Stock Market Update - Tuesday, Nov. 9, 2010 - Mixed Outlook - Minor Gain Possible

Stock Market Update

Tuesday, Nov. 9, 2010

Latest US Economic News Headlines:

USA EQUITY INDEXES: (NOV. 9, 4:00 PM EST)

Dow Jones 11,346.75 -60.09 (-0.53%)
S&P 500    1,213.40 -9.85  (-0.81%)
Nasdaq     2,562.98 -17.07 (-0.66%)


Dow Jones 12:30 PM Averages: DJIA 11,374.07 DN 32.77
  30 INDUS     11,374.07 DN   32.77 OR    0.29%
  20 TRANSP     4,883.27 DN   41.19 OR    0.84%
  15 UTILS        406.68 DN    0.08 OR    0.02%
  65 STOCKS     3,944.55 DN   16.13 OR    0.41%

US COMMODITY PRICES: (NOV. 9, 4:00 PM EST)
Crude Oil     86.05     - 0.77%
Natural Gas     4.20     - 0.19%
Gasoline     2.17     - 0.61%
Heating Oil     2.39     - 0.59%
Gold     1391.62     - 1.30%
Silver     26.80     - 3.39%
Copper     3.95     - unchanged

US DOLLAR FUTURES INDEX DXY: NOV. 9, 4:00PM EST: 77.72  Up 0.69 (0.90%)

US Stocks Close Lower Commodities Rise
Dollar Up

Wall Street pulled back Monday as the dollar rose and traders retreated. At the close in the late afternoon, U.S. stocks and commodities  were mixed, mostly lower after moving up from the market open.

US Indexes turned red as investors remained hesitant to add to the market's climb against the dollar's gains. The materials and energy sector continue to make gains.The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, rose 0.4%. In early morning trading the euro edged up to $1.3844.  

Market Testing Key Levels
The U.S. Dollar is near its lower support area and the equities are at the near-term highs. The major indexes are sitting near their levels when Lehman Brothers failed in September 2008. The next major resistance level for the S&P 500 is around 1300. The index is currently trading above 1220.

COMMODITY PRICES SOAR
A broad array of commodities, including sugar, corn, wheat, soy, silver and gold, are hitting multi-year highs as producers of metals and agricultural goods are finding it increasingly more difficult to meet robust demand.

CRUDE OIL:

Crude Oil: $87.09 per barrel
OIL FUTURES: Nymex Crude Settles 34c Lower At 86.74/Bbl

Light, sweet crude for December delivery rose 23 cents, or 0.3%, at $87.27 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange gained rose 36 cents, or 0.4%, to $88.82 a barrel.

Front-month December reformulated gasoline blend-stock, or RBOB, recently traded up 1.37 cents, or 0.6%, higher at $2.1922 a gallon. December heating oil gained 2.03 cents, or 0.9%, at $2.4380 a gallon.

EIA Raises Oil Price Outlook

Oil prices are expected to hit $87 a barrel by the end of 2011 as global economic conditions improve, according to the U.S. Energy Information Administration.

The EIA also raised its projections for the fourth quarter of 2010, and now sees crude prices at $82.63 a barrel by the end of this year.

Light, sweet crude for December delivery recently traded up 14 cents, or 0.2%, to $87.20 a barrel on the New York Mercantile Exchange.

OPEC
Production quotas are unlikely to be changed when the Organization of Petroleum Exporting Countries meets next month, Qatar Oil Minister Abdullah bin Hamad Al Attiyah said Tuesday.

NATURAL GAS:

Natural Gas $4.12
US GAS: Futures Settle 3% Higher At $4.210/MMBtu

Natural gas futures were lifted Tuesday. Natural gas for December delivery rose 0.5 cent, to $4.093 a million British thermal units on the New York Mercantile Exchange. Futures earlier Tuesday rose as high as $4.210/MMBtu.

The Energy Information Administration's weekly gas storage report is scheduled for release at Noon EST Wednesday.

PRECIOUS METALS:

US Gold: $1,422
US Silver: $ 28.94

Gold and Silver Breaking Record Highs
The most actively traded gold contract, for December delivery, rose $6.90, or 0.5%, to settle at a record $1,410.10 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract hit an intraday record of $1,424.30.

