US SUMMARY: Rise In Commodities Sinks Shares
DJIA 11073.73 loss 63.87 dn 0.6%
NASDAQ 2311.16 loss 14.95 dn 0.6%
S&P 500 1285.33 loss 3.79 dn 0.3%
Dow Future 11134.00 gain 5.00 0.0%
NASDAQ Future 1711.75 gain 1.25 up 0.1%
S&P Future 1293.75 gain 0.75 up 0.1%
10-Yr US Treasury: 5.00% down 0.04
(Futures values as of 0450 GMT)
Surging gold and energy prices dragged stocks lower Monday. Inflation fears curbed Wall Street's enthusiasm over solid first-quarter earnings from Citigroup. Prices of Treasurys gained on weak housing data.
STOCKS: Although Citigroup's upbeat results fed optimism about corporate earnings for the latest quarter, investors again focused on inflation and interest rates after comments from Federal Reserve Bank of Chicago President Michael Moskow indicated he felt the central bank must remain "vigilant" with its policy of boosting rates to stem price increases.
Wall Street turned its attention to the commodities markets, where oil prices topped $70 a barrel and gold lingered at a 25-year high. But despite the threat of rising raw material costs, the inflation picture has remained somewhat positive recently, said Russ Koesterich, portfolio manager at Barclays Global Investments.
"Core inflation (excluding volatile energy and food prices) has stayed relatively contained," Koesterich said, adding that this week's reports on wholesale and consumer inflation should indicate where prices are increasing and draw a reaction from Wall Street.
Political tension in Iran and Nigeria and concerns about shrinking U.S. gasoline reserves drove crude futures to their highest levels since hurricanes shut down much of Gulf Coast production late last summer. A barrel of light crude jumped $1.08 to settle at $70.40 on the New York Mercantile Exchange, where gasoline climbed 6.1 cents to $2.170 a gallon.
The Federal Reserve's Empire State manufacturing index - a measure of industrial activity in the New York region - dropped by almost half to 15.8 for April, missing economists' prediction of 24.
Aside from data on home building and inflation this week, about half the Dow Jones industrials are scheduled to report. Investors want to know how corporations have dealt with higher interest rates, increased lending costs and an upswing in oil prices, as well as what they expect in the coming months.
"It's ultimately going to come down to how companies are responding" to all of these pressures, said Jack Caffrey, equities strategist for JPMorgan Private Bank. "It's worth noting that second- and third-quarter expectations have ticked higher over the past week or so."
Citigroup's earnings grew 4 percent to reach $1.12 per share for the quarter, with strength in stocks and fixed-income returns helping it beat analysts' average estimate of $1.02 per share.
IBM reports its earnings Tuesday, as investors and analysts await the results of the shakeup at the computer giant. Motorola, reportedly eyeing some Siemens operations, also reports Tuesday.
BONDS: U.S. Treasury prices rose modestly Monday, recovering a little from the heavy losses of recent weeks on the back of weak housing data.
"What tipped the balance (Monday) was the home builders confidence index, which has shown a very steep decline over the last few months," said Michael Cheah, portfolio manager at AIG SunAmerica Asset Management.
Cheah said that further weak data could provide the basis for a bounce back in Treasurys, given that the market is already pricing in a 50% chance of two further rate hikes in coming months by June. If there is "any chance that the Fed may not go two more rate hikes then the bond market has a long way to recover," he said.
However, with investors also looking ahead to some key data in coming days, Gerry Lucas, head of agency and Treasury strategy at Banc Of America Securities in New York, said that essentially the "market was in a hold and wait" mode.
On Tuesday, the Federal Reserve releases the minutes of its March 27-28 Federal Open Market Committee meeting minutes. The U.S. releases wholesale price data Tuesday and the consumer price index Wednesday.
