Stocks have recovered from their recent slip, but action remains listless.
Oil prices have also pushed higher with the arrival of pit trade's close. The commodity had been near the unchanged mark for most of the afternoon, but a spike has oil futures priced at $108.45 per barrel, which is near the two-year high that it set earlier today.
Despite oil's price spike, energy stocks are stuck at the flat line, which is where they have spent the past few hours.
USD/JPY continues to pivot around Y84.00 amid light flows, the pair still seen as a buy on dips and after seeing lows around Y83.83 earlier in the day. Offers seen in place at Y84.40/50, above the Y84.38 overnight high.
Stocks have dropped another leg lower so that the S&P 500 and Nasdaq are at new session lows and the Dow is barely below the neutral line. Bank of America (BAC 13.44, +0.07) and General Electric (GE 20.48, +0.14) have been a couple of key sources of support for the Dow.
EUR/USD challenged $1.4200 but failed to break under. Currently rate holds around $1.4205. Trader reminds that Fed's Bernanke speaks late in the day, after US markets close. Area of overnight low near $1.4190 perhaps to hold some demand interest but stops are mentioned below $1.4170.
Both the Nasdaq Composite and the S&P 500 are flirting with fresh session lows. Their slip comes as the tech sector drifts deeper into the red - tech stocks are now down with a collective loss of 0.8%.
Although stocks have come under increased pressure in recent trade, Treasuries haven't been able to break out of their recent trading range. In turn, the yield on the benchmark 10-year Note is still just above 3.40%.
The dollar fluctuated against the yen as Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. economic recovery faces headwinds, encouraging speculation the central bank will keep borrowing costs low.
The dollar slid versus the euro on April 1 after New York Fed President William C. Dudley said the recovery is “still tenuous,” disagreeing with colleagues who said the central bank should curtail purchases of U.S. debt.
The euro fell on concern an increase in interest rates by the European Central Bank will hurt the economies of the region’s most-indebted nations.
The euro appreciated 3.5% in the first quarter. It was the best three-month performance since the shared currency began trading in 1999.
ECB President Jean-Claude Trichet surprised investors on March 3, when he signaled that policy makers may raise interest rates at their next meeting to curb consumer-price inflation, which reached a two-year high of 2.6% in March.
The Nasdaq is holding steady just above the neutral line.
Underlying action has shares of Baidu.com (BIDU 142.35, +3.50), Amgen (AMGN 54.19, +1.11), Sandisk (SNDK 46.69, +1.18), and Express Scripts (ESRX 57.20, +1.03) trading as the four top performers.
Meanwhile, NetApp (NTAP 46.22, -1.98), NVIDIA (NVDA 17.57, -0.63), Apollo (APOL 40.46, -0.95), and Qualcomm (QCOM 53.32, -1.15) represent four of the worst performers.
May light sweet crude oil futures hold around $107.98 per barrel after trading in a $107.58 to $108.78 range. Friday, the front contract broke above the 30-month high of $106.95, seen March 7, to post a new 30-motnh high ($108.05 after hours high). The break of the $106.95 trend highs on crude means that the way is now open to the 76.4% Fibonacci retracement (of the downtrend from the life-time highs at $147.27 and the December 2008 low of $32.40) near $120.
While gold is still about $10 away from revisiting the life-time high of $1447.40/oz (currently at $1436.25/oz), silver has broken above its March 24 peak of $38.13/oz, to post a new 31-year peak of $38.58/oz.
"While the majority of firms still expect inflation to remain within the Bank's inflation control range of 1% to 3%, more firms now expect inflation to be in the upper half of that range."
Tech stocks have come under increased pressure in recent trade. The sector had traded with only a fractional loss in the first few minutes of trade, but it has since fallen to a 0.5% loss.
Weakness among tech stocks is relatively broad, but heavyweight Apple (AAPL 342.00, -2.51) is having one of the most adverse impacts on the space. Semiconductor stocks are also contributing to the sector's slide; they are collectively down 0.7%.
