Stocks Moving Modestly Lower In Early Trading - U.S. Commentary - RTT News Stocks Moving Modestly Lower In Early Trading - U.S. Commentary - RTT News

Thursday, May 17, 2012

Stocks Moving Modestly Lower In Early Trading - U.S. Commentary - RTT News

Stocks Moving Modestly Lower In Early Trading - U.S. Commentary - RTT News

5/17/2012 9:53 AM ET
(RTTNews) - Stocks have moved modestly lower in early trading on Thursday, extending the downward move seen in recent weeks. The major averages have slipped into negative territory after ending the previous session at their worst closing levels in over three months.

The major averages have seen some further downside in the past few minutes, hitting new lows for the young session. The Dow is down 38.98 points or 0.3 percent at 12,559.57, the Nasdaq is down 13.81 points or 0.5 percent at 2,860.23 and the S&P 500 is down 4.95 points or 0.4 percent at 1,319.85.

The early weakness on Wall Street likely reflects continued concerns about the financial situation in Europe, with traders keeping an eye on the latest developments in Greece.

Traders are also digesting the Labor Department's report on initial jobless claims in the week ended May 12th, which showed that claims unexpectedly came in unchanged.

The report said jobless claims came in at 370,000, unchanged from the previous week's revised figure. Economists had expected jobless claims to edge down to 365,000 from the 367,000 originally reported for the previous week.

Jennifer Lee, senior economist at BMO Capital Markets, said, "Although another decline would have been preferred, the results weren't that bad."

Shortly, trading could be impacted by the release of the Philadelphia Federal Reserve's report on regional manufacturing activity and the Conference Board's report on leading economic indicators

Banking stocks have moved to the downside in early trading, with JP Morgan (JPM) leading the sector lower. Shares of JP Morgan are down by 2.8 percent after hitting a four-month low.

While housing, airline, and biotech stocks are also seeing early weakness, gold stocks have moved sharply higher amid a rebound by the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific turned in yet another mixed performance on Thursday. While Japan's Nikkei 225 Index rose by 0.9 percent on upbeat Japanese GDP data, Hong Kong's Hang Seng Index slipped 0.3 percent.

Meanwhile, the major European markets have bounced off their lows but continue to see weakness on the day. The U.K.'s FTSE 100 Index is down by 0.8 percent, while the French CAC 40 Index and the German DAX Index are down by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries are lingering near the unchanged line after trending higher in recent weeks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.767 percent.

by RTT Staff Writer

For comments and feedback:

Which Dow stocks are vulnerable? - MSN Money

With the Dow Jones Industrial Average ($INDU) barely positive for the year and with the visions of previous spring swoons dancing in our heads, it might be worth a moment to figure out which stocks in the averages could take us down and whether it is reasonable to expect that they will.


What we are fearing, obviously, is the 1,000-point bruising we got from Dow 10,700 in May of 2010 through the summer and the hideous 2,000 point May-until-October annihilation that 2011 gave us.


The worries are justified. Europe's in collapse mode and all but Germany's well below our average's performance. Incredibly, given its location, Germany's still up 5% from where the year began.


Now, of course, any average can have a wholesale reversal. We are seeing from the dramatic underperformance in the master limited partnerships so far to date, 1,000 basis points in weakness vs. the benchmark S&P, that yield's not protecting jack right now. Or at least these yields aren't.


We also know that the pull of the foreign markets can overwhelm even the best of the domestically based Dow stocks, but the bounceback tends to be pretty pronounced in those stocks.


Related Articles

So, with those caveats, who can do the most damage in the Dow from here? Who would take the averages down another 10%, the big fear out there on top of the 700-odd points of decline we have already had from 13,300? Who is, for the purposes of this analysis, vulnerable?


First would have to be the oils. Exxon (XOM) is down 3% and Chevron (CVX) is down 5% this year, and while Chevron at least gives you 3.5% yield protection, the Exxon yield of 2.79% doesn't mean jack. This group is in freefall. I don't see it stopping yet because we seem to be replaying last year's decline.


The good news, though, is that even with a 2011 perspective Chevron sold down to only $90. But the bad news, Exxon hit $67. I think Chevron could bang us until it yields 4%, still a little ways, but Exxon, which reported a disappointing quarter, could decline another 7-8% fairly easy. Call Exxon vulnerable.


