Dow Jones - NEW YORK, Feb 21 (Reuters) - U.S.
stocks fell for a second straight day on Thursday and the S&P 500 posted
its worst two-day loss since November after reports cast doubt over the health
of the U.S. and euro-zone economies.
But a late-day rally helped stocks
erase some of their losses with most of the pullback concentrated in the
technology- heavy Nasdaq. The move suggested investors were still willing to buy
on dips even after the sharp losses in the last session.
In Europe, business activity indexes
dealt a blow to hopes that the euro zone might emerge from recession soon,
showing the downturn across the region's businesses unexpectedly grew worse
this month.
"The PMI numbers out of Europe
were really a blow to the market," said Jack De Gan, chief investment
officer at Harbor Advisory in Portsmouth, New Hampshire. "The market was expecting
signs that recovery is still there, but the numbers just highlighted that the
euro-zone problem is still persistent."
U.S. initial claims for unemployment
benefits rose more than expected last week while the Federal Reserve Bank of
Philadelphia said its index of business conditions in the U.S. mid-Atlantic
region fell in February to the lowest in eight months.
The Dow Jones industrial average fell 46.92 points, or 0.34 percent, to 13,880.62 at the close. The Standard
& Poor's 500 Index lost 9.53 points, or 0.63 percent, to
1,502.42. The Nasdaq Composite Index dropped 32.92 points, or 1.04 percent, to close at 3,131.49.
The two-day decline marked the U.S.
stock market's first sustained pullback this year. The Standard & Poor's
500 has fallen 1.8 percent over the period and just managed to hold the 1,500
level on Thursday. Still, the index is up 5.3 percent so far this year.
The abrupt reversal in markets,
which started on Wednesday after minutes from the Federal Reserve's January
meeting suggested stimulus measures may end earlier than thought, looks set to
halt a seven-week winning streak for stocks that had lifted the Dow and the
S&P 500 close to all-time highs.
Wall Street will soon face another
test with the upcoming debate in Washington over the automatic across-the-board
spending cuts put in place as part of a larger congressional budget fight.
Those cuts, set to kick in on March 1 unless lawmakers agree on an alternative,
could depress the economy.
Of the 427 companies in the S&P
500 that have reported results so far, 69.3 percent have exceeded analysts'
expectations, compared with a 62 percent average since 1994 and 65 percent over
the past four quarters, according to Thomson Reuters data through Thursday
morning.
Fourth-quarter earnings for S&P
500 companies are estimated to have risen 5.9 percent, according to the data,
above a 1.9 percent forecast at the start of the earnings season.
About two stocks fell for everyone
that rose on the New York Stock Exchange and Nasdaq. About 7.64 billion shares
changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well
above the 20-day moving average of around 6.6 billion shares.
Brent Crude Oil - NEW YORK, Feb 21 (Reuters) - Brent crude futures fell more
than 1 percent on Thursday, pressured by weak economic data and the possibility
that the U.S. Federal Reserve might curb its economic stimulus program.
Brent April crude fell $2.07, or
1.79 percent, to settle at $113.53 a barrel, having traded from $113.32 to
$115.31.
CBOT Soybean - Soybean futures on the Chicago Board of Trade rose for a
fourth straight session, with front months gaining against back
months on fresh export demand for dwindling supplies of old-crop
U.S. soybeans, traders said.
* USDA said private exporters reported the sale of 130,450 tonnes of U.S. soybeans to unknown destinations, including 75,450 tonnes for 2012/13 delivery and 55,000 tonnes for 2013/14.
·
Trade talk
swirled that China has bought up to nine cargoes of
old-crop U.S. soybeans, including some of which were switched
to the United States from Brazilian origin.
·
Further
support stems from concern about grain shipping delays in
Brazil, where two to three times more ships are lined up to load
at the country's two main ports than a year earlier, and a
six-hour dock workers strike is set for Friday.
·
Soymeal
follows soybeans, gaining against soyoil on meal/oil
spreads on ideas that port congestion and logistics issues in
South America will boost export demand for U.S. soybeans
and meal.
·
Trade
expects USDA's weekly export sales report on Friday to show
U.S. soybean sales in the latest week at 300,000 to 600,000
tonnes (old and new crop years combined), and soymeal sales at
100,000 to 200,000 tonnes.
·
CBOT March
options expire on Friday and traders are eyeing open
interest in calls at the $15.00 strike, which could act as a magnet
drawing futures prices to that level.
·
CBOT March
soybeans trading above all key moving averages;
traders eyeing psychological resistance at $15.00.
BMD CPO - KUALA LUMPUR, Feb 21 (Reuters) -
Malaysian palm oil futures slipped on Thursday, tracking weak U.S. and China
vegetable oil markets and as investors booked profits from prices which have
gained almost two percent so far this week.
