Stock Market Update from Briefing.com


4:15 pm: [BRIEFING.COM] The major averages finished the Thursday session on an upbeat note with the Dow Jones Industrial Average (+0.7%) in the lead. Small caps underperformed with the Russell 2000 adding 0.1% while the S&P 500 settled higher by 0.6% with nine sectors posting gains.

Stocks began the day on the defensive amid cautious action overseas, but were quick to erase their early losses. The S&P 500 climbed out of the red during the first hour of action with most European indices following suit.

The early advance was powered by the heavily-weighted financial (+1.7%) and technology (+0.7%) sectors, both of which continued their outperformance into the close. Outside of the two, the telecom services sector (+2.5%) was the only other area of relative strength, but it bears noting the group accounts for just 3.0% of the entire S&P 500.

Financials began the trading day ahead of the remaining cyclical groups and never relinquished their standing. Major sector components posted solid gains with JPMorgan Chase (JPM 60.11, +1.81) and Morgan Stanley (MS 32.79, +0.98) ending in the lead. The significant strength of the sector reflected the expected benefit from higher rates and a presumption that stress test results would show that most banks meet the Fed’s capital ratio standards. Accordingly, the results, which were released after the close indicated that 29 of 30 banks passed while Zions Bancorp (ZION 32.99, +1.02) failed.

For its part, the technology sector was powered by chipmakers. Intel (INTC 25.42, +0.41) jumped 1.6% while the broader PHLX Semiconductor Index surged 1.9%. Even though most large components outperformed, that was not the case with the largest sector member-Apple (AAPL 528.70, -2.56)-which lost 0.5%.

The underperformance of Apple weighed on the Nasdaq (+0.3%) as the index could not keep up with the broader market. Biotechnology also pressured the Nasdaq Composite as indicated by a 0.5% decline in the iShares Nasdaq Biotechnology ETF (IBB 258.25, -1.22).

Elsewhere, biotechnology also factored into the underperformance of the health care sector (-0.02%), which spent the day in negative territory. Outside of health care, industrials (+0.2%) and utilities (+0.1%) spent the bulk of the session in the red, but erased their losses ahead of the close.

The industrial sector underperformed amid weakness in transports. The Dow Jones Transportation Average shed 0.1% with FedEx (FDX 136.50, -1.88) trailing the remaining index components. The stock ended lower by 1.4% despite being upgraded to ‘Market Outperform’ at Avondale this morning. Interestingly, the logistics company reported disappointing earnings ahead of Wednesday’s open, but the stock ended yesterday’s session little changed.

Meanwhile, the utilities sector lagged as higher rates weighed. Elevated rates also took a bite out of homebuilders, sending the iShares Dow Jones US Home Construction ETF (ITB 24.57, -0.41) lower by 1.6%.

Treasuries spent the entire session in a narrow range with the benchmark 10-yr yield ending unchanged at 2.77%.

Also of note, President Obama announced additional sanctions on 16 Russian officials as well as individuals with close ties to Vladimir Putin while also targeting Bank Rossiya, which is believed to have close ties to the Kremlin. The president also signed an executive order that permits the use of sanctions against specific sectors of the Russian economy. In a swift response, Russia announced sanctions of their own against ten U.S. officials.

Economic data included weekly initial claims, February existing home sales, February Leading Indicators, and the March Philadelphia Fed Survey:

  • The weekly initial claims level increased to 320,000 from an unrevised 315,000 while the Briefing.com consensus expected the claims level to increase to 330,000. Prior to the last couple weeks, the initial claims level-absent unexpected seasonal biases-was bounded between 330,000 and 340,000. The latest data show a slight downward move from that range, which could be the start of another stage in the improvement in labor market conditions. 
  • Existing home sales fell to a seasonally adjusted annualized rate of 4.60 million in February from an unrevised 4.62 million in January. That was exactly what the Briefing.com consensus expected. For the second consecutive month, the National Association of Realtors blamed extreme winter weather conditions as a primary catalyst for the weakness in sales demand. While sales did drop in winter weather-related areas like the Northeast and Midwest, sales in the South and West still remain well below their December levels. Even if sales recover in the weather-affected areas, overall demand remains below the 5.1 million – 5.3 million that was seen last spring and summer. 
  • The Leading Indicators report for February increased 0.5%. That followed a 0.1% increase in January, and was better than the 0.3% uptick expected by the Briefing.com consensus. 
  • Manufacturing activity in the Philadelphia region ended a temporary contraction in March as the Philadelphia Fed’s Business Outlook Survey increased to 9.0 from -6.3 in February. The Briefing.com consensus expected the index to increase to 2.0. 

There is no economic data of note on tomorrow’s schedule but it is worth mentioning that quadruple witching will be taking place.

  • Nasdaq Composite +3.4% YTD 
  • Russell 2000 +3.3% YTD 
  • S&P 500 +1.3% YTD 
  • Dow Jones Industrial Average -1.5% YTD

3:30 pm: [BRIEFING.COM]

  • Precious metals were under pressure today as the dollar index traded higher in response to yesterday’s mentions of sooner-than-expected rate increases from the new FOMC Chair, Janet Yellen. She said interested rates could rise in “probably six months” following completion of the stimulus program.
  • Apr gold fell for a fourth consecutive session, brushing a session low of $ 1320.80 per ounce in early morning pit trade. It eventually settled with a 0.8% loss at $ 1330.20 per ounce.
  • May silver slipped to a session low of $ 20.14 per ounce moments after floor trade opened. It inched slightly higher for the remainder of the session and settled at $ 20.43 per ounce, cutting losses to 1.9%.
  • May crude oil fell for the first time in three sessions as the dollar index traded higher. The energy component dipped to a session low of $ 98.09 per barrel after trading as high as $ 99.45 per barrel in morning action. It settled at $ 98.87 per barrel, or 0.3% lower.
  • Apr natural gas traded lower as inventory data showed a draw of 48 bcf when a draw of 53-59 bcf was anticipated. It pulled back from its session high of $ 4.44 per MMBtu and brushed a session low of $ 4.35 per MMBtu. Unable to gain momentum, it settled with a 2.7% loss at $ 4.37 per MMBtu.

