Asian shares inch down from recent highsREUTERS, Fri Jul 25, 2014 07:52 WIB - An index of Asian shares pulled away from a three-year high on Friday after a mostly...
Initial jobless claims declined 19,000 to a seasonally-adjusted 284,000 for the week ended July 19. That was the lowest since February 2006.
A separate report showed new home sales dropped 8.1 percent in June, their biggest decline since July of last year. But economists noted that other data have pointed to housing getting back on track after stalling late last year.
"There is no question that the labor market is strengthening but the pace of improvement is still falling short of the Fed's expectations," Kathy Lien, managing director of FX strategy at BK Asset Management, wrote in a note to clients.
Fed Chair Janet Yellen said last week that the Fed could raise rates sooner than initially expected if labor markets continued to improve. Most economists expect the U.S. central bank to start raising interest rates in the second half of next year.
MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.1 percent in early trade, though still on track for solid weekly gain, while Japan's Nikkei stock average added 0.4 percent.
On Wall Street overnight, the S&P 500 eked out a slight gain to its second record closing high in a row, even after earnings painted a mixed picture of the economy.
However, after a run of solid tech sector results this week, Amazon dealt a blow to sentiment by reporting a much bigger loss than anyone had expected, even as its sales surged. Shares in the United States's biggest online retailer tumbled 10.6 percent in after-hours trade to $320.52, wiping more than $17 billion from its market valuation.
Ongoing unrest in the Middle East and Ukraine continued to keep investors on their toes for any developments that could have a wider impact on risk sentiment and markets.
Gazan authorities said Israeli forces shelled a shelter at a U.N.-run school on Thursday as any truce remained elusive. Meanwhile, a U.S. State Department spokeswoman said that Russia was firing artillery across its border with Ukraine to target Ukrainian military positions.
Upbeat data helped the euro climb off an eight-month low of $1.3438 touched on Thursday. The common currency was steady on the day in Asia at $1.3465.
Private reports showed business activity in Germany and France strengthened in both July and June, but risks to the euro zone economy from any tougher sanctions on Russia limited the euro's gains.
The dollar was little changed against the yen at 101.79 after spiking more than 0.3 percent overnight to a two-week high of 101.86 yen after the U.S. jobless claims data.
The greenback, which has been closely correlated to U.S. yields, got a lift as U.S. Treasury yields rose after the benefit claims report. On the week it was poised to gain about 0.4 percent against the Japanese currency.
The yen showed little reaction to Japanese consumer prices data released early on Friday that were in line with forecasts and did not do much to stir expectations for further monetary easing by the Bank of Japan. Core consumer prices rose 3.3 percent in June from a year earlier, matching forecasts.
Gold was steady at $1,292.71 an ounce after dropping to a one-month low overnight on the improved U.S. and European economic data, though the Gaza and Ukraine tensions limited losses by supporting demand for safe-haven assets.
U.S. crude edged down to $102.01 a barrel.
Gold set for second weekly loss on strong economic dataREUTERS, Fri Jul 25, 2014 07:30 WIB - Gold held near a five-week low on Friday and was headed for a second straight week of...
Gold's decline despite simmering tensions in the Middle East and Ukraine does not bode well for prices in the near term, especially at a time when physical demand in Asia is sluggish.
Spot gold was little changed at $1,292.37 an ounce by 0014 GMT, after losing nearly 1 percent on Thursday. The metal hit $1,287.46 in the previous session - its lowest since June 19 - before recovering slightly.
Gold has lost 1.4 percent of its value this week. Silver, platinum and palladium were also headed for weekly losses.
Bullion came under pressure after data on Thursday showed the number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8-1/2 years last week, suggesting the labour market recovery was gaining
China's factory activity expanded at its fastest in 18 months in July, boosting global equities.
The metal had managed to stay above $1,300 an ounce for most of this week as violence continued over the Gaza strip, and tensions between the West and Russia over Ukraine remained high.
But sentiment has been hit after strong data, with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, seeing an outflow of 3.6 tonnes on Thursday.
China's net overseas purchases of gold through key conduit Hong Kong fell to a 17-month low in June as a weaker yuan curbed demand from the world's biggest bullion consumer and as direct imports through the mainland flourished.
Global stock markets inched higher while U.S. debt prices fell on Thursday following unexpectedly low U.S. weekly jobless claims and stronger-than-expected U.S. earnings.
1230 U.S. Durable goods Jun
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Dollar, euro supported by positive jobless claims, activity dataREUTERS, Fri Jul 25, 2014 07:12 WIB - The dollar held gains versus the yen on Friday and the euro stood steady after...
