Stocks are sitting near session lows.
The move took the Nasdaq to a loss of almost 1%, but the Dow continues to limit its loss. The disparity between the two averages comes as tech stocks drag down the Nasdaq while integrated energy giants Exxon Mobil (XOM 81.15, +1.15) and Chevron (CVX 100.33, +0.86) provide support to the Dow.
The Dollar Index has held steady to a 0.4% gain today amid 0.6% drop by the euro. Weakness in the euro comes in the wake of word from the World Bank that economic growth in many European countries remains constrained and data that indicate declining trade balances in both Germany and France.
The yen strengthened as global stocks fell and the International Monetary Fund said its 26 billion-euro ($38 billion) loan to Portugal “entails important risks.”
The euro slid from a four-week high versus the dollar after German Finance Minister Wolfgang Schaeuble said bondholders must contribute a “substantial” share of a second aid package for Greece.
The yen rose to the strongest in a month against the dollar as Federal Reserve Chairman Ben S. Bernanke said the “frustratingly slow” U.S. recovery warrants sustained monetary stimulus.
New York Fed President William Dudley said yesterday that the U.S. recovery from the worst financial crisis since the Great Depression is “distinctly subpar” even after “aggressive monetary and fiscal stimulus.”
Kansas City Fed President Thomas Hoenig speaks today. The Fed also releases its regional Beige Book economic survey today.
Japan’s Finance Minister Yoshihiko Noda told reporters yesterday he would closely monitor the yen’s appreciation.
Group of Seven countries jointly intervened in March after Japan’s currency soared to Y76.25, its highest level since World War II, threatening the nation’s recovery from the March 11 earthquake and tsunami. The total size of the G-7 intervention has been estimated at about $25 billion.
The pound fell against the dollar and the euro after Moody’s Investors Service said the U.K. risks losing its top credit ranking should growth remain weak. It said the outlook on the country’s rating is “stable.”
Stocks continue to trade in mixed fashion overall. Unlike its counterparts, the Nasdaq Composite has been unable to poke into positive territory. Its relative weakness comes as tech plays like Akamai (AKAM 30.79, -0.58) and NVIDIA (NVDA 17.84, -0.22) encounter selling. General weakness among tech issues has the sector down 0.4%.
USD/CAD holds near C$0.9785 area in a thin market following the surge in oil prices after the OPEC announcement that no output increase had been agreed. Some bids likely around C$0.9750/40 to underpin, with offers around the earlier high at C$0.9820.
Firmed to resistance level of $1.0635/40, offers behind at $1.0670. Support remains at $1.0580 which if broken will trigger stops and we could see a break down to $1.0560.
The major equity averages are mixed in the first few minutes of morning trade, but energy stocks are off to a strong start. The energy sector's sprint ahead to a 1.5% gain comes after oil prices rallied from a modest loss in early pit trade to a 1.7% gain at $100.75 per barrel in response to word that OPEC will not make a move at its current meeting. Weekly oil inventory data are due at 14:30 GMT.
U.S. stocks were set to open lower Wednesday, as gloomy comments about the economic outlook from Fed chairman Ben Bernanke continue to weigh on investors.
U.S. stocks closed lower Tuesday, after Bernanke dashed hopes that the central bank would provide additional economic stimulus.
Economy: The Federal Reserve will release its "Beige Book" at 18:00 GMT Wednesday. The book is a collection of economic anecdotal observations by the Fed's 12 regional banks. It's used by the central banks as part of their decision making regarding interest rates.
Companies: Shares of Citigroup (C, Fortune 500) slipped nearly 1% in premarket trading, after the bank agreed to sell a $1.7 billion portfolio of private equity assets to Axa Private Equity Wednesday.
LDK Solar (LDK) shares fell more than 2% after the company issued a cautious outlook.
Prudential Financial Inc. (PRU, Fortune 500) said late Tuesday it will buy back $1.5 billion in stock by the end of the month, sending shares of the company nearly 1% higher in premarket trading.
