SD.N 10.14 +0.96 +10.46
PGI.N 6.60 +0.57 +9.45
NLS.N 2.60 +0.22 +9.24
IPG.N 12.65 +1.03 +8.86
SRZ.N 9.95 +0.80 +8.74
MED.N 22.91 -2.31 -9.16
CLGX.N 18.45 -1.57 -7.84
CLD.N 19.93 -1.43 -6.69
PMC.N 11.33 -0.65 -5.43
SRV.N 10.00 -0.53 -5.03
The major equity averages continue to gradually reclaim their gains, but they haven't yet returned to the session highs that were set almost two hours ago.
For the second straight session the Nasdaq Composite has a nice lead over its two counterparts. In fact, its gain is more than triple that of the Dow. The Nasdaq's strength is largely owed to a rebound in tech issues, namely semiconductor stocks, which are collectively up 2.0%.
The Swiss franc fell against most of its major counterparts as concern eases that the political turmoil in Libya will disrupt global oil markets, denting the refuge appeal of the currency.
The MSCI World Index rose for the first time in five days, gaining 0.8%, while the Standard & Poor’s 500 Index advanced 0.7%. Crude oil futures fluctuated after rising earlier to $99.20 a barrel in New York.
The yen gained against the dollar for an eighth day, the longest winning streak this year, after data showed the U.S. economy grew more slowly than first estimated in the fourth quarter.
U.S. gross domestic product expanded in the fourth quarter at a 2.8% annual pace, compared with an earlier estimate of 3.2%, Commerce Department figures showed today in Washington. The forecast in a survey of economists was for a 3.3% increase. GDP grew 2.6% in the third quarter. The franc retreated from a record high versus the greenback and the Australian and New Zealand dollars strengthened against most major peers as investors sought higher-yielding assets such as equities. New Zealand’s dollar also rose after Standard & Poor’s said the earthquake in Christchurch would have no immediate effect on the nation’s credit rating.
The dollar pared its loss against the yen after U.S. consumer confidence rose more than forecast this month, according to the Thomson Reuters/University of Michigan sentiment index, increasing to 77.5 from 74.2 last month.
A sudden flurry of selling has abruptly pulled stocks down from their recent trading range. The overall market is still up nicely for the session, but stocks are now at their lowest level in about 90 minutes.
The recent slip coincided with an upward push by oil prices, which recently made their way to a 0.5% gain. Oil prices have since handed back that gain so that they are now flat at $97.30 per barrel.
The dollar index is near session highs, but this is only pressuring select commodities this morning. April crude oil rose to overnight highs of $99.20 per barrel, but lost steam following news that Saudi Arabia was raising production. Supply shortfalls in Libya are still a concern though. On its pullback, crude fell into negative territory and new session lows of $96.17 per barrel. In current trade, crude is just below the unchanged line at $97.18 per barrel.
EUR/USD printed lows around $1.3720 as dollar gained slightly in the wake of the Michigan data. rate recovered to $1.3744 area with flows still described as very light. Area of $1.3750 likely to offer nearby resistance. Bids at $1.3720 and $1.3700.
GBP/USD stretches down to a new lows at $1.6027 with rate remains under pressure. Further stops mentioned below $1.6020, which if triggered to take rate into next support area between $1.6010/00. Below here and rate can ease on toward $1.5980 ahead of stronger area between $1.5965/60.
Analysts at RBC note "the +2.8% Q4 GDP revision was disappointing but composition was still healthy. The downward revision to fourth quarter GDP growth was largely concentrated in the consumer and government sectors." They expect full-yr '11 growth to be +3.4%.
U.S. stocks were set for a higher open Friday, as oil prices slipped. However, futures backed off slightly from earlier highs after a disappointing report on the health of the U.S. economy.
On Thursday, stocks rebounded from afternoon lows and finished with small losses, as oil prices retreated from two-year highs above $100 a barrel.
"You might get a little bit of a relief rally, because oil prices are hovering around the $96 to $97 per barrel range," said Peter Cardillo, chief market economist for Avalon Partners. "We're looking at stable commodity prices."
All three major indexes are on track for their worst week since August. Despite the pullback, stocks are still higher for the month of February and the year.
The Dow has posted losses for three consecutive sessions, losing 285 points this week, or 2.5%.
"We've seen a pullback in oil prices and there seems to be a direct correlation in the last couple days between stock prices and oil prices," said Mark Luschini, chief investment strategist for Janney Montgomery Scott. The biggest catalyst for even higher oil prices would be "if turmoil in the Middle East pours into another more strategic country, like Saudi Arabia," he said.
Economy: According to revised data the real gross domestic product increased at an annual rate of 2.8% in the fourth quarter. The GDP revision was much less than 3.3% increase economists forecasted.
A final read on February's University of Michigan consumer sentiment survey also is on the docket. The index is expected to remain unchanged at 75.1.
Companies: Shares of Boeing (BA, Fortune 500) were 4% higher in premarket trading, after the aerospace company won a $35 billion contract from the Air Force late Thursday.
Bailed-out insurer AIG (AIG, Fortune 500) posted an $11 billion profit for the fourth quarter, and $10 billion in earnings for the full year. Shares were up slightly in premarkets.
JC Penney (JCP, Fortune 500) reported a 30% surge in quarterly earnings, to $1.09 per share. The retailer beat analysts' forecast, who were expecting the department store chain to earn $1.08 a share.
