 0.15 percent on Monday after having skidded 2.6 percent last week to one-month lows, posting its biggest fall since May 2012.

“Last week’s shock will probably last throughout this week,” said Kenichi Hirano, a strategist at Tachibana Securities. “But the Japanese market’s fundamentals in the mid-to-long term have not changed, so there still is upside in the longer term.”

Other Asian stock markets got off to a cautious start on Monday, having suffered their biggest weekly drop in around a year as investors fretted about the possibility of the Federal Reserve dialing down its stimulus program as well as a slowing Chinese economy.

Australia’s SP/ASX 200 index slipped 0.7 percent, but South Korea’s KOSPI managed to eke out a 0.3 percent gain.

“While the market reaction looked a tad overdone, it is notable that the dichotomy between growth and equity market performance has widened over recent weeks implying that equity markets were prone to a correction,” Mitul Kotecha, head of markets research at Credit Agricole said in a note to clients.

DOLLAR BIDS TO EMERGE?

Supporting the view that the Fed may soon scale down its massive stimulus program, data on Friday showed orders for US-made durable goods rose more than expected in April, a hopeful sign that a sharp slowdown in factory output could soon run its course.

That should be music to the ears of dollar bulls. Indeed, figures on Friday showed currency speculators increased bets in favor of the greenback to the highest since at least June 2008.

The dollar index, which tracks the greenback’s performance against a currency basket, hit a three-year high last week before succumbing to a bit of pressure. It was almost flat at 83.59.

Much of the excitement in currency markets last week centered on the yen as turbulence in the Nikkei prompted investors to book profits on bearish yen positions. That saw the dollar recoil from a 4-1/2 year high of 103.74 yen set on May 22.

Still, traders expect the yen’s downtrend to remain intact after the Bank of Japan (BOJ) last month unleashed the world’s most intense burst of stimulus.

On Sunday, Bank of Japan Governor Haruhiko Kuroda said the bank will be vigilant to any signs of overheating of asset prices or excessive risk-taking by financial institutions, adding that there were no signs of that now.

Commodity markets were subdued with UK and U.S. financial markets closed on Monday for public holidays. There is also little in the way of major economic news due out of Asia.

“A calmer tone to markets ought to ensure that yen upside will be limited and dollar buyers are likely to emerge just below the dollar-yen 100 level,” Kotecha said.

“The potential for a renewed yen decline as well as some stabilization in risk appetite will give some relief to Asian currencies this week as will a relatively firm yuan.”

China’s central bank fixed the tightly managed yuan’s mid-point versus the dollar at 6.1811. It was the highest fixing since the landmark revaluation in 2005.

In the spot market, the yuan was barely changed, at 6.1316 to a dollar.

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Eric Meijer)

Article source: http://www.nytimes.com/reuters/2013/05/26/business/26reuters-markets-global.html?partner=rss&emc=rss