The major U.S. index futures little changed on Wednesday, reflecting the indecision of traders. Traders are likely to remain cautious as they look ahead to some key economic reports that can improve the visibility on the economic environment. A private sector employment report released earlier in the day showed a decline in the rate of job losses, which was more or less in line with expectations of economists. The resurgence in the value of the dollar is keeping a lid on commodity prices. Particularly oil is expected to show some volatility amid the release of the EIA's weekly inventory report. The results of the ISM's services survey and the minutes of the December FOMC meeting could also influence trading in today's session.
U.S. stocks ended on a mixed note on Tuesday following a decent run up in the previous session, as traders preferred to stay on sidelines amid caution ahead of a slew of first-tier economic reports to be released over the course of the rest of the week. Additionally, a sharp drop in the pending home sales index also weighed on sentiment. Volume of trading was light, with merely 2.49 billion shares exchanging hands.
The Dow Industrials opened slightly higher, but it immediately dipped below the unchanged line and languished in negative territory for the rest of the session. The 30-stock index closed down 11.94 points or 0.11% at 10,572. After showing a lack of direction for much of the session, moving back and forth across the unchanged line, the S&P 500 Index and the Nasdaq Composite ended higher for the day. While the S&P 500 Index advanced 3.53 points or 0.31% to 1,137, the Nasdaq Composite Index gained merely 0.29 points or 0.01% to 2,309.
Sixteen of the thirty Dow components closed the session lower, with Alcoa (AA), DuPont (DD), IBM (IBM), Pfizer (PFE), Wal-Mart Stores (WMT), Johnson & Johnson (JNJ) and Coca-Cola (KO) leading the slide. On the other hand, Kraft Foods (KFT) rallied close to 5% and JP Morgan Chase advanced about 2%. Bank of America (BAC) and Boeing (BA) both rose over 3%.
Among the sector indexes, the Dow Jones Utilities Average fell 1.03%. However, the NYSE Arca Airline Index surged up 5.21% and the Dow Jones Transportation Average gained 1.01%. The Philadelphia Oil Service Index ended up 2.06% compared to a more modest 1.03% advance by the NYSE Arca Gold Bugs Index. The Philadelphia Housing Sector Index rose 1.12%, while the KBW Bank Index rallied 2.24%.
On the economic front, the National Association of Realtors reported that the pending home sales index for November, a leading indicator for existing home sales, declined 16% month-over-month. Economists had expected a more modest decline of 2%. The decline is apparently the pay back phenomena from the first time homebuyers' credit, which motivated homebuyers to bring forward their purchases to meet the earlier expiry deadline of November 30th. The stimulus measure has since then been extended.
After showing decent gains in the past three months, the Northeast, Midwest and South showed sharp declines. On a year-over-year basis, the index rose 19.3%, although much of the increase was due to easier comparisons. Meanwhile, factory goods orders rose a better than expected 1.1% in November.
Commodity, Currency Markets
Crude oil futures are trading down $0.19 at $81.58 a barrel after advancing $0.26 to $81.77 a barrel in Tuesday's session. According to Commerzbank, the recent uptick in commodity prices is due to heightened investor interest. The firm is of the view that institutional investors made their asset allocation decisions at the end of 2009 or right at the start of the New Year and positioned themselves on the commodity market.
Gold futures are currently rising $4.10 to $1,122.80 an ounce. In the previous session, gold moved up $0.40 to $1,118.70 an ounce.
Among currencies, the U.S. dollar is trading at 92.298 yen, stronger than the $91.715 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.4357.
Asia
Ignoring the lackluster lead from Wall Street, most Asian markets advanced yet again on Wednesday, with the Taiwanese Weighted Average leading the charge with a 1.42% gain.
Japan's Nikkei 225 average showed some indecision in early trading before moving decisively into positive territory. The index hovered above the unchanged line before closing 49.62 points or 0.46% higher at 10,732. The index settled at a fresh 15-month high following three straight sessions of advances.
Financial stocks rebounded strongly, led by Sumitomo Mitsui Financial, which climbed 5.54%. Resource stocks continued to show strength, while auto stocks also recovered from their previous session's losses. On the other hand, Japan Airline slid 6.67%. Casio Computer, GS Yuasa, Mitsui Engineering & Shipping and Terumo also declined sharply.
After showing a lack of direction for most of the session, Australia's All Ordinaries rose decisively in the afternoon to close up 7.30 points or 0.15% at 4,947. Material stocks showed strength, helping to offset the negativity in most other sectors. In economic news, services activity stalled in December, primarily due to a decline in new orders, according to the results of the AIG/Commonwealth Bank of Australia's survey. The performance of services Index fell to a no-change level of 50 in December from 52.5 in the previous month. Meanwhile, the Australian Bureau of Statistics announced that construction permits for dwelling units in Australia increased by a seasonally adjusted 5.9% month-over-month in November, rebounding from the 1.8% decrease in the previous month. Hong Kong's Hang Seng Index also hovered in positive territory for the bulk of the session before closing up 137.09 points or 0.62% at 22,417. Twenty-five of the forty-two index components closed higher and one ended unchanged, while the remaining sixteen stocks closed lower. China-related stocks closed mostly higher. On the other hand, most bank stocks and some property stocks came under selling pressure.
Europe
The major European markets are trading below the unchanged line on Wednesday amid anxiety over some key economic reports to be released in the U.S. The French CAC 40 Index is trading down 0.03% and the German DAX Index is receding 0.08%. However, the U.K.'s FTSE 100 Index is moving down 0.22%.
In corporate news, Marks & Spencer reported that its like-for-like sales rose for the first rise in quarterly sales in over two years. Comparable store sales rose 0.3% in the three months ended December 26th. On a calendar-adjusted basis, like-for-like sales climbed 1.8%.
