Stocks open higher, but Europe fears loom - Stocks open higher, but Europe fears loom -

Tuesday, May 15, 2012

Stocks open higher, but Europe fears loom -

Stocks open higher, but Europe fears loom -

U.S. stocks advanced Tuesday, but gains were slim amid mixed news out of Europe.

Investors were heartened by better-than-expected economic growth in Germany but face more uncertainty in Greece. Politicians in Athens failed to agree on a coalition government, and President Karolos Papoulias' office said the debt-wracked country will hold new elections in June in response to the political stalemate.

The Dow Jones industrial average rose 38 points, or 0.3%, the S&P 500 gained 5 points, or 0.3%, and the Nasdaq added 18 points, or 0.6%.

The political instability in Greece has re-ignited fears that the country could fail to make debt payments as early as next month, potentially forcing it to exit the euro and imperil Europe's periphery in the process.

"Now Greece is facing at least another month of uncertainty, and that's something that the market hates," said Tom Schrader, managing director at Stifel Nicolaus.

"This doesn't help the rest of the southern European countries in the debt situation either. Spain, Italy and Portugal are going to come back to the forefront as Greece's situation remains fragile," he added.

Meanwhile, German economic growth came in at 0.5% in the first quarter. That's far better than the 0.2% decline in gross domestic product at the end of last year that had raised fears of Europe's largest economy possibly falling into recession.

German growth also helped other European countries avoid recession, lifting the reading for all of the European Union to 0.1%, and leaving GDP unchanged in the 17-nation eurozone.

There had been fears that both the EU and eurozone would report their second straight quarter of declining GDP, the common benchmark for an economy in recession. By that standard, 12 of the nations in the EU are now mired in an economic downturn.

Still, anxieties over Europe continue to loom large this week.

European finance ministers are winding up a two-day meeting Tuesday and newly elected French President Fran├žois Hollande is set to meet with German Prime Minister Angela Merkel immediately after Tuesday's swearing-in ceremony.

Late Monday, Moody's downgraded 26 Italian banks between one to four notches, saying, "the potential for further rating transition is heightened by the possibility of rapid increases in problem loans."

Concerns about the stability of the financial system have resurfaced since JPMorgan Chase revealed a $2 billion trading loss last week. That loss is sure to be high on the agenda during the bank's shareholder meeting Tuesday.

U.S. stocks fell Monday amid worries about the stability of the eurozone and the safety of the U.S. banking sector.

Economy: Reports on retail sales and inflation for April were close to expectations, providing additional support for stocks.

Retail sales edged up 0.1% last month, below the forecast from a survey of economists by, after increasing by 0.7% in March.

The Consumer Price Index was flat in April, as expected, after rising by 0.3% in March.

Companies: Avon Products said that Coty has withdrawn its bid for the company, less than a week after it had upped its offer with backing from Warren Buffett's Berkshire Hathaway. Avon's board had said it wanted a week to consider the latest offer but Coty had demanded an immediate answer. Shares of Avon tumbled.

Dow component Home Depot, a bellwether of activity in the nation's troubled home building industry, reported quarterly earnings in line with estimates but issued an earnings forecasts that fell short. The stock dipped.

Shares of daily deals site Groupon surged for a second day. The company reported narrowing losses and better-than-expected sales Monday, giving investors hope that it can steady its ship.

Indian stocks: Sensex bounces back from its 4-month lows - Kerala Next
SENSEX 16328.25 112.41 (0.69%) NIFTY 4942.80 35.00 (0.71%) FTSE (May 15) 5459.33 -6.19 -0.11% DAX (May 15) 6463.74 11.77 0.18% CAC (May 15) 3072.87 14.88 0.49%

Brent Crude (May 15) $ 112.18 0.61 0.55% Gold (May 15) 28,142.00 -102.00 -0.36% Silver (May 15) 53,400.00 -235.00 -0.44%

Dollar / Rupee 53.79 -0.17 -0.32% Euro / Rupee 69.12 -0.03 -0.04%

BSE benchmark Sensex today bounced back from its 4-month lows and closed 112.41 points higher led by capital goods, metal and IT stocks after higher trends in European markets, snapping a five-day losing streak.

The 30-share Sensex, which had lost nearly 700 points in last five sessions, gained 112.41 points, or 0.69 per cent to 16,328.25 after touching the day's high of 16,370.12.

