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Broadgate: Market News 29/8

29 August 2012

Stocks ended little changed in another day of scarce activity on Tuesday after mixed economic data gave investors little reason to shift their focus from Federal Reserve Chairman Ben Bernanke’s speech on Friday.

The Fed chief is scheduled to address a conference of central bankers in Jackson Hole, Wyoming, and could announce new measures to boost growth. While Bernanke is expected to keep alive expectations for a third round of major bond buying by the Fed, or quantitative easing, he could keep markets guessing about the actual timing.

Volume was among the lightest of the year after Monday’s lightest trading in 2012. August is a slow season, and investors mostly stayed on the sidelines, anticipating Bernanke’s speech.

“I don’t think you can read a lot from what’s going on in the market right now,” said John Fox, co-manager of the FAM Value Fund, in Cobleskill, New York. “Because there’s nothing going on, everyone is waiting for the speech on Friday.”

The latest sign of slowing in the global economy added to expectations for more central bank stimulus. Japan cut its assessment of economic growth, citing a deceleration in U.S. and Chinese demand for Japanese exports.

U.S. consumer confidence unexpectedly weakened in August to its lowest in nine months as Americans turned more pessimistic about the short-term outlook, according to the Conference Board.

But in another report, the S&P/Case Shiller composite index of 20 metropolitan areas showed U.S. home prices rose for a fifth consecutive month, a sign of slow improvement in the housing sector.

Among the day’s biggest gainers, Lexmark International Inc jumped 13.7 percent to $21.62 after it said it would stop making inkjet printers, cut about 1,700 jobs, and focus on its more profitable imaging and software businesses.

The NYSEArca computer hardware index rose 1.2 percent. Shares of Hewlett Packard, which has a substantial portion of inkjet sales, were down 1.8 percent at $16.90.

The Dow Jones industrial average was down 21.68 points, or 0.17 percent, at 13,102.99. The Standard & Poor’s 500 Index slipped 1.14 points, or 0.08 percent, at 1,409.30. The Nasdaq Composite Index edged down 3.95 points, or 0.13 percent, at 3,077.14.

Volume was 4.60 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with Monday’s 2012 low 4.46 billion shares. The year-to-date average is about 6.6 billion.

The S&P 500 has been pinned in a fairly tight range over the last three weeks, finding a support level at 1,400 while also unable to convincingly pierce the April high of 1,422.38, which has acted as a resistance point. The index has been unable to muster a move of at least 1 percent in either direction since August 3.

Among other gainers, PVH Corp raised its full-year earnings outlook for the third time this year as it expects its European business to grow and its flagship Tommy Hilfiger brand to remain popular with shoppers. Shares climbed 4.8 percent to $92.77.

Movado Group Inc shares were up 17.4 percent at $35.36 after hitting an all-time high of $36.11. The watchmaker reported a higher second-quarter profit and raised its full-year earnings forecast for the second time.

Advancers outpaced decliners on the NYSE by about 4 to 3 and on the Nasdaq by about 14 to 9.

Commodities

Brent crude futures slipped towards $112 per barrel on Wednesday on expectations Hurricane Isaac, which hit land in Louisiana, would spare Gulf Coast oil production facilities from significant damage.

Brent October futures had fallen 28 cents to $112.30 per barrel at 0411 GMT, after dropping below $112 in early trade. U.S. crude fell 57 cents to $95.78 per barrel.

Worries about supply disruptions resulting from the hurricane pushed Brent to a high of $115.50 per barrel on Monday, while Nymex futures hit a peak of $97.72.

Brent crude futures slipped towards $112 per barrel on Wednesday on expectations Hurricane Isaac, which hit land in Louisiana, would spare Gulf Coast oil production facilities from significant damage.

Brent October futures had fallen 28 cents to $112.30 per barrel at 0411 GMT, after dropping below $112 in early trade. U.S. crude fell 57 cents to $95.78 per barrel.

Worries about supply disruptions resulting from the hurricane pushed Brent to a high of $115.50 per barrel on Monday, while Nymex futures hit a peak of $97.72.

Currencies

The euro held near its seven-week peak on Wednesday, having been swept higher by a wave of short covering overnight, while the Australian dollar languished at one-month lows on persisting worries about Chinese growth.

The single currency stood at $1.2558, after gaining more than half a percent to reach a high of $1.2577 on Tuesday, coming close to seven-week peak of $1.2590 hit last week.

Against the yen, the euro drifted up to 98.72 yen, not far from last week’s 1 1/2-month high of 99.185 yen.

The Australian dollar continued to wallow near one-month lows. The Aussie stood at $1.0368, near one-month low of $1.0345 hit on Tuesday.

The Aussie plumbed an eight-week trough against the euro, which reached A$1.2123. The single currency has gained around 4.5 percent since hitting a record low around A$1.1597 early this month.

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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