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Date Posted: 09:17:38 04/08/13 Mon
Author: Start week 15 report 169.5==low==lowest algorithm 171
Subject: Monday 08 April 2013=The economy added 88,000 jobs in March, well below 200,000 expected economists

MORNINGSTAR MORNING NOTES
Monday 08 April 2013
Overseas Market Report
Australian Market Report
Company Updates


Overseas Market Report - Stocks End Lower After Disappointing Jobs Data
Stocks pared early losses but still ended lower on Friday after a disappointing jobs report.

The Dow Jones Industrial Average finished down 40.86 points, or 0.28%, to 14,565.25 on Friday. The Standard & Poor's 500-stock index fell 6.70 points, or 0.43%, to 1,553.28 and the Nasdaq Composite Index lost 21.12 points, or 0.65%, to 3,203.86.

The economy added 88,000 jobs in March, well below the 200,000 expected by economists. January and February's numbers were revised upwards. A separate survey showed the unemployment rate falling to 7.6% from 7.7% as more people dropped out of the workforce. Average earnings were up slightly in the month as was the average work week.

The trade deficit shrank 3.4% in February to $42.96 billion from $44.46 billion as crude oil imports fell 21%. Economists had expected the deficit to rise to $45.0 billion. Imports outside of oil, rose in the month while exports shrank.

Hewlett-Packard announced late on Thursday that Ray Lane will relinquish his role as board chairman, but will continue to serve as a director. Activist investor Ralph Whitworth, of Relational Investors, will serve as temporary chair until a permanent replacement is appointed. Two current directors, G. Kennedy Thompson and John Hammergren, will leave the board after its May meeting. Given the level of shareholder scrutiny that Lane and the board in general have faced over the past 18 months, this news isn't overly surprising. H-P shares were down 1.5%.

F5 Networks plunged 19% after the firm announced that fiscal second-quarter results will come in below management's previous guidance. Management expects revenue to be $350 million, versus previous guidance of $370 million to $380 million, and versus our forecast of $375 million. Assuming service revenue remains stable sequentially, we estimate F5's product revenue will fall roughly 7% from the year-ago, which will be the first year-over-year decline since the September 2009 quarter. On a more upbeat note, management expects GAAP gross margin to remain unchanged sequentially at 83%, suggesting reasonably stable software attach rates and pricing.

For Australian ADRs listed on the NYSE, BHP Billiton gained 22 cents (0.33%) to $67.26, ResMed rose 28 cents (0.60%) to $46.77, Telstra Corporation weakened 3 cents (0.13%) to $23.67, Telecom Corporation of NZ fell 15 cents (1.46%) to $10.11 and Westpac fell $2.98 (1.84%) to $158.62.

Treasuries benefited from a raft of disappointing economic data as well as geo-political tensions from the Korean peninsula. At 7:45 AM (AEST), the 10-year Treasury note yield was 1.71% and the 5-year yield was 0.69%.

European stocks were lower on Friday as investors eyed the release of a key report on employment in the US.

The FTSE finished down 94.34 points, or 1.49%, to 6,249.78. The CAC 40 Paris fell 62.68 points, or 1.68%, to 3,663.48 while the German DAX lost 158.64 points, or 2.03%, to 7,658.75.

Investors turned cautious after ECB president Mario Draghi said on Thursday the economic outlook for the euro-zone remained subject to "downside risks".

Banking stocks were trading mostly higher. French lenders Societe Generale SA climbed 1.2% while Credit Agricole SA moved up 0.6%.

German banks Deutsche Bank AG and Commerzbank AG both added 0.5% each.

In London, Lloyds Banking Group edged up 0.3% but Barclays Plc. lost around a percent.

On the downside, mining stocks were trading under pressure. Xstrata Plc. fell 2.9% while Rio Tinto weakened 63.00 pence (2.09%) to 2,942.94 pence and BHP Billiton fell 17.50 pence (0.92%) to 1,879.50 pence.

In stock-specific movement, French media group Lagardere SCA improved 0.6% after announcing its intent to dispose of its stake in European Aeronautic Defence & Space EADS by July-end.

Asian markets all ended lower on Friday barring the Japanese benchmark which extended gains from the previous session fuelled by the BoJ's announcements of aggressive monetary easing.

The Nikkei closed up 1.6%. The Hang Seng fell 2.7% while the mainland Chinese markets remained shut. The Sensex gave up 0.3%.

The Nikkei jumped over 4% in opening trade as the yen dropped further versus the US dollar which was buying 96.11 yen at the time of writing. On Thursday, new Bank of Japan Governor launched a two-year monetary easing campaign aimed at achieving a 2% consumer-inflation target. The Japanese currency slid to a three-and-a-half year low after suffering its biggest single-day tumble after the BoJ's announcements.

Exporters piled on solid gains as the yen weakened with Nintendo up 2.3% and car-maker Toyota Motor 3.4% higher.

Nissan Motor was also higher and revved at 6.1% while Mazda advanced 3.1% at market close. Honda Motor pared gains but still closed up 0.7% as investors reacted to a news report that said the company was recalling more than 145,000 vehicles in Japan.

Property shares were among the top gainers, also propelled by the BoJ which said it would buy more real-estate investment trust securities. Sumitomo Realty & Development surged 12.6% while Mitsui Fudosan zoomed 13% higher. Tokyu Land Corp. shot up 16%.

Financials - also among the beneficiaries of the latest announcements - registered significant gains with Sumitomo Mitsui Financial Group gaining 4.8%. Mitsubishi UFJ Financial was up 5%.

Seven & I Holdings was up 10% after reporting a record annual net profit and after it forecast another record-beating performance for the current year.

Elsewhere, stocks were lower with Cathay Pacific down 6% on worries about the impact on air travel from bird-flu deaths in China - linked to a new strain of avian flu. Other airline stocks also fell sharply, dragging the index lower.

Financials were lower with index heavyweight ICBC down 3.2% while China Construction Bank fell 4%.

Energy stocks were the bigger losers among resources stocks with crude prices unable to move up over $94 a barrel. PetroChina was down 4.1% and CNOOC 4.8% lower.

In India, HDFC and ITC led losses as the stocks declined 2.8% each, respectively. NTPC was down 2.4% on concerns over the tussle with Coal India with respect to the quality of coal supplied by the latter. According to reports, NTPC has held back payments to Coal India while the vendor has stopped supplies to some of NTPC's units.

Bharti Airtel, ICICI Bank, M&M, and Tata Motors were all down about a percent each.

The weakness in the yen benefitted India's largest car-maker Maruti Suzuki whose shares zoomed 7.2% on hopes of improved margins due to lower costs of imported auto parts from Japan.

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