US STOCKS-Wall St slumps as Europe worries grow - Reuters UK US STOCKS-Wall St slumps as Europe worries grow - Reuters UK

Wednesday, May 30, 2012

US STOCKS-Wall St slumps as Europe worries grow - Reuters UK

US STOCKS-Wall St slumps as Europe worries grow - Reuters UK

Wed May 30, 2012 6:07pm BST

* Energy, other cyclical shares hardest hit

* Spanish, Italian yields rise on euro zone concerns

* U.S. housing sector gauge falls to 4-month low

* Research in Motion tumbles, sees operating loss

* Indexes off: Dow 1.3 pct, S&P 1.4 pct, Nasdaq 1.4 pct (Updates to afternoon)

By Ryan Vlastelica

NEW YORK, May 30 (Reuters) - U.S. stocks fell more than 1 percent on Wednesday as mounting fears about the euro zone prompted investors to sell sectors tied to economic growth.

The region's debt woes sent investors fleeing to safe havens, like the 10-year U.S. Treasury note, whose yield fell to the lowest in 60 years. The euro, meanwhile, slid to its lowest against the U.S. dollar in 23 months. U.S. stocks have been closely tethered to the euro's fortunes, with a 50-day correlation between the currency and the S&P 500 index at 0.91.

Yields on 10-year Spanish bonds moved closer to 7 percent, a level at which other euro zone members were forced to seek a bailout.

Spain is expected to issue new bonds to fund its troubled banks and troubled regions despite increased borrowing costs.

Adding to the concern, Italian 10-year yields topped 6 percent for the first time since January at a bond sale, raising concerns the region is vulnerable to contagion. European shares ended 1.5 percent lower.

"We're being held hostage by Europe, by the increasing tensions in Spain," said John Kattar, chief investment officer at Eastern Investment Advisors in Boston, which manages $1.7 billion. "We're back to a risk-off mode, with cyclical sectors getting hit really hard."

The Dow Jones industrial average was down 158.18 points, or 1.26 percent, at 12,422.51. The Standard & Poor's 500 Index was down 18.99 points, or 1.43 percent, at 1,313.43. The Nasdaq Composite Index was down 40.20 points, or 1.40 percent, at 2,830.79.

All 10 S&P 500 sectors fell, with energy the biggest decliner of the day. The group tumbled 2.9 percent alongside a drop in crude oil prices, and consumer discretionary stocks were off 1.7 percent.

The PHLX oil service sector dropped 3.8 percent while crude fell 3.3 percent. Halliburton Co dropped 4.5 percent to $30.56. The CBOE Volatility index jumped more than 12 percent, the biggest spike for the "fear index" since mid-April.

Many analysts view next month's parliamentary election in Greece as key to whether the country stays in the euro zone. Polls showed on Wednesday that parties for and against a bailout were neck-and-neck or very close to each another.

U.S. economic data showed contracts to purchase previously owned U.S. homes unexpectedly fell 5.5 percent in April to a four-month low, dealing a blow to optimism the housing sector may have hit a bottom.

U.S. shares of Research In Motion Ltd tumbled 7.6 percent to $10.37 as the biggest percentage decliner on the Nasdaq 100 index. The company hired bankers for a far-reaching strategic review and to look for partnerships as the BlackBerry maker warned it would likely report a quarterly operating loss.

Apple Inc slipped 0.2 percent to $570.81 after Chief Executive Tim Cook, speaking at the All Things Digital conference, said technology for televisions was of "intense interest" but stressed the company's efforts would unfold gradually.

Macy's Inc said May same-store sales were better than expected, helped by growing e-commerce business, but shares slipped 1.7 percent to $38.34.

Pep Boys-Manny, Moe & Jack plunged 21 percent to $8.73 after the automotive parts and service chain said the sale of the company to private equity firm Gores Group has been called off. (Editing by Kenneth Barry)

Financial reporting limitations impacting businesses' bottom lines - CIO UK

Research out from Oracle and Accenture has found inefficient financial reporting could lead to unnecessary costs which would be taken out of more transformational projects.

According to the report, Challenges of Corporate Financial Reporting, less than half of the 1,123 financial staff surveyed had invested in financial reporting systems in the last three years.

On the whole, spreadsheets and emails are still being used as the core tools to record and distribute financial information used in regulated financial reporting processes.

According to Accenture Finance & Enterprise Performance Consulting Group executive director Scott Brennan, enterprise organisations typically spend as much as 1.5 per cent of yearly earnings on financial reporting processes.

He advocates more embedded financial data management through an ERP system, to break down the siloes in reporting.