3:00 pm: [BRIEFING.COM] The S&P 500 trades higher by 0.6% with one hour remaining in the session.

After today’s closing bell, participants will receive the results of the bank stress test as well as a handful of quarterly reports. Nine companies appear on the earnings calendar with Nike (NKE 78.82, -0.33) headlining the list. The Capital IQ consensus expects the apparel manufacturer to report earnings of $ 0.72 (versus $ 0.73 last year) on $ 6.81 billion in revenue.

Only two companies appear on tomorrow’s schedule with both falling under the consumer discretionary category. Darden Restaurants (DRI 49.46, +0.38) is expected to report earnings of $ 0.82 ($ 1.02 last year) on $ 2.25 billion in revenue while Tiffany & Co (TIF 90.86, -1.93) is expected to announce $ 1.52 in earnings ($ 1.40 last year) on revenue of $ 1.30 billion.

2:30 pm: [BRIEFING.COM] The S&P 500 hovers less than a point below its session high as the quiet afternoon continues.

So far this week, every session has produced below-average volume with Tuesday’s affair seeing the second-lowest volume of the year (574 million). Today is not expected to be much different considering just over 350 million shares have changed hands at the NYSE with 90 minutes left in the trading day. Tomorrow’s session, however, will see above-average volume due to quadruple witching, which means index futures, index options, stock options, and stock futures will expire.

Even though the major averages hover near their highs, market breadth is nearly balanced with just 1.03 advancing issues for every decliner at the NYSE.

2:00 pm: [BRIEFING.COM] Equity indices continue drifting near their best levels of the session with the Dow Jones Industrial Average (+0.7%) maintaining its lead. Interestingly, small caps are not sharing the same enthusiasm as the Russell 2000 sports a more modest gain of 0.2%.

Not much change has taken place among individual sectors as financials (+1.8%) continue trading well ahead of the remaining cyclical groups. On the downside, the industrial space hovers right below its flat line amid weakness in transports. The Dow Jones Transportation Average holds a loss of 0.3% with FedEx (FDX 136.54, -1.84) trailing the remaining index components. The stock trades down 1.4% despite being upgraded to ‘Market Outperform’ at Avondale this morning. Interestingly, the logistics company reported disappointing quarterly results yesterday morning, but the stock ended the Wednesday session little changed.

1:25 pm: [BRIEFING.COM] The major indices continue to trade near their best levels of the day with buying interest broadening out to include every sector but the health care sector (-0.1%).  It would be remiss not to add that the health care sector has been the best-performing sector year to date (+6.8%).

In any event, the stock market is shaking off some of yesterday’s angst about an interest rate hike from the Fed possibly occurring sooner than expected.

The outperformance of the financial sector (+1.7%) has been an important underpinning factor today.  The extent to which financials continue to outperform could go a long way toward changing the current market narrative from a fear of higher interest rates to higher rates being a reflection of stronger growth ahead.

The relative strength for that heavily-weighted sector has stoked buy-the-dip efforts that have been seen regularly in the wake of stock market weakness.

12:55 pm: [BRIEFING.COM] The major averages have spent the first half of today’s session in a steady climb after erasing their slim opening losses during the initial hour of action. The Dow Jones Industrial Average (+0.8%) leads while the S&P 500 trades higher by 0.6% with eight sectors showing gains.

Even though the benchmark index hovers near its best level of the session, sector leadership has been a bit spotty with the two top-weighted groups-financials (+1.6%) and technology (+0.9%)-doing the bulk of the heavy lifting. The third-largest sector-health care (-0.1%)-has yet to join the rally.

The financial sector seized the lead at the open and has not looked back. JPMorgan Chase (JPM 60.28, +1.98) leads all major components with a 3.4% gain while other influential sector members follow not far behind. In all likelihood, the relative strength of the sector reflects the expected benefit from higher rates and a presumption that stress test results, which are expected after the close, will show that most, if not all, banks meet the Fed’s capital ratio standards.

Elsewhere, the technology space has drawn strength from the likes of Intel (INTC 25.56, +0.54), IBM (IBM 187.75, +3.04), and Microsoft (MSFT 40.28, +1.01) while the top component, Apple (AAPL 529.75, -1.51) lags.

The underperformance of Apple has contributed to the relative weakness of the Nasdaq Composite (+0.4%), which also has had to contend with losses in the biotechnology space. The iShares Nasdaq Biotechnology ETF (IBB 258.13, -1.34) trades down 0.5%, pressuring the health care sector.

Outside of health care, the rate-sensitive utilities space (-0.1%) is the only other sector trading lower due to higher yields.

Treasuries are little changed with the 10-yr yield at 2.77% after spiking nine basis points yesterday.

Also of note, President Obama announced additional sanctions on 16 Russian officials as well as individuals with close ties to Vladimir Putin while also targeting Bank Rossiya, which is believed to have close ties to the Kremlin. The president also signed an executive order that permits the use of sanctions against specific sectors of the Russian economy. In a swift response, Russia announced sanctions of their own against ten U.S. officials.

