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Oct 4, 2017

ADVFN Newsdesk - Profit Taking May Lead To Early Weakness On Wall Street

 
ADVFN  World Daily Markets Bulletin
Daily world financial news Wednesday, 04 October 2017 12:34:24   
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The major U.S. index futures are pointing to a modestly lower opening on Wednesday, with stocks likely to give back some ground after trending higher in recent sessions.

Profit taking may contribute to early weakness on Wall Street, as traders cash in on the gains posted over the past few days.

Nonetheless, trading activity may be somewhat subdued as traders look ahead to remarks by Federal Reserve Chair Janet Yellen later in the day.

Stocks moved mostly higher over the course of the trading session on Tuesday, adding to the gains posted in the previous session. With the upward move on the day, the major averages climbed to new record closing highs.

The major averages all ended the day modestly higher. The Dow rose 84.07 points or 0.4 percent to 22,641.67, the Nasdaq edged up 15.00 points or 0.2 percent to 6,531.71 and the S&P 500 inched up 5.46 points or 0.2 percent to 2,534.58.

The strength on Wall Street reflected recent upward momentum, as traders seem optimistic about the economic outlook and the prospects for Republican tax reform.


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Nonetheless, trading activity was remained relatively subdued, with a lack of major U.S. economic data keeping some traders on the sidelines.

The Labor Department is scheduled to release its closely watched monthly jobs report on Friday, while reports on service sector activity and international trade may also attract attention in the coming days.

Airline stocks showed a substantial move to the upside on the day, driving the NYSE Arca Airline Index up by 4.1 percent. With the jump, the index reached its best intraday closing in well over a month.

JetBlue (JBLU), Delta Air Lines (DAL), and United Continental (UAL) turned in some of the airline sector's best performances.

Significant strength was also visible among gold stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the sector came despite a decrease by the price of gold.


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Europe markets

European stocks have turned mixed on Wednesday as Spain braced for further political upheaval and investors waited for speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi.

While the German DAX Index is up by 0.2 percent, the U.K.’s FTSE 100 Index is just below the unchanged line and the French CAC 40 Index is down by 0.3 percent.

Spanish banks have succumbed to selling pressure after King Felipe VI said Catalan authorities deliberately bent the law with "irresponsible conduct" and the state needs to ensure Spain's constitutional order and rule of law.

Royal Dutch Shell shares have also declined on news the oil & gas company has cancelled the $900 million sale of its stake in a Thai gas field to Kuwait Foreign Petroleum Exploration Company.

ThyssenKrupp shares have fallen after the multinational conglomerate said that workers will be equally represented following the planned merger of its European steel operations with Tata Steel's.

British postal service and courier firm Royal Mail has also moved to the downside after workers voted in favor of an industrial action.

Meanwhile, German carmakers BMW, Daimler and Volkswagen have climbed 1 after unveiling their monthly U.S. sales figures. 

In economic news, the euro area private sector ended the third quarter strongly as output growth accelerated to a four-month high, underpinned by new orders in September, final data from IHS Markit showed.

The composite output index rose to 56.7 from 55.7 a month ago, matching the preliminary estimate. The final services PMI climbed to 55.8 from 54.7 in the previous month.

Eurozone retail sales fell for the second straight month in August, while activity in the U.K.'s services sector expanded at a faster rate than expected in September.


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Asian stocks ended mixed on Wednesday as the dollar rally stalled and oil prices extended losses on signs of higher output.

Japanese shares ended on a firm note after hitting a fresh two-year high earlier in the day. The Nikkei 225 Index rose as high as 20,689.05 before paring gains to close up 12.59 points or 0.1 percent at 20,626.66.

Japan Display shares soared after reports that the company had developed methods to mass-produce lower-cost organic light-emitting diode (OLED) screens.

Meanwhile, Australian shares fell sharply as sliding oil prices pulled down energy stocks and a falling currency environment spurred concerns about growth and inflation. The benchmark S&P/ASX 200 Index tumbled 49.30 points or 0.9 percent to 5,652.10, and the broader All Ordinaries Index ended down 44.60 points or 0.8 percent at 5,719.60.

Banks ANZ, NAB and Westpac lost 1-2 percent, while Commonwealth closed 0.3 percent higher. Mining giant Rio Tinto dropped 1.6 percent and smaller rival Fortescue Metals Group declined 2.1 percent. In the energy sector, Woodside Petroleum, Santos, Oil Search, Origin Energy and Beach Energy shed 1-2 percent. 

On the economic front, the latest survey from the Australian Industry Group revealed that the country's service sector continued to expand in September, albeit at a slightly lower pace with a PMI score of 52.1, down from 53.0 in August.

Markets in South Korea and China were closed for the Harvest Festival and National Day, respectively. Taiwan remained closed for the Med-Autumn Festival. 

Hong Kong's Hang Seng Index climbed 205.97 points or 0.7 percent to 28,379.18 ahead of forex reserves data from China and the U.S. jobs report.


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US Economic Reports

Employment in the U.S. private sector climbed by slightly more than anticipated in the month of September, according to a report released by payroll processor ADP.

ADP said private sector employment rose by 135,000 jobs in September after surging up by a revised 228,000 jobs in August.

Economists had expected employment to climb by 125,000 jobs compared to the 237,000 job jump originally reported for the previous month.

At 10 am ET, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of September.

The non-manufacturing index is expected to inch up to 55.5 in September from 55.3 in August, with a reading above 50 indicating growth in the service sector.

The Energy Information Administration is due to release its report on oil inventories in the week ended September 29th at 10:30 am ET. Crude oil inventories are expected to drop by 0.5 million barrels.

At 3 pm ET, St. Louis Federal Reserve President James Bullard is scheduled to deliver the welcoming remarks at the Community Banking in the 21st Century Conference in St. Louis.

Fed Chair Janet Yellen is due to deliver the opening remarks at the Community Banking in the 21st Century Conference in St. Louis at 3:15 pm ET.


 
 

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