Shares of financial companies dipped
after a group of major U.S. banks agreed to pay a total of $8.5 billion to end
a government inquiry into faulty mortgage foreclosures. The KBW bank index, a
gauge of U.S. bank stocks, was down 0.3 percent.
Other sectors were hit as well, most
notably energy and utilities. The S&P 500 energy sector index fell 0.8
percent and the utilities sector was off 1.1 percent.
The day's decline came a session after
the S&P 500 finished at a five-year high, boosted by a budget deal and
strong economic data. The S&P 500 rose 4.6 percent last week, the best
weekly gain in more than a year.
"It's a little bit of taking
some risk off the table ahead of profit season, you're not going to see
anything all that great" on earnings, said Larry Peruzzi, senior equity
trader at Cabrera Capital Markets Inc in Boston.
Earnings are expected to be only
slightly better than the third-quarter's lackluster results, and analysts' current
estimates are down sharply from where they were in October. Fourth-quarter
earnings growth is expected to come in at 2.8 percent, according to Thomson
Reuters data.
Aluminum company Alcoa Inc begins
the reporting season by announcing its results after Tuesday's market close.
Alcoa shares fell 1.7 percent at $9.10.
The Dow Jones industrial average dropped
50.92 points, or 0.38 percent, to 13,384.29. The Standard & Poor's 500
Index fell 4.58 points, or 0.31 percent, to 1,461.89. The Nasdaq Composite
Index lost 2.84 points, or 0.09 percent, to 3,098.81.
Ten mortgage servicers - including
Bank of America Citigroup, JPMorgan, and Wells Fargo - agreed on Monday to pay
$8.5 billion to end a case-by-case review of foreclosures required by U.S.
regulators.
In a separate case, Bank of America
also announced roughly $11.6 billion of settlements with mortgage finance
company Fannie Mae and a $1.8 billion sale of collection rights on home loans.
The bank also entered into
agreements with Nationstar Mortgage Holdings and Walter Investment
Management to sell
about $306 billion of residential mortgage servicing rights.
Bank of America shares lost 0.2
percent at $12.09 while Nationstar Mortgage Holdings jumped 16.8 percent to
$38.83.
Citigroup shares were up 0.09
percent to $42.47, and Wells Fargo shares fell 0.5 percent to $34.77.
"The financials probably have
the wind behind them now with a lot of the regulations coming out ... the
market has to absorb a lot of the gains, and for that reason there's a pullback
from this level," said Warren West, principal at Greentree Brokerage
Services in Philadelphia.
Shares of U.S. jet maker Boeing Co dropped
2 percent after a Boeing 787 Dreamliner aircraft with no passengers on board
caught fire at Boston's Logan International Airport on Monday morning.
Amazon.com shares hit their highest
price ever at $269.22 after Morgan Stanley raised is rating on the stock.
Shares were up 3.6 percent at $268.46.
Video-streaming service Netflix Inc shares
gained 3.4 percent to $99.20 after it said it will carry previous seasons of
some popular shows produced by Time Warner's Warner Bros Television.
Walt Disney Co stock fell 2.3
percent to $50.97. The company started an internal cost-cutting review several
weeks ago that may include layoffs at its studio and other units, three people
with knowledge of the effort told Reuters.
Volume was lower than average, as
4.78 billion shares were traded on the New York Stock Exchange, NYSE MKT and
Nasdaq. This is well below the 2012 average of 6.42 billion per session.
Declining stocks outnumbered
advancing ones on the NYSE by 1,629 to 1,363, while on the Nasdaq decliners
beat advancers 1,438 to 1,066.
NYMEX - PERTH, Jan 7 (Reuters) - U.S. crude
futures dipped below $93 a barrel in early Asian trading on Monday, as demand
concerns continued to weigh on prices after an unexpectedly large build in oil
inventories in the United States, the world's largest oil consumer.
CBOT Soybean - Soybean futures on the Chicago Board of Trade ended higher on bargain-buying, snapping a four-day sell-off that drove the bellwether March contract to a six-week low last week,
traders said. Soymeal also ended higher, halting a seven-day skid that pushed the spot contract on Friday to a seven-month low below $400 a ton.
• Soyoil posted nominal gains but lost ground to soymeal on meal/oil spreads.
• Additional support from unconfirmed trade rumors of renewed Chinese demand for U.S. soybeans as Chinese soy crush margins improve.