Today’s economic data included weekly initial claims, February existing home sales, February Leading Indicators, and the March Philadelphia Fed Survey:

  • The weekly initial claims level increased to 320,000 from an unrevised 315,000 while the Briefing.com consensus expected the claims level to increase to 330,000. Prior to the last couple weeks, the initial claims level-absent unexpected seasonal biases-was bounded between 330,000 and 340,000. The latest data show a slight downward move from that range, which could be the start of another stage in the improvement in labor market conditions. 
  • Existing home sales fell to a seasonally adjusted annualized rate of 4.60 million in February from an unrevised 4.62 million in January. That was exactly what the Briefing.com consensus expected. For the second consecutive month, the National Association of Realtors blamed extreme winter weather conditions as a primary catalyst for the weakness in sales demand. While sales did drop in winter weather-related areas like the Northeast and Midwest, sales in the South and West still remain well below their December levels. Even if sales recover in the weather-affected areas, overall demand remains below the 5.1 million – 5.3 million that was seen last spring and summer. 
  • The Leading Indicators report for February increased 0.5%. That followed a 0.1% increase in January, and was better than the 0.3% uptick expected by the Briefing.com consensus. 
  • The Philadelphia Fed Survey for March rose to 9.0 from -6.3. Economists polled by Briefing.com had expected that the Survey would improve to 2.0.

12:30 pm: [BRIEFING.COM] Recent action saw the S&P 500 (+0.5%) extend to a fresh session high after the index spent the better part of the past two hours inside of a three-point range.

Financials (+1.4%) and technology (+0.8%) contributed to the push to new highs while the other sectors continued showing reluctance in joining the climb. At this juncture, the energy sector (+0.4%) follows not far behind the broader market while consumer discretionary (+0.3%), industrials (+0.1%), and materials (+0.3%) lag.

Interestingly, the energy sector has been able to make new session highs while crude oil has headed in the opposite direction. The energy component is currently lower by 0.9% at $ 98.32 per barrel.

12:00 pm: [BRIEFING.COM] The S&P 500 trades higher by 0.3% with seven of ten sectors showing gains. Two top-weighted groups-financials (+1.0%) and technology (+0.6%)-remain in the lead while the third largest sector-health care (-0.4%)-continues trading below its flat line. Outside of health care, only one other countercyclical group-utilities (-0.6%)-sits in the red as yesterday’s spike in Treasury yields weighs.

The recent weakness among utilities has pushed the sector into the red for the week (-1.6%) while the remaining nine groups continue to hold week-to-date gains between 0.1% (consumer staples) and 3.2% (telecom services). The S&P 500, meanwhile, is higher by 1.4% so far this week.

11:30 am: [BRIEFING.COM] The major averages have continued their retreat from the session highs established during the first hour with the Russell 2000 dipping into the red. Elsewhere, the Dow (+0.3%) continues outperforming while the tech-heavy Nasdaq (+0.1%) trails.

The Nasdaq is being pressured by its top component, Apple (AAPL 528.58, -2.68), which trades down 0.5% while the remainder of the technology sector (+0.5%) is holding up well. Biotechnology, however, remains in a position of relative weakness with the iShares Nasdaq Biotechnology ETF (IBB 257.49, -1.98) hovering near its morning low after making a failed run at its flat line. The biotech ETF trades down 0.8%.

On a separate note, President Obama recently made a brief statement, announcing additional sanctions on certain Russian individuals while also targeting a Russian bank with close ties to the Kremlin.

11:00 am: [BRIEFING.COM] Equity indices hover near their best levels of the session after erasing their opening losses. The Dow Jones Industrial Average (+0.3%) leads while the S&P 500 (+0.2%) follows not far behind.

Today’s session began with eight sectors trading in the red, but some of the groups have since erased their losses leaving consumer discretionary (-0.1%), energy (-0.1%), health care (-0.2%), and utilities (-0.5%) as the decliners.

On the upside, the financial sector, which displayed strength out of the gate, has extended its advance to 0.9%. All major financials display solid gains with JPMorgan Chase (JPM 59.69, +1.39) leading the pack with its 2.4% gain.

10:35 am: [BRIEFING.COM]

  • Natural gas futures have been in the red all day so far and following the weekly EIA inventory data, losses just extended
  • Following the data, natural gas dropped to a new LoD and are now -2.1% at $ 4.39/MMBtu
  • Gold and silver have been in the red all day so far as well, but have been climbing off current lows
  • Apr gold is now -0.9% at $ 1329.70/oz, while May silver is -1.9% at $ 20.43/oz
  • Crude oil futures fell as low as $ 98.38/barrel, but has since recovered all losses.
  • Apr crude is now -0.1% at $ 99.10

10:05 am: [BRIEFING.COM] The S&P 500 trades lower by 0.1% while the Nasdaq (-0.2%) and Russell 2000 (-0.4%) underperform.

Biotechnology is contributing to the relative weakness of the Nasdaq as the iShares Nasdaq Biotechnology ETF (IBB 257.84, -1.63) trades down 0.7%.

Just reported, February existing home sales hit an annualized rate of 4.60 million units, which matched the Briefing.com consensus. The pace for February was slightly down from the prior month’s unrevised rate of 4.62 million units.

The Leading Indicators report for February increased 0.5%. That followed a 0.1% increase in January, and was better than the 0.3% uptick expected by the Briefing.com consensus.

Separately, the Philadelphia Fed Survey for March rose to 9.0 from -6.3. Economists polled by Briefing.com had expected that the Survey would improve to 2.0.

9:45 am: [BRIEFING.COM] The three major averages began the session within 0.2% of their flat lines with eight sectors showing early losses.

Energy (-0.5%), health care (-0.2%), and utilities (-0.7%) are among the early laggards of note while financials (+0.2%) and telecom services (+0.7%) started the day in the green.

Notably, the financial sector is likely to be in focus this afternoon when the Federal Reserve releases the bank stress test results.

On the commodity side, crude oil (98.89, -0.28) sports a modest loss of 0.3% while gold and copper futures display larger losses. Gold is lower by 1.2% at $ 1324.90/ozt while copper trades down 1.5% at $ 2.942/lb.

Treasuries remain little changed with the 10-yr yield at 2.78%.

February Existing Home Sales, February Leading Indicators, and the March Philadelphia Fed survey will be released at 10:00 ET.

