Wednesday, 11 July 2012

July 11, 2012 Financial Market Summary


DJIA fell 0.7% to settle at 12,653.1. NASDAQ slumped 1.0% to close at 2,902.3. S&P 500 shed 0.8% to end at 1,341.5.
Nikkei 225 index is trading 0.4% lower at 8,825.2.
FTSE 100 gained 0.7% to close at 5,664.1.
FTSEurofirst 300 index rose 0.9% to 1,039.1.
In Asia, crude oil for August delivery is trading 0.6% or $0.53 higher at $84.44 per barrel.
At 0400 BST today, the GBP is trading 0.1% higher against the USD at $1.5527, flat against the EUR at €1.2662, and flat against the JPY at ¥123.16.
US Market Snapshot
US markets dropped yesterday, amid concerns about corporate earnings.  Advanced Micro Devices slumped 11.2%, after the company reported an unexpected drop in second quarter sales, while Cummins fell 8.9%, as it cut its full year revenue forecast. Applied Materials fell 2.7% after it reduced its fiscal 2012 profit and sales forecasts. Alcoa tumbled 4.1%, a day after it reported a loss in its second-quarter. JC Penney dropped 5.8%, following bearish comments from Credit Suisse. Research In Motion fell 5.0%, after its CEO Thorsten Heins failed to reassure shareholders gathered at the company’s annual meeting. Mako Surgical plunged 43.1%, after the company posted lower-than-expected sales of its surgical robots for the second quarter in a row.
DJIA fell 0.7% to settle at 12,653.1. NASDAQ slumped 1.0% to close at 2,902.3. S&P 500 shed 0.8% to end at 1,341.5.
Asian Market Snapshot
Asian markets are trading lower this morning, amid speculation that economic worries related to Europe and China would dampen corporate earnings. In Japan, Advantest Corp and Renesas Electronics traded lower, after their US peer Applied Materials lowered its sales and profit forecasts citing weakness in Europe, China and the personal-computer market. Sharp lost value, after the company agreed to pay Dell and two other companies, to settle a lawsuit. In Hong Kong, China Southern Airlines paced lower, after the company warned that its first-half earnings might fall by more than half, amid slowing travel demand and higher fuel prices. In South Korea, Samsung Electronics and SK Hynix declined following weak forecasts from US chip-related firms, Applied Materials and Advanced Micro Devices.
Nikkei 225 index is trading 0.4% lower at 8,825.2. Hong Kong index is trading 0.3% lower, at 19,345.6, while the Kospi index is trading 0.4% lower, at 1,822.3.
UK Market Snapshot
UK markets advanced yesterday, led by gains in banking and energy sector stocks, as an unexpected improvement in UK manufacturing data for May coupled with a drop in Spanish bond yields buoyed market sentiment. BP and Royal Dutch Shell advanced 1.1% and 1.2%, respectively, after the Norwegian government intervened to avert an oil industry dispute in the country. Banks, HSBC Holdings, Royal Bank of Scotland and Standard Chartered rallied between 0.9% and 1.9%, after data revealed that UK goods trade deficit narrowed in May. Barclays rose 2.2%, after its Chairman stated that its former CEO, Bob Diamond would forgo deferred bonuses. Prudential advanced 3.3%, amid speculation that it might acquire Aviva's insurance business in Malaysia. BAE Systems climbed 2.7%, following positive comments from UBS.
FTSE 100 gained 0.7% to close at 5,664.1, while FTSE 250 advanced 0.7% to settle at 11,065.5.
European Market Snapshot
Other European markets closed higher yesterday, after reports revealed an unexpected rise in the UK and Italy’s manufacturing output and as eurozone Finance Ministers agreed to disburse €30 billion by the end of July as part of a €100 billion plan to strengthen the Spanish banking sector. ASML Holding climbed 8.6%, as Intel Corp agreed to invest as much as $4.1 billion in the company. Technip advanced 3.0%, after the company bagged a subsea installation contract worth about $61.4 million. Volkswagen, Renault and Daimler gained between 0.9% and 1.8%, amid optimism over global demand outlook. Logitech International rallied 4.3%, after it proposed a one-time dividend for this year. Statoil rose 1.9%, after the company announced that it would resume production at sites affected by the strike.
FTSEurofirst 300 index rose 0.9% to 1,039.1. German DAX Xetra 30 gained 0.8% to 6,438.3. French CAC-40 closed 0.6% higher at 3,175.4.
Commodities
In Asia, crude oil for August delivery is trading 0.6% or $0.53 higher at $84.44 per barrel. Yesterday, crude oil for August delivery declined 2.4% or $2.08 to end at $83.91 per barrel, after Norway ended a strike that threatened to halt oil production and after a report from China showed a drop in the country’s net crude imports in June. Crude oil also lost value, after the Energy Information Administration lowered its global crude oil demand expectations for current year and the next year.
Gold for immediate delivery is trading 0.2% higher today, at $1,574.95 per ounce. Gold for August delivery fell 0.6% or $9.30 to end at $1,579.80 per ounce yesterday, as the dollar appreciated against its peers, after investors preferred the safe haven appeal of the currency following lacklustre trade data from China. The dollar also appreciated against the euro, after Italy’s prime minister stated that the country might seek eurozone aid and on news that a German court could take more than three months to rule on the country’s participation in funding the European Stability Mechanism.
Currencies
At 0400 BST today, the GBP is trading 0.1% higher against the USD at $1.5527, flat against the EUR at €1.2662, and flat against the JPY at ¥123.16.
The EUR is trading 0.1% higher against the USD at $1.2263, before the release of the US Federal Reserve minutes of its 20 June meeting today.
The EUR is trading flat against the JPY at ¥97.27. Earlier, the currency was trading lower, after a German Court stated that a decision on whether to suspend legislation for the Eurozone’s permanent bailout fund and fiscal treaty could take months.
The JPY is trading flat against the USD. Earlier, the currency was trading higher, amid speculation that Japan’s central bank might not add further stimulus.
The AUD is trading higher against the EUR, after the sentiment index for Australian consumers advanced 3.7% in July to 99.1, the highest level since February, and ahead of data due to be released that might show inflation slowed in Germany and manufacturing activity stagnated in the eurozone.
Yesterday, the USD closed higher against most of its major peers, as mounting concern about the European sovereign debt crisis and lacklustre trade data from China, increased demand for safe haven assets. The GBP ended higher against the EUR, following a report that showed an unexpected surge in UK’s manufacturing activity in May. The GBP closed lower against the USD, amid mounting speculation of further monetary easing, after the Bank of England Governor, Mervyn King, stated that he saw no “great signs” of a recovery in the country’s economy.

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