Settlements (Ranges include Floor and Electronic Trading):

London PM Gold Fix: $1,421.00; previous PM $1,388.50
Dec gold $1,410.10, up $6.90; Range $1,398.20-$1,424.30
Dec silver $28.906, up $1.474; Range $27.530-$29.340
Jan platinum $1,809.60, up $38.50; Range $1,765.70-$1,811.80
Dec palladium $742.65, up $31.75; Range $704.15-$743.50

The Engelhard Corp's base price for industrial gold bullion was $1424.70 per troy ounce, up $33.19 from Monday. It's selling price for gold in fabricated form was $1530.87, up $35.00.

The Handy & Harman's base price for gold was $1421.00 per troy ounce, up $32.50. The fabricated form price was $1534.68, up $35.10.

U.S. TREASURYS/BONDS:
Treasurys fell, pushing the yield on the 10-year note up to 2.61%.

World Government Bond Yields (10yr): US (2.590%); UK (3.033%); JPN (0.970%); GER (2.412%): GRC (11.217%); POR (6.577%); SPN (4.379%); ITY (4.022%) 3 Month     0.10%     0.00 (0.00%) 6 Month     0.15%     0.00 (0.00%) 2 Year     0.43%     +0.04 (10.26%) 5 Year     1.23%     +0.11 (9.82%) 10 Year     2.64%     +0.10 (3.94%) 30 Year     4.24%     +0.14 (3.41%)

FDIC APPROVES INSURANCE COST PLAN FOR SMALL BANKS
U.S. banking FDIC regulators approve an initial plan to change the way they calculate how much community banks pay for deposit insurance..

IBD/TIPP Economic Optimism Index Report

U.S. consumers are more upbeat about the economy, but less so about their own finances, in November than they were a month earlier, according to a report released Tuesday.

The IBD/TIPP Economic Optimism Index, compiled by Investor's Business Daily and TIPP, a unit of TechnoMetrica Market Intelligence, rose 0.6% to 46.7 in November from 46.4 in October. The index's all-time average is 50.7.

The Six-Month Economic Outlook, a measure of how consumers feel about the economy over the next six months, increased 0.4 point to 50. The Personal Financial Outlook, a gauge of how Americans feel about their personal finances in the next six months, dropped 1.2 points to 51.9.

The index of confidence in federal economic policies, a view of how government policies are working, improved 1.8 points to 38.3. Only three of the 21 demographic groups IBD/TIPP tracks were above 50 on the main index. The index is based on a survey of 900-plus U.S. adults chosen at random. IBD/TIPP conducted the survey of 912 people from Nov. 1-6.

Soybean futures for January delivery at the Chicago Board of Trade on Tuesday shot to a fresh contract high of $13.43 3/4, and a fresh two-year high basis nearby futures, in the wake of a surprisingly bullish USDA report issued Tuesday morning. The rare utterance, "beans in the teens" has provided the soybean bulls with a treat.

January soybean futures prices are in a 17-week-old uptrend on the daily bar chart.The all-time record high for nearby soybean futures was reached at $16.60 a bushel in July of 2008. 

US September Wholesale Inventories Rise

Inventories at U.S. wholesalers grew in September more than twice as much as expected. Wholesale inventories climbed by 1.5% to a seasonally adjusted $416.95 billion, the Commerce Department said Tuesday.

Sales of distributors climbed 0.4% to $353.88 billion. Wholesalers' sales in August rose an unrevised 0.5%. Wholesalers account for about 30% of all business inventories in the U.S., with manufacturers and retailers making up the rest. During the third quarter, inventory accumulation was responsible for nearly 75% of the economy's modest 2.0% growth. 

The Commerce report showed the amount of goods on hand relative to sales is low, which indicates factories will keep churning out goods.

Tuesday's data on wholesalers showed inventories of durables, which are goods such as cars and televisions meant to last three or more years, rose 0.7% in September. Sales of durables climbed 0.2%. Non-durable goods inventories soared 2.8%, with a big jump in farm products. Non-durable sales increased 0.6%.