On the economic front, the Nationwide Building Society reported that its consumer confidence index for the U.K. fell to 69 in December from 74 in November, with the drop marking the biggest in more than a year. Economists had expected a more modest decline to 72.
Markit Economics' survey revealed that service sector activity in Germany expanded for the fifth straight month. The services activity index rose to a seasonally adjusted 52.7 in December from 51.4 in November, although economists had expected a higher reading of 53.7. Meanwhile, services purchasing managers' index for France fell to 58.7 in December from 60.9 in the previous month.
Eurostat, the European Union's statistical arm, released a duo of economic reports, which showed a steeper than expected drop in industrial orders and a decline in producer price index. Industrial new orders in the euro area fell 2.2% month-over-month in October, marking the first decline in seven months. Annually, orders fell 14.5%, less severe than the 16.3% drop in the previous month. Economists expected a 1% monthly drop in orders and an 11% annual decline.
U.S. Economic Reports
The ADP National Employment report showed that the private sector in the U.S. lost 84,000 jobs in December. Economists had expected a loss of 75,000 jobs for the month. The report also showed that the estimated change of employment from October to November was revised to a decline of 145,000 from the previously estimated decline of 169,000.
December's job losses were the smallest since March of 2008. Employment in the service-providing sector rose by 12,000, marking the first gain since March 2008. However, employment in the goods producing sector fell by 96,000.
The ISM is scheduled to release the results of its non-manufacturing survey at 10 AM. The non-manufacturing index is likely to show a reading of 50.5 for December.
The November non-manufacturing index fell to 48.7 from 50.6 in October. Economists had estimated an increase in the index to 51.5. The business activity index slipped below the '50' level to 49.6, down 5.6 points, while the new orders index edged down 0.5 points to 55.1. The order backlogs index declined 5 points to 48.5 compared to a 0.5 point-slippage in the employment index to 41.6.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 AM ET.
In the week ended December 25th, crude oil inventories fell by 1.5 million barrels to 326 million barrels, although they were near the upper limit of the average range for this time of the year.
Gasoline inventories edged down by 0.3 million barrels, but yet remained above the upper limit of the average range. Distillate inventories also fell, dropping by 2 million barrels. Despite the decline, inventories remained above the upper boundary of the average range. Refinery capacity utilization averaged 80.3% over the four weeks ended December 25th compared to 80.2% in the previous week.
The Federal Reserve is scheduled to release the minutes of its December 15th-16th meeting at 2 PM ET.
The FOMC statement released last month following the end of a 2-day meeting did not show any significant change. The central bank retained its assessment that economic activity has continued to pick up, while it turned modestly positive on the labor market. The Fed commented that the deterioration in the labor market is abating. The Fed dropped its reference to businesses cutting staff and noted reluctance on the part of the firms to add to payrolls.
As expected, the Fed maintained its stance of keeping interest rates at extremely accommodative levels for an extended period.
Stocks in Focus
Family Dollar (FDO) may move after it reported that its first quarter net income rose to 49 cents per share from 42 cents per share last year. The company confirmed its preliminary sales estimate of $1.823 billion. Analysts estimated earnings of 47 cents per share on revenues of $1.83 billion. The company expects full year sales growth of 4%-6%, while it continues to expect earnings per share of $2.15-$2.35 compared to the consensus estimate of $2.25 per share.
Mosaic (MOS) is likely to react to its announcement that its second quarter earnings fell to 24 cents per share from $2.15 per share last year, which included a one-time gain of $1.03 per share. On an adjusted basis, the company reported earnings of 32 cents per share, trailing the 35 cents per share consensus estimate. Sales plummeted 43% to $3.01 billion, exceeding the consensus estimate of $1.68 billion.
Beazer Homes (BZH) is also likely to see some activity after it announced preliminary order results. The company said orders rose 36.6% year-over-year to 728 in the December quarter, while closings improved 8% to 961.
Phoenix Technologies (PTEC) may be in focus after it said it has retained GrowthPoint Technology Partners to explore strategic options for its FailSafe, HyperSpace and eSupport products and services. The company said it intends to focus on its core systems software markets.
Alaska Airl Group (ALK) is expected to see some activity after it said its load factor rose to 83.6% in December from 80.7% in the year-ago period, as capacity increased 5% and traffic rose 3.2%.
Autodesk (ADSK) may move in reaction to its announcement that it has agreed to settle a lawsuit with Dassault Systemes' SolidWorks pending in the U.S. District Court for the Northern District of California. The lawsuit concerns allegations that SolidWorks' inappropriately used Autodesk's trademarks AutoCAD and DWG. The companies did not reveal the terms of the settlement agreement.
Robbins & Myers (RBN) could move to the upside after it announced an increase in its quarterly cash dividend to $0.0425 from $0.04.
Crane Co. (CR) is likely to be in focus after it said it has commenced its tender offer for Merrimac Industries pursuant to its announcement regarding an acquisition announced on December 23rd, 2009. The company has agreed to acquire all outstanding Merrimac shares at $16 per share in cash and expects the offer to close in the first quarter of 2010.
Brown & Brown (BRO) could see some activity after it announced the retirement of its Vice Chairman and CEO Jim Henderson, effective August 2010. Henderson confirmed that he would not see re-election at the company's 2010 annual shareholders' meeting. Separately, the company also announced that its subsidiary has acquired the assets of Alamo Insurance, which has annual revenues of $4.3 million.
Sonic (SONC) receded sharply in Tuesday's after hours session after it reported that its first quarter earnings declined to 10 cents per share from 12 cents per share last year. Revenues fell 26% year-over-year to $136.5 million. Analysts estimated earnings of 13 cents per share on revenues of $137.1 million. The company also issued a below-consensus earnings guidance for 2010.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.