U.S. soy prices slid on Thursday
from a selloff in commodities amid speculation that a hedge fund had been
forced to liquidate assets, rattling sentiment across major commodity markets
and weighing on palm prices.
But major losses in palm oil were
prevented by hopes that seasonally slowing output in Malaysia, the world's No.2
producer, will help ease stocks despite sluggish exports.
"At the end of the month
exports may be slightly down compared to January, but it will not have much
impact because production is slowing by more than ten percent," said a
trader with a foreign commodities brokerage in Malaysia.
"I think there will be a slight
drawdown in end-stocks again," the trader added. Inventory levels in
January had inched down 1.9 percent from record highs of 2.63 million tonnes.
"For today, the immediate
support is 2,500 ringgit and resistance is 2,550 ringgit. There is a bit of
profit taking and market correction."
The benchmark May contract on the Bursa Malaysia Derivatives Exchange slipped 1.1 percent to close at
2,536 ringgit ($814) per tonne. Prices traded in a tight range between 2,513
and 2,543 ringgit.
Total traded volumes stood at 16,996
lots of 25 tonnes each, lower than the typical 25,000 tonnes.
Technicals showed a bullish target
at 2,620 ringgit per tonne will only be valid when Malaysian palm oil climbs
above a resistance at 2,593 ringgit, said Reuters market analyst Wang Tao.
Palm oil products shipped in the
first twenty days of the month showed signs of slowing down from robust exports
in earlier weeks, cargo surveyors data showed on Wednesday.
Oil extended the previous session's
decline on Thursday to a three-week low on concern the U.S. Federal Reserve
might stop its stimulus program sooner than thought and on the prospect of a
rise in Saudi Arabian oil output.
In other vegetable oil markets, the
U.S. soyoil for May delivery fell 0.4 percent in early Asian trade. The most active September soybean oil
contract on the Dalian Commodity Exchange closed
1.4 percent lower.
Regional Equities - Feb 21 (Reuters) - Southeast Asian
stock markets mostly fell on Wednesday with Indonesia coming off record high
close and Thailand retreating from a 19-year high, on worries that the U.S.
Federal Reserve could prematurely wind down its bond-buying programme.
The minutes from the Fed's January
meeting showed many officials voiced concern over potential costs of more asset
purchases, suggesting that the programme, known as QE, may slow before the
pick-up in hiring it was intended to deliver.
Indonesia ,
after hitting a record high of 4,656.13 points in intraday trading, ended tad
weaker, falling 0.04 percent to 4,632.04 from the previous day's all-time
closing high, led by mining and finance shares.
Jakarta also enjoyed a net foreign
inflow of $78.5 million on Thursday.
Thailand fell 1.2 percent to 1528.74 from a 19-year high, led by 2.3 percent fall in top
energy firm PTT PCL .
Singapore fell 0.64 percent, weighed by a 2.7 percent fall in property developer
CapitaLand Ltd after it posted a 45 percent drop in
fourth-quarter net profit.
Vietnam ,
the region's best performer, plummeted as much as 3.7 percent to close at a
near four-week low led by banks.
Bucking the trend, the Philippine
index hit a record closing high of 6,667.41 points
with a 0.28 percent gain, while Malaysia's edged up marginally with a 0.04 percent gain helped by $17.96 million net
foreign buying.
FOREX - NEW YORK, Feb 21 (Reuters) - The
euro fell to a six-week low against the dollar and a three-week trough against
the yen on Thursday, pressured by disappointing euro zone economic data and by
uncertainty ahead of Italy's election at the weekend.
The dollar rose to a 5-1/2-month
high against a basket of currencies, a day after minutes from the Federal
Reserve's last meeting bolstered expectations the central bank may pull back
from its bond-buying program sooner rather than later.
The downturn in the euro zone
worsened unexpectedly this month, especially in France. The weak data kept
alive chances of an interest rate cut by the European Central Bank in coming
months.
"Today's data stands in sharp
contrast to the consensus market expectations that the region will see
turnaround in growth as soon as Q1 of this year," said Boris Schlossberg
Managing Director of FX Strategy at BK Asset Management in New York.
Concerns that a fragmented
parliament after Italy's national election could trigger a sell-off in the
peripheral euro zone bond market also weighed on the euro.
Nichi Vendola, leader of the Left
Ecology Freedom party (SEL) and frontrunner in polls for Italy's election, said
the country should seek revisions of European Union budget rules.
That raised fears that Vendola will
push a centre-left government too far to the left and prevent a coalition
agreement with outgoing Prime Minister Mario Monti, which is seen as the most
market-friendly election outcome.