Similarly, the broad-based National Stock Exchange index rose by 35 points, or 0.71 per cent to 4,942.80.The BSE Sensex and NSE Nifty snapped five-day losing streak on Tuesday, gaining 0.7% each on the back of stabilisation in European markets and Indian rupee. Index heavyweights L&T, ICICI Bank, Infosys and State Bank of India led the up move.

After falling 700 points or 4% in previous five sessions, the BSE benchmark rose 112.41 points or 0.69%, to close at 16,328.25. The NSE benchmark went up 0.71% or 35 points to 4,942.80.

France's CAC, Germany's DAX and Britain's FTSE were up 0.3-1% after better than expected German gross domestic product data, though Greece woes still persist. Germany's GDP rose 0.5% QoQ and 1.2% YoY in first quarter of 2012.

Italy GDP declined by 0.8% QoQ while French and Euro zone GDP remained flat at 0.00%. Mecklai report says the data released today helped allay fears of recession in the 17- member area, which majority of market participants had expected prior to the release of these reports.

The Indian rupee gained quite sharply after hitting an intraday low of 54.15 initially. Reports suggest that selling dollars by public sector banks helped the rupee gain. It appreciated by 23 paise to 53.73 a dollar as against previous close of 53.97 a dollar.

Top lenders State Bank of India and ICICI Bank were up 1% and 2%, respectively. Infosys, India's No. 2 software services exporter surged over 3%.

Larsen & Toubro, India's largest engineering and construction company by sales shot up 5.41% after the company strongly said its topline and order inflow would grow 15-20% in FY13.

Healthcare stocks too participated in today's rally. Sun Pharma shot up over 3% and Cipla gained more than 1%.

Among metal stocks, Sterlite Industries, Tata Steel, Jindal Steel, SAIL and Hindalco climbed 2-3% while Sesa Goa rose 5%.

Two-wheeler majors too witnessed buying interest - Hero Motocorp went up 2.65% and Bajaj Auto gained 1.6%. Realty major DLF jumped 2.5%.

However, shares of top telecom operator Bharti Airtel fell as much as 5% intraday, before closing 1.3% down. Enforcement Directorate is probing money laundering case against the company. Bharti said it maintained highest standards of corporate governance and had always complied with all necessary norms.

Among other largecaps, ITC, NTPC, Maruti and GAIL were down 1-3%; HDFC Bank and ONGC were moderately lower.

In the second line shares, India Infoline and Gammon India rallied 10% and 16%, respectively after better than expected results for Q4FY12.

Fertiliser stocks spiked after Fertiliser Ministry approved 10% hike in urea prices, though these stocks mildly came off day's high after fertiliser secretary says any hike in urea price has to be cleared by cabinet. There is no change in urea prices as of now, he says.

Chambal Fertiliser, FACT, Madras Fertiliser, Mangalore Chemical, NFL, RCF and Zuari Industries moved up 4-9%.

Geometric shot up 15.4% after Rakesh Jhunjhunwala bought 10 lakh shares of the company yesterday.

Orchid Chemical was down nearly 8% today and fell 13% yesterday after disappointing set of numbers in Q4FY13.

The market breadth was neutral while the BSE Midcap and Smallcap indices gained 0.3-0.6%.

Stocks drop as deadlock continues in Greece - Jamestown Sun

NEW YORK — A political stalemate in Greece rattled financial markets worldwide on Monday, driving U.S. stocks lower.

The euro sank to a three-month low against the dollar and borrowing costs for Spain and Italy jumped as bond traders anticipated that financial stress could spread far beyond Greece. Investors dumped risky assets and plowed into the safety of the Treasury market, pushing yields to their lowest levels this year.

The Dow Jones industrial average dropped 125.25 points to close at 12,695.35. The Dow has lost more than half of its gains for the year in the past two weeks as worries resurface about Europe and the strength of the U.S. economy.

In Athens, talks between political parties to form a government dragged into a second week. The uncertainty has raised concerns that Greece could miss a debt payment and drop the euro currency. The worry is that if Greece leaves the currency union, bond traders may demand steeper borrowing rates from other troubled countries and push them deeper into debt.