Sticking with the resource and resource-related portion of the Dow, you can't help but wonder where Caterpillar (CAT) is going to fall to. Could it reprise its trip to $70 from last year? Given BHP's comments Tuesday night about the slowdown in commodity capital equipment spending, I am saying that $70 is not out of the realm, but an $80 move is probably likely given the lack of dividend support. Call CAT extremely vulnerable.


The other industrials seem to be on firmer footing. United Technologies (UTX) and 3M (MMM) both reported excellent quarters. They can be taken down given their less than 3% yields, but their businesses are diversified and strong. They have Europe, but they also have some secular positives. Call them not all that vulnerable.


DuPont (DD) missed its projections last year, but it has much going for it right now including strong life sciences, ag, housing and auto exposure. I think it is a $50 stock with a 3.45% yield that everyone would be crazy about owning. 4-5 points down. I am saying not all that vulnerable.


General Electric's (GE) quarter wasn't perfect. The gross margins were a tad disappointing, but at $16 and change you have about a 4% yielder with another dividend boost around the corner. Let's say it is relatively safe. Alcoa's (AA) got tons of Europe, but has taken drastic action to bring its costs down. Can it go to $7? The way it is trading it can. Have to wonder whether, despite its total commodity orientation, it doesn't get saved by the aircraft, turbine and auto build. China can only do so much damage. Not all that vulnerable.


The retailers are resilient, buoyed by the decline in gasoline. If they haven't hit Wal-Mart (WMT) more than this off the Mexican scandal, I don't see a lot of vulnerability. After going through the Home Depot (HD) quarter call, I was surprised that it went down much at all. Both seem not all that vulnerable.


Speaking of just reporting, Disney (DIS) put up monster-good numbers. Given the strength of a new multi-billion brand that didn't exist 21 days ago, plus robust themepark and ad rates, Disney has to be one of the least vulnerable stocks in the Dow.


The recession-resistant names are also the ones that benefit from a commodity decline. Not only do they not appear vulnerable, but they seem to be in a position to gain price. I think that Procter & Gamble (PG), off its myriad restructurings, Johnson & Johnson (JNJ) with its new management, Merck (MRK) with its already reduced earnings targets and Pfizer (PFE) with its already acknowledged decline in Lipitor all look like buys. So much for vulnerability there.


We are buying Kraft (KFT) for Action Alerts PLUS ahead of the split into two companies because both are huge beneficiaries of the commodity declines across the board -- but particularly gasoline.


So is Coca-Cola (KO), where truck fuel is one of the main variables, and packaging costs seem to have some upside. The only weakness here will be a strong dollar. Not all that vulnerable and maybe positive.


Tech's not all that worrisome because of yield and product cycle support. Intel (INTC) and Microsoft (MSFT) are going to be huge beneficiaries of Windows 8 and Intel is going to gain share in communications and servers with its new lines of chips coming out right now. Given that both had extremely strong quarters, I would be a buyer of both right here. Not Vulnerable and maybe positive.


Cisco's (CSCO) already been crushed. How about was vulnerable? Let's put Hewlett-Packard (HPQ) in the same camp. Was real vulnerable, but I think it is much less vulnerable at $22. But $20 seems reasonable.


IBM (IBM), because it has so many points in it -- hey, it's a silly-weighted index -- presents vulnerability. But the buyback and the soundness of the actual earnings gives you a nice floor. How about somewhat vulnerable?


JPMorgan (JPM) feels like Cisco. It now is much less vulnerable because of the swoon. That swoon has included Bank of America (BAC), which, while still up 30% for the year, looks like a stock that is worth picking up at $7 given the housing floor we see brewing and an improving balance sheet.


While we just sold American Express (AXP) for Action Alerts PLUS, the quarter was terrific and I know there are buyers underneath. Travelers (TRV) reported a fantastic quarter and has shown no degradation during this selloff. I would call AmEx vulnerable to $54 and Travelers only to $62.


AT&T (T) and Verizon (VZ) have run gigantically and yet I don't know a soul that doesn't want in given their totally domestic businesses and remarkable wireless growth and wireline recovery. Call them not vulnerable to much of a decline at all. I want to buy them down a point and two points respectively.


