The major U.S. index futures are pointing to a slightly higher opening on Wednesday. In the absence of any major market moving economic event, the focus could continue to rest on the debt crisis in Europe. Germany's reluctance to confirm its willingness to rescue debt-laden Greece could pour cold water on the nervous recovery the markets staged yesterday. A report released earlier in the day showed a wider than expected U.S. trade deficit in December, as imports rose at a faster rate than exports. Incidentally, China reported today a strong increase in exports as well as imports.
The price of oil may track the crude oil inventory report, which is due to be released during the trading session, and the value of the dollar. Both oil and gold are currently trading lower.
Bargain hunting supported stocks on Tuesday, as traders took heart from signals emerging from the European Union that Greece will be supported to avert a sovereign credit default. In reaction, the dollar declined, sending commodities higher.
The major U.S. averages opened higher and hovered firmly in positive territory in the first two hours of trading. They legged up further in the afternoon before moving sideways again to close notably higher. The Dow Industrials closed 150.25 points or 1.52% higher at 10,059.
Although the Dow rebounded yesterday, the rally lacked conviction. After breaking above a near term resistance around 9,960, the index advanced up to its next overhead resistance around 1,0128, but it unsuccessfully challenged the level and settled slightly lower. While the S&P 500 Index advanced 13.78 points or 1.30% to 1,071, the Nasdaq Composite Index ended at 2,151, up 24.82 points or 1.17%.
Twenty-seven of the thirty Dow components ended the session higher, with Caterpillar (CAT), Boeing (BA), Coca Cola (KO), DuPont (DD) and American Express (AXP) advancing strongly in the session.
Among the sector indexes, the Dow Jones Transportation Average rose 2.03%, the Dow Jones U.S. Basic Materials Average gained 3.02%, the Philadelphia Oil Service Index advanced 2.83%, the NYSE Arca Gold Bugs Index rallied 4.33% and the NYSE Arca Oil Index moved up about 2%. The NYSE Arca Networking Index rose 2.73%.
Commodity, Currency Markets
Crude oil futures are edging down $0.09 to $73.66 a barrel after advancing $1.86 to $73.75 a barrel on Tuesday. Gold futures, which rose $11 to $1,077.20 an ounce, are currently sliding $0.70 to $1,076.50 an ounce.
On the currency front, the U.S. dollar is trading at 89.366 yen compared to the 89.6945 yen it fetched at the close of New York trading on Tuesday. Against the euro, the greenback is valued at $1.3740 compared to yesterday's $1.3797. In the previous session, the euro rebounded by 1%, recording its biggest one-day gain since November 25th, 2009, primarily on hopes that the Greek debt crisis may be drawing to a close.
Even after the recovery, the euro did not break above its 10-day moving average. While noting that the euro is restrained by the upper bound of a down trending channel seen since mid-January, DBS Research Group commented that the upside could be nothing more than short covering. Looking ahead, the firm sees the possibility of either the resumption in the euro selling or a consolidation such as the one witnessed between late December and mid-January.
Asia
Encouraged by the positive lead from the Wall Street, the major Asian averages opened higher on Wednesday, although commodities pulled back in Asian trading. However, as the session progressed, some of the optimism dissipated, resulting in the averages trimming their gains by late trading.
Japan's Nikkei 225 average broke a four-session losing streak and closed up 31.09 points or 0.31% at 9,964. Sentiment was supported to some extent by machinery orders data showing a 20.1% month-over-month increase in core private sector machinery orders in December. Annually, machinery orders were down 1.5%. Based on its survey, the Cabinet Office predicts 2% monthly growth in machinery orders for the March quarter.
Meanwhile, Japan's producer price index, referred to as the corporate goods price index, continued to slide for the 13th straight month, falling 2.1% year-over-year in January. However, the index rose 0.3% compared to the previous month following a 0.7% decline in each of the past two months.
Finance and utility stocks came under selling pressure. However, most technology stocks advanced. Toyota (TM), which has been plagued by recall woes, edged up, rising for the second straight session, while Honda (HMC) slid 1.63% after it announced the recall of an additional 437,763 cars for problems identified in the driver's airbag inflator.
Australia's All Ordinaries opened higher and rose sharply in early trading. However, the index declined steadily through the session to close up merely 12.3 points or 0.27% at 4,533. Material, utility and consumer staple stocks saw some strength, while energy and financial stocks lost ground in the session.