The turmoil could easily spread to the U.S. through the banking system. “The large banks are globally connected,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. “The concrete fear is that if Greece exits the euro, that would hurt European banks. They’ll pull back lending to U.S. banks and then they’d be in worse shape.”

In other trading, the Standard & Poor’s 500 index dropped 15.04 points to 1,338.35. The Nasdaq composite sank 31.24 points to 2,902.58.

The losses swept across the market. All 10 of the industry groups within the S&P 500 fell.

JPMorgan Chase’s $2 billion trading loss continued to hang over bank stocks. JPMorgan dropped 3 percent following news that the executive overseeing its trading strategy would step down. Morgan Stanley and Citigroup, two banks with large trading operations, sank more than 4 percent.

The loss to JPMorgan appears “manageable,” said Matt Freund, a portfolio manager at USAA Investments. “But people are looking at other banks and wondering who’s going to be next? What else could be lurking?”

Major markets in Europe plunged. France’s CAC-40 and Germany’s DAX lost 2 percent. Benchmark indexes fell nearly 3 percent in Italy and Spain.

Traders shifted money into the safest of government bonds, pushing Treasury prices up and their yields down. The yield on the 10-year note hit a low for the year, 1.77 percent.

Since hitting its high for the year on May 1, the Dow has been on a steady slide, closing lower on seven of the previous eight trading days. The Dow’s 1.7 percent loss last week was its worst since Dec. 16.

Despite the broad market decline, some stocks posted gains:

— Chesapeake Energy Corp. jumped 4 percent on reports that the investor Carl Icahn bought a stake in the natural gas company. Chesapeake’s CEO said he’d welcome an investment by Icahn, who is known for shaking up companies.

— Yahoo gained 2 percent. The company replaced its CEO, Scott Thompson. Yahoo reportedly pushed Thompson out for padding his resume.

— Electronics retailer Best Buy Co. rose 1 percent after the company’s founder, Richard Schulze, said he would step down as chairman. An investigation found that he knew the CEO was having a relationship with a female employee and didn’t tell an audit committee.

Tags: us businessbusiness

Stocks And Gold Should Rally Post Facebook IPO - Forbes

A major stock market event will occur later this week when Facebook goes public. Stocks and gold likely will keep selling off until the Facebook offering hits the market. And everything else being equal, I then expect a sharp rebound in stocks and gold after the offering.

I personally will be buying Facebook and gold on the IPO day.

The Biderman Market Theory says all there is in the stock market are shares of stock. Not very complicated. Eighty percent of all shares are held by mutual funds, exchange-traded funds, hedge and pension funds and family offices. Money flows in and out of those institutions.

Now Facebook will be selling anywhere from $12 billion to $15 billion of new shares in a few days. The main reason stock prices have being going down recently is that there is not $12 to $15 billion in cash sitting on the sidelines waiting for this deal. That means almost all the money that will going into Facebook has to come from the sale of existing stocks or gold.

There has been no new money going into stocks lately; cash has been leaving not arriving. Individuals have been selling more shares than they have been buying since early in 2011. Pension funds are being forced to sell U.S. stocks every quarter to meet obligations to aging beneficiaries. Hedge fund are attracting almost no net new cash and little of the cash they are attracting is flowing into U.S. stocks.

Based on the announced corporate actions that TrimTabs tracks daily, companies have been net sellers of shares since the start of May. That is huge. Why? Since the end the QE2 in June 2011, companies have been the sole source of new cash for stocks. That is, until last month when corporate buying started slowing. This month, in May, new share sales will go ballistic because of the sale last week of $6 billion for AIG and with Facebook this week.

Everything else being equal stock prices should rebound after the Facebook offering. But that is only for the short term. Unless there is a big turnaround in corporate buying, or QE4 is announced in June, I expect stock prices to keep weakening until whenever the next round of Fed stimulus is announced.

I also expect gold to rebound post Facebook. But unlike stocks, I expect gold to keep rising, again for supply and demand reasons. Bullion buying by the emerging worlds central banks and by the globes newly wealthy is greater than the new supply coming out of the ground.

Silver prices as well as the shares of precious metal miners will lag the gold price rise initially. But once the gold uptrend is intact, silver and miner share prices should surge and go up by lots more than gold.

Special Offer: China’s economic setbacks last year have created a buying opportunity. Click here for a free investment report: 7 Chinese Stocks on Ken Fisher’s Buy List.