He said: “The current practices are having a significant impact on investor confidence when companies cannot articulate their financial results clearly. Any improvement on financial reporting systems will go straight through to the bottom-line.”

According to the report, over two thirds of respondents admitted that they have inadequate visibility of reporting processes. Over four fifths of finance managers reported that they find it difficult to control the quality of financial data across the course of their reporting.

STOCKS NEWS SINGAPORE-Maybank Kim Eng cuts Midas target price - Reuters UK

Thu May 31, 2012 4:18am BST

Maybank Kim Eng lowered its target price on Singapore-listed Midas Holdings Ltd to S$0.32 from S$0.41 and kept its hold rating on the stock, citing concerns about its book value.

Shares of Midas fell 1.6 percent to S$0.30 and have lost 9 percent so far this year, compared to a 0.2 percent drop for the FT ST China Index.

The company, which supplies aluminum components to trains in China, posted a 75 percent fall in its first-quarter net profit to 15.3 million yuan ($2.41 million). Current book value is 49 cents a share, and is trading at 0.6 times the its price-to-book ratio.

"We believe there is no longer any earnings visibility for Midas," said Maybank in a report.

The broker expects Midas to post poor earnings as a slowdown in the supply chain casts uncertainty on the delivery schedule for its order book worth about 650 million yuan.

However, Midas' cash position of 671 million yuan should tide it till next year, even if no further bank credit is given, said Maybank.

For Midas' first-quarter results, click

($1 = 6.3577 Chinese yuan)

1042 (0242 GMT)

(Reporting by Leonard How in Singapore;


10:16 STOCKS NEWS SINGAPORE-CIMB cuts Yangzijiang target price

CIMB Research cut its target price for China's Yangzijiang Shipbuilding (Holdings) Ltd shares to S$1.30 from S$1.43 and kept its outperform rating, citing increased risk aversion triggered by the euro zone's debt woes.

Yangzijiang shares were 1.4 percent lower at S$1.025, and have gained about 12 percent so far this year, compared with the FT ST China Index's 0.3 percent gain in the same period.

CIMB said that the 13.6 percent plunge in Yangzijiang in May was unwarranted and the shares are oversold, trading at 1.2 times price-to-book value.

"With no news of order cancellations, we foresee a rapid recovery in its share price if and when euro zone concerns dissipate," CIMB said in a report.

Yangzijiang's entry into rig building could be easier than that of other Chinese shipbuilders such as COSCO Corp Singapore Ltd and JES International Holdings, due to its strong track record, the broker said.

0931 (0131 GMT)

(Reporting by Charmian Kok in Singapore;


8:43 STOCKS NEWS SINGAPORE-Index futures down 0.5 pct

Singapore index futures were down 0.5 percent, signalling a lower start for the benchmark Straits Times Index .

Asian shares, the euro and oil prices fell on Thursday as surging borrowing costs in troubled Spain heightened fears that more countries in the euro zone will be hit hard by the regions' debt crisis.

0846 (0046 GMT)

(Reporting by Charmian Kok in Singapore; ($1 = 6.3577 Chinese yuan)

Stocks Continue To Post Steep Losses In Mid-Afternoon Trading - U.S. Commentary - RTT News

5/30/2012 2:14 PM ET
(RTTNews) - Stocks continue to see significant weakness in mid-afternoon trading on Wednesday after moving sharply lower earlier in the session. The major averages have climbed off their worst levels of the day but remain firmly in negative territory.

Concerns about the financial situation in Europe continue to weigh on the markets amid worries about rising Italian and Spanish bond yields as well as the results of a new poll showing the anti-bailout Syriza party in the lead in next month's elections in Greece.

Disappointing U.S. economic data is also helping to keep stocks in the red, with a report from the National Association of Realtors showing that pending home sales unexpectedly saw a notable decrease in the month of April.

Oil service stocks continue to turn in some of the market's worst performances amid a sharp drop by the price of crude oil. With crude for July delivery falling $2.87 to $87.89 a barrel, the Philadelphia Oil Service Index is down by 3.9 percent.

Significant weakness also remains visible among housing stocks, which were dragged lower following the disappointing pending home sales data. The Philadelphia Housing Sector Index is down by 3.5 percent after trending higher in recent sessions.

Natural gas, steel, electronic storage, and networking stocks also continue to post steep losses, moving lower along with most of the major sectors.

The major averages have climbed well off their lows for the session in recent trading but remain stuck in the red. The Dow is down 133.28 points or 1.1 percent at 12,447.41, the Nasdaq is down 27.07 points or 0.9 percent at 2,843.92 and the S&P 500 is down 15.42 points or 1.2 percent at 1,317.00.

by RTT Staff Writer

For comments and feedback:

Money's too tight to mention -

THE European Central Bank gets a lot of brickbats, even though it has shown great flexibility at several stages of this crisis (including all the way back in August 2007, when it was quick to supply liquidity to the markets as the subprime mess was revealed). Mario Draghi has reversed his predecessor's rate rises and lent €1 trillion to European banks.