9:15 am: [BRIEFING.COM] S&P futures vs fair value: -7.00. Nasdaq futures vs fair value: -13.00. The stock market is on track to begin today’s session on a lower note after the S&P 500 lost 0.6% yesterday. The S&P 500 futures trade seven points below fair value after trading little changed at the start of the European session.

Overnight, nearly all global equity markets retreated while the Dollar Index (80.28, +0.29) strengthened in reaction to the latest policy statement from the Federal Reserve, which moved up the expectations in the fed funds futures market for the first rate hike from mid-2015 to April of next year.

Today’s pre-market data has not had much impact on the early trading activity and was limited to the weekly initial claims count, which increased to 320,000 from an unrevised prior rate of 315,000 while the Briefing.com consensus expected an increase to 330,000. The report suggested that labor market trends remain stable at this time.

Some more data remains on the schedule with February Existing Home Sales, February Leading Indicators, and the March Philadelphia Fed survey all set to cross the wires at 10:00 ET.

Treasuries are little changed to start the day with the benchmark 10-yr yield hovering at 2.78%.

8:57 am: [BRIEFING.COM] S&P futures vs fair value: -6.10. Nasdaq futures vs fair value: -10.50. The S&P 500 futures trade six points below fair value.

It was a sea of red across Asia as all of the major bourses ended with losses as sellers took control following the Fed’s taper and change to its forward guidance. Overnight, Bank of Japan Governor Haruhiko Kuroda reiterated the central bank will maintain its policy stance until the 2.0% inflation target is reached. Economic data was limited to an in-line New Zealand GDP (0.9% quarter-over-quarter, prior 1.2%) and Hong Kong’s inflation rate (3.9% year-over-year, previous 4.6%).

  • Japan’s Nikkei lost 1.7%, slumping to six-week lows. Shares of Toyota Motor sank 1.5% after the company announced it would pay $ 1.2 billion to settle charges in the U.S. 
  • Hong Kong’s Hang Seng fell 1.8% and is now in a correction with shares down ~12% from their December highs. Internet gaming company Tencent Holdings slid 1.7% as profit growth slowed. 
  • China’s Shanghai Composite slumped 1.4% to its lowest level in two months. Automaker BYD tumbled 7.3% after its earnings disappointed. 

In Europe, the major indices trade broadly lower with Great Britain’s FTSE (-1.0%) displaying the largest decline while Italy’s MIB (-0.2%) outperforms. Participants received just a few data points. Germany’s PPI was unchanged month-over-month (expected 0.1%, prior -0.1%) while the year-over-year reading fell 0.9%, as expected (previous -1.1%). Great Britain’s CBI Industrial Trends Orders improved to 6 from 3 (expected 5). The Swiss National Bank held its key interest rate at 0.00%, as expected. Separately, the trade surplus expanded to CHF2.62 billion from CHF2.55 billion (consensus CHF2.24 billion).

Among news of note, German Chancellor Angela Merkel spoke in front of parliament, saying Ukraine will be the main focus of today’s European leader summit.

  • Great Britain’s FTSE is lower by 1.0% with financials trading in mixed fashion. Admiral Group, Resolution, and Hargreaves Lansdown are down between 2.2% and 4.8%. On the upside, HSBC Holdings and Royal Bank of Scotland display respective gains of 0.1% and 0.5%. 
  • In France, the CAC trades down 0.8% with Credit Agricole leading the slide. The stock trades lower by 2.9%. Energy company Technip and steelmaker ArcelorMittal are among the outperformers. The two names hold respective gains of 1.0% and 0.9%. 
  • Germany’s DAX holds a loss 0.8%. Deutsche Lufthansa and Volkswagen underperform with losses close to 1.0% apiece. Chemical producer Lanxess outperforms with a gain of 4.1% after selling one of its units. 
  • Italy’s MIB is lower by 0.2%. Mediaset trades lower by 1.1 while financials UniCredit, Banca Popolare dell’Emilia Romagna, and Mediobanca lead with gains between 0.2% and 1.4%.

8:32 am: [BRIEFING.COM] S&P futures vs fair value: -6.40. Nasdaq futures vs fair value: -11.50. The S&P 500 futures trade six points below fair value.

The latest weekly initial jobless claims count totaled 320,000, which was lower than the 330,000 that had been expected by the Briefing.com consensus. Today’s tally was above the unrevised prior week count of 315,000. As for continuing claims, they rose to 2.889 million from 2.848 million.

7:58 am: [BRIEFING.COM] S&P futures vs fair value: -4.90. Nasdaq futures vs fair value: -6.30. U.S. equity futures hold modest losses amid cautious action overseas. The S&P 500 futures trade five point below fair value.

Reviewing overnight developments:

  • Asian markets ended lower across the board. China’s Shanghai Composite -1.4%, Japan’s Nikkei -1.7%, and Hong Kong’s Hang Seng -1.8%. 
    • Economic data was limited: 
      • New Zealand’s GDP rose 0.9% quarter-over-quarter, as expected (prior 1.2%) 
      • Japan’s Foreign Bonds Buying report pointed to net purchases in the amount of JPY143.10 billion (prior sales of JPY617.90 billion). 
      • Hong Kong’s CPI rose 3.9% year-over-year (last 4.6%). 
    • In news: 
      • China’s State Council announced plans to speed up construction projects in order to stabilize economic growth in the immediate term. Also of note, the yuan continued weakening against the dollar with the dollar/yuan exchange rate climbing above 6.2275. 
  • Major European indices trade broadly lower. France’s CAC -0.8%, Germany’s DAX -0.8%, and Great Britain’s FTSE -1.0%. Elsewhere, Italy’s MIB -0.4% and Spain’s IBEX -0.5%. 
    • Participants received just a few data points: 
      • Germany’s PPI was unchanged month-over-month (expected 0.1%, prior -0.1%) while the year-over-year reading fell 0.9%, as expected (previous -1.1%). 
      • Great Britain’s CBI Industrial Trends Orders improved to 6 from 3 (expected 5). 
      • The Swiss National Bank held its key interest rate at 0.00%, as expected. Separately, the trade surplus expanded to CHF2.62 billion from CHF2.55 billion (consensus CHF2.24 billion). 
    • Among news of note: 
      • German Chancellor Angela Merkel spoke in front of parliament, saying Ukraine will be the main focus of today’s European leader summit. 

