US & World Daily Markets Financial Briefing 01-05-2007

The world's most trusted name in professional trader education. Click Here

Stocks rise before manufacturing data

NEW YORK - Stocks rose Tuesday as investors grew cautiously optimistic ahead of data on the nation's manufacturing sector that will provide clues about how much the economy is slowing.
   
After a strong April, during which the Dow Jones industrials crossed 13,000 for the first time, investors will be looking to economic data and more profit reports to decide whether to keep buying up stocks in May.
   
The Institute for Supply Management was scheduled to release its April index of U.S. manufacturing early in the session, and economists predicted a reading of 51.0. A reading below 50, which would indicate that manufacturing activity is
contracting, could revive fears of an upcoming recession.
   
Also Tuesday, investors will examine the National Association of Realtors' report on pending sales of existing homes in March, and automakers' April sales figures.
   
In the first hour of trading, the Dow Jones industrial average rose 24.63, or 0.19 percent, to 13,087.54.
   
Broader stock indicators were also higher. The Standard & Poor's 500 index was up 1.73, or 0.12 percent, at 1,484.10, and the Nasdaq composite index was up 3.06, or 0.12 percent, to 2,528.15.
   
Bonds were virtually flat, with the yield on the benchmark 10-year Treasury note at 4.62 percent, unchanged from late Monday. The dollar slipped against other major currencies, while gold prices also fell.
   
Procter & Gamble Co., one of the 30 components of the Dow industrials and maker of Crest toothpaste and Pampers diapers, reported a 14 percent increase in its fiscal third-quarter profit in part as it extracted savings from its Gillette business. But with a string of better-than-expected quarterly reports in recent weeks, Wall Street appeared unimpressed with profit that failed to top expectations.
   
Procter & Gamble fell $1.72, or 2.7 percent, to $62.68 in early trading.
   
The Russell 2000 index of smaller companies was down 0.62, or 0.08 percent, to 813.95.
   
Overseas, Japan's Nikkei stock average fell 0.72 percent. In afternoon trading, Britain's FTSE 100 was down 0.51 percent, Germany's DAX index was up 0.42 percent, and France's CAC-40 was up 0.49 percent.

VantagePoint's market forecasts are nearly 80% accurate.  Take a look at actual  forecasts and see the difference they can make in your trading. Click here to see two recent forecasts now.

Dollar rises after strong ISM

LONDON  - The dollar got a fillip from an unexpectedly strong snapshot of the US manufacturing sector.
   
The afternoon's Institute for Supply Management's April manufacturing index
jumped to 54.7 from 50.9 in March. The index had been expected to edge up
slightly to just 51.0.
   
Notably, the key price component in the index also edged up, suggesting price pressures are increasing.
   
At 3.08 pm BST, the dollar was at 1.3635 against the euro, down from 1.3662 ahead of the data. The pound eased to 2.0035 usd from 2.0060 usd.

Euro scales record high against Swiss franc

LONDON - The euro scaled a record high against the Swiss franc in holiday-thinned trade.
   
At 2.05 pm BST, the euro was at 1.6490 sfr, after setting an all time high of 1.6502 moments earlier.
   
Strong euro zone data and the likelihood of more interest rate hikes have been underpinning the single currency. At the same time, the low level of interest rates in Switzerland has been weighing on the franc. Along with the yen, the franc is popular as a funding currency for carry trades.

Traders borrow in the lower yielding currencies to invest elsewhere to maximise gains.

Inflation picked up in September in Europe as both areas show fragile economic growth. Just as in the U.S., rising energy prices are to blame. Read free, daily market reports available only at CMS Forex and open your free demo trading account today. Click here

London shares weak, off lows midafternoon; NY up; Punch hit by profit taking

At 3.08 pm, the FTSE 100 index was down 39.4 points at 6,409.8, holding off a morning low of 6,395.5, having reversed from an earlier peak of 6,449.2.  The FTSE 250 index was 53.6 points lower at 11,875.8. Volume was light, with 1.269 bln shares changing hands in 225,505 deals.
   
Punch Taverns remained the top casualty, losing 47 pence to 1,257 on profit-taking following in-line interim results from the pubs operator. Punch saw its profit before tax and asset sales increase 12 pct to 130 mln stg in the first half, after what the group called "an extremely active" period.
    
Elsewhere, Northern Rock shares lost 19 pence at 1,058 as Citigroup reiterated its 'sell' stance and cut its price target to 1,000 pence from 1,100 pence following a recent trading update from the mortgage bank.
   
Schroders was also a blue chip faller, down 6 pence at 1,288 following an uneventful trading statement.
   
The UK investment manager said its pretax profit for the three months to end-March 2007 rose 30 pct to 93.2 mln stg, up from 71.4 mln for the same period last year.
   
Funds under management at end-March 2007 were up less strongly to 132.3 bln stg from 128.5 bln stg at Dec 31, 2006.
   
Out of FTSE 100 gainers at midday, InterContinental Hotels Group climbed 18 higher at 1,234 following the news that the Barclay brothers have again lifted their stake in the company, to 8.19 pct.
   
