Stock Market Update - Thursday, Nov.11, 2010 - Mixed Outlook

Stock Market Update

Thursday, Nov.11, 2010

Latest US Economic News Headlines:

USA EQUITY INDEXES: (NOV. 11, 4:10 PM EST)


Dow Jones 11,283.10 -73.94 (-0.65%)
S&P 500    1,213.54 -5.17 (-0.42%)
Nasdaq     2,555.52 -23.26 (-0.90%)



Dow Jones 3:30 PM Averages: DJIA 11,277.91 DN 79.13
  30 INDUS     11,277.91 DN   79.13 OR    0.70%
  20 TRANSP     4,860.53 UP    9.28 OR    0.19%
  15 UTILS        403.42 DN    0.06 OR    0.01%
  65 STOCKS     3,915.80 DN   12.38 OR    0.32%

US COMMODITY PRICES: (NOV. 11, 4:00 PM EST)
Crude Oil     87.72     - 0.10%
Natural Gas     3.93     + 0.13%
Gasoline     2.24     -
Heating Oil     2.43     -
Gold     1408.84     + 0.39%
Silver     27.71     + 2.10%
Copper     4.02     + 1.31%

US DOLLAR FUTURES INDEX DXY: NOV. 11, 3:52PM EST: 78.17   0.53 (0.68%)

US Stocks Lower

US Dollar Up - Stocks Slip

US Stock Indexes remained lower throughout the trading day Thursday as the U.S. Dollar regained from the over-night trade pattern..


US Stocks Open Lower; DJIA Down 121

U.S. stock indexes slipped in early trading as the dollar regained against other currencies and poor earnings eyed. The Nasdaq was down by nearly 2% and other major US indices slumped Thursday after a weak outlook from Cisco late Wednesday raised concerns about the strength of tech spending. The Dow Jones Industrial Average was down by 87 points at 10:15a.m. EST.  Earlier, the Dow Jones Industrial Average was down 92 points, or 0.8%, to 11264.

The technology-heavy Nasdaq Composite, which has risen in 21 of the last 25 trading days, was recently down 1.4% at 2544. The Standard & Poor's 500-stock index fell 0.8% to 1209, with technology and financial stocks leading the declines.


Before the bell, stock futures pointed lower Thursday as the dollar is trading above Wednesday's close and a weak outlook from Cisco (CSCO) late Wednesday raised concerns about the strength of tech spending. 

Futures declined as the dollar regained value after overnight trading. The S&P 500 futures declined 6.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 53 points, and Nasdaq 100 futures dipped 19.5 points.

The dollar was slightly higher, up 0.3 percent against a basket of major currencies .DXY is still 12 percent weaker than its June high. The US Dollar Index rallied off support at 76, but is now encountering resistance at 78.5.

The G20 leaders’ summit in Seoul has taken center stage amid the fact that the renewed Fed QE2 is a deliberate move to devalue the US Dollar, boost commodities and exports.



THURSDAY EQUITIES:

DISNEY EARNINGS UP

The Walt Disney Co 4Q Studio Entertainment Rev $1.59B

The 4th Quarter Adjusted earning per share seen at 45cents after the 4Q restructuring, charges of $58M.
 
Disney showed a slight improvement in revenue with earnings down a bit as it benefits from strong international box-office and consumer-products sales for "Toy Story 3." Disney's prior-year quarter included an extra week, which could hurt theme-park comparisons.


Among other stocks in focus, Jabil Circuit dropped 8.1% and Flextronics fell 3.4% after Citigroup cut its investment ratings on both companies to "hold" from "buy," citing their exposure to Cisco. Other technology companies slumping after Cisco's results include Juniper Networks, which is down 1.8%, and Altera Corp., off 3.2%.

Viacom's third-quarter earnings fell 59% on write-downs at the Harmonix video-game operation, which the media company disclosed Thursday it plans to sell. Outside that, revenue improved and earnings from continuing operations rose more than analysts expected. Shares rose 4.1%.