ASIAN SUMMARY: Tokyo Shares Gain As Gold Soars
USD-Yen 117.81 gain 0.05 up 0.04%
AUD-USD 0.7392 gain 0.0022 up 0.3%
Nikkei 225 17168.86 gain 168.50 up 1.0%
Hang Seng 16617.51 gain 188.00 up 1.1%
Taiwan Index 7001.79 gain 1.70 0.0%
S.Korea Kospi 1428.96 gain 6.33 up 0.4%
JGB Yield 2.0000% up 0.0450
(All values as of 0450 GMT)
STOCKS: Japanese stocks are up Tuesday as bargain-hunting lifted blue chips after the market's recent decline, although concerns about rising oil prices weighed on sentiment. The rise in oil prices helped refiners, but could also hurt earnings at chemical companies and various manufacturers. The Australian share market is up 1% Tuesday on the back of strong gains by resource stocks, led by BHP Billiton's 2.4% gain.
BONDS: Prices of Japanese government bonds fell as the 10-year yield hit 2.00% for the first time since August 1999. Hedge funds sold ahead of the 30-year auction. Japanese Finance Minister Sadakazu Tanigaki said Tuesday that recent rises in long-term interest rates are undesirable for Japan's economy.
METALS: Concerns about Iran's nuclear program and a sharp drop in the U.S. dollar is helping gold extend Monday's gains, with June gold up $1.20 to $620 in Asian trade. Silver and copper futures also rose.
OIL: Prices are extending gains Tuesday, up 19 cents to $70.59, to trade near a record over heightened supply worries linked to disruptions in Nigeria and international tensions over Iran's nuclear program.
EUROPEAN OUTLOOK: Lower Start For Stocks; Euro Firm
Euro-USD 1.2263 gain 0.0009 up 0.08%
Stlg-USD 1.7714 gain 0.0012 up 0.07%
USD-Franc 1.2789 loss 0.0004 dn 0.05%
(All values as of 0450 GMT
European shares are set to start a shade lower, while government debt prices and the euro open steady.
STOCKS: European markets face a slightly weaker open, following Wall Street's downturn overnight. However, mining and energy stocks again could buck the tide with prices of commodities remaining bullish.
U.K. spreadbettor CMC Markets is calling the FTSE down 4 points at 6025, the DAX down 12 at 5907 and the CAC down 3 at 5100.
European shares closed higher on Thursday, helped by strength in the U.S. technology sector and strong first quarter sales from Carrefour. Most European markets were closed Friday and Monday for the Easter holiday.
BONDS: Investors might take a cue from U.S. Treasurys and help European government debt stage a slight recovery on some short-covering. But JGB losses may curb enthusiasm.
A lack of European economic data Tuesday leaves the markets focused on U.S. figures, especially on inflation. Fed minutes and speakers later Tuesday will feed into the European markets' undertone on Wednesday.
Euro government bonds fell in price Thursday after a technically-inspired selloff.
FOREX: The euro opens firm, with some profit-taking expected if it hits $1.2300.
Tim O'Sullivan, chief trader at Gain Capital, said the market is looking for a lower dollar ahead of Chinese President Hu Jintao's meeting with President George W. Bush this week. He expects the euro to test levels around $1.2305 and the dollar to test levels around Y117.50.
Dollar weakness also comes ahead of the G7 meeting of the largest industrialized nations taking place in Washington Friday. Market participants say that the meeting could have a sharp impact on currency markets, particularly if the group makes a joint statement regarding China.
Federal Reserve Bank of Chicago President Michael Moskow on Monday reiterated a rosy view of the U.S. economy's current and future circumstances, even as he again warned prevailing inflation levels were testing his tolerance range.
The dollar was down significantly against its major rivals Monday. Euro strength dominated the currency markets Monday, as the single currency pushed to an all-time high versus the yen and lifted to a new ten-day high versus the dollar. The euro posted about a 1.1% gain versus the dollar from late Friday.