In U.S. corporate news:

  • ConAgra Foods (CAG 30.00, +0.41): +1.4% after beating the Capital IQ consensus earnings estimate by two cents on in-line revenue. In addition, the company reaffirmed its longer-term targets. 
  • Jabil Circuit (JBL 18.44, +0.18): +1.0% despite missing on earnings and issuing mixed guidance. The company said it expects below-consensus third quarter earnings while the midpoint for fiscal-year 2015 earnings was set above estimates. 
  • Lennar (LEN 42.20, +0.86): +2.1% after beating revenue estimates. 

Weekly initial claims will be released at 8:30 ET while February Existing Home Sales, February Leading Indicators, and the March Philadelphia Fed survey will cross the wires at 10:00 ET.

6:33 am: [BRIEFING.COM] S&P futures vs fair value: -6.00. Nasdaq futures vs fair value: -9.50.

6:33 am: [BRIEFING.COM] Nikkei…14224.23…-238.30-1.70%.  Hang Seng…21182.16…-365.50-1.80%.

6:33 am: [BRIEFING.COM] FTSE…6512.02…-61.10-0.90%.  DAX…9204.10…-73.00-0.80%.

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Stock Market Update from Briefing.com


2:30 pm: [BRIEFING.COM] The major indices have been locked in mostly sideways action for the last hour or so.  Interestingly, the S&P 500 made a run at yesterday’s high.  On the brink of getting there, selling interest percolated to hold it back.

There just isn’t a lot of leadership to speak of at the moment, which is preventing a breakout effort.  In turn, bond traders haven’t been in a hurry to buy today’s dip, so the yield on the 10-yr note remains pinned near its high for the day at 2.93%.  That is being watched closely as it is thought a move above 2.95% opens the door for a quick move to 3.00% that some think will be a brake on the equity rally.

Volume isn’t all that heavy today, but that won’t be the case tomorrow with the quarterly rebalancing and quadruple witching options expiration day (index futures, single stock futures, stock options, and index options).

1:55 pm: [BRIEFING.COM] All in all, the stock market is showing some good resilience today after a big surge yesterday in the wake of the FOMC decision to taper..  The strength of that move, and the talk of a possible setup for a “Santa Claus” rally, could be keeping sellers at bay.

The “Santa Claus” period, according to the Stock Trader’s Almanac, encompasses the last five trading days of the year and the first two trading days of the new year.  That period has been good for an average gain of 1.6% since 1969.  Over the last 44 years, there have been only 10 instances when Santa failed to show up (i.e. the return for the period was negative).  The most recent was 2007 when the S&P 500 dropped 2.5%, so it’s currently riding a five-year winning streak.

In terms of today’s performance, large-cap averages are exhibiting the best relative strength.   The S&P Midcap 400 Index and the Russell 2000 are currently down 0.7% and 0.4%, respectively, after leading their larger counterparts in 2013.

1:30 pm: [BRIEFING.COM] The S&P 500 has trimmed its loss to 0.1% as the deliberate rebound off the morning lows continues. The three advancing sectors-energy (+0.3%), materials (+0.2%), and technology (+0.2%)-have now been joined in the green by telecom services (+0.1%). However, the telecom sector is the smallest S&P 500 group, which limits its influence over the broader market.

Interestingly, despite the rebound in the Dow and S&P 500, the Nasdaq (-0.3%) remains near its opening level. Small-caps also lag as the Russell 2000 trades lower by 0.4%.

1:00 pm: [BRIEFING.COM] The major averages are little changed at midday. The Dow Jones Industrial Average hovers right at its flat line while the Nasdaq and S&P 500 hold respective losses of 0.3% and 0.2%.

Equities began the session on a lower note amid some profit taking following yesterday’s surge that sent the Dow and S&P 500 to record closing highs. The early selling was limited as the indices notched their lows 45 minutes into the session before staging a turnaround.

The Dow has already returned to its flat line thanks to the outperformance of some of its top-weighted components. Chevron (CVX 123.02, +1.42), IBM (IBM 179.97, +1.27), and Visa (V 216.81, +1.46) hold gains between 0.7% and 1.2%.

Meanwhile, the S&P 500 has yet to regain its flat line as seven of ten sectors register losses. On the upside, the three advancing sectors-energy, materials, and technology-hold modest gains of no more than 0.2%.

The energy sector (+0.1%) trades just above its flat line as crude oil displays a gain of 1.2% at $ 99.27 per barrel. The other commodity-linked group-materials (+0.1%)-has received support from steelmakers. The Market Vectors Steel ETF (SLX 49.25, +0.60) trades higher by 1.2%. Despite the notable gain, the sector also has to contend with significant weakness among miners. The Market Vectors Gold Miners ETF (GDX 20.52, -0.34) is lower by 1.6% as gold futures trade down 3.3% at $ 1194.60 per troy ounce.

Elsewhere, the tech sector is being underpinned by Accenture (ACN 79.73, +4.11) and Oracle (ORCL 36.52, +1.92) after both reported better-than-expected results.

Even though the technology sector can be found among the leaders, the tech-heavy Nasdaq (-0.3%) continues to hover near its opening levels. The largest index component, Apple (AAPL 545.28, -5.49), has contributed to the weakness as it trades lower by 1.0%. Biotechnology also weighs as the iShares Nasdaq Biotechnology ETF (IBB 218.41, -0.90) displays a loss of 0.4%.

