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Broadgate: Market News 26/10

26 October 2012

Stocks eked out small gains on Thursday in another uninspiring session on Wall Street, with worries about weak business spending keeping investors wary.

After the close of trading, Apple Inc, the most valuable public company in the United States, posted quarterly earnings that fell short of expectations. Apple’s earnings per share came in at $8.67, compared with Wall Street’s estimate for $8.75 a share. Trading of Apple’s stock was halted after the close and ahead of the earnings, but trading resumed at about 4:50 p.m. Apple’s stock fell 1.4 percent to $600.71 in extended-hours trading after its results, though it was down 4 percent when trading resumed.

Equity futures fell on the news, with S&P 500 futures dropping 3 points to 1,405.20, signaling a possible fall in stocks on Friday.

The Nasdaq 100 Powershares exchange-traded fund, which tracks the Nasdaq 100 Index, dropped 0.7 percent in after-hours trading following Apple’s results. Apple accounts for 19 percent of that index’s value.

The broad S&P 500 has declined 3.6 percent over the previous five sessions before a modest rebound Thursday. A string of high-profile disappointments pointing to weak global demand has sapped buying enthusiasm after what has been a strong run in 2012.

There were a few bright spots during the day, such as Procter & Gamble, which rose 2.9 percent to end the regular session at $70.07 after reporting stronger-than-expected results. But that was not enough to motivate investors reeling from a sharp decline in recent days.

U.S. durable goods orders rose more than expected in September, though orders excluding volatile defense goods and aircraft were unchanged, and business investment showed signs of stalling.

“Global concerns are always in the background and people haven’t forgotten about it. That’s what markets on Friday and earlier this week told us,” said Jaewoo Nakajima, associate managing director at International Strategy and Investment Group, in New York.

With about 244 companies in the S&P 500 reporting results so far, 62.3 percent have beaten expectations, a slight improvement on the typical 62 percent average, Thomson Reuters data showed.

Revenue this quarter has been less than stellar, with just 36.3 percent of companies reporting higher-than-expected revenue – compared with a historic beat rate of 62 percent.

“We had 50-some companies report today, and it’s all a continuation of companies beating on earnings, but coming in lower on revenue,” said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

Big-picture uncertainty has also had a quiet dampening effect on stock prices as the countdown to the U.S. presidential election and the impending fiscal cliff begins in earnest.

“Certainly, the fiscal cliff continues to weigh on the market. If it weren’t for that pressure, we’d probably be higher,” Morris said.

The Dow Jones industrial average rose 26.34 points, or 0.20 percent, to 13,103.68 at the close. The Standard & Poor’s 500 Index gained 4.22 points, or 0.30 percent, to finish at 1,412.97. The Nasdaq Composite Index advanced 4.42 points, or 0.15 percent, to end at 2,986.12.

Tech bellwether Apple was scheduled to report earnings after the close. The iPad and iPhone maker was expected to report quarterly earnings of $8.75 a share, according to Thomson Reuters data. Apple’s stock lost 1.2 percent to end the regular session at $609.54 ahead of the results.

Colgate-Palmolive shares fell 1.8 percent to $104.60 after the toothpaste and household products manufacturer unveiled a cost-cutting plan that involved shedding 6 percent of its workforce by the end of 2016.

Volume was relatively light, with just 6.34 billion shares traded on U.S. exchanges.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 3 to 2. On the Nasdaq, about seven stocks rose for every five that fell.

Commodities

Gold dropped more than half a percent in volatile trade on Friday, heading for its third week of decline after shares fell in Asia and the U.S. dollar firmed, while persistent fears about the health of the global economy also dragged.

Gold hit a high for the day at $1,714.65 an ounce before slipping to $1,702.96 by 0618 GMT, down $8.23. It dropped to a 7-week low around $1,698 on Wednesday, when the Fed said it was sticking to its plan to keep stimulating growth until the job market improved.

U.S. gold for December fell $9.10 an ounce to  $1,703.90

Currencies

The yen steadied in Asian trading after hitting a four-month low against the dollar early Friday, but it was still on track for a second week of losses as markets geared up for the Bank of Japan to ease policy next week.

The dollar was down about 0.4 percent at 79.99 yen after rising as high as 80.38 yen early in the session. A break of its June peak of 80.63 yen would take it back to highs unseen since April 27. The greenback was still headed for weekly gains, adding to last week’s rise of 1.1 percent.

The yen also gained against the euro, with the euro skidding 0.5 percent late in the session to 103.37 yen, moving away from a five-month peak of 104.59 yen on Tuesday

Source:  Reuters.com

The information set out herein has been obtained from various public sources and is by way of information only. Broadgate Financial can accept no liability of any sort in relation thereto and readers should obtain their own verification of any statement before making any decision which may have any financial or other impact.

Neither the information nor the opinions herein constitute, or are they to be construed as, an offer or a solicitation of an offer to buy or sell investments.

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