Unfortunately, it does not look as if it has done enough. The ECB has always paid a great deal of attention to money supply and the latest numbers look awful. A 0.5% month-on-month fall in M3 (the biggest fall since January 2009), dragging the annual number down to 2.5%. Private sector loan growth is a measly 0.3%.

As James Ashley of RBC Capital Markets remarks

improving the supply and availability of credit is only one side of the equation; and in an environment of heightened uncertainty and an awareness of the need to deliver, households and businesses appear to be shunning the option to tap into those credit lines. As a result, while base money has increased by some 30% over since December, the increase in broad money aggregates has been much more subdued; consequently, the money multiplier has now fallen to an all-time low.

There are signs that investors have withdrawn cash from banks and are keeping it under the metaphorical mattress; an understandable reaction, perhaps, to talk of a euro zone break-up.

In the light of this data, the ECB really has to respond. And it could start by cutting rates by half a point from the current 1%. It is hard to believe, based on the monetary or economic data, that there is any short-term inflation threat.

Stocks at Lows, All S&P Sectors Fall; Vix Soars - CNBC

Stocks finished sharply lower Wednesday, wiping out all of the previous session's gains, as growing worries over rising bond yields in Spain and Italy and fears over Greece's possible euro zone exit kept investors on edge.

Facebook [FB  Loading...      ()   ] took another leg lower, with the stock finishing near $28 a share. The stock has plunged nearly 25 percent since its market debut almost two weeks ago. The social-networking giant received notice that U.S. antitrust regulators will give its proposed purchase of Instagram a lengthy investigation.

The Dow Jones Industrial Average tumbled 160.83 points, or 1.28 percent, to close at 12,419.86, led by Alcoa [AA  Loading...      ()   ] and BofA [BAC  Loading...      ()   ]. The blue-chip index is less than 2 percent from erasing all of this year's gains.

The S&P 500 fell 19.10 points, or 1.43 percent, to end at 1,313.32. The Nasdaq dropped 33.63 points, or 1.17 percent, to finish at 2,837.36.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, surged nearly 15 percent to finish above 24.

All 10 S&P sectors closed lower, led by energy and financials.

“There’s certainly no panic—the S&P bounced at 1,311, which is right where we’re supposed to bounce,” said Stephen Gilfoyle, trader at Meridan Equity Partners. “We’re going into two very heavy macro days in the U.S. where the focus could shift to domestic [reports]—the GDP and non-farm payrolls.”

Non-farm payrolls are expected to show a gain of 150,000 in May, according to a Reuters poll, after a small gain of 115,000 new jobs in April, the fewest in six months.

On the economic front, pending home sales dropped 5.5. percent in April to a four-month low, according to the National Association of Realtors. Economists polled by Reuters had expected a gain of 0.1 percent, after a previously reported 4.1 percent gain.

Meanwhile, the European Commission said the euro zone must move towards a banking union, issue eurobonds and boost growth while cutting debt. (Read More: 'Spexit' Will Come Before a 'Grexit': Analyst)

European shares finished sharply lower and the euro touched a 23-month low against the U.S. greenback as investors worried that Spain's banking problems would push its borrowing costs near highs not seen since last November. And worries over Italy's borrowing costs also raised alarm, pushing the Italian 10-year bond above 6 percent.

“There isn’t a quick fix for this…we’re in a very strong downtrend,” said Andy Busch, global market strategist of BMO Capital Markets. “The very important decision that has to be made on fiscal integration, whether countries are going to give up their sovereignty—that’s highly questionable at this point so you continue to see the euro make new lows and dollar strengthen.”

Apple [AAPL  Loading...      ()   ] CEO Tim Cook said technology for televisions was of "intense interest" but stressed the company's efforts would unfold gradually, amid speculation the iPad and iPhone maker was on the brink of unveiling a revolutionary iTV.

Meanwhile, Research In Motion [RIMM  Loading...      ()   ] plunged almost 10 percent after the troubled BlackBerry maker said it hired bankers for a strategic review and to look for partnerships as the company warned it would likely report an operating loss in the first quarter. In addition, at least nine brokerages slashed their price target on the firm.

Pep Boys [PEP  Loading...      ()   ] plunged after the automotive parts and service chain .n>said the sale of the company to private equity firm Gores Group had been canceled.