• Trade expects a commodity index fund to buy 45,000 to 50,000 contracts of CBOT soymeal this week as part of annual rebalancing, while selling smaller amounts of soybeans and soyoil. The DJ-UBS fund announced in October that it would add soymeal to its weightings for 2013.
• Market gains capped by softening cash markets for soy at the U.S. Gulf and optimal weather in Brazil, where the harvest of a likely record-large crop is under way.
• USDA reported export inspections of U.S. soybeans in the latest week at 39.652 million bushels, within a range of trade expectations for 37 million to 43 million.
• A new cold front is expected to bring rain to all of Brazil's main soy growing areas this week, supporting expectations for a record crop, forecaster Somar said. Top soy state Mato Grosso, where some small producers have already started the harvest, should receive some 50 mm (2 inches) of rain in the next five days.
• CBOT reported no deliveries of soybeans, soymeal or soyoil against January futures contracts.
FCPO - SINGAPORE, Jan 7 (Reuters) -
Malaysian palm oil futures dropped to a 2-week low on Monday, its third
consecutive fall, as investors remained cautious ahead of the release of export
data this week which will provide clues about the demand outlook for the edible
oil.
Traders are eyeing shipment data for
the first 10 days of January, due out on Thursday, to gauge the impact of
Malaysia's zero crude palm oil export tax. The market is also keeping a close
watch on any rejected cargoes from China due to its stricter import policy.
Malaysia's inventory levels are
expected to edge lower in December due to slower production. Industry
regulator, the Malaysian Palm Oil Board (MPOB), will release official stocks
and output data also on Thursday.
The U.S. Department of Agriculture
(USDA) report on the 2012 U.S. soybean harvest due Friday is also in focus, as
a higher soybean production for crushing into soybean oil may shift demand away
from palm oil.
"People are waiting for the
MPOB & USDA data releases later this week. Traders are staying on the
sideline as palm oil technically faces stress at the 2,500-ringgit mark,"
said a dealer with a foreign commodities brokerage in Malaysia.
The benchmark March contract on the
Bursa Malaysia Derivatives Exchange closed 1.9 percent down at 2,420 ringgit
($796) per tonne. Prices had earlier fallen to as low as 2,416 ringgit, a level
last seen on Dec. 24.
Total traded volume stood at 58,065
lots of 25 tonnes each, more than double the usual 25,000 lots.
Technicals showed that palm oil is
expected to fall further to 2,407 ringgit, as a drop from the Jan. 2 high of
2,524 ringgit has yet to end, said Reuters market analyst Wang Tao.
Favourable weather in South America
leading to better soybean crop prospects and potentially higher supply of
soybean oil could also place further pressure on palm oil prices.
Palm oil exports from Indonesia, the
world's biggest producer of the edible oil, may rise by as much as 9 percent
this year, a top industry association official said on Monday, as improving
global economic conditions boost demand.
In related markets, Brent crude
futures slipped towards $111 per barrel on Monday as profit taking and
inventory data showing weak fuel demand in the United States offset optimism
that the world's biggest economies are on a steady recovery path.
In competing vegetable oil markets,
U.S. soyoil for March delivery gained 0.2 percent in late Asian trade, lifted
by bargain-hunting activities in the soybeans market, which bounced back from a
six-week low.
The most active May soybean oil
contract on the Dalian Commodity Exchange closed 0.4 percent lower.
Regional Equities - BANGKOK, Jan 7 (Reuters) - Most
Southeast Asian stock markets gained on Monday, with Philippine stocks hitting
a fresh record close and Vietnamese shares rising to a near five-month high
helped by selective buying in stocks with good earnings outlook.
Philippine Composite Index set an
all time closing high for a fourth session, finishing at 6,044.91. The Ho Chi
Minh Stock Exchange's VN Index extended its gain for a ninth session, closing
up 1.9 percent at 434.19.
In Manila, property developer
Megaworld Corp, the most actively traded and top performer on the day, surged
8.8 percent to a five-year high, backed by a low interest rate environment.
Investors bought the stock on the view that it was undervalued.
Late selling wiped out earlier gains
elsewhere in the region amid global market weakness.
Jakarta's Composite Index edged down
0.4 percent at 4,392.38, coming off Friday's record close of 4,410.02. Thai
benchmark SET index closed at its day's low of 1,415.32, earlier hovering
around 17-year highs.