Advancing Sectors: Materials (+0.5%), Health Care (+0.3%), Energy (+0.3%), Telecom (+0.1%), Financials (+0.1%)
Unchanged: Consumer Staples
Declining Sectors: Tech (-0.5%), Industrials (-0.2%), Utilities (-0.1%), Consumer Discretionary (-0.1%)
The broad market is up with a slight gain in the first few minutes of trade. Early support is broad, but materials stocks currently bost the best gains. The sector is up an enviable 0.6%. Tech stocks have actually fallen to a slight loss, though. The weakness comes after tech stocks had already lagged this past Friday.
U.S. stock futures edged higher Monday, as investors continue to bask in upbeat sentiment following a better-than-expected jobs report.
On Friday, U.S. stocks started the first day of the second quarter with modest gains, helped by the government's stronger-than-expected jobs report.
Economy: No market-moving economic reports are on the agenda Monday, but investors will keep a close eye on comments from Federal Reserve Chairman Ben Bernanke in the evening.
Investors will also listen for comments from Atlanta Fed President Dennis Lockhart and Chicago Fed President Charles Evans, who are speaking throughout the day.
Companies: General Electric (GE) shares rose in pre-market trading Monday, after a Barron's article -- citing a Citigroup analyst -- noted that GE may not be liable for financial damage in Japan's nuclear crisis.
Southwest Airlines (LUV) shares fell nearly 5%. The Texas-based airline canceled about 600 flights over the weekend, after a hole opened on top of a Boeing 737 mid-flight Friday. Southwest expects to cancel another 100 flights on Monday to accommodate aircraft inspections.
Crude oil for May delivery gained 31 cents to $108.25 a barrel.
Gold futures for June delivery rose $9.10 to $1,438 an ounce.
The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.47% from 3.45% late Friday.
The euro snapped a four-day advance against the dollar on concern a likely interest-rate increase by the European Central Bank this week will hurt the economies of the most-indebted nations in the 17-member bloc.
The shared currency slid versus all but two of its 16 major counterparts before the ECB’s April 7 policy meeting, at which all economists predict the benchmark rate will be raised by 25 basis points from a record low 1 percent. A report today showed producer-price inflation in the euro-region accelerated at the fastest pace since September 2008. The yen erased an earlier decline against the dollar.
“It’s clear that a rate increase is going to inflict damage on peripheral Europe and the greater the realization of that in the market, the greater the chances of downside adjustment in the euro,” said Neil Mellor, a currency strategist at Bank of New York Mellon Corp. in London. “A lot of these peripheral nations are hanging on to their recoveries by their fingertips and the last thing they need is another rate increase.”
But they say "virtually all business surveys and labor market indicators continue to look solid and are probably a more accurate guide to the economy's true strength. We believe that first-quarter GDP was held down by temporary factors, including poor weather and perhaps a bad draw from noisy data."
Support today is seen at $106.62 and $106.03 with resistance at $109.30 and $109.85.
USD/JPY: Y83.25, Y84.00, Y84.50
EUR/JPY: $1.4000, $1.4165, $1.4200, $1.4300
AUD/USD: $1.0300, $1.0375, $1.0400, $1.0450
European stocks rose in early trade on Monday as merger activity kept the market's three-week rally going ahead of an expected interest rate rise by the European Central Bank seen as supportive for European equities.
Shares in chemical group Rhodia (RHA.PA) jumped 50 percent after Solvay (SOLB.BR) launched a 3.4 billion euro agreed bid for its French rival, while Vodafone (VOD.L) also rose after selling its 44 percent stake in France's second-biggest mobile telecoms operator SFR to Vivendi (VIV.PA) for a total of 7.95 billion euros ($11.3 billion).
Solvay (SOLB.BR) was up 3.1 percent while Vivendi (VIV.PA) gained 0.4 percent.
Drifting lower again to Y83.95 on some aussie-yen sales, with some further bids seen at Y83.70/75 ahead of large at Y83.40/45.
On monday the yen fell against all its major counterparts as radiation levels that can prove fatal were detected at a damaged nuclear power plant in Japan amid signs the global economic recovery is gaining momentum elsewhere.
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