DJI - NEW YORK, Feb 19 (Reuters) - U.S.
stocks rose on Tuesday as this year's ongoing surge in merger activity
suggested investors were still finding value in the market even as indexes
closed in on all-time highs.
Office Depot Inc surged 9.4 percent to $5.02 after a person familiar with the matter said the
No. 2 U.S. office supply retailer was in advanced talks to merge with smaller
rival OfficeMax Inc , which jumped more than 20 percent.
Deal activity has helped equities
resist a pullback as investors use dips in stocks as buying opportunities. The
S&P is up about 7 percent so far in 2013 and has climbed for the past seven
weeks in its longest weekly winning streak since January 2011, though most of
the weekly gains have been slim.
The Dow industrials closed 0.9
percent away from their record high while S&P 500 was 2.2 percent off its
peak.
"Deals are good for the
market," said Frank Lesh, a futures analyst and broker at FuturePath
Trading LLC in Chicago. "The fact that they're being done is a
positive."
More than $158 billion in deals has
been announced so far in 2013, more than double the activity in the same period
last year and accounting for 57 percent of global deal volumes, according to
Thomson Reuters Deals Intelligence.
The Dow Jones industrial average gained 53.91 points, or 0.39 percent, to 14,035.67. The Standard & Poor's
500 Index gained 11.15 points, or 0.73 percent, to
1,530.94. The Nasdaq Composite Index gained 21.56 points, or 0.68 percent, to 3,213.59.
"Equity investors have to be
encouraged by M&A since, if the number crunchers are offering large
premiums, that shows how much value is still in the market," said Mike
Gibbs, co-head of the equity advisory group at Raymond James in Memphis,
Tennessee.
Wall Street's strong start to the
year was fueled by better-than-expected corporate earnings, as well as a
compromise in Washington that temporarily averted automatic spending cuts and
tax hikes that are predicted to damage the economy.
The compromise on across-the-board
spending cuts postponed the matter until March 1, at which point the cuts take
effect. Ahead of the debate over the cuts, known as sequestration, further gains
for stocks may be difficult to come by.
Some investors say the debate could
be the catalyst for a long anticipated sell-off after the market's recent
strong run.
Carter Worth, a technical analyst at
Oppenheimer, pointed to the "especially complacent action of the past six
weeks," noting that, as of Friday, stocks have gone 33 sessions without a
dip of more than 1.5 percent.
"We would be selling
aggressively into the market's current strength," he said in a research
note.
Economic data showed the NAHB/Wells
Fargo Housing Market index unexpectedly edged down to 46 in February from 47 in
the prior month as builders faced higher material costs.
According to the Thomson Reuters data
through Monday morning, of the 391 companies in the S&P 500 that have
reported results, 70.1 percent have exceeded analysts' expectations, compared
with a 62 percent average since 1994 and 65 percent over the past four
quarters.
Fourth-quarter earnings for S&P
500 companies have risen 5.6 percent, according to the data, above a 1.9
percent forecast at the start of the earnings season.
About two stocks rose for everyone
that fell on the New York Stock Exchange and Nasdaq. About 6.48 billion shares
changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, in line
with the daily average so far this year.
NYMEX - PERTH, Feb 19 (Reuters) - U.S. crude
futures slipped in early Asian trading on Tuesday, after a day of light trading
due to the U.S. President's Day holiday.
FUNDAMENTALS
- U.S. crude for March delivery dropped 26 cents to $95.60 a barrel by 0119 GMT.
- Brent crude rose 10 cents to $117.48 a barrel.
- A bearish target of $116.28 per
barrel remains unchanged for Brent as a correction from the Feb. 8 high of
$119.17 will continue. U.S. oil is expected to drop to $94.24 per barrel,
as indicated by its wave pattern, according to a Reuters technical
analysis.
- U.S. manufacturing got off to a
weak start this year as motor vehicle output tumbled in January, but a
rebound in factory activity in New York state this month suggested any
setback would be temporary.
* A sharp cut in Saudi Arabia's
crude output and exports may support crude prices going forward.
* Major powers plan to offer an
easing of sanctions on trading gold and other precious metals with Iran in
return for steps to shut down Iran's newly expanded Fordow uranium enrichment
plant, Western officials told Reuters.
* Brazil's state-led Petroleo
Brasileiro SA was forced to shut down operations for
nearly a day at its PPM-1 offshore oil platform in the Pampo Field after an oil
leak.
CBOT Soybean- Soybean futures on
the Chicago Board of Trade surged 3 percent, rising to a one-week high as weekend rains in Argentina fell short of expectations and China bought old-crop U.S.
soybeans, traders said.
·
USDA said
private exporters reported sales of 120,000 tonnes of
U.S. soybeans to China for 2012/13 delivery, raising concerns
that the world's top soy buyer could seek more from scarce
U.S. "old crop" stocks.
·
Adding to
fears that port problems in Brazil will steer soy export
demand to the United States, Brazilian dock workers refused
for a second day to let nonunion workers unload a Chinese
ship at Santos Port.
·
Rains
forecast to bring relief to wilting Argentine soy and corn
crops over the weekend were lighter than expected,raising
the prospect of lower yields in the 2012/13 harvest, a weather
specialist said on Monday.
·
Oilseeds
analyst Oil World cut its forecast of Argentina's 2013
soybean harvest to 50 million tonnes, from 52 million last month, due
to dry weather. Oil World also raised its forecast of Brazil's
crop to 82.0 million tonnes, from 81.5 million tonnes last
month.
·
Brazil's
soybean harvest was 19 percent complete by Friday, up
from 12 percent a week earlier and above the five-year
average of 10 percent, analyst Celeres said.
·
Snow and
freezing temperatures in the major rapeseed growing
areas of central China drove domestic rape meal futures to a record high, with traders
anticipating damaged crops and
a decline in output.
·
USDA
reported export inspections of U.S. soybeans in the latest
week at 40.384 million bushels, at the low end of trade expectations
for 40 million to 45 million bushels.
FCPO - SINGAPORE, Feb 19 (Reuters) -
Malaysian palm oil futures edged higher on Tuesday, tracking gains in soybeans
after disappointing rains in Argentina raised the prospect of a smaller crop.
U.S. soybeans rose to a one-week
high, resuming trading after the President's Day holiday, as rain that had been
expected to bring relief to wilting Argentine soybean crops over the weekend
proved to be lighter than expected.
A smaller soybean crop for crushing into
soybean oil may shift more demand to competing palm oil that trades at a steep
discount of almost $300 per tonne.
"There was news of much less
rain received than expected in Argentina this week, and Chinese players are
also positive after coming back from the Lunar New Year break," said a
Singapore-based trader with a regional commodities house.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange rose 1.1 percent to close at 2,565
ringgit ($827) per tonne. Prices traded in a range of 2,550 to 2,575 ringgit.
Total traded volumes stood at 33,012
lots of 25 tonnes each, higher than the typical 25,000 tonnes.
Technicals showed Malaysian palm oil
is expected to rise to 2,593 ringgit per tonne, as indicated by a rising wedge,
said Reuters market analyst Wang Tao.
Traders are awaiting the Malaysian
Feb. 1-20 palm export data due on Wednesday, after rising shipments in the
first half of the month raised hopes for stocks to ease further.
Malaysia's January palm oil stocks
inched down 1.9 percent from a month ago to 2.58 million tonnes, the first drop
since last June.
Industry players are also expecting
stronger export demand for crude palm oil this month as exporters take
advantage of February's zero percent tax before it rises to 4.5 percent in
March.
Brent crude edged lower towards $117
per barrel on Tuesday, adding to losses across the previous three sessions,
with traders waiting for U.S. data to provide clues to growth in the world's
largest oil user, besides weekend elections in Italy.
Other competing vegetable oil
markets also gained on Argentine soy crop worries. The most active U.S. soyoil
for May delivery gained 1 percent in late Asian trade. The
most active September soybean oil contract on the Dalian Commodity Exchange edged up 0.7 percent.
Regional Equities - Feb 19 (Reuters) - The Philippines
stock market gained to a record on Tuesday led by property developer Ayala Land
Inc on foreign inflows, while others ended
mixed ahead of German economic data, which may provide investors some direction
after last week's weaker euro zone data.
The Philippine index ,
which saw a net foreign inflow of $17.7 million, hit a fresh all-time high of
6,632.56 points, before ending 0.85 percent up at 6,620.72, surpassing its
previous record close of 6,582.51 on Monday.
Shares in Ayala Land, the largest
property developer in the Philippines, which posted a 27 percent rise in net
profit last week, gained 2.9 percent to its record high of 31.8 peso.
Bangkok's SET index rose 0.58 percent to 1,532.07, to hit an 18-year high as domestic institutions
bought large cap stocks, but volume was light as investors were cautious ahead
of a central bank rate review.
A 1.4 percent gain in Singapore
Telecommunications Ltd.. helped boost its overall Straight Times
Index to end 0.2 percent up at 3295.77.
Malaysia and Indonesia lost 0.4 percent and 0.2 percent
respectively despite foreign inflows. Jakarta saw a net foreign buying of $74.5
million, while Kuala Lumpur witnessed $9.85 million of inflows on Tuesday.
Vietnam ,
the region's best market this year, ended 0.6 percent weaker at 490.78.
FOREX - NEW YORK, Feb 19 (Reuters) - The yen
rose against the dollar and euro on Tuesday as disagreement between Japanese
officials raised doubts over how aggressively Japan will ease its monetary
policy.