Cisco Systems Inc's (CSCO) revenue forecasts fell far short of expectations, a blow at the end of a stronger-than-expected earnings season, underscoring the risks a still-weak economy poses to corporate profits. Cisco shares fell 16.4 percent to $20.47 in pre-market trading.

Ceremony To Launch Work On Disabled Vets Memorial
Secretary of Veterans Affairs Eric Shinseki and actor Gary Sinise will be among the speakers at a ground-breaking ceremony Wednesday for the American Veterans Disabled for Life Memorial in Washington, D.C. The memorial will be the only permanent public tribute to more than 3 million living disabled U.S. veterans.

Veteran's Memorial Day Holiday

All U.S. Government offices, public schools, banks, and postal services will be shut in observance of the national holiday. We the citizen's of America, thank every veteran that has served our country.

We think and remember the sacrifice and loss that all American families have made during wartime. We look forward to a time when country's can find a better way to settle their differences than more bloodshed upon this earth.

CRUDE OIL:

US Crude Oil: $87.81 per barrel

OIL FUTURES: Nymex Crude Closes Up 3c at $87.84/BblCrude futures rose slightly Thursday after retreating from fresh highs reached in electronic trading following strong economic data from China.

Light, sweet crude for December delivery gained 8 cents, or 0.1%, at $87.89 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose a penny at $88.97 a barrel. Nymex crude previously hit a 25-month high of $88.63 in electronic trading, but retreated from that level.

Oil market participants are closely watching the fast-growing Chinese economy. The International Energy Agency expects the country to account for more than 40% of growth in global oil demand this year.

Front-month December reformulated gasoline blend-stock, or RBOB, recently fell 0.19 cent at $2.2343 a gallon. December heating oil gained 0.55 cent at $2.4364 a gallon.

NATURAL GAS:

Natural Gas: $ 4.05 
US GAS: Futures Settle Down 2.9% At $3.927/MMBtu

PRECIOUS METALS:

Gold: $1,403

Silver: $ 27.40

The most actively traded contract, for December delivery, rose $4, or 0.3%, to settle at $1,403.30 a troy ounce on the Comex division of the New York Mercantile Exchange. Comex December silver rose 54 cents, or 2%, to settle at $27.405.

Other precious metals traded in New York also rose. Nymex January platinum gained $7.90, or 0.5%, to settle at $1,745.80 an ounce, while December palladium gained $7.40, or 1.1%, to settle at $704.15.

Settlements (Ranges include Floor and Electronic Trading):

London PM Gold Fix: $1,398.50; previous PM $1,390.50
Dec gold $1,403.30, up $4.00; Range $1,396.50-$1,417.60
Dec silver $27.405, up 54 cents; Range $26.890-$27.840
Jan platinum $1,745.80, up $7.90; Range $1,733.50-$1,774.70
Dec palladium $704.15, up $7.40; Range $697.10-$722.90

U.S. TREASURYS/BONDS:
In observance of Veterans Day, the U.S. Bond Market will be closed all day on Thursday, Nov. 11. U.S. Banks will also be closed. Bond sales will resume on Friday. 

3 Month     0.00%   0.00 (0.00%)
6 Month     0.00%   0.00 (0.00%)
2 Year       0.00%    0.00 (0.00%)
5 Year       0.00%    0.00 (0.00%)
10 Year     0.00%    0.00 (0.00%)
30 Year     0.00%    0.00 (0.00%)

US 30-Year Mortgage Rate Falls to Record Low
U.S. mortgage rates dropped to a record low, the first decline in a month.The previous record low for the 30-year rate was 4.19 percent.

The rate for a 30-year fixed loan fell to 4.17 percent in the week ended today from 4.24 percent, Freddie Mac said in a statement. That was the lowest level in the McLean, Virginia- based mortgage-finance company’s records dating to 1971. The average 15-year rate declined to 3.57 percent from 3.63 percent.


US FORECLOSURES SLOW
Repossessions Fall 9%  Due To Foreclosure Suspension

93,246 more American families lost their homes last month due to bank foreclosure. Overall, foreclosures declined in October, due to a temporary stay from banks freezing foreclose auctions nation wide.