Ellerman Corp, the reclusive brothers' investment vehicle, last declared a 7.1 pct stake in the Crown Plaza and Holiday Inn operator on March 5, having built up a holding of 5 pct in late January.
   
Meanwhile, property group Liberty International was up 21 pence to 1,230-1/2 following first-quarter results that prompted KBC Peel Hunt to raise its stance to 'add' from 'hold'. The broker said Liberty is an incredibly strong business and a core global retail real estate investment trust (REIT).
   
Its peer Slough Estates gained in sympathy, taking on 15-1/2 pence at 788-1/2 -- aided also by a return of bid speculation, while Hammerson was up 13 at 1,538 and British Land edged 8 at 1,481.
   
And on the downside with mid caps, Aberdeen Asset Management shares shed 6 pence to 214 after slightly disappointing interim results.
   
Elsewhere, Rentokil Initial fell back 0.76 pence at 172-1/4, ahead of tomorrow's expected decline in first-quarter earnings reflecting the impact of difficult market conditions on its Textiles & Washroom (T&W) Services business and one-off costs.

Follow the futures and FX markets with our trading experts and read their analysis.  Click here to sign up now!

Oil edges higher on Nigerian tensions, tight US gasoline supply

LONDON - Oil edged higher in London, supported by tensions in Nigeria and expectations US gasoline supply is too tight to satisfy higher demand in the imminent driving season.
   
Trading was quiet, however, with most of Europe on a May Day holiday while Japan and China are closed for most of the week.
   
At 1.30 pm, London Brent crude for June delivery was up 4 cents at 67.69 usd. Meanwhile, New York crude for June delivery was down 20 cents at 65.51 usd a barrel.
   
Currently, oil production in Nigeria, Africa's largest producer, is down by nearly 25 pct, or 500000 bpd.
   
Brent prices are tied more closely to Nigerian crude prices than the WTI benchmark.
   
A Chevron Corp. ship in Nigeria's southern oil-producing region was attacked by gunmen armed with dynamite, who seized six foreign workers and killed a Nigerian sailor.
   
"This incident has once again highlighted the instability in the region, with the countrys output still below full capacity," said Sucden analyst, Michael Davies.
   
Early estimates of the US government's weekly snapshot, due to be released tomorrow, also lent support. Analysts predicetd the report would show gasoline stocks fell for the twelfth week in a row, while crude stocks will have risen.
   
"The tightness in gasoline supply remains a supportive factor for crude oil," noted Dresdner Kleinwort analyst Peter Fertig.
   
Gasoline stocks are the most closely watched indicator in the report ahead of the driving season, which starts late May. US gasoline stocks are down 15 pct since early February, having fallen for eleven straight weeks.

Trade with RCG fxtrader ™, the platform offering instant access to 12 major FX trading pairs with low spreads (2 pips EURUSD, USDJPY) and global news from 3 major sources.  Trade with a registered and regulated company in business for 80 years. Smart money trades here. Get your FREE Trial Today!

Gold lower amid thin trading, softer oil prices

LONDON - Gold continued lower amid very thin trading conditions and softer oil prices, while traders looked for direction from the dollar.
   
Most of Europe is enjoying the May Day holiday while Japan and China are closed for most of the week.
   
At 2 pm, spot gold was quoted at 675.15 usd per ounce, down from 680.10 usd seen in late New York trade yesterday.
   
Amid quiet conditions, "gold prices are likely to continue to look to the dollar for guidance, which in turn is likely to be impacted by US data releases today," said Barclays Capital analysts.
   
Also dampening sentiment, oil prices eased in New York, and were relatively lower in London compared to last week, leaving investors with little need to hedge against inflationary pressures.
   
Among other precious metals, platinum dipped to 1,282 usd from 1,288 usd in late New York trade yesterday, while its sister metal palladium eased to 365 usd from 371 usd.
   
Silver meanwhile continued to languish, slipping to 13.32 usd per ounce from 13.46 usd.

Peruvian strike lifts copper

LONDON - Copper was higher, supported by supply fears from Peru where the largest mining union is continuing with strike action, demanding higher wages.
   
Almost 36 hours after the official start of the strike, the countrys umbrella mining body claimed that as many as 40,000 members had joined the strike, although government officials downplayed this number.
   
At 11.07 am, LME copper for 3-month delivery stood at 7,840 usd per tonne, against 7,761 usd at the close yesterday.
   
Gains were capped, however, as the market tried to, "get a handle on the extent of the Peruvian strikes," said Man Financial analyst, Edward Meir.
   
"The information we have is that the strike is being carried out by an absolute minority," a government official was quoted as saying.
   
Trading was quiet in the session, however, with most of Europe on a May Day holiday while Japan and China are closed for most of the week.
   
Among other metals, aluminium softened to 2,824 usd from 2,860 usd, lead slipped to 2,010 usd from 2,015 usd. Zinc was up at 3,793 usd from 3,756 usd.
   
Meanwhile nickel rose to 48,200 usd per tonne from 47,800 usd and tin was at 14,000 usd, up from 13,775.

• Perfect for technical day traders
• High leverages allows for more trading flexibility
• Limit risk with Guranteed Stop Losses

Join us today! FOREXYARD | trading made easy. Click Here