Shares of Ford (F, Fortune 500) rose nearly 1% before the market open Wednesday, a day after the auto giant announced plans to boost sales worldwide by 50%.
Retailer Men's Wearhouse Inc. (MW) will report quarterly earning results after the market close.
Other stocks on the move included eBay (EBAY, Fortune 500), JDS Uniphase (JDSU) and Radiosack (RSH, Fortune 500).
World markets:
Oil for July delivery dipped 63 cents to $98.46 a barrel. OPEC is holding a meeting Wednesday in Vienna, during which the organization is expected to boost oil production.
Gold futures for August delivery fell $10.60 to $1,533.40 an ounce.
The price on the benchmark 10-year U.S. Treasury edged up, pushing the yield down to 2.97% from 2.99% late Tuesday.
EUR/USD $1.4700, $1.4600, $1.4520, $1.4515, $1.4475
USD/JPY Y79.75, Y80.35, Y80.60, Y80.95, Y81.00
EUR/JPY Y118.60
GBP/USD $1.6430, $1.6500
USD/CHF Chf0.8385
AUD/USD $1.0600, $1.0615, $1.0700, $1.0730, $1.0745
AUD/NZD NZ$1.2800, $1.3200
EUR/AUD A$1.3500, A$1.3450
The yen strengthened as stocks fell and the International Monetary Fund said its 26 billion-euro ($38 billion) loan to Portugal “entails important risks,” spurring demand for the Japanese currency as a refuge.
The euro slid from an almost four-week high versus the dollar after German Finance Minister Wolfgang Schaeuble said bondholders must contribute a “substantial” share of a second aid package for Greece. The yen rose to the strongest in a month against the dollar as Federal Reserve Chairman Ben S. Bernanke said the “frustratingly slow” U.S. recovery warrants sustained monetary stimulus. The MSCI World Index declined 0.4 percent.
“Lack of clarity about a solution to the debt crisis in Europe and concern about the economic outlook in the U.S. damped appetite for risk,” said Neil Jones, head of European hedge- fund sales at Mizuho Corporate Bank Ltd. in London. “The environment supports the yen partly because it reduced demand to use it to fund investment in higher-yielding currencies.”
The pound fell against the dollar and the euro after Moody’s Investors Service said the U.K. risks losing its top credit ranking should growth remain weak. It said the outlook on the country’s rating is “stable.”
US data starts at 1100GMT with the weekly MBA Mortgage Application Index, while is followed at 1400GMT by Q1 Services data and then at 1430GMT by the weekly EIA Crude Oil Stocks data. The Fed Beige Book, the Fed's compilation of anecdotal evidence about conditions in the 12 District Bank regions, is due at 1800GMT.
EUR/USD
Offers: $1.4680, $1.4700, $1.4710/20, $1.4750/60
Bids: $1.4600, $1.4580, $1.4560/50, $1.4515/00
USD/JPY
Offers: Y80.00/05, Y80.30/40, Y80.50, Y80.65/75, Y81.00/05, Y81.30/35
Bids: Y79.70/65, Y79.60/50, Y79.35/30, Y79.20, Y78.85
Importer bids around the Y79.70/65 level caused the rate to firm to Y79.80.
Stops sub $1.4640 triggered. taking the rate down to challenge demand in the area between $1.4625/20. Below here and rate can ease toward next support into $1.4600 with break below to target $1.4570/55 area.
EUR/USD $1.4700, $1.4600, $1.4520, $1.4515, $1.4475
Resistance 3: Y81.00 (Jun 3 high)
Resistance 3: Chf0.8540 (38.2 % FIBO Chf0.8890-Chf0.8330)
Resistance 3: $ 1.6550 (May 31 high)
Resistance 3: $ 1.4940 (May 4 high)
06:00 Germany Current account (April) unadjusted, bln 12.0 19.5
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