The drop in repossessions came after increases in four of the six previous months, topped by an all-time high in September, when 102,000 people lost their homes. In October, 93,246 homes were repossessed.

Banks postponed auctions of homes with mortgages in default to make sure all all the documents were properly processed and signed, and that all the paperwork was in compliance with the law.

U.S. Foreclosure filings of all kinds, including notices of default, notices of auctions and notices of auction sales, dropped 4.4% during the month, according to a report released by RealtyTrac on Thursday. But bank repossessions, the filing most affected by the freeze, shrank 8.7%.


U.S. HOUSING PRICES DECLINE
Home resale prices fall in 76 out of 155 of U.S. metropolitan areas in 3Q, indicating the market is losing steam without government tax credits, according to an industry report. The national median price for single-family homes, however, is nearly unchanged.

California Deficit Seen at $25.4 Billion Dollars
California's legislative analyst reported Wednesday that the State deficit has grown to $25.4 billion dollars.

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Canadian Market:

Canadian Stocks Mixed Lower

Toronto Materials and energies declined against the US dollar moved up from overnight trades.
Toronto Indexes, Volume; 4:15 PM EST Composite Down 7.90

 S&P/TSX Composite   12934.74  off   7.90  or 0.1%
 S&P/TSX 60 Index      741.86  off   0.20  or 0.0%
 Financials            179.35  off   1.45  or 0.8%
 Materials             425.43  up    3.85  or 0.9%
 Energy                303.90  up    0.13  or 0.0%
 Industrials           106.56  off   0.40  or 0.4%
 IT                     30.38  off   0.11  or 0.4%

   Volume            Thursday   Wednesday
   3-4:15              78.5M      95.5M
   9:30-4:15          475.0M     576.9M
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South American Markets:
 ..

BRAZIL:

.Brazil Stocks Close Lower

Brazil's benchmark Ibovespa stocks index closed 0.62% lower at 71,195 points. Volume was moderate at 5.99 billion Brazilian reais ($3.5 billion).

Blue chips were mostly lower at the close Thursday.

State oil company Petrobras (PBR, PETR4.BR) fell 1.51% to close at BRL26.72 ahead of the release, scheduled for later Thursday, of the company's third-quarter earnings report. Mining major Vale SA (VALE, VALE5.BR) saw its shares rise 0.28% to close at BRL49.99 on higher international metals prices.

Telecom leader Tele Norte Leste Participacoes SA (TNE, TNLP4.BR), or Oi, retreated 1.85% to close at BRL25.52. Steelmaker Usiminas (USIM5.BR, USNZY) fell 0.66% to BRL22.55. Steel rival Cia Siderurgica Nacional (SID, CSNA3.BR), or CSN, declined 0.54% to BRL29.25.

Aircraft manufacturer Empresa Brasileira de Aeronautica (ERJ, EMBR3.BR), or Embraer, fell 0.64% to BRL12.35. Minas Gerais utility Cemig (CMIG4.BR) was down 3.78% to BRL28.78. Real estate developer Gafisa (GFSA3.BR) advanced 2.62% to BRL13.70.

Comments by Brazilian Central Bank President Henrique Meirelles during congressional testimony Thursday showed rising central bank worries about inflation. Brazil's 12-month inflation rate rose to 5.2% in October from only 4.7% in September.Meirelles' comments led many investors to predict a new round of monetary tightening. 

Brazil Real Closes Lower

The Brazilian real closed slightly weaker against the U.S. dollar Thursday as the U.S. dollar gained against the euro and other currencies worldwide. The real closed at BRL1.7160 to the dollar, weaker against the Wednesday close of BRL1.7105.


Brazil's Selic base interest rate is currently a towering 10.75%. Brazil's 12-month inflation rate rose in October to 5.2% from 4.7% in September, making a new round of monetary tightening more likely.
 
In credit markets Thursday, interest-rate futures contracts were broadly higher, reflecting increased worries about inflation. The contracts, quoted on the Brazilian Mercantile and Futures Exchange, reflect investor expectations for annualized interest rates at future dates.