The Commerce Department data are available online at: 
http://www2.census.gov/wholesale/pdf/mwts/currentwhl.pdf


U.S. Grain Reserves Sept. 2010
USDA and PSD Data Released Tuesday, November 09, 2010

Source: Foreign Agricultural Service, Official USDA Estimates
Production, Supply and Distribution Online (PSD)
The Foreign Agricultural Service's Production, Supply and Distribution (PSD) online database.
http://www.fas.usda.gov/psdonline/psdHome.aspx

GRAIN RESERVES ARTICLE:
http://www.standeyo.com/NEWS/10_Food_Water/101108.grain.reserves.html

Just since September supplies have dwindled both here in the U.S. and through the world's developed nations. As of October 8, America's 69-day grain stockpile has shrank to an unsettling 53 day supply.

U.S. Grain Reserves Chart:

http://www.standeyo.com/NEWS/10_Food_Water/10_Food_Water_pics/101107.grain.reserve.chart.gif

U.S. GRAINS AT RECORD 2008 HIGHS
ON USDA FORECAST 
Grains futures prices touched their highest in more than two years Tuesday as the Agriculture Department slashed its expectations for the soybean crop, surprising the market.

According to Kansas State University's Grain Market Outlook from two weeks ago, contracts for roughly 800 million bushels corn and wheat have yet to be filled. Soybeans, which aren't included in the "blue" chart have outstanding commitments of 796 million bushels.

In New York, March raw sugar futures climbed to a 30-year high of 33.32 cents a pound. Raw sugar prices have not been this high since the early 1980s when prices reached 45 cents/lb.

Sugar prices have more than doubled since May as weather concerns in producers, including the world's largest producer Brazil, have sparked fears the hoped-for surplus in world markets this season won't appear.

Coffee prices also rose Tuesday, with December arabica futures on New York's ICE exchange rising to a high of $2.1525/lb while robusta futures in London rose to a fresh 25-month high of $2,098/ton on the January contract.

From a longer-term technical perspective, it would take a drop in nearby futures prices below longer-term technical support at the $10.75 area to produce significant longer-term chart damage to suggest that a major market top is in place for soybean futures.

Near-term chart resistance for January soybean futures comes in at Tuesday's contract high of $13.43 3/4, at $13.50, $13.75 and then at $14.00. Near-term technical support is located at $13.00, at $12.90, at Tuesday's low of $12.69 1/2 and then at $12.50.

The department cut its soybean production expectations to 3.375 billion bushels, down from 3.408 billion bushels forecast in the previous month. Analysts had expected an increase, spurring a jump in prices later subdued.

The agency also downgraded further its estimates for corn, which comes on top of record forecast cuts in October. Analysts had expected the decrease, however.

As revised, corn’s 2010/2011 production is expected by the Agriculture Department to total to 12.54 billion bushels, down from 12.664 billion bushels seen in the prior month.

Government forecasters also lifted production expectations for soybeans in Brazil and Argentina, among the world’s top producers, but analysts were concerned about potential dry-weather conditions in these two countries.

Wheat for December delivery reverted lower, trading at $7.32 per bushel. Wheat had traded as high as $7.96 per bushel, its best since mid-2008.


TUESDAY CONFERENCES:
Among the significant financial conferences today are;

Credit Suisse Group Health Care Conference from Tuesday through Friday in Phoenix.

JP Morgan Ultimate Services Investor Conference on Tuesday in New York.

Piper Jaffray Technology, Media & Telecommunications Conference on Tuesday and Wednesday in New York.

Robert W. Baird Industrial Conference on Tuesday and Wednesday in Chicago.

Wells Fargo Securities Technology, Media & Telecom Conference on Tuesday and Wednesday in New York.

____________________________________________________________

Canadian Market:

Toronto Stocks Down Mixed
In mixed trading, material providers continue to drive the Toronto exchange with oil, copper, silver and gold breaking record highs.  At 11:45 a.m. EST, the S&P/TSX Composite Index was up 14.35 points, or 0.11%, at 13066.83. Advancers outpaced decliners 828 to 662. Trading volume was 376.3 million shares. The S&P/TSX 60 Index was flat at 747.30 points.

The Canadian dollar is ending moderately lower Tuesday after a U.S. dollar rebound midway through the session undercut earlier gains.