Which leaves two stocks that have fallen that could fall more. However, I think that they have catalysts that could halt their declines: Boeing (BA) and McDonald's (MCD). The former has the Paris Air Show coming up and I think it is going to show big share gains vs. Airbus, which reported a decent number Tuesday night. McDonald's is already down a lot and I think is factoring in a real slowdown in numbers that now might not even happen. Limited vulnerability to both.


So, all in all, the index, while subject to a decline that could take it down to even for the year without much difficulty, seems better with very few stocks on the vulnerable list and many more on the hope-they-come-down-so-I-can-buy-them list.


Frankly, a small decline wouldn't shock me from these levels. But a big decline a la 2010 and 2011? That would be hard for me to get my arms around without a total collapse in Europe. Unfortunately that, in itself, is not out of the realm. So despite the attractiveness of so many of these stocks, it remains a possibility.


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust, and is long BA, DD, GE, IBM, JPM and KFT.

Commodity stocks weigh on JSE - Independent Online

Independent Newspapers

The JSE. Photo: Simphiwe Mbokazi.

The JSE extended its losses at noon on Thursday, dragged down by a selloff in general mining shares, against the negative global investor sentiment backdrop.

The JSE had a 30 minute interruption this morning due to international connectivity issues, which have since been resolved.

At 12:06 local time, the JSE all-share index was down 1.08% to 33,431.24 points, with resources dropping 1.88%, which extends the sector's losses to 6.97% since the beginning of May.

Gold miners lost 1.22%, while platinum counters edged up 0.34%.

Financials were down 0.60%, banking stocks fell 0.21% and industrials shed 0.77%.

The rand was trading at 8.31 to the US dollar, from 8.29 at the JSE's close on Wednesday, while gold was quoted at US$1,547.90 a troy ounce from $1,546.53/oz at the JSE's previous close and platinum was at $1,443.20/oz, from $1,438.70/oz at the previous session.

“The market continues to be extremely volatile. The resource counters continue to be the main drag on the overall index due to uncertainty in Europe and the slowdown in the Chinese economic growth,” said Martin Strauss, market analyst at PSG Konsult.

Franklin Templeton Investments said in a research note that to the extent that the recent downturn in China was due to a slowdown in external demand, signs of improvement in the US and continued robustness in other parts of Asia should help support economic growth.

In addition, while the rate of consumer inflation in March was higher than expected, upstream inflationary pressure from producer prices appears limited, so there may be room for some easing of monetary and fiscal policy.

European stocks were lower on Thursday, as worries about contagion from Greece to other “peripheral” nations continued to weigh on investors' minds, while the results of Spain's latest bond auction saw borrowing costs rise, Dow Jones Newswires reported.

The UK's FTSE 100 index was down 0.71% to 5,366.74 points just before noon local time.

Spain sold EUR2.494 billion in bonds, which was at the upper end of the EUR1.5 billion to EUR2.5 billion range expected.

Asian markets ended mixed, stabilising after heavy selling on Wednesday, as worries subsided over Europe with Greece preparing to hold fresh elections in June.

Japan's Nikkei rose 0.90% while China Shanghai SE Composite finished up 1.4%.

On the JSE, Anglo American (AGL) was down R7.27, or 2.61%, to R270.85, BHP Billiton (BIL) fell R5.81, or 2.49%, to R227.31 and Sasol (SOL) dropped R5.05, or 1.40%, to R356.45.

AngloGold Ashanti (ANG) slipped R3, or 1.14%, to R260, Harmony Gold Mining (HAR) was down R1, or 1.35%, to R72.83 and Gold Fields (GFI) lost R1.34, or 1.36%, to R97.46. The gold producer earlier reported attributable group production of 827,000 gold equivalent ounces in the quarter ended March, similar to the corresponding quarter's 830,000 gold equivalent ounces a year ago, but 6% lower than the December 2011 quarter's 883,000oz.

Anglo American Platinum (AMS) bucked the trend, lifting R5.13, or 1.04%, to R497.13, while Lonmin (LON) dropped R4.36, or 4.07% to R102.86.

Among other miners, Kumba Iron Ore was off R14.65, or 2.75%, to R517.89.