Treasuries hover in the red with the benchmark 10-yr yield up four basis points at 2.93%.

Participants received several economic data points today. The weekly initial claims level increased to 379,000 from an upwardly revised 369,000 (from 368,000). The Briefing.com consensus expected the initial claims level to fall to 333,000. Once again, today’s release was accompanied by a statement saying the claims data was biased with Thanksgiving and Christmas holidays responsible for this week’s skewed reading.

November existing home sales hit an annualized rate of 4.90 million units, which was a bit weaker than the rate of 5.00 million units that had been expected by the consensus. The pace for November was down from the prior month’s unrevised rate of 5.12 million units.

Separately, the Leading Indicators report for November increased 0.8%. That followed a 0.2% increase in September, and was better than the 0.6% uptick expected by the consensus.

Lastly, the November Philadelphia Fed Survey rose to 7.0 from 6.5. Economists polled by Briefing.com had expected that the Survey would decline to 5.0.

12:30 pm: [BRIEFING.COM] The Dow (+0.03%) has clawed its way back to its flat line, but the Nasdaq (-0.3%) remains essentially where it started today’s session.

Despite the outperformance of the technology sector (+0.2%), the tech-heavy Nasdaq is feeling the weight of its largest component, Apple (AAPL 545.86, -4.91), which trades lower by 0.9%. The index is also being pressured by biotechnology as the iShares Nasdaq Biotechnology ETF (IBB 218.59, -0.72) trades lower by 0.3%.

12:00 pm: [BRIEFING.COM] Recent action saw the major averages continue working their way back from the morning lows. The S&P 500 has narrowed its loss to 0.2% while the Dow Jones Industrial Average hovers less than 0.1% below its flat line.

The price-weighted Dow owes its outperformance to some of its most influential components. Chevron (CVX 122.80, +1.20), IBM (IBM 179.86, +1.16), and Visa (V 216.48, +1.13) hold gains between 0.5% and 1.0%.

Elsewhere, Treasuries have risen off their lows, but they remain down for the day. The benchmark 10-yr yield is higher by three basis points at 2.93%.

11:25 am: [BRIEFING.COM] Not much has changed since our last update as the major averages remain near their opening levels.

The technology sector (+0.2%) continues to outperform with Oracle (ORCL 36.19, +1.59) contributing to the strength. Shares of Oracle trade higher by 4.7% after the company beat its earnings estimates by two cents on above-consensus revenue. On a related note, Accenture (ACN 78.81, +3.19) also outperforms, trading higher by 4.2% after reporting better-than-expected results.

Outside of the two big gainers, other tech components trade in mixed fashion. Facebook (FB 54.57, -1.00) is lower by 1.8% after commencing a public offering of 70 million shares of its common stock. Of the 70 million shares, 41.35 million shares are being sold by founder and CEO Mark Zuckerberg.

Chipmakers can also be found among the laggards as the PHLX Semiconductor Index trades lower by 0.6%.

11:00 am: [BRIEFING.COM] Equity indices have ticked up off their lows, but they continue to hold the bulk of their losses. The tech-heavy Nasdaq (-0.3%) remains among the laggards but the small-cap Russell 2000 (-0.4%) has slipped behind all of its peers.

Sector standing remains little changed from our earlier updates with most groups trading lower. At this juncture, the materials sector (+0.1%) is lone advancer as steelmakers contribute to the strength. The Market Vectors Steel ETF (SLX 49.28, +0.63) trades up 1.3%. Despite the notable strength of steelmakers, the sector is being weighed down by miners. The Market Vectors Gold Miners ETF (GDX 20.52, -0.34) is lower by 1.6% while gold futures display a loss of 3.2% at $ 1195.90 per troy ounce.

The other commodity-related group, energy, hovers right at its flat line while crude oil trades higher by 0.5% at $ 98.57 per barrel.

10:35 am: [BRIEFING.COM]

  • The dollar index has been in positive territory all day so far and remains near its HoD
  • Gold and silver have been in the red all day so far
  • Gold broke below $ 1200/oz and remains there. Feb gold is currently -3.2% at $ 1195.70/oz
  • Silver remains at its LoD. Mar silver is now -4.5% at $ 19.16/oz
  • Crude oil futures began to take off higher just before pit trade began Feb crude ran as high as $ 98.70/barrel. Crude is now +0.5% at $ 98.52/barrel
  • Natural gas is higher, and was near its HoD just ahead of the weekly EIA inventory data
  • Following the inventory data, Jan natural gas popped to a new HoD. Jan nat gas is now +3.0% at $ 4.38/MMBtu

10:00 am: [BRIEFING.COM] The S&P 500 continues to hover near its session low (-0.3%) as nine of ten sectors display losses.

November existing home sales hit an annualized rate of 4.90 million units, which was a bit weaker than the rate of 5.00 million units that had been generally expected by the Briefing.com consensus. The pace for November was down from the prior month’s unrevised rate of 5.12 million units.

Separately, the Leading Indicators report for November increased 0.8%. That followed a 0.2% increase in September, and was better than the 0.6% uptick expected by the Briefing.com consensus.

Lastly, the November Philadelphia Fed Survey rose to 7.0 from 6.5. Economists polled by Briefing.com had expected that the Survey would decline to 5.0.

9:40 am: [BRIEFING.COM] Equity indices registered opening losses with the Nasdaq (-0.3%) pacing the opening retreat. Interestingly, despite the early underperformance of the Nasdaq, the tech sector (+0.1%) is the only group trading in positive territory.

The remaining nine sectors display losses between 0.1% (energy and materials) and 1.0% (utilities). More importantly, heavily-weighted financials (-0.3%) and health care (-0.3%) are among the early laggards.