BHP Billiton edged up after issuing a cautious outlook. The company reported strong profit growth for the first-half of fiscal year 2010, helped by cost control, sales volume growth and a reversal of an impairment charge recorded in 2009. However, on an adjusted basis, the first-half profit declined 7% year-over-year. Peer Rio Tinto also traded higher. On the other hand, all the four major banks declined.
A report released by the Westpac-Melbourne Institute showed that its consumer confidence index fell 2.6% in February to 117, although it still remains elevated. All index components, with the exception of the measurement of economic sentiment in five years' time, declined from month-ago levels. The slip back in confidence is apparently in reaction to the successive rate hikes the Reserve Bank of Australia implemented in the run up to the February meeting, when it paused.
Meanwhile, housing finance to owner-occupied houses in Australia extended its decline in December, primarily as additional bonuses under the Federal Government's First Home Buyer scheme were phased out between October and December.
Hong Kong's Hang Seng Index, which showed caution throughout the session, closed moderately higher. At the close of trading, the index was up 131.54 points or 0.66% at 19,922. Most stocks advanced, with the exception of utilitied, some Hong Kong-based banks and China Mobile.
In another significant economic release from the region, a report from China's Customs Office showed Chinese export growth of 21% year-over-year in January, not as strong as the 22.5% growth forecast by economists. On a monthly basis, exports were down 16.3%. Imports showed a year-over-year 85.5% jump. Consequently, the trade surplus came in at $14.2 billion compared to the $19.5 billion surplus expected by economists. Following the release of trade data from Germany yesterday, it was confirmed that China has indeed toppled Germany as the world's second largest exporter, exporting $1.20 trillion worth of goods and services last year compared to Germany's $1.12 trillion.
Europe
The major European averages are trading firm on Wednesday, with the French CAC 40 and the German DAX Index rising 0.93% and 0.91%, respectively. The U.K.'s FTSE 100 Index is rising 0.73%.
The Bank of England's quarterly inflation report released today showed that the central bank is now less optimistic about growth now. The central bank now expects the year-over-year growth to be around 3.5% by the end of 2010 compared to its earlier estimate of 4% growth. The central bank also said it expects inflation to peak at about 3.5% this year before retreating below the 2% target level.
The report also suggested that the growth outlook remains highly uncertain, as the outlook for growth is underpinned by the considerable stimulus from the easing in monetary policy, and supported by global growth and the past depreciation of sterling.
A report released by the U.K. Office for National Statistics showed that the U.K.'s industrial production rose 0.5% month-over-month in December, helped by a 0.9% increase in manufacturing output. The increase was unexpected, as economists had estimated a 0.2% decline. However, on a year-over-year basis, industrial output fell 3.6% compared to the 4.1% drop expected by economists.
Meanwhile, INSEE reported that French industrial output declined 0.8% month-over-month in December compared to the downwardly revised increase of 0.8% in November. Economists expected a 0.2% increase for the month. Meanwhile, a government report showed that France's current account deficit widened to 3.6 billion euros from a revised deficit of 3.4 billion euros for November, with the widening reflecting a wider trade deficit.
U.S. Economic Reports
The U.S. trade deficit unexpectedly widened in the month of December, according to a report released by the Commerce Department, with the wider deficit coming as the value of imports increased at a faster pace than the value of exports.
The Commerce Department said that the trade deficit widened to $40.2 billion in December from $36.4 billion in November. The wider deficit came as a surprise to economists, who had expected the deficit to narrow to $35.8 billion. The Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended February 5th at 10:30 AM ET.
The oil inventory report for the week ended January 29th showed a 2.3 million barrel increase in crude oil stockpiles to 329 million barrels. Crude oil stockpiles remained above the upper limit of the average range.
Gasoline inventories decreased by 1.3 million barrels but remained above the upper limit of the average range. Distillate inventories also dropped, falling by 1 million barrels. Inventories of distillate fuel were above the upper boundary of the average range. Refinery capacity utilization averaged 79% over the four-weeks ended January 29th compared to 79.5% in the previous week. The Treasury Budget, a monthly account of the surplus or deficit of the federal government is due to be released at 2 PM ET. The budget is considered an indicator of budgetary trends and the thrust of fiscal policy. Economists estimate a deficit of $46 billion for January.
