Thursday, September 27, 2012

Trader's Highlight

DJI- NEW YORK, Sept 26 (Reuters) - The S&P 500 fell for a fifth straight trading day on Wednesday as protests in Spain and Greece over euro zone austerity measures raised fresh concerns over Europe's ability to get its debt crisis under control.

Investors sold risk-sensitive sectors such as energy and tech, while they poured money into more defensive areas like utilities and consumer staples. The S&P technology sector .GSPT declined 0.8 percent and the energy sector .GSPE fell 0.9 percent, while S&P utilities .GSPU ended up 0.2 percent.

Violent protests in Madrid against expected austerity measures and growing talk of secession in the wealthy Catalonia region increased pressure on Spanish Prime Minister Mariano Rajoy as he moves closer to asking euro zone policymakers for rescue money.
Meanwhile, Greece faced its biggest anti-austerity protest in more than a year as international lenders admitted to difficulty in working out how to solve Athens' debt crisis.
"When it gets down to it, there is real disagreement between the people in the streets and the policy makers" in Europe, said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

"I think it's certainly causing some concerns" for investors, he said, adding, "The market's probably looking for an excuse to have a correction."

The S&P 500 is up 5.2 percent so far for the third quarter and 1.9 percent for September, historically a weak month for equities. Gains were largely tied to actions taken by the U.S. Federal Reserve and European Central Bank to prop up their economies.

For the day, the Dow Jones industrial average .DJI was down 44.04 points, or 0.33 percent, at 13,413.51. The Standard & Poor's 500 Index .SPX was down 8.27 points, or 0.57 percent, at 1,433.32. The Nasdaq Composite Index .IXIC was down 24.03 points, or 0.77 percent, at 3,093.70.

Longer term, the outlook for stocks appeared more positive. While the S&P 500 wasn't expected to move much from its current level through the end of the year, according to a Reuters poll of analysts, it should advance in the first half of 2013, largely on central bank actions.
Also weighing on tech shares Wednesday, Jabil Circuit JBL.N tumbled 9.9 percent to $18.90 after the technology company reported fourth-quarter earnings that missed expectations and forecast weak first-quarter results.
Other recent earnings warnings from companies including FedEx Corp FDX.N, the world's second biggest package delivery company, and Caterpillar Inc CAT.N, the biggest maker of earth-moving equipment, have sparked concerns about global growth.

Outlooks for the third quarter are at the most negative since 2001, according to Thomson Reuters data. The negative-to-positive ratio for the upcoming earnings period stands at 4.3 to 1.

On the plus side for the day, American Greetings Corp AM.N jumped 17.3 percent to $16.82 after the company said it received an offer to go private from a group led by its chief executive, valuing the greeting card company at about $580 million.

Economic data showed prices of new U.S. single-family home sales vaulted to their highest level in more than five years in August, the latest evidence the housing market was making progress.

Volume was roughly 6.54 billion shares traded on the New York Stock Exchange, the Nasdaq and the Amex, compared with the year-to-date average daily closing volume of 6.53 billion, even though many participants were out for the observance of the Jewish holiday of Yom Kippur.

Decliners outnumbered advancers on the NYSE by about 17 to 12, and on the Nasdaq by about 5 to 3.

NYMEX- NEW YORK, Sept 26 (Reuters) - U.S. crude futures fell a third straight session on Wednesday as Europe's debt crisis and concerns about slowing global economic growth weighed on oil prices.

Concerns about Europe and the global economy overshadowed any bullish sentiment generated by government data showing U.S. crude inventories fell 2.45 million barrels last week, against analyst expectations that they would be higher.

CBOT SOYBEAN- Spot soybean futures on the Chicago Board of Trade fell to a near three-month low, joining a broad-based sell-off in commodities tied to concerns about slowing global growth, traders said.

* The dollar hit a two-week high against the euro and U.S. equities fell as renewed upheaval in the euro zone over financial bailouts led investors to book profits near the close of a strong third quarter.
• Additional pressure from talk of better-than-expected soy yields as the U.S. harvest expands.

• Also bearish, rains across central Brazil this week have eased dryness in some areas, lifting prospects for the planting of that country's 2013 soybean crop.

• Benchmark November soybeans SX2 hit sell-stops as the contract fell below $15.82, the 38 percent retracement mark of the contract's summer rally from early June to early September.

• Spot soybeans Sc1 fell to $15.65, the lowest spot soybean price since July 3.

• USDA confirmed sales of 140,000 tonnes of U.S. soybeans to unknown destinations for delivery in 2012/13.

FCPO- SINGAPORE, Sept 26 (Reuters) - Malaysian palm oil futures ended lower on Wednesday, as investors stayed cautious on rising stocks and renewed fears about a slowing global economy on Spain's financing woes.

Palm oil stocks in No.2 producer Malaysia look set to climb higher on strong production, and while exports rose from a month ago, traders said the increase was not enough to bring down high inventory levels, which hit a 10-month high in August.

Malaysian palm oil exports rose 11 percent for the first 25 days of September from a month ago, cargo surveyor data showed on Tuesday. PALM/ITS PALM/SGS

"The export numbers are a non-factor now -- the first 25 days is not that fantastic. We need bigger exports coming in to reduce stocks," said a trader with a foreign commodities brokerage in Malaysia.

"I believe stocks cannot be reduced in one or two months' time, it will take longer, probably until the end of the year, to be reduced further, then it will help to suppress the drop in prices."

The benchmark December contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 1.8 percent to close at 2,621 ringgit ($851) per tonne.

Futures hit a two-year low on Monday and have lost more than 17 percent so far this year, on track for their worst yearly performance since 2008.

Total traded volumes stood at 34,447 lots of 25 tonnes each, higher than the usual 25,000 lots.

Technicals showed that over the next three months, palm oil would drop into a support zone of 2,387 to 2,415 ringgit per tonne, a break below which will open the way towards a range of 1,899 to 1,952 ringgit, said Reuters analyst Wang Tao.

Cautious sentiment dominates as the markets are closely watching Madrid's ability to control its finances, with ballooning regional debts crippling the government's refinancing efforts.

The country is also subject to a ratings review by Moody's Investors Service. MKTS/GLOB

Also weighing on palm oil, Brent crude oil fell below $110 on Wednesday, weighed down by a stronger dollar, worries over growth and the euro zone debt crisis as Greece faced its biggest anti-austerity strike for months.

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 lost 1.4 percent in late Asian trade. The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange also edged down 1.8 percent after touching its lowest level since July 27.

REGIONAL EQUITY- BANGKOK, Sept 26 (Reuters) - Most Southeast Asian stock markets fell on Wednesday, tracking larger regional markets amid concerns about debt problems in Europe, with Thailand hitting a one-week low after General Electric's GE.N block sales of Bank of Ayudhya BAY.BK.

Shares in Bank of Ayudhya shed 7.5 percent, their biggest one-day loss in a year, pulling the Thai benchmark index .SETI down 1 percent at 1,274.50, the lowest close since Sept. 18.

General Electric sold a 7.6 percent stake in Bank of Ayudhya in a block trade to institutional investors, cutting its share in the bank to 25.3 percent. GE sold part of its stake at 31.30 baht per share, a source said on Wednesday.

Indonesia's Bumi Resources BUMI.JK, which lost 2.9 percent, was a drag on Jakarta's Composite Index .JKSE, which closed down 1.1 percent at a two-week closing low of 4,180.16.

Standard & Poor's Ratings cut its credit ratings on Bumi Resources while Moody's Investors Service has revised the outlook on the coal miner, after an investigation into alleged financial irregularities by its parent company.