Among telecoms, MTN (MTN) fell R2.85, or 2.09%, to R133.77 and Vodacom (VOD) declined R1.95, or 1.83%, to R104.70.

Among financials and banks, Absa (ASA) lost R1.79 or 1.16%, to R153.11 and Investec plc (INP, INL) was down 80 cents, or 1.84%, to R42.75. The international specialist banker and asset manager saw adjusted earnings per share decline by 26.4% from 43.2 pence to 31.8 pence for the year ended March. Headline earnings per share for the 12-month period were down 28.9% to 26.8 pence from 37.7 pence a year ago.

Pretoria Portland Cement (PPC) was up 23 cents to R29.23. The company reported an 8% rise in headline earnings per share to 77.6 cents for the six months ended March 2012 from 7.8 cents a year ago. - I-Net Bridge

Pakistani stocks drop; rupee, o/n rates flat - DAWN Group

File photo show a trader on the floor of the Karachi Stock Exchange.—Reuters Photo

ISLAMABAD: Pakistan stocks fell for a second day running on Thursday with confidence hit by two days of consecutive net selling by foreign investors and concerns about regional markets, analysts said.

The Karachi Stock Exchange (KSE) benchmark 100-index ended 0.13 per cent, or 17.99 points, lower at 14,063.08 on volume of 103.3 million shares.

“The mood in the market was dull because of concerns that other markets in the region aren’t doing so well, and also because of selling by foreign investors for the last two days,” said Atif Zafar, a research analyst at the JS Global financial services company.

Foreign investors sold shares worth a net $1,674,866 on Wednesday, and $3,487,911 on Tuesday, according to the National Clearing Company of Pakistan.

In the currency market, the Pakistani rupee ended almost flat at 90.88/95 to the dollar, compared with Wednesday’s close of 90.86/91.

The rupee has been supported by remittances, which rose 20.2 per cent to $10.88 billion in the first 10 months of the 2011/12 fiscal year, compared with $9.05 billion in the same period last year.

In April, remittances totalled $1.14 billion.

Overnight rates in the money market ended at 11.90 per cent, the same level as on Wednesday.

4-Star Stocks Poised to Pop: Lorillard - Daily Finance

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette specialist Lorillard (NYS: LO) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Lorillard's business and see what CAPS investors are saying about the stock right now.

Lorillard facts

Headquarters (Founded) Greensboro, N.C. (1760)
Market Cap $16.5 billion
Industry Industry
Trailing-12-Month Revenue $4.5 billion
Management Chairman/CEO Murray Kessler
CFO David Taylor
Return on Capital (Average, Past 3 Years) 128.2%
Cash/Debt $1.9 billion / $2.6 billion
Dividend Yield 4.9%
Competitors Commonwealth Brands
Philip Morris USA
Reynolds American

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 373 members who have rated Lorillard believe the stock will outperform the S&P 500 going forward.  

Just last month, one of those Fools, Buffettinvestor, succinctly summed up the bull case for our community:

Still cheap even after its recent huge rally. Earns great returns on capital and owns the second most sold brand in the US (Newport), and the most sold brand of menthols. Cigarettes will not go away, for the same reason as alcohol won't go away. It's too ingrained in to world culture, and too much money and jobs are dependent on it.  

If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Lorillard may not be your top choice.

If that's the case, we've compiled a special free report for investors called "Secure Your Future With 9 Rock-Solid Dividend Stocks," which uncovers several other juicy income opportunities. The report is 100% free, but it won't be around forever, so access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Stocks with Strong Financial Metrics (NYSE: WF) -
Shares of WF fell by 9.68% or $-2.84/share to $26.51. NYSE is trading at a price to book ratio of 0.5. This indicates that the value of the company's underlying assets exceeds today's market price. The PEG is 1.29. The price to sales ratio came in at 1.14. Thus, the company is not very expensive in terms of its sales. On average, 17727 shares of WF exchange hands on a given day and today's volume is recorded at 9370. These financial metrics combined make this company seem undervalued. Value investors may have an eye on this one, especially if the stock gets cheaper.

Woori Finance Holdings Co., Ltd. is a Korea-based financial holding company engaged in the management of its subsidiaries.

No comments: