Thursday, May 9, 2013

Trader's Highlight


DJI- NEW YORK, May 8 (Reuters) - The S&P 500 closed at an all-time high for a fifth day on Wednesday in a broad rally that keeps surprising investors with its longevity and resilience.

The Dow also ended at a record high for a second straight day, pushing further above 15,000.
Financials, materials and technology sectors were among the strongest performers, with shares of International Business Machines IBM.N leading the Dow higher. IBM's stock rose 1.1 percent to $204.82.

Solid corporate earnings along with continued accommodative monetary policies have supported the market's climb, which had been led by mostly defensive sectors. The recent rally, though, appears to reflect a shift to growth-oriented sectors leading the advance.

"Cyclicals will probably be fairly strong in the short term, based on the strengthening parts of the economy," said Bryan Evans, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois.

The Dow Jones industrial average .DJI gained 48.92 points, or 0.32 percent, to end at a record high of 15,105.12 - its second consecutive close above 15,000. The Standard & Poor's 500 Index .SPX rose 6.73 points, or 0.41 percent, to finish at a record high of 1,632.69. The Nasdaq Composite Index .IXIC advanced 16.64 points, or 0.49 percent, to close at 3,413.27.

During the session, the Dow also reached an all-time intraday high of 15,106.81 and the S&P 500 set a record intraday high of 1,632.78.

The S&P 500 has climbed 14.5 percent so far this year, while the Dow has advanced 15.3 percent and the Nasdaq has gained 13 percent.

Despite the gains, the market remains below overbought territory, with the relative strength index on the S&P 500 slightly below 70.

Still, the potential for the market to pause increases as the earnings reporting period winds down, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"Now that earnings are over and done ... there's no real fundamental reason to buy stocks," he said.
Results are in from about 440 companies so far. Earnings have largely been better than expected this quarter, with the majority of companies surpassing estimates.

Some of the day's biggest movers were stocks cited by prominent investors at the Sohn Investment Conference, a hedge fund industry event in New York.

Volume was roughly 6.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.4 billion this year.

Advancers outpaced decliners on the NYSE by a ratio of nearly 2 to 1, while on the Nasdaq, seven stocks rose for every five that fell.

CRUDE- NEW YORK May 8 (Reuters) - The spread between Brent and U.S. crude oil futures narrowed sharply in the last half hour of trade on Wednesday fueled by expectations for increased capacity to funnel rising U.S. crude oil production out of benchmark-supply-point Cushing.

The spread between U.S. crude oil and Brent settled at $7.72, the lowest settlement since late January 2011.

Oil stocks at Cushing, Oklahoma, fell by 652,000 barrels to 49.15 million in the latest week, U.S. Energy Information Administration (EIA) data released on Wednesday showed.

The perception and expectation that further capacity could bring a flood of crude out of Cushing and into U.S. refineries drove U.S. prices higher, tightening the differential between the U.S. benchmark and Brent for much of the trading session.

A flood of volume at the end of the session pushed U.S. crude oil futures CLc1 up $1 per barrel higher to settle at $96.62, after it traded mostly 30-50 cents higher during Wednesday's session.
"People bid the market on the draw in Cushing," said Stephen Schork, editor of The Schork Report in Pennsylvania.

But the sharp action was seen at the end of the session when a chunk of volume was pushed through.
BP Plc BP.L is expected to begin the start-up of an upgraded crude distillation unit at its 405,000 barrel-per-day Whiting, Indiana, refinery at the end of May.

Last month, traders speculated that a report showing an increase in oil shipments on a pipeline from Cushing into the Whiting refinery was a sign that new units were set to restart.

This was also linked to a narrowing in the Brent/WTI spread.

Brent crude oil futures LCoc1 settled 6 cents lower at $104.34 per barrel, after trading as low as $103.53 during the session.

Brent prices were weakened by mixed economic data. China's daily crude imports in April rose 3.7 percent from a year ago and 3.5 percent compared to March, but EIA data on Tuesday left a lacklustre outlook for demand.

In its monthly Short-Term Energy Outlook, the EIA cut its forecast for demand growth this year to 890,000 barrels per day (bpd), a reduction of 70,000 bpd from last month's forecast, and reduced its 2014 estimate by 120,000 bpd to 1.21 million bpd.

Imports and exports from China, the world's second largest oil consumer, grew more than expected in April from a year ago, but the accuracy of the data was called into question.

"I have no strong conviction whether the data reflects reality. We'll focus on next Monday's activities data," said Zhiwei Zhang, chief China economist at Nomura in Hong Kong.

A stronger stock market lent some support to oil markets, lifting equities and commodities prices alike.
The Dow Jones .DJI unofficially closed above 15,000 points for a second day after setting a record on Tuesday.

CBOTMay 8 (Reuters) - Soybean futures on the Chicago Board of Trade ended mixed on Wednesday, with nearby contracts higher on tight old-crop supplies and firm cash markets, traders said.
  • The benchmark July soybean contract SN3 briefly rose above psychological resistance at $14 and reached $14.03, its highest level since April 30, before paring gains.
  • Deferred soybean contracts edged lower on spillover pressure from corn and expectations that improving weather in the U.S. Midwest will promote planting. 
  • Soymeal futures settled higher on tight U.S. supplies and a lack of cash soybean movement, while soyoil ended lower.
  • At least three cargoes of Paraguayan and Brazilian soybeans are set to be shipped to the United States, where stocks are unusually tight, industry sources familiar with the trades told Reuters. 
  • Soy imports by top buyer China fell 18.4 percent in April compared with a year earlier, hit by serious port congestion in Brazil, customs data showed.
  • USDA said private exporters reported sales of 115,000 tonnes of U.S. soybeans to China for delivery in 2013/14.
  • Global equity markets and the euro rose as strong Chinese trade data and signs that Germany may escape a sharp slowdown pushed shares to five-year highs worldwide. 
FCPO- SINGAPORE, May 8 (Reuters) - Malaysian palm oil futures rose to a one-week high on Wednesday, pulling away from near five-month lows plumbed earlier in the week, as investors eyed a potential fall in stocks in the world's second-largest producer of the edible oil.

Malaysia's April palm oil stocks likely fell 6.1 percent to 2.04 million tonnes, with domestic consumption and exports outstripping a rise in output, a Reuters survey of five plantation companies showed.

Industry regulator the Malaysian Palm Oil Board (MPOB) will release official data stocks and output on Friday.
"The market is a bit bullish on the coming MPOB stocks data. On the physical side, there is some tightness in terms of cargoes for nearby months and people have come to notice this tightness," said a Singapore-based trader with a global commodities house.

The benchmark July contract FCPOc3 on the Bursa Malaysia Derivatives Exchange rose 1.3 percent to close at 2,290 ringgit ($773) per tonne, slightly below the intraday high at 2,294 ringgit, a level last seen on April 30.

Total traded volumes were thin at 23,202 lots of 25 tonnes each, compared to an average of 35,000 lots.
Technicals were bullish with Malaysian palm oil expected to test resistance at 2,295 ringgit per tonne, a break above which will lead to a further gain to 2,335 ringgit, said Reuters market analyst Wang Tao.

Traders will also be looking for an improvement in Malaysia's palm oil exports data for May 1-10 due on Friday, after cargo surveyors reported slowing exports in April.

Shares of Wilmar International Ltd WLIL.SI rose as much as 3 percent in early trade on Wednesday after the Singapore palm oil firm posted a 23 percent rise in first-quarter net profit, largely due to a recovery in its oilseeds and grains segment.

REGIONAL EQUITIES- BANGKOK, May 8 (Reuters) - Singapore shares hit their highest close in more than five years on Wednesday as Wilmar International Ltd WLIL.SI jumped after strong quarterly results while gains in large cap Ayala Land Inc ALI.PS helped the Philippine main index recover from two days of losses.

The Thai SET index .SETI rose 0.8 percent, to close at its highest in almost 19-1/2 years at 1,614.15, while most other bourses ended up as several major Southeast Asian companies have posted better-than-expected earnings, raising hopes from the remaining results.

Strong Chinese trade data also helped underpin sentiment in broader Asia, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS up 0.98 percent and MSCI's index of Southeast Asia .MISU00000GUS 0.94 percent higher.

Shares in Singapore-listed Wilmar jumped 2.1 percent following better-than-expected quarterly earnings, with the benchmark Straits Times Index .FTSTI ending up 0.9 percent at 3,413.02, the highest since January 2008.

Philippine developer Ayala Land gained 2.2 percent after it posted a 30 percent rise in quarterly net income. The broader Philippine index .PSI edged up 0.5 percent, after a 1 percent drop over the past two sessions.

Jakarta's Composite Index .JKSE climbed almost 1 percent to a record high of 5,089.33.

Bucking the trend, Malaysia's main index .KLSE slipped 0.15 percent to 1,774, capping a two day rally that sent the benchmark to a record 1,776.73 on Tuesday as Sunday's general election lifted a market overhang.