CALENDAR: Tuesday, April 18: BoE Survey; US PPI
GMT Expected Previous
0830 UK Mar MM22: Producer Prices
0830 UK BOE & NOP Quarterly Inflation Attitudes
1145 US Apr 15 ICSC Store Sales Index +1.8%
1200 US Asst Tsy Secy Henry addresses Atlanta
1230 US Mar Housing Starts -4.7% -7.9%
1230 US Mar PPI +0.4% -1.4%
1230 US Mar PPI, ex-food and energy +0.2% +0.3%
1255 US Apr 15 Redbook Retail Sales Index +3.1%
1505 US Chicago Fed Pres Moskow speaks at auto
industry conference in Detroit
1545 US San Francisco Fed Pres Yellen speaks on
the econ outlook in San Jose, Calif.
1600 US Tsy Secy Snow speaks in Manchester,
1730 US Fed Gov Warsh speaks at Atlanta Fed
1800 US Mar 28 FOMC Minutes
2100 US Apr 16 ABC/Washington Post Consumer Confidence -9
Hennes & Mauritz (HM-B.SK): March Sales
Note: Hennes & Mauritz is expected to report a rise of only 3.9% in sales for March, according to an SME Direkt survey of 17 analysts. Sales at stores that have been open longer than one year are expected to have fallen 5.6%, hit by cold weather and the fact the Easter holiday takes place in April this year. H&M has already warned of weak March sales in central
Europe. Sales rose 11% in February and were up 20% in March last year.
OAO Novolipetsk Steel (NLMK.RS): FY Earnings
Average IFRS net profit (DJ, 8 analysts): $1.40B ($1.77B)
Average EBITDA: $2.11B ($2.47B)
Average revenue: $4.39B ($4.54B)
Note: Higher input costs and lower steel production levels due to extensive blast furnace maintenance are seen responsible for the decline, although profit margins still remain stronger than any other Russian steelmaker. The company is due to release at 0600 GMT.
PartyGaming (PRTY.LN): 1Q Revenue
Average revenue (Co, 11 analysts): $322.6M ($222.6M)
Note: No earnings forecasts are available as it doesn't post profit figures in its quarterly Key Performance Indicators statement. Analysts will be watching out for further news on the group's success in attracting more non-US players to its website. As well as an update on the progress of its recently launched PartyCasino site, which has combined most of the company's online casino activities under one brand.
Philips (PHG): 1Q Earnings
Average net profit (DJ, 5 analysts): EUR234M (EUR117M)
Note: Increase due to strong performance of its consumer electronics and semiconductor divisions. Sales seen rising 6.6% to EUR7.08B from EUR6.64B, due to strong consumer spending, strengthening of USD. Analysts eye comments on the legal separation of the semiconductor division, general market conditions, 06 outlook, expect reiteration of margin target of 7%-10% income from operations. Report due at 0500 GMT.
Pyaterochka Holding (FIVE.LN): FY Earnings
Average net profit (DJ, 4 analysts): $93.1M ($$74.4M)
Average EBITDA: $158.2M ($111.4M)
Note: Analysts note the company gave a preliminary sales figure of $1.36B in January, up 23% from $1.11B on continued expansion, as well as guidance on margins, thus the net profit figure is not expected to deviate much from the forecast.
Sogecable (SGC.MC): 1Q Earnings
Average net loss (DJ, 3 analysts): EUR21M (EUR17.9M loss)
Average revenue: EUR417.3M (EUR396.4M)
Average EBITDA: EUR43.3M (EUR77.2M)
Note: Analysts cite the expenses from Cuatro's network launch for the increase in the net loss. EBITDA seen -44% on anticipated negative operating contribution from Cuatro. Focus will be on Cuatro targets, ARPU perspectives. Company to report after the market closes.
Vimpel Communications (VIP): 4Q Earnings
Average net profit (DJ, 10 analysts): $157M ($84M)
Average revenue: $887M ($636M)
Average EBITDA: $410M ($284M)
Note: The rise in net profit reflects expansion and organic growth, as well as the effect of pre-Christmas special offers. Average monthly revenue per subscriber is expected to fall to $7.2 from $9.1 as competition forces prices down, while the bulk of new subscribers joined in December, towards the end of the quarter. As the market becomes saturated, investors will look at capex and cost efficiency, not just growth, Dalibor Vavruska at ING says. He has a hold rating on the stock.