Elsewhere, Treasuries have held their levels for the past 45 minutes after spending over four hours in a steady retreat. The benchmark 10-yr yield is higher by five basis points at 2.94%.

November Existing Home Sales, November Leading Indicators, and the December Philadelphia Fed Survey will all be released at 10:00 ET.

9:15 am: [BRIEFING.COM] S&P futures vs fair value: -6.20. Nasdaq futures vs fair value: -12.50. Equities are expected to begin today’s session on a lower note as index futures hover near their worst pre-market levels. The S&P 500 futures trade six points below fair value with the entire decline coming in the past 45 minutes. There was no specific catalyst responsible for the drop, which suggests it was likely a function of profit taking after the Dow and S&P 500 ended yesterday’s session at new record closing highs.

The retreat in futures coincided with Treasuries falling to their lows after spending the entire morning in a downtrend. The benchmark 10-yr yield is higher by almost five basis points at 2.94%. More notably, the 5-yr note has been under more aggressive selling pressure with its yield spiking eight basis points to 1.68%.

Pre-market economic data was limited to weekly initial claims, which rose to 379,000 from 369,000. The reading was disappointing at first glance, but the Department of Labor said that seasonal adjustment issues related to the holidays continue to skew claims data.

November Existing Home Sales, November Leading Indicators, and the December Philadelphia Fed Survey will all be released at 10:00 ET.

8:57 am: [BRIEFING.COM] S&P futures vs fair value: -6.30. Nasdaq futures vs fair value: -12.50. U.S. equity futures fell to their lows during the past 30 minutes of action without a specific catalyst. The S&P 500 futures now trade more than six points below fair value.

Asian markets ended mixed as Japan’s Nikkei (+1.7%) rallied while markets in China (-1.0%) and Hong Kong (-1.1%) lagged as the recent liquidity crunch intensified once again. The two-week Shanghai Interbank Offered Rate jumped almost 114 basis points to 6.218%.

Economic data was scarce. Japan’s foreign bonds buying report indicated net purchases in the amount of JPY110.50 billion (JPY390.10 billion prior). Separately, the All Industries Activity Index ticked down 0.2% month-over-month (-0.2% expected, 0.5% last). Elsewhere, New Zealand’s GDP rose 1.4% quarter-over-quarter (1.1% consensus, 0.3% previous).

  • Japan’s Nikkei gained 1.7%, ending less than 100 points below its mid-May high as heavyweights Fast Retailing and FANUC led the advance. The two names settled higher by 4.5% and 4.1%, respectively. 
  • Hong Kong’s Hang Seng lost 1.1% after falling from its flat line into the close. Property names weighed as China Resource Land and Hang Lung Properties fell 2.5% and 4.6%, respectively. 
  • China’s Shanghai Composite slid 1.0%, ending on its lows. Financials weighed as China Vanke lost 1.5%. 

Major European indices hold solid gains across the board. Among new of note, there are reports circulating that Eurozone finance ministers have reached an agreement on a single resolution mechanism to be used in winding down troubled banks. Elsewhere, Fitch affirmed the United Kingdom’s sovereign rating at ‘AA+’ with a Stable outlook.

Investors received several economic data points. Eurozone current account surplus expanded to EUR21.80 billion from EUR14.90 billion (EUR14.20 billion expected). Great Britain’s retail sales ticked up 0.3% month-over-month (0.3% expected, -0.9% prior) while the year-over-year reading increased 2.0% (2.3% forecast, 1.8% last). Core retail sales increased 0.4% month-over-month (0.3% consensus, -0.7% prior) while the year-over-year reading pointed to an increase of 2.3% (2.5% forecast, 2.3% last). Italy’s wages were unchanged month-over-month (0.2% prior). Elsewhere, Spain’s industrial new orders fell 4.0% year-over-year (1.1% expected, -0.3% prior).

  • Great Britain’s FTSE is higher by 1.0% with industrials and financials in the lead. Petrofac is higher by 4.3% and Standard Life holds an advance of 2.8%. Miners lag with Fresnillo, Glencore Xstrata, and Randgold Resources down between 0.5% and 2.9%. 
  • In France, the CAC trades up 1.2% as growth-sensitive names contribute to the gains. Technip is higher by 3.2% while financials AXA and Credit Agricole trade with respective gains of 3.0% and 2.3%. 
  • Germany’s DAX sports an advance of 1.3%. Deutsche Boerse leads with a gain of 2.6% while Deutsche Post follows (+1.9%) not far behind. On the downside, HeidelbergCement is lower by 0.8%.

8:31 am: [BRIEFING.COM] S&P futures vs fair value: -2.00. Nasdaq futures vs fair value: -5.30. The S&P 500 futures continue to hover two points below fair value.

The latest weekly initial jobless claims count totaled 379,000, which was higher than the 333,000 that had been expected by the Briefing.com consensus. Today’s tally was above the revised prior week count of 369,000 (from 368,000). As for continuing claims, they rose to 2.884 million from 2.790 million.

7:59 am: [BRIEFING.COM] S&P futures vs fair value: -1.70. Nasdaq futures vs fair value: -5.50. U.S. equity futures hold modest losses amid light profit taking following yesterday’s surge that sent the Dow Jones Industrial Average and S&P 500 to new record closing highs. The S&P 500 futures hover less than two points below fair value.