Earnings
Coca-Cola Enterprises (CCE) reported that its fourth quarter comparable earnings remained flat at 22 cents per share. Net operating revenues fell 2.5% to $5.12 billion. Analysts estimated earnings of 20 cents per share on revenues of $5.28 billion. The company expects 2010 comparable earnings per share growth at a low single-digit rate, while it reaffirmed its revenue growth guidance of low single digit growth.
Elan (ELN) reported a fourth quarter loss of 10 cents per share compared to a profit of 36 cents per share in the year-ago period. Total revenues rose to $300 million from the year-ago's $149.6 million. The consensus estimates called for a loss of 8 cents per share on revenues of $296.25 million. The company said it expects to report operating profits before times for the first time in several years.
Marsh & McLennan (MMC) said its fourth quarter consolidated revenues rose 3% to $2.7 billion. On an adjusted basis, the company reported earnings of 38 cents per share, higher than 36 cents per share in the year-ago period. Analysts estimated earnings of 37 cents per share on revenues of $2.56 billion.
Stocks in Focus
Disney (DIS) is likely to be in the spotlight after it said it earned 44 cents per share in its fiscal first quarter on 1% revenue growth to $9.74 billion. On an adjusted basis, the company reported earnings of 47 cents per share. The consensus estimates had called for earnings of 39 cents per share on revenues of $9.65 billion.
Baidu (BIDU) may move in reaction to its announcement that its fourth quarter revenues rose 39.8% to $184.7 million and its non-GAAP earnings came in at $1.88 per share. Analysts estimated earnings of $1.68 per share on revenues of $180 million. For the first quarter, the company expects revenues of $176 million to $181 million compared to the $170.2 million consensus estimate.
Airline stocks could be in focus after some of the airlines such as JetBlue (JBLU) and Continental Airlines (CAL) reported that they would be reducing scheduled service for January 10th, 2010 due to winter storms.
Micron Technology (MU) may see some activity after it said it has agreed to acquire private-held Numonyx Holdings, which is jointly owned by STMicroelectronics (STM), Intel (INTC) and Francisco Partners for about $1.27 billion. Micron will also pay up to 10 million additional shares issued pro rata to Numonyx shareholders to the extent the volume weighted average share price of Micron ranges between $7 and $9 for 20 days ending 2 days prior to the closure of the deal.
EOG Resources (EOG) is likely to be in focus after it said its fourth quarter net income available to common shareholders fell to $1.58 per share from $1.84 per share last year. On an adjusted basis, the company reported non-GAAP earnings of 92 cents per share compared to 74 cents per share last year. Net operating revenues rose to $1.76 billion from $1.63 billion last year. Analysts estimated earnings of 98 cents per share on revenues of $1.33 billion. The company announced an increase in its cash dividend by 75 to $0.155 per share.
Delta (DAL) and U.S. Airways (LCC) are expected to move in reaction to their response to a Department of Transportation ruling seeking divestment of 20 of the 125 slot pairs involved at New York-LaGuardia and 14 of the 42 slot pairs at Washington-National. The airlines expressed disappointment over the DOT's decision and are of the view that the decision, if implemented, will negatively impact consumer and economic benefits created by the proposed merger of these two airlines.
Tessera Technologies (TSRA) may gain ground after Standard & Poor's announced that the company would replace Financial Federal (FIF) in the S&P SmallCap 600 Index after the close of trading on Thursday, February 18th. Financial Federal is being acquired by People's United Financial (PBCT).
3M Co. (MMM) is likely to see buying interest after it announced that its board has approved a 3% increase in its dividend. Meanwhile, Kensey Nash (KNSY) could gain ground after it announced that its board has approved the buyback of an additional $30 million shares.
IMS Health (RX) could be in focus after it reported fourth quarter revenues of $599.2 million, up 3% year-over-year. The company reported non-GAAP earnings of 52 cents per share, higher than 50 cents per share in the year-ago period. Analysts estimated earnings of 36 cents per share on revenues of $526.24 million.
Netgear (NTGR) is likely to move in reaction to its announcement that its fourth quarter net revenue rose to $218.8 million from $161.4 million in the year-ago period. The company reported non-GAAP earnings of 35 cents per share compared to a loss of 7 cents per share last year. The consensus estimates had called for earnings of 25 cents per share on revenues of $175.76 million. For the first quarter, the company expects net revenues of $195 million to $205 million and non-GAAP operating margin in the range of 10%-11%. Analysts estimate revenues of $172.19 million.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.