3/25 U.S. stocks hammered as fears about quarterly results intensify

Administrator - Wednesday, 25 March 2015 09:10

Stocks are overpriced, overleveraged, headed for trouble
NEW YORK (MarketWatch) — Wall Street can’t say it hasn’t been warned.

The Office of Financial Research, the agency tasked with promoting financial stability and keeping an eye on markets, released a paper last week stating that the stock market is dangerously overpriced, and that excessive leverage will exacerbate the next market correction.

The paper is aptly titled “Quicksilver Markets” alluding to when prices deflate, it will happen swiftly and not without pain.

“The timing of market shocks is difficult, if not impossible, to identify in advance, let alone quantify — a shock, by definition, is unexpected,” wrote Ted Berg, an analyst at OFR.

But Berg identified several indicators that are pointing to a correction. Instead of looking at valuation in isolation, Berg and his team analyzed other factors, such as corporate profits and leverage, and found a disturbing picture.

He argued that forward price-to-earnings ratios are not very good predictors of market downturns, as they tend to be biased during boom times, but other metrics, such as the so-called CAPE ratio, Q-ratio and Buffett indicator all offer warning signs.


ScreenHunter_472 Mar. 25 21.14

Gold nears $1,200 in 6-day winning streak
SAN FRANCISCO (MarketWatch) — Gold futures rebounded from early weakness and posted a sixth straight winning session on Wednesday after an unexpected drop in February durable-goods orders.

Gold for April delivery GCJ5, -0.06%  rose $5.60, or 0.5%, to close at $1,197 an ounce on Comex after tapping an intraday high of $1,199.30. The close was the highest since March 4.


ScreenHunter_471 Mar. 25 20.35

U.S. stocks hammered as fears about quarterly results intensify
NEW YORK (MarketWatch) — U.S. stocks were bludgeoned in Wednesday trading with the Dow threatening a 300-point drop as the Nasdaq Composite suffered its steepest decline since April 2014 as investors dumped technology and biotechs shares.

The carnage on the Street marks the third consecutive losing session, with the S&P 500 and Dow industrials recording the sharpest losses in two weeks and occurred as one of the year’s biggest mergers, a deal between Kraft Foods Group Inc. and H.J. Heinz Co., was announced in the morning.

Analysts attributed the selloff to pre-earnings season jitters and investors cashing out of stocks in companies that have seen big run-ups.

The Nasdaq Composite COMP, -2.37%  ended the day down 118.21 points, or 2.4%, at 4,876.52.ost 19.06 points, or 0.9%, to 2,072.44. Biotechnology stocks were hit the hardest, with the iShares Nasdaq Biotechnology ETF IBB, -0.06%  dropping 4.1%.

The S&P 500 SPX, -1.46%  fell 30.45 points, or 1.5% to 2,061.05, with nine of its 10 main sectors finishing sharply lower. Energy sectors stocks defied the trend and followed a rally in oil prices higher sparked by an intensifying conflict in Yemen.

The Dow Jones Industrial Average DJIA, -1.62%  lost 292.60 points, or 1.6% to 17,718.54, and turned negative for the year. All but two of its 30 components closed lower.

Quincy Krosby, market strategist at Prudential Financial, said investors are beginning to fret about first-quarter earnings and fear the disappointment will be worse than expected.

“Traders began buying protection from downside, which means they are very nervous,” Krosby said, pointing to a jump in the implied volatility as measured by the CBOE volatility index, which rose 13% to 15.42.

“Investors have been selling top-performing, high-beta stocks for several sessions now, so people owning biotechs and high-flying tech stocks decided to lock in profits and exit before the earnings season began,” Krosby said.

John Manley, chief equity strategist at Wells Fargo Advantage Funds, also attributed the selling action to the jitters stemming from uncertainty about the Fed policy and expectations that earnings would be poor.

“Typically, high-multiple stocks, such as biotechs and technology stocks get clipped badly during such times,” Manley said.