OTHER SCHEDULED EVENTS:
4imprint (FOUR.LN): AGM
Austrian Airlines (AUA.VI): March Traffic Data
Bever Holdings (28527.AE): AGM
Bjorge (BJORGE.OS): AGM
Boizel Chanoine Champagne (402706.FR): 1Q Sales
Canal Plus (12546.FR): AGM
Clinical Computing (CLC.LN): FY Earnings
Dalet (7617.FR): FY Earnings
Emerald Energy (EEN.LN): FY Earnings
Groupe Ares (7216.FR): 4Q Sales
Hologram Industries (6216.FR): 1Q Sales
Lafuma (3526.FR): 2Q Sales
Mondial Peche (6285.FR): FY Earnings
Pirelli & Co Real Estate (PRS.MI): AGM
Plasmon (PLM.LN): EGM
Reed Elsevier (RUK): AGM
Soitec (402506.FR): 4Q Sales
Sopheon (SPE.LN): FY Earnings
Stedim (5326.FR): 1Q Sales
Umanis (6677.FR): FY Earnings
VNU (38987.AE): Shareholders Meeting
XL Techgroup (XLT.LN): FY Earnings
Aspo (ASU1V.HE): FY 2005 Dividend Payment Date
Banco Bilbao Vizcaya Argentaria (BBV): 4Q 2005 Dividend Payment Date
Banco Bilbao Vizcaya Argentaria (BBV): 4Q 2005 Ex-Dividend Date
Belgacom (BELG.BT): FY 2005 Dividend Payment Date
Belgacom (BELG.BT): FY 2005 Ex-Dividend Date
Bell Holding (BELN.EB): FY 2005 Dividend Payment Date
Bell Holding (BELN.EB): FY 2005 Ex-Dividend Date
Biotrace International (BOI.LN): FY 2005 Ex-Dividend Date
Cardo (CARD.SK): FY 2005 Dividend Payment Date
Chesnara (CSN.LN): FY 2005 Ex-Dividend Date
Converium Holding (CHR): FY 2005 Dividend Payment Date
Converium Holding (CHR): FY 2005 Ex-Dividend Date
Credito Artigiano (CRA.MI): FY 2005 Ex-Dividend Date
Devro (DVO.LN): FY 2005 Ex-Dividend Date
Finsbury Growth & Income Trust (): 1H 2006 Dividend Payment Date
HaldEx (HLDX.SK): FY 2005 Ex-Dividend Date
Kungsleden (KLED.SK): FY 2005 Dividend Payment Date
Ladbrokes (LAD.LN): FY 2005 Ex-Dividend Date
Ladbrokes (LAD.LN): FY 2005 Special Ex-Dividend
Olvi (OLVAS.HE): FY 2005 Dividend Payment Date
OMX (OMX.SK): FY 2005 Dividend Payment Date
OMX (OMX.SK): Special Dividend Payment Date
Poolia (POOL-B.SK): FY 2005 Dividend Payment Date
Prevas (PREV-B.SK): FY 2005 Dividend Payment Date
Protect Data (PROT.SK): FY 2005 Dividend Payment Date
Sogefi (SO.MI): FY 2005 Ex-Dividend Date
Svenska Cellulosa - A Shares (SCA-B.SK): FY 2005 Dividend Payment Date
Svenska Cellulosa - B Shares (SCA-B.SK): FY 2005 Dividend Payment Date
Telecom Italia (TI): FY 2005 Ex-Dividend Date
Wallenstam Byggnads (WALL-B.SK): FY 2005 Dividend Payment Date
WM-Data Nordic (WM-B.SK): FY 2005 Dividend Payment Date
(END) Dow Jones Newswires