Stock Market Update - Thursday, September 2, 2010

Stock Market Update
Thursday, September 2, 2010

Latest News Headlines:

US Stocks Close Up, Trading in a Tight Range With Low Volume

Stocks added only modest gains, on light volume, trading in a tight range as investors awaited official monthly jobs data on Friday.

Dow Jones	10,320.10	+50.63	(0.49%)
S&P 500	1,090.10	+9.81	(0.91%)
Nasdaq	2,200.01	+23.17	(1.06%)

Stocks traded below and above the opening prices all day Friday.
30 INDUS 10,266.44 DN 3.03 OR 0.03%
20 TRANSP 4,311.45 UP 28.04 OR 0.65%
15 UTILS 394.69 DN 2.67 OR 0.67%
65 STOCKS 3,583.82 UP 1.80 OR 0.05%

US Stocks Rise As Pending-Home Sales, Retail Sales Provide Small Boost

U.S. stocks rose Thursday morning, boosted by an unexpected increase in U.S. pending home sales and better-than-expected back-to-school sales from retailers.

The Dow Jones Industrial Average climbed 23 points, or 0.2%, to 10292, in recent trading. Home Depot was the measure's best performer, up 1.8%, boosted by the housing data. Alcoa and Boeing were also strong, with gains of more than 1% each.

The Nasdaq Composite rose 0.4% to 2186 and the Standard & Poor's 500 index added 0.4% to 1085, led by its consumer-discretionary sector.

Minor gains came as the National Association of Realtors' index for pending sales of used homes increased 5.2% to 79.4. The report represents a surprising reversal after the index fell two months in a row following the April 30 expiration of a tax credit for buyers. Economists had expected a 1% drop.

In addition, retailers delivered a late-summer surprise, with sales for the key back-to-school buying month of August largely coming in better than expected. Kohl's, J.C. Penney and Macy's all beat expectations and the latter two said back-to-school sales were going well. Kohl's climbed 1.6%, while J.C. Penney jumped 3.8% and Macy's edged up 1.1%.

However, Lawrence Yun, NAR's chief economist, warned that the housing market's recovery would still be a long one.

readings on the U.S. economy were less encouraging. U.S. factory orders rose less than expected in July, while the level of U.S. workers filing new claims last week suggested lingering troubles in the job market. Meanwhile, U.S. productivity in the second quarter fell more than previously thought, a big drop that reflects the cooling of the economy.

The data come a day ahead of the government's monthly employment report.

Burger King sold for $4billion £2.6bn

Burger King has been sold to private equity firm 3G Capital in a deal worth $4bn (£2.6bn). The $24-a-share agreement is 46% more than Burger King shares closed at on 31 August.


U.S. stocks fluctuated between small gains and losses Thursday morning as retailers' back-to-school sales topped expectations, but weekly jobless claims continued to suggest a sluggish employment recovery, adding to worries ahead of monthly employment data due Friday.

Retailers delivered a late-summer surprise, with sales for the key back-to-school buying month of August largely coming in better than expected. Kohl's, J.C. Penney and Macy's all beat expectations and the latter two said back-to-school sales were going well. Kohl's climbed 1%, while J.C. Penney jumped 3.3% and Macy's edged up 0.6%.

Thursday's round of U.S. data pointed to continued weakness in the economy. The number of U.S. workers filing new claims last week for jobless benefits edged down slightly, but their high level suggests lingering troubles in the job market. Meanwhile, U.S. productivity in the second quarter fell more than previously thought, a big drop that reflects the cooling of the economy.

The data come a day ahead of the government's monthly employment report. Unemployment currently stands at 9.5%, and that figure Friday is expected to creep up to 9.6% as U.S. employers drop another 110,000 people off the payrolls.

Wednesday, data on private-sector jobs for the month of August disappointed, yet the Dow had its biggest one-day gain in nearly two months thanks to better-than-expected manufacturing data that gave investors the ray of hope they were looking for. After such a big jump on Wednesday, investors were hesitant to move stock up much higher ahead of Friday's employment data.