Reviewing overnight developments:

  • Asian markets ended mixed. Japan’s Nikkei +1.7%, China’s Shanghai Composite -1.0%, and Hong Kong’s Hang Seng -1.1%. 
    • Regional economic data was limited: 
      • Japan’s foreign bonds buying report indicated net purchases in the amount of JPY110.50 billion (JPY390.10 billion prior). Separately, the All Industries Activity Index ticked down 0.2% month-over-month (-0.2% expected, 0.5% last). 
      • New Zealand’s GDP rose 1.4% quarter-over-quarter (1.1% consensus, 0.3% previous). 
    • In news: 
      • Markets in China underperformed as the recent liquidity crunch intensified once again. The two-week Shanghai Interbank Offered Rate jumped almost 114 basis points to 6.218%.
  • Major European indices hold solid gains across the board. Great Britain’s FTSE +1.1%, France’s CAC +1.2%, and Germany’s DAX +1.4%. Elsewhere, Italy’s MIB +1.4% and Spain’s IBEX +1.6%. 
    • Investors received several economic data points: 
      • Eurozone current account surplus expanded to EUR21.80 billion from EUR14.90 billion (EUR14.20 billion expected). 
      • Great Britain’s retail sales ticked up 0.3% month-over-month (0.3% expected, -0.9% prior) while the year-over-year reading increased 2.0% (2.3% forecast, 1.8% last). Core retail sales increased 0.4% month-over-month (0.3% consensus, -0.7% prior) while the year-over-year reading pointed to an increase of 2.3% (2.5% forecast, 2.3% last). 
      • Italy’s wages were unchanged month-over-month (0.2% prior). 
      • Spain’s industrial new orders fell 4.0% year-over-year (1.1% expected, -0.3% prior). 
    • Among news of note: 
      • Fitch affirmed the United Kingdom’s sovereign rating at ‘AA+’ with a Stable outlook. 
      • Reports indicate Eurozone finance ministers have reached an agreement on a single resolution mechanism to be used in winding down troubled banks. 

In U.S. corporate news:

  • Accenture (ACN 78.00, +2.38): +3.2% following its earnings beat on above-consensus revenue. 
  • Darden Restaurants (DRI 53.52, +0.60): +1.1% after reporting in-line results. Also of note, the company announced plans to enhance shareholder value, which include a spinoff of Red Lobster. 
  • Facebook (FB 53.30, -2.27): -4.1% after commencing a public offering of 70 million shares of its common stock. Of the 70 million shares, 41.35 million shares are being sold by founder and CEO Mark Zuckerberg. 
  • Oracle (ORCL 35.19, +0.59): +1.7% after beating on earnings and revenue. 

Weekly initial claims will be reported at 8:30 ET while Existing Home Sales for November will cross the wires at 10:00 ET. In addition, November Leading Indicators and the December Philadelphia Fed Survey will also be released at 10:00 ET.

6:39 am: [BRIEFING.COM] S&P futures vs fair value: flat. Nasdaq futures vs fair value: -2.00.

6:39 am: [BRIEFING.COM] Nikkei…15852.22…+271.40+1.70%.  Hang Seng…22888.75…-255.10-1.10%.

6:39 am: [BRIEFING.COM] FTSE…6557.47…+65.20+1.00%.  DAX…9315.56…+133.70+1.50%.

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UPDATE 1-Schroders net assets rise 11 pct in first quarter

* Q1 net inflows 5.6 bln stg vs year-ago 1.6 bln

* Net assets rise to 236.5 bln stg

* Warns strong retail demand unlikely to continue

LONDON, May 2 (Reuters) – British fund manager Schroders attracted 5.6 billion pounds ($ 8.7 billion) of net new money in the first quarter, buoyed by strong retail demand for equities that it warned was unlikely to continue.

In a trading statement on Thursday, Schroders said assets under management rose to 236.5 billion pounds by the end of March, up 11.5 percent from 212 billion in December, with the rise coming from inflows and positive investment performance.

The net new money was far more than in the first quarter of last year, when Schroders added 1.6 billion pounds.

While Schroders’ asset management business saw strong net inflows, its private banking unit reported 200 million of net outflows. Schroders said its acquisition of rival Cazenove Capital – a move to bulk up its business of serving wealthy private banking clients – was is on track to complete in July.

Analysts at brokerage Numis described the update as “a good set of results”, with net inflows 1 billion pounds higher than it had forecast.

Rallying stock markets this year have encouraged investors to put more of their money in funds.

For some, such as Aberdeen Asset Management and Ashmore Group, the first quarter was one of their strongest for attracting new money in several years.

“We saw significant retail investor demand in the first quarter on the back of buoyant equity markets. While we do not expect demand to continue at this level, we remain well placed for continued growth,” Schroders said in the statement.


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Fiat will update 2013 targets with first quarter results: CEO

TURIN, Italy (Reuters) – Italian automaker Fiat (FIA.MI) will update its 2013 forecasts when it releases first quarter results on April 29, Chief Executive Sergio Marchionne said on Tuesday.

“Markets in North America, Asia and Latin America support our forecasts for 2013, but in Europe there is a significant level of uncertainty,” he said.

Automakers are facing a sustained slump in the European car market against the backdrop of the euro zone debt crisis and government austerity measures. European unemployment in February was at a record high of 12 percent. Italian car sales fell 19.8 percent in 2012, and are set to fall more in 2013.

Fiat, which owns U.S. automaker Chrysler, sees sales at 88 billion-92 billion euros this year, more than half of it from North America, and expects to sell 4.3-4.5 billion cars.

(Reporting by Jennifer Clark, editing by Silvia Aloisi)


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Verizon to report results, may update on new plans

NEW YORK (AP) — Verizon is reporting its quarterly earnings and is expected to show a healthy increase in net income.

Second-quarter results from Verizon Communications Inc., parent of the country’s biggest wireless carrier, are expected before the market opens Thursday.

On June 28, Verizon’s wireless business dropped most of its phone plans in favor of one plan that provides unlimited calling and shares a pool of data among up to ten devices.

The “Share Everything” plan was introduced too late to have an effect on second-quarter results, but executives may give an indication about how customers are reacting and what that means for future results.

Verizon Communications, the New York-based phone company, owns 55 percent of Verizon Wireless. The rest of the wireless division is owned by Vodafone Group PLC of Britain.


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