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Jan 9, 2014

ADVFN Newsdesk - Sentiment Improves as Economic Data Offers Hope

 
ADVFN III World Daily Markets Bulletin
Daily world financial news Thursday, 09 January 2014 10:18:16   
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US Market

 

The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment firmer as traders digest the domestic jobless claims report, which showed a bigger than expected drop in claims. Global economic data has also been encouraging, with Chinese inflation slowing, offering scope for additional easing measures. In Europe, German industrial production rose more than expected and eurozone economic confidence improved.

Although the data could offer cheer to traders, the underlying mood could remain cautious, as traders await Friday's non-farm payroll report and the impending earnings season. Aluminum maker Alcoa is scheduled to kick start proceedings on the fourth quarter reporting season, with its earnings report due after the close of trading.

U.S. stocks moved about in a lackluster fashion on Wednesday amid the release of strong jobs data. The averages ended the session on a mixed note. The Dow Industrials ended down 68.20 points or 0.40 percent at 16,463 and the S&P 500 Index closed 0.39 points lower at 1,838, while the Nasdaq Composite added 12.43 points or 0.30 percent before closing at 4,166.

Twenty of the thirty Dow components closed lower, with AT&, Chevron , Microsoft , Procter & Gamble , Verizon and Disney leading the declines. On the other hand, DuPont and JP Morgan Chase advanced notably.

Gold stocks were among the biggest decliners of the session, while airline, Semiconductor and Biotechnology stocks rose notably.


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US Economic Reports
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While the data continues to reflect the impact of the holidays, the Labor Department released a report showing that first-time claims for U.S. unemployment benefits fell by more than expected in the week ended January 4th.

The report said initial jobless claims dropped to 330,000, a decrease of 15,000 from the previous week's revised figure of 345,000. Economists had expected jobless claims to edge down to 335,000 from the 339,000 originally reported for the previous week.

Kansas City Federal Reserve Bank President Esther George is scheduled to speak on banking and the economy in Madison, Wisconsin at 1:30 am ET. Minneapolis Federal Reserve Bank President Narayana Kocherlakota will participate in a public town hall in Minneapolis at 8 pm ET.


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Stocks in Focus
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GlaxoSmithKline announced that the FDA has approved Mekinist for use in combination with Tafinlar for the treatment of patients with unresectable melanoma or metastatic melanoma.

Texas Industries reported a second quarter loss that was wider than estimates, while its revenues were also below expectations.

Bed Bath & Beyond reported third quarter results missed estimates and lowered its fourth quarter and full year guidance. Global Payments reported higher second quarter earnings and raised its full year earnings outlook.

AstraZeneca and Bristol-Myers Squibb announced that the FDA has approved Farxiga.

Fred's reported comparable store sales growth of 1.4 percent year-over-year in December. Citing less than anticipated gains in Black Friday sales, the company said it now expects fourth quarter sales to be flat to up modestly. The company also said to support strategic initiatives, it is promoting Jerry Shore to be its COO.

Zumiez reported that its December comparable store sales fell 2.4 percent. Citing weaker sales trend, the company lowered its fourth quarter sales and earnings guidance.


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European Market

 

After a weak start, European stocks recovered in late morning trading. However, by mid-session, the indexes gave back their gains and are trading mixed, as traders digest domestic economic events and the U.S. jobless claims data.

On the economic front, the European Central Bank kept interest rates unchanged at a record low level of 0.25 percent. The decision was in line with economists' expectations. The marginal lending facility rate was held at 0.75 percent. The deposit facility rate was kept at zero, where it has remained since July 2012. The Bank of England also decided to maintain record-low interest rates and the size of quantitative easing at 375 billion pounds.

German industrial production expanded more than expected in November after declining for two straight months, data from the Federal Ministry of Economics and Technology showed. Industrial output grew 1.9 percent month-over-month in November, recovering from a 1.2 percent fall in October. Economists had forecast output to expand 1.5 percent.

A report released by the European Commission showed that eurozone economic confidence strengthened more-than-expected to a 29-month high of 100 in December. The Office for National Statistics reported that the U.K. visible trade deficit narrowed to 9.4 billion pounds in November from 9.7 billion pounds in October.


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Asian Markets
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Most Asian markets ended lower, tracking the lackluster performance on Wall Street overnight, although the Australian and New Zealand markets advanced.

On the economic front, the National Bureau of Statistics reported that consumer prices in China were up 2.5 percent year-over-year in December, slower than forecasts for a 2.7 percent increase and the 3.0 percent increase in November. Producer prices were down 1.4 percent compared to forecasts for a 1.3 percent drop.

The Japanese market languished below the unchanged line throughout the session, as the yen firmed up. The index closed down 241.12 points or 1.50 percent at 15,880.

Australia's All Ordinaries recovered in the final few minutes of trading before closing up 8.80 points or 0.17 percent at 5,328. Hong Kong's Hang Seng Index closed at 22,787, down 209.26 points or 0.91 percent.


Currency and Commodities Markets


Crude Oil futures are trading up $0.47 at $92.80 a barrel after declining $1.34 to $92.33 a barrel on Wednesday. Gold futures, which fell $4.10 to $1,225.50 an ounce in the previous session, are trading up $4.50 at $1,230 an ounce.

Among currencies, the U.S. dollar is trading at 104.90 yen compared to the 105.14 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3578 compared to yesterday's $1.3576.


 
 

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