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MARKET ANALYSIS: Risk Appetite Perks Up Amid Positive Catalysts(Alliance News Via Acquire Media NewsEdge) WASHINGTON (Alliance News) - The major US index futures are pointing to a higher opening on Tuesday, with sentiment lifted by a couple of positive catalysts. China reported September GDP growth that was ahead of expectations. Earnings news has largely been mixed, with companies such as Apple and Travelers Companies beating expectations, while there were disappointments as well. Meanwhile, reports on a probable buying of corporate bonds by the European Central Bank in the secondary market have also generated some positive sentiment, which has triggered strong buying across the Atlantic After an uncertain start on Monday, US stocks recovered and closed higher amid a positive reaction to earnings. The major averages opened lower following a negative lead from Europe. However, the S&P 500 Index and the Nasdaq Composite Index recovered, moving into positive territory in early trading and advancing steadily throughout the session before closing notably higher. The S&P 500 ended up 17.25 points or 0.91% at 1,904 and the Nasdaq closed 57.64 points or 1.35% higher at 4,316. The Dow Industrials dipped sharply in early trading but recouped its losses over the course of the session and sneaked above the unchanged line in late trading. The index ended up 19.26 points or 0.12% at 16,400. Twenty-four of the thirty Dow components closed higher, with Disney (DIS), Nike (NKE), American Express (AXP), DuPont (DD), Home Depot (HD) and Wal-Mart (WMT) leading the gains. On the other hand, IBM (IBM) plunged 7.1% in reaction to its earnings, while Caterpillar (CAT) slid over 1%. Transportation, oil service, gold, basic material, retail, housing, semiconductor, utility and biotechnology stocks all showed notable moves to the upside. Currency, Commodity Markets In the first day of trading as the front month contract, crude oil futures for December delivery are edging up USD0.47 to USD82.38 a barrel. On Monday, the November futures expired at USD82.71 a barrel, down USD0.04. Meanwhile, gold futures are climbing USD9.80 to USD1,254.50 an ounce. On Monday, gold rose USD5.70 to USD1,244.70 an ounce. Among currencies, the US dollar is trading at 106.60 yen compared to the 106.95 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at USD1.2768 compared to yesterday's USD1.28. Asia The Asian markets turned in a mixed performance despite the positive performance by Wall Street stocks overnight. The Australian, Hong Kong, New Zealand and Singaporean markets advanced, while the rest of the markets saw some weakness. The Japanese market retreated sharply amid the yen's rebound in the wake of waning risk appetite. The Nikkei 225 average opened lower and moved sideways in the morning before plunging sharply in the afternoon. The index ended down 306.95 points or 2.03% at 14,804. A majority of stocks retreated in the session, led lower by resource and export stocks. After hovering above the unchanged line until late trading, Australia's All Ordinaries retreated in late trading but still closed up 5.20 points or 0.10% at 5,313. Defensive utility, telecom and real estate stocks gained ground, while material and consumer stocks also saw some strength. On the other hand, financial and energy stocks moved to the downside. Hong Kong's Hang Seng Index ended at 23,089, up 18.32 points or 0.08%, while China's Shanghai Composite Index fell 17.07 points or 0.72% to 2,340. On the economic front, the Chinese National Bureau of Statistics released a slew of economic data that reinforced the view that the economic growth is slowing, although the slowdown is not as bad as feared. A report said Chinese September GDP was up 7.4% year-over-year, stronger than the 7.2% growth forecast by economists but slower than thEUR7.5% growth in the June quarter. Chinese industrial production growth accelerated to 8% from 6.9% in August, another report from the NBS showed. Production was forecast to grow 7.5%. Meanwhile, Chinese retail sales growth moderated to a less than expected 11.6% in September from 11.9% in August. During the January to September period, Chinese fixed asset investment expanded 16.1% from the same period of the preceding year, slower than the 16.5% growth seen in the January to August period. The Japanese Ministry of Economy, Trade and Industry showed that an index measuring all industry activity fell 0.1% month-over-month in August, slower than the 0.4% drop in