The U.S. dollar was at C$1.0060 at 3:25 p.m. EST (2025 GMT), from C$0.9999 at 8:00 a.m. EST and C$1.0022 late Monday.

Exchange rates at 3:31 p.m. EST, 8:00 a.m. EST, and late Monday.

            USD/CAD   1.0060  0.9999  1.0022
            EUR/CAD   1.3867  1.3950  1.3950
            CAD/JPY    81.36   80.62   80.98





Toronto Indexes, Volume; 3 PM EST Composite Down 89.46

 S&P/TSX Composite   12963.02  off  89.46  or 0.7%
 S&P/TSX 60 Index      742.38  off   4.58  or 0.6%
 Financials            181.43  off   1.77  or 1.0%
 Materials             423.91  off   5.18  or 1.2%
 Energy                304.02  off   0.17  or 0.1%
 Industrials           106.72  off   0.37  or 0.3%
 IT                     30.11  up    0.53  or 1.8%

   Volume      Tuesday   Monday
   2-3                80.1M     73.0M
   9:30-3            648.7M    529.6M

____________________________________________________________

South American Markets:

BRAZIL:

Brazilian Stocks End Lower

Brazilian stocks closed lower Tuesday.Blue chips were mixed, with commodity producers falling as oil prices ended declined at the end of the day.

The benchmark Ibovespa stock index closed at 71679 points, down 1.4% from Monday's close of 72657.

Leading gainers was ALL America Latina Logistica (ALLL3.BR), Brazil's biggest railroad company. ALL reported a 20% jump in third-quarter profit, and rose Tuesday 3.2% to BRL15.95.

Government-controlled energy giant Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, fell 1.53% to BRL 27.12.

Vale SA (VALE5.BR, VALE), the world's biggest iron-ore producer, dropped 0.14% to BRL49.69.

MMX Mineracao e Metalicos SA (MMXM3.BR), the iron-ore producer controlled by Brazilian billionaire Eike Batista, rose 1.11% to BRL13.70.

Usinas Siderurgicas de Minas Gerais (USIM5.BR, USNZY), Brazil's biggest maker of flat steel for the automotive industry, declined 2.35% to BRL22.40.

Telephone giant Tele Norte Leste SA (TNE, TNLP4.BR), or Oi, gained 0.4% to BRL25.75.

Minas Gerais utility Cemig (CIG, CMIG4.BR) added 0.24% to BRL29.60.

Aircraft manufacturer Empresa Brasileira de Aeronautica (ERJ, EMBR3.BR), or Embraer, fell 2.6% to BRL12.37.

Ending lower were Real-estate developers and banks led declines on the index, with Cyrela Brazil Realty SA Empreendimentos e Participacoes (CYRE3.BR) and Gafisa SA (GFSA3.BR), the country's biggest home-building companies, slipping more than 5% each. Gafisa slid 6.04% to 13.53 Brazilian reais ($7.98), while Cyrela fell 5.39% to BRL21.05. Banco Santander do Brasil SA (SANB11.BR), the Brazilian unit of Spain's biggest bank, fell 5.59% to BRL24.50. 

Brazilian Inflation Accelerates

A surge in food costs pushed Brazilian consumer prices higher in October, setting the stage for a new round of monetary tightening, perhaps as soon as the first quarter of 2011. Food and commodities prices jumped 14% between July and October .

The official IPCA consumer price index gained 0.75% in October compared with 0.45% in September, the Brazilian Census Bureau, or IBGE, said Tuesday. The index was pushed up by seasonal factors affecting food prices.

In the 12 months through October, the IPCA rose at a 5.20% pace versus 4.70% in the 12 months through September. The September figure was already above the government's official year-end 2010 target of 4.50%. A similar target has been adopted for end-2011.

Consumer prices will likely continue to rise through the end of the year, said Santander Economia's Tatiana Pinheiro. The fourth quarter typically sees seasonal pressures, as families ramp up purchases of specialty items for year-end holiday celebrations.

Food prices, which carry the heaviest weighting in the index, posted a strong advance in October, registering their biggest monthly increase since June 2008, the IBGE said. Food and beverage prices surged 1.89% compared with a 1.08% increase in September. Food prices had declined in June, July and August. Nonfood prices also rose in October, gaining 0.41% after rising 0.27% in September and 0.12% in August, IBGE said.

The central bank's latest survey of analysts and economists, released Monday, estimated 2010 year-end inflation at 5.31%, up from an estimate of 5.29% a week earlier. For 2011, the IPCA is expected to weigh in at 4.99%.

ECUADOR:
.
Ecuador October Consumer Price Index Rose 0.25%

Ecuador's consumer price index rose 0.25% in October, virtually unchanged from the pace of increase in September, the National Institute of Statistics and Censuses, or Inec, said Tuesday on its website. In September the consumer-price index rose 0.26%.

The cities with the highest increases in CPI in October included Guayaquil, Quito and Ambato.Inec attributed October's data to increases in the cost of food and beverages.

The CPI rose 3.46% over the 12-month period through October. In October of last year, the CPI was up 3.50% on year. The accumulated CPI rise between January and October was 2.52%, compared with 3.37% registered in the same period last year.

Inec also said the cost of the basic basket of consumer goods was $540.10 in October while the cost of the so-called living basket for minimum subsistence was $386.32. The baskets are calculated on the monthly needs of an average four-person Ecuadorean family with 1.6 salary earners.

The government has said inflation is expected to be 3.1% this year, after reaching 4.31% in 2009.

CHILE:

Chile Stocks End At Record High

The peso ended at CLP476.90 to the dollar - Peso ended stronger than dollar

Chile's blue-chip Ipsa index ended higher at a second straight record as select stocks gained on strong earnings and investment bank recommendations.

The Ipsa ended 0.4% higher at 5024.90, while market volume grew to 122.7 billion Chilean pesos ($257.3 million) from CLP83.3 billion the prior session.

Among gainers, shopping center developer Parque Arauco (PARAUCO.SN) jumped 4.6% to a 52-week high of CLP1,180.00, after local investment bank Celfin Capital increased its 2011 year-end target price to CLP1,298 per share. Celfin Capital also upgraded Parque Arauco's recommendation from hold to buy.

The nation's largest retailer Falabella (FALABELLA.SN) increased 1.1% to CLP4,820.00, after Mall Plaza, which is controlled by Falabella, said it aimed to become the leading operator of shopping malls in Colombia.

La Polar (LAPOLAR.SN), which recently opened its first store in Colombia and has said that within a decade its operations in Chile will likely be eclipsed by those in Colombia, expanded 2.0% to CLP3,602.50.

Telecommunications operator Entel (ENTEL.SN) rose 2.0% to CLP8,127.50 after posting a better-than-anticipated 22% on-year gain in third quarter net profits to 45.9 billion. Traders see additional upside potential for Entel.

Flagship carrier LAN Airlines (LFL, LAN.SN) pared back earlier gains to end 0.2% lower at CLP14,799.00 after the European Commission fined it and 10 other airlines a total of EUR799 million for forming a global cartel to fix air-freight tariffs, mainly fuel surcharges.

____________________________________________________________

European Markets:

European Stocks End Higher
The euro was down 0.4% at $1.3865. The British pound fell 0.5% to $1.6056.

The Stoxx Europe 600 index ended up 0.6% at 273.46. The U.K.'s FTSE 100 closed up 0.4% at 5875.19 . Germany's DAX gained 0.6% to 6787.81 and France's CAC-40 closed 0.8% higher at 3945.71.

The Stoxx Europe 600 basic resources index rose 2.0% to 598.25 as base and precious metal prices continued to sprint higher. Copper in particular was strong and surged to a two-year high while gold raced above the $1400 per ounce mark.

LONDON:

U.K. industrial production data for September were in line with consensus expectations, rising 0.4% month-on-month.

GERMANY:

Deutsche Post AG rose 4.1% after the company swung to a third-quarter net profit.

FRANCE:

Shares of Hermes International rallied 7.6% after the luxury-goods maker reported a 31% rise in third-quarter sales and lifted its outlook.

FRENCH COURT PASSES PENSION LAW
France's constitutional court approves President Nicolas Sarkozy's retirement reform bill that has drawn millions on to the streets in weeks of protests, and he now has 15 days to sign it into law. 

SWITZERLAND:
Shares of Adecco advanced 3.7% after the personnel-services firm said its third-quarter net profit surged 42% and revenue increased sharply.

DENMARK:
Danish brewer Carlsberg slumped 5% after the group said market conditions remain "challenging" in several Northern and Western European markets. The firm also warned it will be impacted by rising input costs and will have to increase sales prices.

____________________________________________________________
Asian Pacific Markets:
(pending news)

____________________________________________________________
WORLD FOREX CURRENCIES SNAPSHOT:
(TUESDAY, NOV 9, 2010 4:10 PM EST)

EUR/USD     1.3862     -0.0056 (-0.40%)
USD/JPY     81.1500  0.0000 (0.00%)
GBP/USD     1.6046     -0.0097 (-0.60%)
CAD/USD     0.9987     +0.0021 (0.21%)
USD/HKD     7.7511     +0.0003 (0.00%)
USD/CNY     6.6424     -0.0367 (-0.55%)
AUD/USD     1.0115     -0.0004 (-0.04%)


WORLD MARKETS SNAPSHOT:
(TUESDAY, NOV 9, 2010 4:10 PM EST)

Shanghai     3,135.00     -24.51 (-0.78%)
Nikkei 225     9,694.49     -38.43 (-0.39%)
Hang Seng Index     24,710.60     -253.77 (-1.02%)
TSEC     8,445.63     +15.05 (0.18%)
FTSE 100     5,875.19     +25.23 (0.43%)
DJ EURO STOXX 50     2,890.64     +22.68 (0.79%)
CAC 40     3,945.71     +32.01 (0.82%)
S&P TSX     12,916.63     -135.85 (-1.04%)
S&P/ASX 200     4,740.70     -37.70 (-0.79%)
BSE Sensex     20,932.48     0.00 (0.00% 



____________________________________________________________
TUESDAY'S U.S. ECONOMIC CALENDAR:

7:30 a.m.
Oct NFIB Index of Small Business Optimism Index (previous 89)

7:45 a.m.
Nov 6 ICSC-Goldman Sachs Chain Store Sales Index - WoW (previous +0.1%), YoY (previous +2%)

8:30 a.m.
World Agricultural Supply & Demand Estimates (WASDE)

8:55 a.m.
Nov 6 Johnson Redbook Retail Sales Index MoM % Change (previous +0.2%), 12MonChgPct (previous +2.6%), 52WkChgPct (previous +2.5%)

10:00 a.m.
Sept. Job Openings & Labor Turnover Survey

10:00 a.m.
Nov IBD/TIPP Economic Optimism Index Economic Optimism Index (previous 46.4), 6-Month Economic Outlook (previous 49.6)

10:00 a.m.
Sept. Monthly Wholesale Trade Inventories (expected +0.6%)

4:30 p.m.
Nov 6 API Weekly Statistical Bulletin Crude Stocks (Net Change) (previous -4.14M), Gasoline Stocks (Net Change) (previous -3.2M), Distillate Stocks (Net Change) (previous -4.73M), Refinery Runs (previous 81.2%)

5:00 p.m.
Nov 7 ABC News Consumer Confidence Index (previous -46)

____________________________________________________________
US STOCK MARKET SUMMARY, MONDAY, NOV. 8, 2010:

Stocks:
U.S. stocks were mixed as the Dow Jones Industrial Average fell and the Nasdaq Composite rose amid resurging concerns over European sovereign debt, and international disputes about the Federal Reserve's recent actions.

Treasurys:
Treasury prices fell, pressured by a heavy slate of new bond supply from both the U.S. government and the private sector. The Treasury auctioned $32 billion notes at a second-lowest yield ever of 0.575%, allowing the U.S. government to borrow at historically low interest rates to fund a budget shortfall. The record low yield was set at last month's sale, at 0.569%.

Forex:
The euro declined against the dollar and yen as investors renewed their scrutiny of the euro-zone periphery nations, especially Ireland. Many investors pared aggressive bets in favor of the common currency due to debt problems in Ireland, Portugal and Spain, analysts said. The cost of insuring against sovereign debt defaults for those nations went up overnight.



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