Currencies and commodities: The dollar gained strength against the euro and the British pound but slipped against the Japanese yen.
Oil for April delivery fell 74 cents, or less than 1%, to $96.54 a barrel.
EUR/USD holds above the morning low at $1.3752, currently at $1.3770 after surprise downward revision to Q4 GDP data. Dollar modestly lower though impact of data perhaps diminished by a market still digesting the report. Demand interest positioned from $1.3750 down to $1.3740 with stops below there.
09:00 EU(17) M3 money supply (January) adjusted Y/Y 1.5% 1.9% 1.7%
09:00 EU(17) M3 money supply (3 months to January) adjusted Y/Y 1.7% - 1.6%
09:30 UK GDP (Q4) revised Y/Y -0.6% -0.4% -0.5%
09:30 UK GDP (Q4) revised Y/Y 1.5% 1.8% 1.7%
The yen and franc declined before a report that is forecast to show U.S. economic growth quickened and as stocks rose, denting demand for the perceived safety of the Japanese and Swiss currencies.
“The yen is overbought, and there’s potential for further losses once the crisis is resolved,” said Jane Foley, a senior currency strategist at Rabobank. Losses by the yen may be limited as the Libyan crisis “is clearly not resolved yet and the market won’t want to leave a lot of risk open over the weekend,” Foley said.
The franc retreated from a record high against the dollar on speculation the Libyan rebellion won’t trigger an oil-price rally sufficient to dent the global economic recovery.
Libyan leader Muammar Qaddafi, who has lost control of much of his country’s oil-rich east, appealed on state television to citizens to end violence as his forces stepped up a crackdown on opponents. The nation holds Africa’s largest crude oil reserves.
The pound slumped to its weakest level this month against the euro after a report showed Britain’s economy shrank more than initially estimated in the fourth quarter.
U.K. gross domestic product contracted 0.6% in the fourth quarter, the Office for National Statistics said today, more than the Jan. 25 estimate of a 0.5% drop.
EUR/USD consolidated within the $1.3815/40 for the most hours in EU before weakened to current $1.3775/80. Bids at $1.3770/75 give some support to euro.
GBP/USD fell to the lows around $1.6070 before trying to recover to $1.6100. In general rate remains under pressure.
USD/JPY holds between Y81.80/Y82.05.
U.S. gross domestic product probably grew at a 3.3% annual rate in the fourth quarter, Commerce Department figures will show today, according to the median prediction. That’s higher than an initial estimate of 3.2% reported on Jan. 28.
We can see Golden-cross of 21- & 55-DMAs on daily charts with oil tests the daily Bollinger band top at $98.97 (former resistance). Daily studies remain bullish, albeit in overbought territory. New initial resistance seen as yesterday's high at $103.41 with further resistance at $108.03, $110.85 and $113.19. Initial supp seen as 38.2% Fib & former Aug 4 res line at $95.93/96.04.
The euro edged closer to a key resistance against the dollar on Friday, supported by more inflation-fighting rhetoric from the European Central Bank, while the Swiss franc touched a new peak on fears the unrest in Libya may spread to other oil producers.
The dollar's fall, however, was tempered somewhat after oil prices came off of 2-½ year highs, and market players said the U.S. currency could regain ground in the near-term if short dollar positions against the Swiss franc are unwound.
"While in Europe there is talk of monetary tightening due to inflationary pressures, rises in oil prices are seen as negative for the U.S. economy," said Koji Fukaya, chief FX strategist at Credit Suisse. "Yield differentials have been moving against the dollar," he added.
Higher oil prices are seen as having a bigger impact on the U.S. economy given it's reliance on consumer spending as a source of growth.
Lending support to the euro were more hawkish comments from European officials. ECB policymaker Axel Weber said the only direction for interest rates to go is up.
Some traders said the euro was likely to be supported until an ECB policy meeting next week and could rise above the February peak of $1.3862.
The dollar hit a record low of 0.9229 Swiss francs on Friday.
"Among the currencies typically regarded as safe havens, namely the dollar, yen and Swiss franc, the Swiss franc may be the currency that is closest to seeing its interest rates rise," said Credit Suisse's Fukaya, referring to the potential for monetary tightening by Switzerland's central bank.
But with many market players now probably long on the Swiss franc, the currency may face some long liquidation, especially if oil prices stabilise, market players said.
Meanwhile, today's focus is on revised US GDP data for Q4 at 13:30 GMT. At 14:55 US Michigan sentiment index for February will come.
Gold moved back below the former 11-week resistance line, yesterday. Currently price tests today's res level at $1409.4 but failed to break above. The 11-week resistance line remains key and there is a chance for a sustained move above. Daily studies are becoming more neutral with stochastic showing a sell-signal. Initial support seen as the rising channel base from Jan 28 at $1391.80.
EUR/USD breaks under earlier pullback lows at $1.3795 to extend the losses to $1.3779. Bids earlier were mentioned at $1.3780, then - ahead of the $1.3850 (option barrier too).
Coming under secondary react selling, following disappointing UK GDP Q4 revision, with rate making a brief show under $1.6100. Rate currently trades around $1.6090. A clear below the figure to open a retest of overnight lows at $1.6085, with demand seen placed between
$1.6085/80. Below here and rate can ease on toward $1.6050. Resistance now seen toward $1.6150.
The Swiss franc climbed to a record against the dollar and the yen strengthened to an almost three- week high as the uprising in Libya drove oil to a 29-month high, spurring demand for the safest assets.
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