The dollar was little changed at 101.79 after spiking more than 0.3 percent overnight to a two-week high of 101.86 as data that showed weekly U.S. filings for first-time jobless benefits fell to the lowest since early 2006.
The greenback, which has been closely correlated to U.S. debt yields, was buoyed after Treasury bond yields rose in wake of the upbeat employment indicator. It was poised to gain about 0.4 percent on the week against the Japanese currency.
The yen's reaction to Japanese consumer prices data that was in line with forecasts was muted and did not do much to stir expectations for further monetary easing by the Bank of Japan. Core consumer prices rose 3.3 percent in June from a year earlier, before the effect of April's sales tax hike is stripped out, matching forecasts.
The euro stood steady at $1.3464, having rebounded on Thursday from an eight-month trough of $1.3438 after stronger-than-expected German and French business activity reports slightly tempered bearish views towards the eurozone economy faced with possible fallout from any tougher sanctions on Russia.
Still, the euro was on track to lose more than 0.4 percent on the week against the dollar with many market participants retaining a bearish longer-term view for the common currency.
Any targeting of Russian banks by the European Union or any other sanctions would likely weigh on a fragile recovery, stoking bets of an even looser policy from the European Central Bank. The ECB cut interest rates in June and has left the door open to further monetary easing, which would hurt the euro.
Currency strategists at Morgan Stanley said key pillars of support for the euro - foreign buying of eurozone equities and peripheral bonds and diversification into the currency by central banks - were crumbling and likely to keep pushing the euro lower in the long term.
"The prospect of additional sanctions against Russia is also a potential negative factor for the euro. We do not see the euro as a safe haven from recent developments in Russia/Ukraine, especially given Europe's high level of exposure to the region," they said in a report to clients.
Sterling traded at $1.6990 after pulling back overnight from a one-month low of $1.6967 after weaker-than-expected retail sales numbers cast more doubt on the case for a swift rise in interest rates.
Market focus was on Britain's second quarter GDP data due at 4.30 P.m. ET.
The British economy is forecast to have grown 0.8 percent from the previous quarter, with any upside surprise expected to further support sterling's bounce from the one-month trough.
Wall Street ends flat on mixed earnings; S&P 500 at recordREUTERS, Fri Jul 25, 2014 04:59 WIB - U.S. stocks finished a quiet session mostly flat on Thursday as earnings painted a...
The latest economic data failed to impress buyers. U.S. claims for initial jobless benefits fell to a seasonally adjusted 284,000, the lowest since mid-February 2006. New home sales declined 8.1 percent in June, the biggest drop in almost a year. The PHLX housing sector index .HGX lost 2.7 percent, marking its biggest one-day drop since February.
Recent gains on Wall Street have been fueled by earnings, which have been strong this quarter. With 41 percent of S&P 500 companies having reported results so far, 68 percent have posted earnings that topped expectations, according to Thomson Reuters data, above the long-term average of 63 percent. On the revenue side, 62.1 percent have beaten analysts' forecasts, compared with the historical average of 61 percent.
Facebook Inc (FB.O) jumped 5.2 percent to $74.98 and hit an intraday record high of $76.74 a day after the world's No. 1 social network reported earnings and revenue that beat expectations.
Caterpillar Inc (CAT.N) raised its full-year outlook but posted a decline in sales, pushing its stock down 3.1 percent to $105.04. The Dow component is the world's largest maker of earth-moving equipment.
"There's a tug of war in the market today between the companies that did well and the companies that didn't. Caterpillar was disappointing, but stocks remain reasonably valued and the earnings season supports continued gains," said Kate Warne, investment strategist at Edward Jones in St. Louis.
The Dow Jones industrial average .DJI dipped 2.83 points or 0.02 percent, to close at 17,083.80. The S&P 500 .SPX gained 0.97 of a point or 0.05 percent to end at 1,987.98, its second record closing high in a row. The Nasdaq Composite .IXIC shed 1.59 points or 0.04 percent, to finish at 4,472.11.
At its record intraday high of 1,991.39, the S&P 500 was just 0.4 percent below the 2,000 milestone.
Among the companies that reported results after the closing bell, Amazon.com Inc (AMZN.O) shares fell 9.7 percent to $324 after the online retailer reported a second-quarter loss that was wider than expected.
