Broadgate: Market News 12/10
12 October 2012
U.S. stocks ended flat on Thursday after gains brought by a sign of improvement in the labor market were erased in part by a drop in Apple shares after a legal setback in a court ruling.
Apple fell 2 percent to $628.10 after a U.S. appeals court overturned a preliminary injunction on the sale of Samsung’s Galaxy Nexus smartphone, dealing a blow to the iPhone maker in a battle against Google’s Android mobile software.
Traders have been bearish recently, with the S&P 500 down 2 percent in the last five sessions in anticipation of a weak earnings season. News that the number of Americans filing new claims for jobless benefits fell to its lowest level in more than 4-1/2 years gave the market only marginal support.
“Unless we get blowout numbers in the earnings season, this sort of volatile environment will likely continue in the near term,” said Robert Pavlik, chief market strategist at New York-based Banyan Partners.
AT&T and Verizon also weighed after news that Japan’s Softbank may buy a majority stake in their competitor, Sprint Nextel. Sprint shares rallied more than 13 percent but AT&T and Verizon lost more than 1 percent each on expectations of harsher market competition.
The S&P 500 is just over 8 percent below its record closing high, set five years ago, and the corporate results season that started this week is expected to show the first drop in year-on-year quarterly earnings since 2009.
“We’re so close to all-time highs, and there’s so much talk of fundamentally having no reason to be here, that people are taking profits,” said Doreen Mogavero, CEO of Mogavero, Lee & Co in New York.
The Dow Jones industrial average fell 18.58 points, or 0.14 percent, to 13,326.39. The S&P 500 edged up 0.28 point, or 0.02 percent, to 1,432.84. The Nasdaq Composite dipped 2.37 points, or 0.08 percent, to 3,049.41.
Energy stocks led gains in the main 10 S&P 500 sectors with a 0.6 percent advance. Coal miner Peabody Energy rose 8.9 percent to $26.18 and its peer Consol Energy added 8 percent to $35.48 on bets higher natural gas prices would encourage coal use by power producers.
Sprint shares jumped 14.3 percent to $5.76 on news of the possible acquisition by Japan’s Softbank, while AT&T lost 1.8 percent to $36.26 and Verizon dropped 1.3 percent to $45.20. Clearwire Corp, in which Sprint holds a majority interest, surged 70.8 percent to $2.22.
Truck manufacturer Oshkosh rallied 11.4 percent to $29.90 on news that investor Carl Icahn had offered to buy all of its shares for $32.50 each. OshKosh advised shareholders to take no action until further notice.
Dollar Tree, off 7.7 percent to $43.28, led percentage declines among discretionary sector stocks after it said it will post third-quarter sales at the lower end of its earlier forecast.
The S&P retail sector index fell 0.9 percent.
About 6.1 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, slightly below the daily average so far this year of about 6.52 billion shares.
On the NYSE, almost two issues rose for every one that fell and on the Nasdaq three issues rose for every two that posted declines.
Brent crude held above $115 a barrel on Friday, trading near four-week highs and on course for its biggest weekly gain in two months, supported by tensions between Turkey and Syria, lower output at North Sea oilfields and upbeat U.S. data.
Brent November crude had eased 23 cents to $115.48 a barrel by 12.25 a.m. EDT, but was up more than 3 percent for the week so far, its biggest weekly gain since August.
U.S. crude was up 18 cents at $92.25, and set to post its first weekly gain in four weeks.
Gold was little changed on Friday after gaining in the previous session when the dollar eased from a one-month high, although it remained on target for its biggest weekly drop in two months.
Spot gold was little changed at $1,769.84 an ounce by 2.18 a.m. EDT, on course for a 0.6-percent weekly loss, its sharpest one-week drop in two months.
U.S. gold traded nearly flat at $1,771.90.
Spot silver edged up to $34.04, but was headed for a 1.3-percent fall this week, its biggest weekly loss in three months.
The euro steadied on Friday after snapping a three-day decline the day before when the International Monetary Fund said indebted euro zone economies should have more time to cut budget deficits, while the yen was capped as risk aversion eased.
The euro steadied around $1.2928, after hitting a high of $1.29465 earlier, near Thursday’s peak of $1.2952. The single currency has stayed above key technical support at its 200-day moving average.
The Aussie was steady against the yen at 80.40, after rising to a high of 80.74 earlier. The euro also stood nearly flat at 101.28 yen off an earlier high of 101.59.
The Aussie earlier came just a touch below its highest since October 2 of $1.0294 seen on Thursday.
Against the yen, the dollar was buoyed by a number of factors, rising to a high of 78.54 yen. On Thursday, it hit 77.94 yen, its lowest against the Japanese currency since October 1.
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