The S&P 500 recently broke free from its narrow trading range to set a fresh session high. The overall scope of the move and today's gain remain modest, though.
There weren't many corporate announcements ahead of the open and only a few are expected after the close. This evening's earnings announcements include the latest quarterly reports from Agilent (A 44.91, -0.11) and Marriott (MAR 41.06, -0.16), but tomorrow morning brings the latest from Marsh McLennan (MMC 28.79, -0.01) and Qwest (Q 7.43, +0.01).
The S&P 500 has repeatedly extended two-year highs during the past two weeks. It closed Friday just off of that peak, which is near the 100% gain level from its 2009 low at 666.79.
However, the market has been unable to build on this momentum this session. Still, no selling interest has been evident. That has left the broader market to drift contently in a relatively narrow range today.
EUR/JPY traded higher after short euro's rise. Cross printed session high on Y112.41 before retreated to current Y112.30. Stops a risk above Y112.50.
The euro dropped as European finance ministers ruled out immediate steps to tackle the debt crisis.
The 17-nation currency fell for the first time in more than a week against the Swiss franc on speculation an attempt to restructure WestLB AG, the German state-owned bank bailed out during the financial crisis, is floundering.
“The fall-off in the euro is from concerns over the German bank WestLB,” said Carl Forcheski at Societe Generale SA. “If people get the impression things aren’t being worked out, from the finance minister meeting, they have so many underlying problems that could cause the euro to come down even more.”
German Finance Minister Wolfgang Schaeuble told reporters before a meeting of European finance ministers in Brussels today that “stable” financial markets ease pressure for a boost in the 440 billion-euro ($593 billion) rescue fund.
“The markets are so stable right now that it’s better not to unsettle them with superfluous discussions,” Schaeuble said. “No especially exciting news” will come out of the meeting, according to Schaeuble.
The dollar remained lower versus the yen as President Barack Obama sent Congress a $3.7 trillion budget that projects the federal deficit will exceed $1 trillion for the fourth consecutive year in 2012 before falling to more “sustainable” levels by the middle of the decade.
The pound gained before a report this week forecast to show inflation accelerated, reinforcing expectations the Bank of England will raise interest rates.
Barclays Capital's technical strategists say last week's USD/CHF close above its 100-day moving average (Chf.9683 Monday) and break over Chf0.9700 suggests scope for a retest of the 2011 highs at Chf0.9785 (seen Jan 11). "We expect support on pullbacks to Chf0.9600 and a break above a swing move at Chf0.9815 would force us to raise our sights to the Q4 peaks around parity," the strategists say.
EUR/USD trades around $1.3480 but flows low. Offers mentioned from $1.3485 to $1.3500. Above $1.3510 said to hold a few stops from intra-day types.
EUR/USD rises to current $1.3485 as short-squeeze continues and as UK clearer buys of euro-sterling add fresh upside momentum. Pair expected to find supply in the area of $1.3490/00 that contains the Friday US and Asian overnight lows.
Broader market trade is still mixed, but semiconductor stocks continue to rise. Led by NVIDIA (NVDA 24.01, +0.54), the group is now up 1.2%.
Despite strength among semiconductor issues, the tech sector is only up 0.2%. That's mostly due to weakness in shares of Tellabs (TLAB 5.63, -0.16) and eBay (EBAY 33.97, -0.54).
Defensive-oriented issues like telecom and utilities have come under a rather pronounced spell of selling pressure in recent trade. Those sectors are down 0.8% and 0.9%, respectively.
Advancing Sectors: Energy (+0.8%), Materials (+0.7%), Tech (+0.1%), Industrials (+0.1%)
Declining Sectors: Utilities (-0.9%), Telecom (-0.8%), Consumer Discretionary (-0.4%), Consumer Staples (-0.4%), Health Care (-0.1%)
Andy Chaveriat, chief technical analyst at BNP Paribas, says the break of $1.3500/10 support hints at even lower levels. "The $1.3475 and $1.3500 are now resistance, with the euro risking a clean break of $1.3430/35 over the next day or so, targeting $1.3395 to $1.3370," he says. A move below $1.3370 would target $1.3245/50," Chaveriat says.
U.S. stocks were poised for a flat open Monday as investors took a cautious stance ahead of President Obama's 2012 budget outlook.
Stocks finished a strong week at multi-year highs on Friday, as investors cheered the resignation of Egyptian President Hosni Mubarak.
For the week, the three major indexes closed more than 1% higher. The Dow and the S&P also ended Friday's session at their highest levels since mid-June 2008.
Economy: There are no market-moving economic reports on tap for Monday, but President Obama will release his budget proposal for fiscal year 2012 in the morning.
The $3.7 trillion budget request proposes painful cuts in many government programs, but fails to address the largest drivers of the country's long-term debt: Medicare, Medicaid and Social Security.
The budget takes a big bite out of domestic spending and would slash deficits by $1.1 trillion over the next decade, according to White House estimates.
Congress will hold budget hearings throughout the week, and investors are likely to focus their attention on deficit levels.
Companies: GE (GE) said late Sunday that it's oil and gas business will acquire the well support division of John Wood Group for about $2.8 billion. The deal is expected to close later this year. Shares of GE were flat.
Internet radio site Pandora filed late Friday to raise up to $100 million in an initial public offering.
After the market close on Monday, Marriott (MAR) will report its quarterly results. Analysts surveyed by Thomson Reuters expect the company to post earnings per share of 36 cents, on $3.58 billion in revenue.
Oil for March delivery gained 10 cents to $85.68 a barrel.
Gold futures for April delivery fell $2.10 to $1,360.40 an ounce.
The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 3.65% from 3.64% late Friday.