US Retailers have delivered a late-summer surprise, with sales for the key back-to-school buying month of August largely coming in better than expected.

US Stock Edge Up then Dip as US Jobless Claims Dip

US Stock futures are trading in a tight range after new claims for unemployment benefits fell slightly but still remain above levels considered a sign of a healthy economy. The Labor Department says new claims for unemployment benefits fell by 6,000 to 472,000 last week.


Crude Oil:

The price of crude moved up with the market today, boosted by a declining US Dollar, closing at $75 per barrel.

Natural Gas
Natural gas for October delivery settled down 1.1 cent, or 0.3%, to $3.751 a million British thermal units on the New York Mercantile Exchange.


Precious Metals:
Spot gold at 1:40 p.m. ET: $1,251.25, up $7.35; Range: $1,243.90-$1,253.30

Dec gold $1,253.40, up $5.30; Range $1,245.30-$1,255.20
Dec silver $19.672, up 27.9 cents; Range $19.345-$19.740
Oct platinum $1,551.50, up $15.80; Range $1,531.00-$1,559.90
Dec palladium $525.25, up $5.15; Range $515.40-$526.45



Canadian Market:

Toronto Stocks Up, Led By Banks, Commodity Producers
The stock market was higher at midday Thursday, with the banks and producers of raw materials lifting the broader index as concern eases about the fragility of the global economic recovery.

At 11:45 a.m. EDT (1545 GMT), the S&P/TSX Composite Index was up 68.81 points, or 0.6%, at 12072.59. Advances led declines 760 to 503. Trading volume was 182.2 million shares. The S&P/TSX 60 Index was up 4.73 points, or 0.7%, to 704.02.


Toronto Indexes, Volume; 3 PM EDT Composite Up 81.59

3PM EDT Toronto Indexes
3 PM EDT Toronto Indexes

S&P/TSX Composite 12085.37 up 81.59 or 0.7%
S&P/TSX 60 Index 704.78 up 5.49 or 0.8%
Financials 172.65 up 1.44 or 0.8%
Materials 382.06 up 3.91 or 1.0%
Energy 278.58 up 1.07 or 0.4%
Industrials 102.75 up 0.71 or 0.7%
IT 27.23 up 0.34 or 1.3%

Volume Thursday Wednesday
2-3 49.8M 44.3M
9:30-3 322.6M 354.3M


South American Markets:

Brazil:
Brazil's Bovespa stock index fell in early trading Thursday, then edge up on caution over trends abroad despite strong gains locally by heavyweight state-controlled oil company Petrobras (PBR, PETR4.BR).

As of 1350 GMT, the main Sao Paulo stocks index fell 0.6% to 66,659 points after ending at 67,702 points Wednesday. Traders noted investors were maintaining some pause following a 3% advance of the local index Wednesday on a wave of enthusiasm over trends abroad.

Argentina:
Argentina's July Leading Index +1.2% On Mo; +16.7% On Year


Uruguay:

Uruguay August Inflation Picks Up As Food, Drink Costs Soar
Uruguay's prices rose sharply in August, with the cost of food and drink soaring and leading the gains. The consumer price index in August jumped 1.2% on the month, bringing inflation so far this year to 5.46%, the national statistics agency, or INE, reported Thursday.

Over the past 12 months, consumer prices have risen 6.25%, INE said. In August, food and drink prices rose 2.67% on the month, while education costs jumped 1.65%. Housing costs also rose a steep 1.03%

Uruguay's central bank is working hard to contain price gains this year, but is facing runaway inflation in neighboring Argentina and strong economic growth that is fueling rising consumer costs.



European Markets:

UK Summary:FTSE 100 Ends A Touch Higher After Flat Session
FTSE 100 5371.04 +4.63 +0.09%
FTSE 250 10140.97 +80.08 +0.80%
DJ UK Smaller Companies 832.86 +6.07 +0.73%

Royal Bank of Scotland Group PLC (RBS) said Thursday that it will cut 3,500 positions in its back-office operations across the U.K., as it continues to shrink its businesses.

