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MARKET ANALYSIS: Weak Data Could Reignite Economic Fears(Alliance News Via Acquire Media NewsEdge) WASHINGTON (Alliance News) - The major US index futures are pointing to a lower opening on Wednesday, with sentiment turning markedly weak following the release of disappointing economic data on retail sales and the manufacturing sector. Bank earnings released earlier in the day were bordering on the positive. The weak economic data has served to weaken the dollar and the commodities on the premise that demand growth could remain lukewarm. Selling could resume unless the data offers hopes for an extended period of accommodative monetary policy. The selling in US stocks stalled on Tuesday amid the release of mixed earnings reports. After initially moving higher, the major averages pulled back near the unchanged line not long after the open. However, the averages launched into a strong rally in the morning, reaching their intra-day highs by the mid-session. Thereafter, the averages pared back their gains and closed mixed for the session. The Dow Industrials ended down 5.88 points or 0.04% at 16,315, while the S&P 500 Index ended up 2.96 points or 0.16% at 1,878 and the Nasdaq Composite Index closed at 4,227, up 13.52 points or 0.32%. Despite the Dow's decline, the breadth was in favor of the advancers, with seventeen of the thirty Dow components advancing, while the remaining thirteen stocks declined. Boeing (BA), Caterpillar (CAT) and Intel (INTC) were among the biggest gainers among the index components, while UnitedHealth (UNH), Coca-Cola (KO), Johnson & Johnson (JNJ) and Chevron (CVX) posted notable losses. Transportation stocks rebounded strongly, while utility, gold, housing and semiconductor stocks also saw significant strength. On the other hand, energy stocks came under selling pressure. Currency, Commodity Markets Crude oil futures are falling USD1.38 to USD80.46 a barrel after plunging USD3.90 to USD81.20 a barrel on Tuesday. The previous session's decline came on the back of some weak eurozone data that accentuated fears of a global economic slowdown and the release of the International Energy Agency's monthly oil market report, which showed that demand growth would remain muted. Meanwhile, an ounce of gold is currently trading at USD1,234.50, up USD0.20 from the previous session's close of USD1,234.30. On Tuesday, gold rose USD4.30. On the currency front, the US dollar is trading at 106.41 yen compared to the 107.05 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at USD1.2740 compared to yesterday's USD1.2658. Asia Most Asian markets advanced amid bargain hunting and a modest rebound in crude oil, although the South Korean and Taiwanese markets retreated. The Japanese market rebounded on a recovery by the dollar, which pushed the yen lower. The Nikkei 225 average opened higher and hovered mostly above the unchanged line in the morning before seeing some weakness in the mid-session. However, the average recovered in the afternoon and advanced steadily for the rest of the session, ending up 137.01 points or 0.92% at 15,074. Most export stocks moved to the upside, while some defensive sectors came under selling pressure. Australia's All Ordinaries hovered above the unchanged line for much of the session before closing up 34 points or 0.65% at 5,238. Most sectors advanced, with the exception of energy stocks. Telecom, IT, healthcare and financial stocks were among the best performers of the session. Hong Kong's Hang Seng Index closed at 23,140, up 92.08 points or 0.40%, and China's Shanghai Composite ended the session 14.19 points or 0.60% higher at 2,374. On the economic front, a report released by China's National Bureau of Statistics showed that consumer prices in China rose 1.6% year-over-year in September following a 2% increase in August. Economists expected a 1.7% increase. Meanwhile, producer prices fell a steeper 1.8%. The results of a survey by Westpac showed that consumer confidence in Australia improved slightly in October. The consumer confidence index rose 0.9% to 94.8. Meanwhile, the Australian Bureau of Statistics reported that motor vehicle sales rose 2.9% month-over-month in September, reversing the 1.8% drop in August. Revised estimates released by Japan's Ministry of Economy, Trade and Industry showed that industrial production saw a steeper decline of 1.9% for August compared to the previous month. Previously, the ministry had estimated a 1.5% drop. Europe European stocks opened lower and witnessed some volatility in early trading. Following the release of the US data, the averages have turned notably lower. Traders are reacting to some corporate tidings and tame Chinese inflation data even as they stay tuned to a few key US economic reports. In corporate news, Chip equipment maker AMSL reported higher profits for its third quarter and said its fourth quarter sales will be about 1.3 billion euros, ahead of estimates by most economists. The company also affirmed its full year sales guidance. Danone's third quarter sales also exceeded estimates and it confirmed its full year guidance. Rio Tinto (RIO) said its iron ore output was up 13% in the third quarter and raised its full-year mined copper forecast. LVMH reported a 4% rise in revenue for the