For disclosure purposes, I plan to buy Facebook either the day of, or the day after the IPO and keep it. In my opinion Facebook has greater growth potential than Google, LinkedIn or any other social media play. Yes, it has yet to figure out how to monetize iPhone usage, but it will.

Report: Amid problems, U.S. fish stocks rebound - Arlington Heights Daily Herald

BOSTON A record number of fish populations have been rebuilt in U.S waters, even as problems continue to threaten the future of the high-profile New England fishing industry, according to a federal report released Monday.

Six species that were once considered overfished have rebuilt to optimal population levels in waters from the Bering Sea to the Atlantic Coast, according to the annual report to Congress by the National Oceanic and Atmospheric Administrations fisheries arm.

The report also said just 45 of 219 fish populations (21 percent) were considered overfished in 2011.

Still, 13 of those stocks are in New England. Thats the most, by far, of any geographic region.

Emily Menashes, acting director of NOAAs sustainable fisheries office said, overall, the report shows, We are turning the corner on ending overfishing.

But New England is defying the positive trends and its unclear how that can change, said NOAAs Galen Tromble.

Its a challenging situation and there arent any easy solutions, he said.

The report looks at fish populations on both coasts and off Alaska and Hawaii, using the most recent data, generally two to three years old, Menashes said.

The six fish species now considered rebuilt include Bering Sea snow crab, Atlantic coast summer flounder, Gulf of Maine haddock, northern California coast Chinook salmon, Washington coast coho salmon and Pacific coast widow rockfish.

In the last 11 years, 27 U.S. marine fish populations have been rebuilt, according to the report.

Tromble said that reflects years of effort by fishery managers and sacrifice by fishermen to follow rebuilding plans started 10 or 15 years ago.

Were starting to see the results of those, Tromble said.

Regulators on Monday also touted a dropping percentage of species where overfishing is occurring from 16 percent in 2010 to 14 percent in 2011. That simply means fishermen are fishing too hard on fewer species now.

It differs from the falling percentage of species considered overfished, which is down from 23 percent to 21 percent. The drop in that category means there are fewer fish populations in such poor shape that managers must devise a plan to protect them.

Still, theres not much good news in that category in New England. Its 13 overfished stocks in 2011 compare to six in the next highest region, the Pacific. The North Pacific (off Alaska) counts just 2 overfished stocks, and the Mid-Atlantic just one.

Just this month, New England fishermen absorbed a 22 percent cut in the catch of cod in the Gulf of Maine and an 80 percent cut in the yellowtail flounder catch on Georges Bank.

The lower catch limits present a huge problem for already stretched New England fishermen, because they prevent them from going after the more abundant fish the cod and flounder swim among. Fishermen have predicted catastrophe for the industry by next year unless something changes.

Tromble said New England is unique because the fish off its coast have been under pressure for so long, both from the industrys early beginnings and the foreign fleets who heavily fished its waters until the U.S. government kicked them out in the mid-1970s.

Also, he said, fish reproduction on important stocks has recently lagged in New England, compared to other regions, and its unclear why.

To many fishermen, the problem is flawed fishery science. Their doubts have recently been fueled by radical shifts in the population estimates. The cut in Gulf of Maine cod, for instance, came just four years after scientists said the species was robust.

Its a dynamic environment out there and the data that we have from the fishery reflects that, Tromble said. So sometimes we get results that arent what we expect. Weve just had an unusual amount of that in New England recently.

Stocks with Strong Financial Metrics (NYSE: KEP) -
Shares of KEP fell by 1.44% or $-0.14/share to $9.55. NYSE is trading at a price to book ratio of 0.26. This indicates that the value of the company's underlying assets exceeds today's market price. The PEG is 0.11 suggesting that the shares are trading at an excellent value relative to firm's growth rate. The price to sales ratio came in at 0.32. Hence, the firm is extremely cheap relative to its top line sales figures. On average, 669608 shares of KEP exchange hands on a given day and today's volume is recorded at 1102386. These factors combined may make this company a potential takeover candidate. Value investors may have an eye on this one, especially if the stock gets cheaper.

Korea Electric Power Corporation is a Korea-based company engaged in the generation, transmission and distribution of electricity and development of electric power resources in the Republic of Korea.

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