“There are also concerns that the Fed might be tightening too soon, given very weak growth we are experiencing,” Manley added.

One sign of that economic softness was durable good orders, released ahead of the start of trading on Wednesday, which fell more than expected in February, suggesting businesses remain reluctant to invest more aggressively.

Dan Greenhaus, chief global strategist at BTIG, said the market is still digesting economic reports in the wake of a Federal Reserve that said it would be “data dependent” in determining the pace of its first rate hike in nine years.

“Today’s durable-goods orders were in line with poor data of late, which suggest that the first-quarter GDP will be weak,” Greenhaus said.

Stocks to Watch: Shares of Kraft Foods Group Inc. KRFT, -0.11%  surged more than 36% after a merger was announced with H.J. Heinz Co.

Shares of Kofax Ltd. KFX, +46.00%  were up 46% after the software company agreed to be acquired by Lexmark International LXK, +0.36%  late Tuesday.

3/24 U.S. stocks fall as worries over rate hikes loom

Administrator - Tuesday, 24 March 2015 07:32

Sorry, the Fed won’t hold your hand forever

Bullard: Worried about ‘violent’ reaction to Fed rate hike

ScreenHunter_02 Mar. 24 19.41

Gold futures settle near a three-week high
Greek jitters, weak dollar provide tailwind
SAN FRANCISCO (MarketWatch) — Gold futures scored a fifth straight session of gains on Tuesday, with European jitters and worries about a potentially overheated equity market helping to lift prices to their highest level in nearly three weeks.

Gold for April delivery GCJ5, +0.07%  rose $3.70, or 0.3%, to settle at $1,191.40 an ounce on Comex — the highest settlement for a most-active contract since March 5. May silver SIK5, -0.31%  advanced 9.2 cents, or 0.5%, to $16.983 an ounce.

Dips in gold will be bought, said Jason Rotman, president of Lido Isle Advisors. “We believe gold will try to get above $1,200 soon.”

A day earlier, gold gained on the back of hand-wringing over Greece’s debt problem.

Gold has also taken some cues from the latest declines in the dollar DXY, -0.01% which took a breather last week from a torrid rally that had put pressure on commodities. Last week, gold climbed 2.8%, while silver jumped around 9%.

“After last week’s short-covering rally, gold is doing nothing of much overall,” said Adrian Ash, head of research at BullionVault.

And “with currencies still the focus, Thursday brings eurozone money-supply and bank-lending data — a key indicator of the region’s tilt toward deflation. More fireworks could come with U.S. consumer confidence on Friday,” said Ash.


ScreenHunter_01 Mar. 24 19.26

U.S. stocks fall as worries over rate hikes loom
Consumer prices rise in February for the first time in four months
NEW YORK (MarketWatch) — U.S. stocks declined for the second straight day on Tuesday, with Dow industrials losing more than 100 points as investors grappled with a batch of better-than-expected economic reports that suggest a rate hike may be nearing.

Wall Street is starting to fret that upbeat economic trends may offer Chairwoman Janet Yellen, who said that the central bank plans to be very “data dependent” at the conclusion of the Fed’s policy meeting last week, more reason to hike rates sooner than later.

The S&P 500 SPX, -0.61%  fell 12.92 points, or 0.6%, to 2,091.50, with all of its 10 main sectors ending with losses. Homebuilder stocks were among the bright spots, rallying after a jump in new-home sales.

The Dow Jones Industrial Average DJIA, -0.58%  dropped 104.90 points, or 0.6%, to 18,011.14, with 24 of the 30 components finished lower.

The Nasdaq Composite COMP, -0.32%  ended the day down 16.25, or 0.3%, at 4,994.73.

Kim Forrest, senior equity analyst at Fort Pitt Capital Group, said that markets have not fully weaned themselves off relying on the Federal Reserve’s lose monetary policy.

“Today’s CPI was a goldilocks number – the uptick was enough for those who wanted to see a rise, but was not too big for those who worry about high inflation,” Forrest said.

Economic reports showing the first increase in inflation in four months pushed the dollar higher. Stocks briefly rose after a jump in new-home sales and a strong initial reading on manufacturing activity in March. But those gains soon evaporated.

Randy Frederick, managing director at the Schwab Center for Financial Research, said markets appear to be puzzled about economic indicators, as investors are at a loss of how to parse gauges of U.S. economic health and the implications for the pace of the Fed’s rate-hike plan.

Pointing at low levels of implied volatility measured by the CBOE volatility index, Frederick said institutional investors are not anticipating big downside moves. The CBOE Vix has been falling since it spiked in January and at 13, is hovering around its lowest levels of this year.

Economic data: The U.S. consumer-price index climbed a seasonally adjusted 0.2% in February, as gas prices rebounded and the cost of food and shelter increased again, the Labor Department said Tuesday.

New U.S. homes sold at an annual rate of 539,000 in February to mark the best month of sales in seven years, the government reported Tuesday. Separately, U.S. house prices rose a seasonally adjusted 0.3% in January, the Federal Housing Finance Agency said Tuesday.

The flash reading of the Markit manufacturing purchasing managers index unexpectedly rose in March to 55.3 from 55.1 in February, to mark the highest reading since October.

Speaking at CityWeek in London on Tuesday, St. Louis Federal Reserve President James Bullard said that the Fed’s zero-rate interest policy is no longer appropriate and that a rate hike this summer wouldn’t strangle the U.S. economic recovery. However, he warned the reaction to the first rate hike may be ‘violent’, because of a mismatch in expectations.

Stocks to Watch: Whiting Petroleum Corp. WLL, +0.16%  shares plunged nearly 20% to $30.91 after the oil and gas company announced a secondary stock offering.

McCormick & Co. MKC, +0.11%  shares jumped 2.6% after quarterly results that came in above expectations.

Netflix Inc. NFLX, +0.16%   shares jumped 3.1% after Barlays raised its price target raised to $450 from $400.


3/23 U.S. stocks end lower in late-trade selling

Administrator - Monday, 23 March 2015 09:40

Gold and oil have a complicated relationship with the dollar
SAN FRANCISCO (MarketWatch)—The most common excuse for the recent strength in the prices for gold and oil in the wake of the Federal Reserve’s meeting last week has been the drop in the U.S. dollar, but the two commodities don’t always have an inverse relationship with the greenback.

The general rule of thumb has been that commodities priced in dollars often move in the opposite direction of the currency, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.

Many times, however, “it’s almost impossible to see a correlation” between oil and the dollar, said Phil Flynn, senior market analyst at Price Futures Group. “Supply and demand factors overshadow, at times, any concern about the dollar or exchange rate.”


ScreenHunter_470 Mar. 23 21.35

U.S. stocks end lower in late-trade selling
NEW YORK (MarketWatch) — U.S. stocks erased modest gains in the last 15 minutes of trading, finishing slightly lower on Monday.

Some market watchers attributed recent volatility in stocks to fluctuations in the currency markets, where the surge in the dollar raised concerns over profitability of multinational corporations. Monday’s pullback in the dollar failed to provide support to stocks, however.

Despite the reversal, Monday’s moves were fairly tepid compared with volatile swings last week, when the Federal Reserve signaled that the first interest-rate hikes may come as soon as June.

Even though the central bank dropped its reference to being “patient”, markets took the statement and the following news conference by Chairwoman Janet Yellen as dovish.

The S&P 500 SPX, -0.17%  ended the session 3.68 points, or 0.2%, lower at 2,104.42, with four out of its main 10 sectors closing lower.

The Dow Jones Industrial Average DJIA, -0.06%  finished 11.61 points, or 0.1%, lower at 18,116.04, with more than half of its 30 components ending with losses.

The Nasdaq Composite COMP, -0.31%  closed 15.44 points, or 0.3%, lower at 5,010.97, as biotechnology stocks led the losses. The iShares Nasdaq Biotechnology ETF IBB, -0.20%   fell 2.3%.

Peter Cardillo, chief market economist at Rockwell Global Capital, said that the market felt the pressure from transportation stocks, which sold off on Monday.

Indeed, the Dow Transportation Average DJT, -1.96%  dropped 2% on Monday, led by a 8% drop in Kansas City Southern KSU, +0.30%

“Markets are technically driven at this point and a selloff in the transportation average may have pushed stocks lower,” Cardillo said.

Arthur Hogan, chief market strategist at Wunderlich Securities, said the Fed put the markets on data watch.

“Investors will be focusing on economic data, especially the PCE component of the fourth-quarter GDP revision this week, as the Fed made it clear it would remain flexible and data-dependent,” Hogan said.

“Markets are also using the break in the dollar surge as a spring board. While ultimately stronger dollar is good for the U.S. economy, a sharp gain in a short time had been disruptive for markets,” Hogan added.

Fed speakers: Monetary policy still was in the spotlight, with St. Louis Federal Reserve President James Bullard telling CNBC Monday that the dovish statement from last week may have misplaced investor expectations about the first rate hike. Bullard also said the market could throw another “tantrum” with the Fed possibly raising rates later this year.

Cleveland Fed President Loretta Mester was speaking in Paris Monday morning. Mester, who isn’t a voting member of the policy-setting committee this year, said the central bank can do more at helping guide the market in terms of rate moves.

Fed Vice Chair Stanley Fischer speaking at the Economic Club of New York, said rate hike is likely to be warranted this year.

Economic data: Monday’s sole economic report was on sales of existing homes, which rose 1.2% in February to a seasonally adjusted annual rate of 4.88 million, the National Association of Realtors reported Monday. The gain was below expectations. The median sales price of used homes hit $202,600 in February, up 7.5% from the year-earlier period.

Stocks to watch: Shares of Carnival Corp. CCL, +0.04% CCL, -1.56%  fell 1.8% after Deutsche Bank cut the cruise-operator to hold from buy.

Tenet Healthcare Corp. THC, -0.13%  gained 4.9% on news the company is creating a $2.6 billion joint venture with United Surgical Partners International.

Gilead Sciences Inc. GILD, -0.11%  dropped 2% after the drug maker on Friday warned health-care providers that nine patients taking its hepatitis C drugs Harvoni or Sovaldi along with the heart treatment amiodarone developed abnormally slow heart beats and one died of a heart attack, according to Bloomberg.

Shares of Kansas City Southern KSU, +0.30%  dropped 8%, after the railroad company lowered its 2015 sales growth outlook.

3/18 U.S. stocks rally as Fed telegraphs cautious rate-hike plan

Administrator - Wednesday, 18 March 2015 08:26

ScreenHunter_468 Mar. 18 20.33

Gold surges after Fed removes ‘patient’ from statement
Gold prices jumped on Wednesday, after the Federal Reserve dropped the word “patience” from its policy statement, stoking expectations for a mid-year rise in U.S. interest rates.

As the global investment community focused its attention on the U.S. central bank, the Fed Open Market Committee lived up to expectations: It dropped the word “patient” from its post-meeting statement, an indication, subtle though it may be, that the era of zero interest rates is about to end.

Spot gold was up 2.1 percent to $1,172.30 an ounce, above its lowest since Nov. 7 at $1,142.86, hit on Tuesday.

U.S. gold futures for April delivery settled up 0.3 percent at $1,151.30 an ounce.


ScreenHunter_467 Mar. 18 20.19

U.S. stocks rally as Fed telegraphs cautious rate-hike plan
SAN FRANCISCO (MarketWatch) — U.S. stocks closed higher Wednesday after the Federal Open Market Committee indicated a slower pace of rate hikes, following the removal of the word “patient” from its policy statement.

The S&P 500 SPX, +1.21%  jumped 25.14 points, or 1.2%, to close at 2,099.42, with all 10 sectors finishing higher on the day, led by energy and utilities. Just before the Fed’s statement, the S&P 500 was down 8 points.

Trading within a 400-point range on the session, the Dow Jones Industrial Average DJIA, +1.27%  surged 227.11 points, or 1.3%, to close at 18,076.19, after trading down 101 points just before the statement’s release. Twenty-eight of the Dow’s 30 components finished higher, with Caterpillar Inc. CAT, +3.67%  and Chevron Corp. CVX, +3.42%  among the biggest gainers.

The Nasdaq Composite COMP, +0.92%  surged 45.39 points, or 0.9%, to close at 4,982.83, after being down about 17 points before the statement.

The Fed’s “dot plot,” or survey of what Fed officials think rates should be at certain times, indicated a slower rise in rates, as the median dot for the end of 2015 declined to 0.625% from 1.125%.

Even though the word “patient” was removed, new cautionary language in the Fed statement is setting up for a first rate hike in September, said Dan Greenhaus, chief strategist at BTIG, in emailed comments. The Fed said it would raise rates when “further” improvement in the labor market has been seen, Greenhaus noted.

“What’s important about this part of the statement is that it clearly says the FOMC is looking for ‘further’ improvement, meaning the economy and labor market has not yet met whatever criteria necessary to warrant a rate hike,” he said.

Bob Baur, chief global economist at Principal Global Investors, said the Fed wants to maintain the most flexibility as it attempts to lift rates.

The Fed wants “some flexibility to be able to raise rates fairly soon,” Baur noted. “But they don’t want to be locked in,” to a specific timetable, he added.

Fed Chairwoman Janet Yellen said at a news conference the central bank has not determined timing on rate increases.

The Fed action resulted in stunning moves in the euro EURUSD, +0.06%   which jumped to $1.10 versus the dollar late in trading, while the central bank moves took the wind out of what had been a rapid climb in the value of the dollar compared with its main rivals. The dollar sank against a basket of six main currencies DXY, -0.21%  on the heels of the Fed’s policy statement, which indicated that it will move cautiously in lifting key interest rates for the first time in nearly a decade.

Notable stocks: Oracle Corp. ORCL, +0.02% shares jumped after the company posted flat earnings, but raised its dividend.

Adobe Systems Inc. ADBE, -0.38%  shares slumped after the company said subscriber growth badly missed expectations.

Quiksilver Inc. ZQK, +18.82%  jumped 19% after the outdoor sports apparel maker reported a narrower-than-expected loss late Tuesday.

FedEx Corp. FDX, -0.08% shares fell after the company reported a better-than-expected fiscal third-quarter profit but missed revenue estimates.

Kraft Foods Group Inc. KRFT, +0.28%  shares finished fractionally higher after the company said it has recalled 242,000 cases of Kraft Macaroni & Cheese Dinner boxes, saying specific products could contain small metal pieces.

3/17 U.S. stocks fall as investors brace for Fed statement

Administrator - Tuesday, 17 March 2015 08:24

A key part of the gold market will see a major shift Friday
SAN FRANCISCO (MarketWatch) — On Friday, for the first time in close to a century, the gold market price fix is about to change. It is a move that could potentially provide a better view of China’s insatiable demand for the precious metal.

The London Bullion Market Association said the LBMA Gold Price will launch on Friday, with the ICE Benchmark Administration operating the auction process. That will replace the so-called London Gold Fix, a widely-used pricing medium that has been around since 1919 and is administered by London Gold Market Fixing Ltd. twice daily.

“The changes taking place with the new gold fix could be a game changer for gold trading as we know it,” said Kevin Kerr, president of Kerr Trading International.

Here’s why:


ScreenHunter_465 Mar. 17 20.21

U.S. stocks fall as investors brace for Fed statement
NEW YORK (MarketWatch)—U.S. stocks ended Tuesday’s choppy session broadly lower, with the Dow industrials posting a triple-digit loss.

Investors wrestled with jitters as the Federal Open Market Committee two-day meeting got under way, with many expecting the central bank to pave the way to an interest-rate hike as early as this summer by removing the word “patient” from its statement.

The S&P 500 SPX, -0.33%  closed 6.99 points or 0.3%, lower at 2,074.20, with nine of its 10 main sectors finishing lower.

The Dow Jones Industrial Average DJIA, -0.71%  dropped 128.34 points, or 0.7%, to 17,849.08, with 25 of its 30 members posting losses.

The Nasdaq Composite’s COMP, +0.16%  defied the trend and closed in positive territory, up 7.93 points, or 0.2%, at 4,937.43, with the help of Apple Inc.’s AAPL, +0.09%  1.7% gain.

“The sideways trading action since the end of QE is an indication that people are confused about the economy. Tomorrow’s statement is unlikely to bring about any clarity to markets, as the Fed is likely to replace the word ‘patient’ with ‘slow path’ rhetoric,” said Ed Shill, chief investment officer at QCI Asset Management.

“But markets are absolutely wrong about the June-September rate hike, because they have ignore one of the biggest words the Janet Yellen has been saying all this time—‘if’. The Fed will raise if we see strong employment growth, wage growth and inflation at 2%. But none of that is happening,” Shill said.

In Tuesday’s economic news, data showed construction on new U.S. homes slumped in February, mostly due to harsh winter, but permits jumped, suggestion construction will pick up in the spring.

Softer data over the past two months had pushed expectations of a rate hike further out, resulting in markets rallying on ‘bad news,” which was seen delaying a rate hike, and falling on “good news.” However, so far this year, the S&P 500 moved largely sideways, rising less than 1% since the start of the year.

Diane Jaffee, senior portfolio manager at TCW, an asset manager with $7 billion under management, said much of the market expects the word “patient” won’t be removed from the central bank’s statement.

“After lower consumer sentiment figures, markets think the Fed will keep ‘patient’ and if it does not, then we are in for a selloff,” Jaffee said. “But ultimately, the Fed will start raising rates some time this year and markets will go through rough patches,” she said.

Stocks to watch: Burlington Stores Inc. BURL, +2.11%  rose 2.1% after the discount retailer posted better-than-expected fourth-quarter profit and revenue.

Plug Power Inc. PLUG, -1.92% shares dropped 5.1% after the company missed earnings and sales estimates.

Shares of American Airlines Group Inc. AAL, +0.20%  jumped 6.9% after Standard & Poor’s said late Monday that the airline will be included in the S&P 500 index.

Apple Inc. AAPL, +0.09%  jumped 1.7% after The Wall Street Journal, citing sources, reported that the tech company is in talks with programmers to launch an online television service based on a slim bundle of TV networks.


ScreenHunter_466 Mar. 17 20.56

Gold logs lowest settlement in more than 4 months
SAN FRANCISCO (MarketWatch) — Gold futures settled on Tuesday at their lowest level since early November, as investors awaited the outcome of the two-day Federal Open Market Committee meeting for cues on the metal’s next direction.

The FOMC meeting concludes Wednesday with a policy statement and news conference.

Gold for April delivery GCJ5, +0.12%  declined by $5, or 0.4%, to settle at $1,148.20 an ounce on Comex after settling higher for a third straight session on Monday. That was the lowest settlement for a most-active contract since Nov. 6.

Silver for the same month SIK5, -0.12%  shed 3.9 cents, or 0.3%, to $15.578 an ounce.

The metals market is likely to get its next real directional cue from the FOMC meeting, with market participants looking for a signal the central bank is getting ready to hike interest rates and drop the “patient” reference in its statement.

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