U.K. mortgage lender Nationwide Building Society (NANW.LN) Thursday said house prices fell for the second straight month in August, but said overall price declines are likely to be "relatively modest."

Demand at the latest auction of U.K. government bonds weakened Thursday as investors were deterred by the low yield on offer and recent volatility in the financial markets.

Europe’s muddled action comes after it was announced eurozone GDP increased 1.0% in the second quarter. That matched what had been previously reported. The European Central Bank (ECB) announced that its target lending rate will remain at 1.00%, as expected. ECB President Trichet stated in a press conference that unlimited offerings will be extended into 2011.

Germany will soon present a joint initiative to tighten the oversight of commodity derivatives, with a view to then promoting it at a European level.

AMF chairman Jean-Pierre Jouyet said France and Germany would join forces for the plan to go through in Europe. Jouyet added he was in favor of the new European securities regulator, to be created early next year, having extensive powers, such as the possibility to impose temporary bans on short-selling if necessary.

Austria:

Austrian Central Bank Raises GDP Outlook Due To Strong Exports
Austria's economy will expand more than previously assumed, due mainly to a stronger-than-anticipated pick-up in exports, the Austrian National Bank said Thursday in its latest full-year economic forecast. The Austrian National Bank, or OeNB, now expects gross domestic product to grow by 1.8% in 2010, an upward revision from its June forecast of 1.6% growth.

OeNB highlighted, in particular, a 16% year-on-year increase in second-quarter exports as a driving factor in the upward revision. It also noted, however, that second-quarter exports still remained 15% below the pre-economic crisis level.

OeNB said it expects Austrian inflation to remain "moderate" for the remainder of 2010, but it didn't provide a detailed estimate. At the start of the year, the central bank had estimated GDP would grow by 1.2% in 2010.



EU Approves EUR264 Mln Crisis Aid For 19 Countries

The European Union began to disburse on Thursday EUR264 million in aid to help 19 of the most vulnerable African, Caribbean and Pacific countries cope with the global economic crisis.

The funding is the second part of a EUR500 million program launched last year to help countries "most affected by the crisis due to their poor resilience to external shocks," the European Commission said. The EU's executive arm approved EUR14 million for Burkina Faso and EUR3.5 million for Grenada on Thursday.

Allocations for the other 17 countries will be made later this year--Antigua & Barbuda, Benin, Burundi, Cape Verde, Central African Republic, Guinea Bissau, Haiti, Lesotho, Liberia, Malawi, Congo, Samoa, Sierra Leone, Togo, Tonga, Tuvalu and Zimbabwe.

Thousands of workers in India ransacked the offices of a refinery run by U.K. resource giant Vedanta Resources PLC (VED.LN), media reports said Thursday, in the latest of a series of difficulties for the company.



Asian Pacific Markets:

Nikkei up 1.5 pct, climbs further above 16-month low.

Market Summary:

Stocks:

Investors eagerly bought up stocks and other risky assets, looking to leave behind a bleak month of economic gloom."Investor sentiment was so negative that any flicker of light was going to move sentiment with quite a roar, and that's what we got," said Anthony Chan, chief economist at J.P. Morgan Private Wealth Management. "With the [industrial data] coming out of two largest economies in the world - China and the U.S.- coming in larger than expected, you can't ignore that this is good news."

World Markets Snapshot:

Shanghai	2,655.78	+32.89 (1.25%)
Nikkei 225	9,062.84	+135.82 (1.52%)
Hang Seng Index	20,868.92	+245.09 (1.19%)
TSEC	7,720.82	+52.57 (0.69%)
FTSE 100	5,371.04	+4.63 (0.09%)
CAC 40	3,631.43	+7.59 (0.21%)
S&P TSX	12,082.37	+78.59 (0.65%)
S&P/ASX 200	4,532.70	+37.00 (0.82%)
BSE Sensex	18,238.31	+32.44 (0.18%)

Treasurys:

Treasurys suffered broad-based losses Wednesday as the latest batch of global data eased worries about the economic outlook, sapping demand for safe assets. Selling was driven mainly by better-than-forecast increases in the manufacturing sector for both China and the U.S., the two main engines of the global economy. The data came as a relief for many investors after recent data, especially from the U.S., had raised worries that the economic recovery could lose traction in the second half of the year.

