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Wall Street's Resilience Tested

Wall Street's Resilience Tested
4/2/2012 6:35 AM ET

Sentiment on Wall Street seems to have soured on Monday after last week's resilience. The major U.S. index futures point to a mixed open on Wall Street. Economic data from China did not relay a clear message about the manufacturing sector of the nation, while manufacturing readings from Europe were broadly in line. The domestic manufacturing data to be released shortly after the markets open may also impact market mood.

As of 6:30 am ET, the Dow futures are receding 2 points, while the S&P 500 futures are adding 0.80 points and the Nasdaq 100 futures are rising 2 points.

U.S. stocks advanced amid volatility week ended March 30th, as traders reacted to mixed data and stayed hopeful of a lasting solution for the eurozone's debt woes.

Employment and manufacturing readings are likely to take center stage in the unfolding week, as economic anxiety has returned following most recent data points that have questioned the strength of the recovery. Traders may closely watch the March non-farm payrolls report to be released on Friday, the ADP's private sector employment report, the weekly jobless claims report and the results of the Institute for Supply Management's manufacturing and service sector reports.

The FOMC minutes, some Fed speeches the Federal Reserve's consumer credit report for January and monthly auto sales may also create some ripples in the market. The Commerce Department's construction spending report for February, the factory goods orders report and announcements concerning the Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.

The results of the manufacturing survey of the Institute for Supply Management are due out at 10 am ET. Economists expect the index to show a reading of 53 for March after it declined by 1.7 points to 52.4 in February.

The Commerce Department's construction spending report to be released at 10 am ET is expected to show a 0.7 percent increase in February, reversing the 0.1 percent drop in the previous month.

In corporate news, Ericsson (ERIC) said it has completed its earlier announced acquisition of carrier-grade Wi-Fi company BelAir Networks.

Curtiss-Wright (CW) said it has completed the sale of its heat treating business to Bodycote for $52 million in cash. Curtiss-Wright also said it the sale has resulted in a book gain of $18 million, net of tax, or about 37 cents per share in the first quarter.

Medtronic (MDT) announced that it has reached an agreement to settle a previously disclosed federal securities class action. The agreement calls for Medtronic making a payment of $85 million to resolve all the class claims.

Analog Devices (ADI) announced the acquisition of clocking technology company Multigig in a cash transaction.

Groupon (GRPN) announced a revision to its previously published fourth quarter and full year results related to an increase to its refund reserve accrual. The revision has led to a $14.3 million reduction to its revenues and a 4 cents per share decrease to its earnings per share. Meanwhile, the company confirmed its first quarter revenue guidance, which calls for revenues of $510 million to $550 million and income from operations of $15 million to $35 million. Analysts estimate revenues of $533.79 million.

The major Asian markets ended mixed after two separate surveys relayed two different messages concerning the manufacturing sector of the "hot and happening Chinese economy." Meanwhile, the Chinese market was closed for a 3-day public holiday beginning today.

Official data showed that China's manufacturing sector expanded, with the corresponding purchasing managers' index rising 2.1 points to 53.1. Meanwhile, final reading based on the HSBC purchasing managers' survey suggested contraction.

Japan's Nikkei 225 average opened notably higher but gradually gave back its gains over the course of the session but still closed up 26.31 points or 0.26 percent at 10,110. Export stocks received some support from the weakness of the yen, which pulled back after the release of the Bank of Japan's Tankan survey.

The survey showed that confidence among Japanese manufacturers remained unchanged at -4 in the March quarter, while economists had expected it to improve to -1.

Australia's All Ordinaries ended down 3.60 points or 0.08 percent at 4,416, as sectors, with the exception of material and energy stocks, declined. Hong Kong's Hang Seng Index closed at 20,522, down 33.32 points or 0.16 percent.

European stocks are trading mixed after rebounding last Friday. Final reading of Markit's survey showed that contraction of the eurozone's manufacturing sector was confirmed, with the purchasing managers' index retained unrevised at 47.7 in March. Meanwhile, the U.K. manufacturing purchasing managers' index rose 0.6 points to 52.1 in March.

A separate report released by Eurostat showed that the unemployment rate rose to a record high of 10.8 percent.

France's CAC 40 Index is down 0.24 percent, while Germany's DAX Index and the U.K.'s FTSE 100 Index are gaining 0.38 percent and 0.50 percent, respectively.

Crude oil is modestly weak, adding to its previous week's loss and gold futures are weaker too, while risk currencies are advancing.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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