nine-month period, led by growth across most businesses. On the economic front, revised estimates released by the German Federal Statistical Office confirmed the flash estimate for an annual inflation rate of 0.8% for September. On a monthly basis, consumer prices were unchanged. The UK Office for National Statistics released a report showing a small decline in the UK jobless rate to 6% in the three months ended August to 6.1% in the three months ended July. Claimant count fell by 18,600 in September compared to expectations for a 35,000 drop. US Economic Reports Retail sales in the US fell by more than anticipated in the month of September, according to a report released by the Commerce Department, with the decrease partly reflecting the recent drop in gas prices. The report said retail sales dropped by 0.3% in September after climbing by 0.6% in August. Economists had been expecting sales to edge down by just 0.1%. Excluding a pullback in auto sales, retail sales dipped by 0.2% in September compared to a 0.3% increase in the previous month. Ex-auto sales had been expected to rise by another 0.3%. Reflecting lower prices for food and energy, the Labor Department released a report showing an unexpected drop in US producer prices in the month of September. The Labor Department said its producer price index edged down by 0.1% in September after coming in unchanged in August. The modest drop surprised economists, who had expected prices to inch up by 0.1%. Excluding food and energy prices, core producer prices came in unchanged in September after inching up by 0.1% in the previous month. Core prices had been expected to tick up by 0.1%. Business activity in the New York manufacturing sector grew at a substantially slower rate in the month of October, according to a report released by the Federal Reserve Bank of New York. The New York Fed said its general business conditions index tumbled to 6.2 in October from 27.5 in September. While a positive reading indicates continued growth in the New York manufacturing sector, economists had expected the index to show a much more modest decrease to 20.5. The Commerce Department is also due to release its business inventories report for August at 10 am ET. The consensus estimate calls for a 0.4% month-over-month increase in business inventories for the month. Business inventories rose 0.4% month-over-month and 5.9% year-over-year in July. At the same time, business sales rose 0.8% compared to the previous month and were 5.3% higher than a year ago. The business inventories to sales ratio was at 1.29 compared to 1.28 in July of 2013. The Federal Reserve is scheduled to release its Beige Book, which gives anecdotal evidence of economic conditions in the 12 Fed districts, at 2 pm ET. Stocks in Focus Earnings Intel (INTC) reported third quarter results that were ahead of expectations. The company's fourth quarter revenue guidance was also positive. Bank of America (BAC) reported a loss for its third quarter, which was in line. However, the company's revenues missed estimates. Smaller peer Commerce Bancshares (CBSH) also reported better than expected third quarter results. PNC Financial (PNC), MGIC Investment (MTG) and BlackRock Financial (BLK) also reported third quarter results that beat estimates, while KeyCorp. (KEY) reported third quarter results that trailed expectations. Linear Technology (LLTC) reported first quarter earnings of 53 cents per share on revenues of USD371.1 million, up 9% year-over-year. The results trailed estimates. The company issued second quarter revenue growth guidance that was below estimates. Separately, the company announced that Paul Coghlan will retire as its CFO at the end of the current fiscal year in July 2015 and that company veteran and Corporate Controller Donald Zerio will be promoted to the role of CFO on June 29, 2015. ADTRAN (ADTN) reported third quarter non-GAAP earnings of 25 cents per share on revenues of USD162.89 million. The results exceeded estimates. CSX (CSX) reported third quarter earnings of 45 cents per share on revenues of USD3.2 billion. The results were better than expected. Healthcare Services' (HSCG) third quarter earnings were ahead of expectations, while its revenues trailed estimates. American Express (AXP), eBay (EBAY), Kinder Morgan (KMI), Kinder Morgan Partners (KMP), Las Vegas Sands (LVS), Netflix (NFLX) and United Rentals (URI) are among the companies due to release their quarterly results after the close of trading. Others Qualcomm (QCOM) reached an agreement with CSR regarding the terms of a recommended cash offer through which the entire issued and to be issued ordinary share capital of CSR will be acquired by Qualcomm for 1.56 billion pounds. Hewlett-Packard (HPQ) said it would resume its share repurchase program under its current authorization. The company reaffirmed its 2014 and 2015 earnings guidance that was in line with estimates. ANN (ANN) announced that it has entered into a non-disclosure agreement with Golden Gate Capital providing for the sharing of some non-public information. Apache (APA) announced that resignation of its CFO Alfonso Leon, who is quitting to pursue other opportunities. The company also announced the appointment of executive VP Anthony Lannie to the post on an interim basis. Copyright RTT News/dpa-AFX |