July. Europe After a weak start, European stocks recovered and are advancing solidly amid the release of some key earnings news and reports that suggested that .the European Central Bank is seeking to buy corporate bonds from the secondary market. The better than expected Chinese GDP growth also offered some encouragement to traders after yesterday's sell-off. In corporate news, UK consumer goods company Reckitt Benckiser reported a decline in its third quarter revenues and also stated that it expects full year revenue growth to come in at the low end of its guidance range. Meanwhile, Dutch paints company Akzo Nobel reported higher third quarter profits and said it remains on track to meet its 2015 targets. Chipmaker ARM Holdings reported third quarter revenues that rose year-over-year and expects fourth quarter revenues to be in line with market expectations. Whitbread's first half profits and revenues also rose year-over-year. US Economic Reports The National Association of Realtors is scheduled to release its existing home sales report for September at 10 am ET. Economists expect existing home sales to come in at a seasonally adjusted annual rate of 5.10 million units compared to a 5.05 million unit rate in August. Existing home sales came in at a seasonally adjusted annual rate of 5.05 million units in August, down 1.8% from a revised reading of 5.14 million units in July. Inventories measured in terms of months of supply remained unchanged at 5.5 months. First-time buyers accounted for 29% of total existing home sales, the same as in July. The median price of an existing home rose 4.8% year-over-year to USD219,800. Stocks in Focus Apple's (AAPL) fourth quarter earnings and revenues exceeded estimates. The company's first quarter revenue guidance was also positive. United Technologies (UTX) reported better than expected third quarter profit and earnings but its full year guidance was lukewarm. Verizon's (VZ) third quarter earnings trailed estimates, while its revenues exceeded estimates. McDonald's (MCD) third quarter results trailed estimates. Texas Instruments (TXN) reported third quarter earnings of 76 cents per share on revenues of USD3.50 billion. The results were better than expected. The company's fourth quarter guidance was also strong. Travelers Companies' (TRV) third quarter earnings and revenues were ahead of estimates. Rambus (RMBS) reported better than expected third quarter earnings, while its revenues trailed expectations. The company's fourth quarter revenue guidance was lukewarm. Rent-A-Center (RCII) reported third quarter adjusted earnings that beat estimates, while its revenues were below expectations. Chipotle Mexican Grill (CMG) reported above-consensus results for its third quarter and continues to expect comparable restaurant sales to increase in mid-teens and to open 180 to 195 new restaurants. Steel Dynamics (STLD) reported better than expected third quarter adjusted earnings and revenues. Packaging Corp. of America (PKG) reported third quarter adjusted earnings of USD1.26 per share on revenues of USD1.52 billion. The earnings were in line, while the revenues were ahead of estimates. For the fourth quarter, the company expects earnings of USD1.16 per share, above the consensus estimate. Citrix (CTXS) announced the completion of its acquisition of RightSignature, leading cloud-based electronic signature company. The company did not reveal the terms of the deal. Coca-Cola (KO) reported third quarter results that were roughly in line but said its 2014 earnings per share growth will trail its long term growth target. Separately, the company announced actions to reinvigorate growth. It plans to maintain its long-term high single-digit earnings per share growth target while adjusting its net revenue target to mid single-digit growth and replacing its operating income metric with profit before tax. DSIH Network (DISH) announced that Turner Networks removed channels, including Cartoon Network and CNN, from the DISH programming lineup Monday night. DISH noted that the companies have not been able to negotiate the terms of a renewed distribution agreement and Turner refused to extend the overall agreement. Broadcom (BRCM), Celestica (CLS), Cree (CREE), Discover Financial Services (DFS), E*TRADE (ETFC), Fulton Financial (FULT), Intuitive Surgical (ISRG), Nabors Industries (NBR), Unisys (UIS), VMware (VMW), Waste Connections (WCN) and Yahoo! (YHOO) are among the companies due to report their quarterly results after the close of trading. Copyright RTT News/dpa-AFX |