Forex:

The dollar slumped against its higher-yielding rivals after positive global economic data encouraged investors to dip into currencies closely tied to global growth. Better-than-expected U.S. manufacturing figures added fuel to the rally in higher-yielding currencies, helping the Australian dollar push nearly 2% higher against the U.S. currency, while the euro racked up a gain of about 1%.

Currency Markets Grows
A broader array of participants are piling into currency trading, by far the world's biggest market, while robust growth is being driven by simple spot trades, new data show.

Over the past three years, trading volumes of a group of currency players ranging from day-traders at their kitchen-table laptops to hedge-fund experts to computer-driven traders has surpassed volume from the big banks that once dominated the market, a major survey showed.

Average daily trading among "non-dealers'--everyone from big-money vehicles such as hedge funds to mutual funds, insurance companies and smaller banks and investment outfits--grew 42% since 2007 to $1.9 trillion as of April, according to the survey by the Bank for International Settlements. This outstripped the 11% rise in transactions between bank dealers to $1.5 trillion a day.

"The expansion of electronic brokering and algorithmic trading systems has been a major factor in this trend," said Hideki Amikura, deputy general manager of the foreign-exchange section at Nomura Trust and Banking in Tokyo.

The entire global currency market has grown 20% over the past three years to a staggering $4 trillion a day, the BIS said in its closely watched triennial survey.

US Dollar declines, Index Futures DXY: 82.38, The euro edged up on Thursday after healthy results at Spanish and French bond auctions.

Currencies:

EUR/USD 1.2820 +0.0024 (0.19%)
USD/JPY 84.1900 -0.2900 (-0.34%)
GBP/USD 1.5398 -0.0047 (-0.30%)
CAD/USD 0.9517 +0.0015 (0.16%)
USD/HKD 7.7723 -0.0021 (-0.03%)
USD/CNY 6.8070 -0.0032 (-0.05%)
AUD/USD 0.9084 0.0000 (0.00%)

Commodities
Crude Oil	74.96	+ 1.38%
Natural Gas	3.78	+ 0.83%
Gasoline	1.92	-
Heating Oil	2.06	-
Gold	1251.58	+ 0.56%
Silver	19.66	+ 1.55%
Copper	3.49	+ 0.55%
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Thursday's US Economic Calendar

12:01 Noon EST
Aug U.S. Monster Employment Index

8:30 a.m.
Aug 28 Unemployment Insurance Claims Report - Initial Claims Weekly Jobless Claims (expected 470K), Net Change (expected -3K), (prior week) (previous 4456000), Cont Jobless Claims Net Chg (prior week) (previous -62K)

8:30 a.m.
2Q Revised Productivity & Costs

Non-Farm Productivity (expected -1.9%), Unit Labor Costs (expected +1.1%) 0905/A
Cleveland Fed Pres Pianalto, Boston Fed Rosengren speak in Washington

10:00 a.m.
Aug 21 DJ-BTMU Business Barometer (previous +0.2%), Barometer (52 Wk) (previous +5.1%)

10:00 a.m.
July Pending Home Sales Index Current (previous 75.7), MoM Pct Change (Current Period) (expected -1%), YoY Pct Change (Current Period) (previous -18.6%)

10:00 a.m.
July Manufacturers' Shipments, Inventories & Orders (M3) Total Orders (expected +0.2%), Orders, Ex-Defense (previous -1.1%), Orders, Ex-Transportation (previous -1.1%), Durable Goods 1st Est (previous -1%), Durable Goods Revised (previous -1.2%)