The euro fell versus most of its 16 major counterparts on speculation European finance ministers meeting today and tomorrow will struggle to agree on debt- reduction targets.
The single currency dropped for a second day against the yen as Ireland’s opposition party said it would seek to renegotiate details of the country’s bailout and Greece’s government criticized demands from the European Union and International Monetary Fund for sales of state assets. The yen rose from close to a seven-week low against the dollar on speculation Japanese exporters took advantage of its recent weakness. New Zealand’s dollar fell after retail sales declined.
Enda Kenny, leader of Ireland’s largest opposition party, Fine Gael, yesterday said senior bank bondholders should share the cost of bailing out the country’s financial system. He said a new government would seek to renegotiate details of the international bailout after Feb. 25 national elections.
Greece’s government spokesman George Petalotis said demands for asset sales to raise as much as 50 billion euros by 2015 to pay down debt were “unacceptable.”
The nation last week also joined Italy in opposing annual numerical debt-reduction targets. Greece, which required financial aid last year to help counter its widening deficit, said the proposed rule would force it to make unsustainably large cuts once its support package runs out in 2013, according to a draft of EU legislation.
European finance ministers will meet to review the rules today and tomorrow in Brussels.
Cross continuing to work into bids placed stg0.8400/10. A break through stg0.8400 targets the 7 Feb low of stg0.8389. Stops now placed stg0.8395 with more through stg0.8375.
CLI points to ongoing moderate growth in Canada, France, UK;
signs of robust expansion in Germany, Japan, US;
signs of a downturn emerging in Italy;
CLI points to downturn in China, ongoing growth in Russia;
December leading OECD indicator +0.3 pt M/M, +2.2 pts Y/Y.
Breaks down through $1.6000 as euro fall continues and euro sterling finds some traction below stg0.8410. Cable slips towards overnight lows of $1.5985. Stops on a break of $1.5960, ahead of $1.5920 (38.2% FIBO $1.5340-$1.6280).
Asian stocks dropped, sending the regional gauge to its worst weekly performance since May, as Egyptian President Hosni Mubarak refused growing calls for his resignation, and amid lingering concern China will further tighten monetary policy.
Newcrest Mining Ltd., Australia’s biggest gold producer, dropped 1.4 percent after posting first-half earnings that missed estimates. China Resources Land Ltd., a state-linked developer, decreased 1.1 percent in Hong Kong after a newspaper reported new home sales in Shanghai dropped. Hana Financial Group Inc., South Korea’s fourth-largest financial company, declined 5.7 percent after announcing a share sale to fund the purchase of Korea Exchange Bank.
The MSCI Asia Pacific Excluding Japan Index gauge is heading for a 4.3 percent drop this week, the worst weekly performance since the period ended May 21, after China raised interest rates for the third time since mid-October to curb inflation and as Egyptians intensified protests after President Mubarak defied calls for his immediate resignation.
Of the 102 companies that reported results since the beginning of the year, 54 had a negative surprise, while 44 had a positive surprise.
European stocks posted a second weekly gain as companies from Swatch Group AG to Alcatel-Lucent SA reported better-than-expected earnings and after Egypt’s president stepped down.
Swatch climbed 8.5 percent, while Alcatel surged 35 percent. ArcelorMittal advanced after forecasting a stronger year ahead as demand recovers. Nokia Oyj, the world’s biggest maker of mobile phones, dropped 14 percent after saying it will form a software partnership with Microsoft Corp.
The Stoxx 600 Europe Index gained 0.7 percent to 287.99. The gauge reached the highest level since 2008 earlier this week,
“Earnings have been reassuring,” said Guillaume Duchesne, equity strategist at BGL BNP Paribas in Luxembourg. “There have been positive surprises. Sales have progressed. Our vision of the market is positive, without being euphoric.”
Some 57 percent of the 143 companies in the Stoxx 600 that have reported results since Jan. 10 topped per-share earnings projections
Deutsche Boerse AG climbed 8.4 percent. The company said it is in advanced talks to buy NYSE Euronext in an all-stock transaction that would create the world’s biggest exchange operator. London Stock Exchange Group Plc gained 6.3 percent after the company confirmed it will merge with TMX Group Inc.
UBS AG gained 5.4 percent. Switzerland’s biggest bank attracted net new money from wealthy clients for a second straight period even as fourth-quarter net income missed estimates.
Automakers posted the biggest gain among the 19 industry groups in the Stoxx 600, led by Nokian Renkaat Oyj. The Nordic region’s biggest tiremaker jumped 12 percent this week. The company on Feb. 9 reported fourth-quarter pretax profit that beat analyst estimates.
U.S. stocks rose, extending a second straight weekly advance, as Egyptian President Hosni Mubarak’s resignation and a jump in consumer confidence to an eight-month high bolstered optimism in the global economic recovery.
The Standard & Poor’s 500 Index rose 1.3 percent last week.
“As some of the uncertainty clears in Egypt, people can focus on fundamentals,” said Peter Sorrentino, who helps oversee $14.4 billion at Huntington Asset Advisors in Cincinnati. “We’ve had a fair amount of pretty good economic reports, including consumer confidence. Unfortunately, the optimism was recently disrupted by geopolitical concern. We’ll see how that plays out. There’s enough momentum in the U.S. economy right now.”
The S&P 500 rose 5.1 percent this year through yesterday as better-than-forecast economic data and company earnings boosted confidence in the economic recovery. Earnings at 74 percent of the 348 companies in the S&P 500 that reported results since Jan. 10 posted per-share profit that beat analyst estimates.
At 1000GMT, the EMU December industrial output data is released, followed at 1100GMT by the EMU December OECD leading indicator.
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