Stanley Black & Decker [SWK  Loading...      ()   ] is among potential bidders for private equity-owned Infastech, a Singapore-based industrial fastener maker with revenues of more than $500 million, sources with direct knowledge of the matter said.

Wynn [WYNN  Loading...      ()   ] shares rose after Goldman Sachs upgraded the gaming resort company from "neutral" to "buy."

Also on the economic front, mortgage applications fell last week even as rates hit another record low, according to the Mortgage Bankers Association.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

THURSDAY: Challenger job-cut report, ADP employment report, GDP, jobless claims, Fed's Pianalto speaks, corporate profits, Chicago PMI, oil inventories, chain-store sales, Zipcar shareholders mtg; Earnings from Joy Global
FRIDAY: Non-farm payrolls, personal income & outlays, ISM mfg index, construction spending, auto sales, Wal-Mart shareholders mtg

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Europe financial worries stalk Wall Street; Dow loses 161 points - Lubbock Avalanche-Journal

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Fearing a financial rupture in Europe, investors around the world fled from risk Wednesday. They punished stocks and the euro, and the yield on a benchmark U.S. bond hit its lowest point since World War II. In the United States, where concerns ...

US stocks waver; euro dives on Greece turmoil - Yahoo Finance

Stronger news about the U.S. economy stilled the ripples from Europe's latest political impasse Tuesday, pushing U.S. stocks between modest gains and losses.

The euro and European stocks plunged as trading in New York began after efforts to form a government in Greece collapsed. Newly-elected political leaders there disagree about whether to accept more international bailouts and continue with painful spending cuts.

In the U.S., stocks staged a mid-morning rally after word that confidence among U.S. builders rose to a five-year high in May. The index has risen for seven of the past eight months. Homebuilders rallied. Hovnanian Enterprises surged 10 percent, Lennar Corp. 4 percent and KB Home 3 percent.

Earlier, a survey by the New York Federal Reserve found that manufacturing activity in the New York region rebounded this month far more strongly than economists had expected.

The market's early rise deflated briefly, then stocks climbed at midday to new daily highs. By the afternoon, the indexes again were flat for the day.

The Dow Jones industrial average fell 12 points to 12,683 as of 3 p.m. EDT. Losses by most of its components were offset by gains for JPMorgan Chase and Bank of America, shaking off recent losses related to the surprise $2 billion trading loss that JPMorgan announced last week.

The Standard & Poor's 500 index fell two to 1,336. The Nasdaq composite index rose seven to 2,909.

Stocks are having their worst month in the past eight. For the month, the Dow is down 518 points — about 4 percent — after hitting a four-year high on May 1. The average is on track to post its first monthly loss since September, when it fell 6 percent.

If the Dow closes higher, it will be only its second up day since the peak reached on May 1.

The euro fell as low as $1.2730, a four-month low against the dollar, after Greek socialist leader Evangelos Venizelos declared that attempts to form a governing coalition there had failed and new elections will be held next month. If voters elect parties opposed to the terms of the country's financial rescue, Greece could be expelled from the euro, shocking global markets.

Stock indexes in France, Britain and Germany gave up earlier gains after Venizelos' remarks and closed sharply lower.

Aside from fears about Europe, stocks are suffering because a string of weaker economic data in recent weeks has dampened hopes for corporate performance in the current quarter ending June 30, said John Butters, senior earnings analyst at FactSet, a financial data provider.

For the first month of the quarter, as earnings came in strong and stocks rose, analysts' expectations for second-quarter earnings growth held steady at 6 percent, Butters said. In the two weeks since then, as the U.S. economy appeared to soften and Europe's problems reemerged, analysts cut their estimates for S&P 500 earnings growth to 5 percent, he said.

Analysts expect earnings to decline this quarter for half of the 10 industry groups in the S&P 500, Butters said. He said many expect a strong rebound in the fourth quarter as demand returns in emerging markets such as China and India.

Among other stocks making big moves:

— Home Depot slumped 2 percent, the most of the 30 companies in the Dow, after the world's biggest home-improvement company forecast revenue that was below what Wall Street analysts were expecting.

— TJX Cos., which owns the T.J. Maxx, Marshalls and HomeGoods store chains, shot up 7 percent, the most in the S&P 500 index. The discount retailer reported a 58 percent surge in first-quarter income and raised its full-year profit forecast.

— Avon Products Inc. fell 11 percent, the most in the S&P 500 index, after Coty Inc. canceled its unsolicited, $10.7 billion bid for the cosmetics retailer.

— Groupon leapt 6 percent after the online daily discount site reported first-quarter revenue that exceeded analysts' expectations.


Daniel Wagner can be reached at

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