In congressional testimony Thursday, Central Bank President Henrique Meirelles admitted that rising inflation is viewed as a problem by the monetary authority. 
.

Mexican Stocks Lower Against Dollar's Gain
Mexico's stocks opened lower Thursday, and the peso ceded ground against the dollar.The market's IPC index of leading issues was down 0.2% to 36,354 points around 10:30 a.m. EST. Volume was 28.6 million shares worth 981.9 million pesos ($80 million).

The peso was trading weaker against the dollar at MXN12.2710, compared with MXN12.2240 at the close Wednesday.

Retailer Wal-Mart de Mexico V shares were off 0.1% to MXN33.89, and cement maker Cemex CPO shares were down 0.2% to MXN11.68. Bellwether America Movil shares were gaining 0.2% to MXN35.30.
 


CHILE/PERU/COLUMBIA:

MILA TESTING NOVEMBER
Integrated Market in Latin American, MILA, Will Begin Nov. 22 2010

The integration of the Chilean, Colombian and Peruvian stock exchanges will create a virtuous cycle of liquidity and increased investments that will help the respective countries in their economic development, said Jose Antonio Martinez, the chief executive of the Santiago Stock Exchange.

The Integrated Latin American Market, also known as MILA, which will begin a test period on Nov. 22, is slated for completion by the end of January and will create Latin America's largest stock exchange in terms of companies listed and second largest by market capitalization, at under half the size of Brazil's. 

It will have 563 listed companies, market capitalization of some $614 billion, compared to Brazil's at $1.5 trillion, and an estimated initial daily trading volume of about $300 million.

"The merged exchange will help our countries increase their levels of investments and will, undoubtedly, make the companies more attractive and goes towards boosting economic development in each of the three nations," Martinez told Dow Jones Newswires Thursday at the exchange in downtown Santiago.

Peru's gross domestic product is expected to expand by more than 8% this year and by some 6% next year.

Chile's GDP is expected to expand by 5.4% this year and 6% in 2011

Colombia's gross domestic product is expected to be between 5% and 6% in 2010 and by 4.5% the following year.

"The three countries are coming together to present to international and local investors a market that has greater liquidity, with more companies, with increased capitalization, which will naturally create a virtuous cycle that's attractive for companies and for investors," Martinez said.

The increased exposure to investors and greater liquidity will help reduce financing costs, he said, adding, "it's a win-win situation wherein the countries, markets, companies and investors involved all benefit."

Considering their different strengths and weaknesses, the three bourses complement each other well.

Chile's mining industry represents about 20% of the country's gross domestic product and the nation produces nearly a third of the world's copper, only three mining companies are listed on the local bourse.

Peru, where mining is also an important part of the economy, nearly 56% of the local stock market value is made up of miners. 

Colombia's main index is made up of industrial and energy companies.

  "Those who want to access mining companies will be able to invest in Peru's stock exchange and those that want to invest in industrial and energy companies will have a greater array of options in Colombia.. We'll achieve greater sectoral and geographical diversification for investors and reduced risk for them," Martinez said.

The Santiago Stock Exchange is working with Chile's government to prepare legislation that will encourage more local listings of mining companies.


____________________________________________________________

European Markets:

European Stock shares Edged 0.2 percent Lower
European stock markets ended Thursday's session mostly lower. The Stoxx Europe 600 index edged down less than 0.1% to close at 271.39.

The economic docket during the European trade was fairly light as the only scheduled event was the European Central Bank monthly report. European bourses are trading mixed in the red; FTSE -0.04% Cac -0.32% Dax +0.06%. The iBEX dramatically underperforms -1.07%

European stocks edged lower on Thursday, with Wall Street also set for modest losses, while the dollar firmed and copper prices pushed to a record high.

Euro zone troubles are haunting markets again because Irish debt is under intense pressure despite a huge bank recapitalization program.

The cost of insuring Spanish, Portuguese and Irish debt against default hit record highs.

The euro was 0.2 percent lower against the dollar at $1.3749 EUR= partly as a result.

GERMANY:
In Germany, shares in power provider RWE AG dropped 1.5% after the group said it expects new regulatory requirements to impose "substantial burdens" in the coming year.

German industrial conglomerate Siemens bucked the negative trend after announcing a 70% increase in its dividend and setting ambitious growth targets.

Siemens shares gained 2.6% and helped the DAX 30 index close up 0.1% at 6,723.41.

LONDON:
The U.K.'s FTSE 100 index dipped 0.03% to 5,815.23 as gains for mining and oil stocks were offset by losses in the financial sector.

Royal Bank of Scotland Group, which is seen as one of the banks with the most exposure to Ireland, dropped 2.7% in London.
Antofagasta PLC rose 4.8%, Xstrata jumped 3.7% and Kazakhmys gained 3.8%

London copper rose more than 2 percent on Thursday to a record high and crude oil scaled a 25-month high. U.S. crude was trading around $88.50 a barrel .

FRANCE:
The French CAC 40 index closed down 0.5% at 3,867.35, pressured by a 2.4% drop for shares of banking group Credit Agricole. Societe Generale dropped 2.1%. BNP Paribas SA fell 1.6%


IRELAND:
Ireland's ISEQ ended trading down 1.3%, led lower by Bank of Ireland, which slumped around 8% and is down nearly 50% since early October.



SPAIN:
Spain's benchmark IBEX-35 index fell 0.8% and Greece's ASE Composite index slumped 1.1%.

Spanish telecoms giant Telefonica SA, on the other hand, dropped 1.6% after the group said its third-quarter net profit nearly tripled to EUR5.06 billion ($6.98 billion), but still fell short of the EUR5.29 billion consensus forecast.


____________________________________________________________

Asian Pacific Markets:

CHINA:
The main stock index in Shanghai, the Hang Seng Index closed up to  24,700.30 +199.69 (0.82%)..

G20, China growth, euro zone debt in focus
Leaders of the Group of 20 developed and developing nations were meeting in South Korea to try to sort of disagreements over policy that have seen both the United State and China accused on artificially weakening their currencies for trade advantage.


China's Inflation Jump 
Paves Way for More Tightening

China's headline consumer price inflation rose to 4.4 percent in the year to October from 3.6 percent in September, the National Bureau of Statistics (NBS) said on Thursday.

Chinese inflation sped to a 25-month high in October and bank lending blew past expectations, highlighting the challenge faced by Beijing as it battles to keep a lid on price pressures.

Markets have already moved to factor in tighter policy with five-year Chinese government bond yields rising sharply in expectations of a rate rise before the end of 2010.

Producer prices also jumped, climbing at an annual pace of 5 percent, up from 4.3 percent a month earlier.

Industrial output increased 13.1 percent year on year in October, while urban fixed-asset investment rose 24.4 percent. Both were down a touch from September, but at levels that would be consistent with overall annual growth of about 9 percent in the fourth quarter.

The rise in inflation was dominated by a run-up in food prices, with core inflationary pressure more muted. But that will give little relief to policymakers looking at surprisingly strong monetary and credit growth.

Chinese official data showed the oil volumes processed by Chinese refineries hit a record 37 metric tons, or 8.75 million barrels a day, in October.

Chinese banks extended 588 billion yuan ($88.6 billion) of new local-currency loans in October, topping forecasts for 450 billion yuan. And the broad M2 measure of money growth climbed to 19.3 percent year on year, the highest in five months.

China was driving some commodities higher after reports that China's industrial production grew 13.1 percent in October from a year earlier.

The central bank raised interest rates last month for the first time in nearly three years and increases in bank reserve requirements this week mean big banks have to set aside a record level of funds.

The yield on the benchmark five-year government bond rose 26 basis points in the first half of the trading day, reflecting a view that it is just a matter of time before the next rate rise.

Chinese bank shares rose on hopes higher interest rates would improve their net interest margins but most international markets showed little reaction and were more focused on the G20 meeting.

Jiang Jianqing, chairman of Industrial and Commercial Bank of China and the only banker on the monetary policy committee of the central bank, told Reuters that he expected further tightening.

With benchmark one-year lending rates at 2.5 percent, the sharp rise in inflation puts real rates deeper into negative territory, an inducement to savers to move their money from bank accounts to the stock and property markets.

Commodities Surged
Crude oil surged, copper CMCU3 hit a record high and gold XAU maintained its recent allure on expectations inflation fears would drive investors to hard assets to protect wealth.

The yuan hit its highest level since a revaluation in 2005. Its appreciation has quickened this week, which some dealers speculated was a move by China to deflect U.S. complaints that Beijing holds the currency down in order to help exporters, an issue being aired at a G20 meeting in Seoul.


JAPAN:

Japan stocks rally and hit highest level since June. Japan's Nikkei N225 closed at a 4-1/2 month high. Nikkei 225 9,861.46  +30.94 (0.31%)

Japan's Nikkei stock index rose to its highest since June on Thursday, adding to returns that have outstripped U.S. and European markets in November, while a blast of Chinese economic data sent copper prices to a record high.


____________________________________________________________
WORLD FOREX CURRENCIES SNAPSHOT:
(THURSDAY, NOV 11, 2010 4:00 PM EST)

EUR/USD     1.3656     -0.0117 (-0.85%)
USD/JPY     82.4300 +0.2100 (0.26%)
GBP/USD     1.6110     -0.0004 (-0.02%)
CAD/USD     0.9960     -0.0027 (-0.27%)
USD/HKD     7.7505     -0.0009 (-0.01%)
USD/CNY     6.6240     -0.0095 (-0.14%)
AUD/USD     0.9979     -0.0042 (-0.42%)



WORLD MARKETS SNAPSHOT:
(THURSDAY, NOV 11, 2010 1:15 PM EST)

Shanghai     3,147.74     +32.39 (1.04%)
Nikkei 225     9,861.46     +30.94 (0.31%)
Hang Seng Index     24,700.30     +199.69 (0.82%)
TSEC     8,436.95     -13.68 (-0.16%)
FTSE 100     5,815.23     -1.71 (-0.03%)
DJ EURO STOXX 50     2,831.22     -14.71 (-0.52%)
CAC 40     3,867.35     -21.10 (-0.54%)
S&P TSX     12,904.08     -38.56 (-0.30%)
S&P/ASX 200     4,728.60     +28.80 (0.61%)
BSE Sensex     20,589.09     -286.62 (-1.37%)

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THURSDAY'S U.S. ECONOMIC CALENDAR:

10:00 a.m.
Oct 30 DJ-BTMU Business Barometer (previous 0%), (52 Wk) (previous +4.3%)

6:45 p.m.
Atlanta Fed Pres Lockhart speaks in Atlanta.

Bonds Notice:
Veterans Day holiday. All U.S. Government offices will be closed. Treasurys bonds will resume being sold on Friday.

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US STOCK MARKET SUMMARY, WED., NOV. 10, 2010:

Stocks:
U.S. stocks closed higher on a volatile session as global concerns continued to weigh ahead of a meeting of world leaders. Energy stocks helped to lead the recovery as oil jumped to a fresh two-year high.

Treasurys:
The benchmark 10-year Treasury note rose, recovering from earlier losses, as investors were heartened by the U.S. Federal Reserve's announcement that it will buy $105 billion in government securities over the next month. The 30-year bond also pared declines. The bond had weakened earlier due to a lukewarm sale of $16 billion in 30-years, the last leg of this week's $72 billion in new government-debt supply.

Forex:
The euro recouped its losses against the dollar in a seesaw late-afternoon session. Details of the Federal Reserve's bond-buying program reminded investors of quantitative easing--and its corrosive effect on the greenback. "There are these two huge forces in the market right now, and one of them is quantitative easing," said Steven Englander, head of G10 strategy at Citigroup in New York. "The other is the euro zone's sovereign debt crisis. It's random as to which dominates the market at one time."


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