Visa Inc (V.N), the world's largest credit and debit card company, reported earnings growth of 11 percent, but the Dow component's stock fell 3.3 percent to $215.33 in extended-hours trading. Starbucks Corp (SBUX.O) posted revenue that was slightly higher than expected. The coffee chain's stock slipped 0.7 percent to $79.91 in after-hours trading.
Baidu Inc (BIDU.O) rose 6.4 percent to $217.35 in extended-hours trading after China's biggest Internet search company reported results that were much stronger than had been expected.
During the regular session, stocks that made big moves after earnings included Under Armour Inc (UA.N) - up 14.7 percent at $69.55 after the sports apparel manufacturer and retailer reported a sharp rise in revenue. Under Armour's stock hit an all-time intraday high of $70.25 and was the S&P 500's biggest gainer.
The benchmark S&P 500's biggest decliner was homebuilder D.R. Horton Inc (DHI.N), which tumbled 11.5 percent to $21.94 after the company reported a 23 percent slide in profits. The results gave investors a reason to unload some homebuilders' shares.
General Motors Co (GM.N) dropped 4.5 percent to $35.74 after the company reported a much lower second-quarter profit because of numerous recalls and the expected cost of at least $400 million for its victims' compensation fund.
Almost 51 percent of stocks listed on the New York Stock Exchange ended the day lower, while 52 percent of Nasdaq-listed shares ended in negative territory.
About 5.58 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the month-to-date average of 5.54 billion.
Asia shares edge higher, wary ahead of China factory surveyREUTERS, Thu Jul 24, 2014 07:30 WIB - Asian stocks inched higher on Thursday, encouraged by upbeat corporate results and a...
There was an air of caution ahead of a manufacturing survey from China and a horde of other countries over the day. The HSBC flash PMI is expected to inch up to 51 in July, which would gel with other signs of stabilisation in the economy.
MSCI's broadest index of Asia-Pacific shares outside Japan was up a slim 0.09 percent.
Japan's Nikkei eked out a 0.1 percent gain, while South Korea's market added 0.2 percent despite data showing the country's economy grew at the slowest pace in more than a year in the second quarter. Seoul was expected to announce stimulus measures later in the morning in a bid to counter weak domestic demand and sluggish exports.
Traders noted that, despite all the geopolitical risk, money was clearly flowing back into emerging markets in search for yield. MSCI's index of emerging equities had jumped in the past two sessions to reach its highest since January 2013.
"Emerging markets continue to be main benefactor from the mix of low volatility, improving global growth and supportive central banks," said analysts at Barclays in a note.
Helping sentiment is that the U.S. earnings season is turning out better than first feared. Barclays estimates that of the 22 percent of S&P 500 companies have reported quarterly results since July 1, 64 percent beat earnings expectations and 65 percent beat revenue estimates.
Apple Inc gave one of the biggest lifts to the market, rising 2.6 percent as concerns faded about the iPhone maker's margins. Facebook Inc also beat forecasts and its stock climbed almost 5 percent after hours.
All of which helped the Nasdaq gain 0.4 percent, while the S&P 500 added 0.2 percent.
The Dow bucked the trend, pulled lower by a 2.3 percent drop in Boeing Co shares. The U.S. aircraft maker reported a 52 percent jump in quarterly profit, but investors were spooked by rising costs in its military tanker program.
The Dow closed down 0.2 percent.
NZ DOLLAR SKIDS
Still, the prospect of more sanctions against Russia over the Ukraine crisis and a downed Malaysian airliner maintained a safety bid for high-rated bonds. German 10-year yields fell to 1.147 percent, just shy of record lows.
For U.S. Treasuries, investors were buying more liquid shorter-dated paper, nudging two-year yields down to 0.4715 percent.
In currencies, the New Zealand dollar led the action by skidding to a six-week low after the country's central bank signalled a pause following its fourth straight rate hike.
The kiwi dollar dropped nearly a full U.S. cent to $0.8606 after the Reserve Bank of New Zealand (RBNZ) raised rates by 25 basis points to 3.5 percent, but said it was time to wait and gauge the impact of its recent policy tightening on the economy.
Activity elsewhere was limited with the euro stuck at eight-month lows around $1.3461, leaving the dollar index hovering at a six-week peak.
Against the yen, the U.S. dollar firmed a tad to 101.54 , recovering slowly from the recent low of 101.09.
In commodities, gold was behind in the beauty competition with equities and eased to $1,303.99 an ounce.
Crude oil prices were mixed. Brent crude for September delivery added 6 cents to $108.09 a barrel, while U.S. crude eased 6 cents to $103.06.