Weakness among tech stocks has weighed heavily on the Nasdaq, which is down with a marked loss so that it is underperforming its counterparts. Tech stocks are down 0.5%, as a group. Novellus (NVLS 33.59, -1.75), F5 Networks (FFIV 99.44, -4.17), and NVIDIA (NVDA 16.22, -0.55) are among the worst performers in the space. However, Hewlett-Packard (HPQ ) has been a source of support for the tech sector. The blue chip has also helped prop up price-weighted the Dow.
Gainers
Symb Last Change Chg %
GCAP.N 6.64 +0.45 +7.27
CSR.N 4.90 +0.23 +4.93
VC.N 64.98 +2.92 +4.71
TNC.N 36.77 +1.54 +4.37
CGI.N 13.74 +0.54 +4.09
Losers
Symb Last Change Chg %
PNC' 10.88 -0.71 -6.13
DANG.N 11.45 -0.72 -5.92
FBP_pc.N 17.01 -0.96 -5.34
BZ' 0.44 -0.02 -4.35
HEP.N 50.35 -1.23 -2.38
A recent bout of selling pressure has caused stocks to roll over so that both the S&P 500 and the Nasdaq Composite are in the red. The Dow is still clinging to a very modest gain.
No headline or announcement has been made that can account for the sudden turn in sentiment. Most likely, though, the downturn is owed to the interest among participants to exit their positions since stocks have struggled to add to their gains today. Such action suggests that traders are still inclined to sell into the stock market's downward, rather than try to step in with a firm bid.
The euro pared its decline against the dollar after reaching a three-week low amid speculation an agreement between the European Union and the International Monetary Fund may allow Greece to avoid a debt default.
Europe’s shared currency erased most of its earlier declines after European Union Economic and Monetary Commissioner Olli Rehn said Greece will be able to get funding from the EU and International Monetary Fund in July as long as it enacts budget cuts. The IMF backed Rehn in a statement. The yen strengthened against the dollar after a report showed an unexpected slowdown in Philadelphia area manufacturing.
“The slight improvement in risk was generated by a perception that Greece will be given some breathing room by the EU in which they will provide funding for upcoming July funding dates,” said Alan Ruskin, global head of Group-of-10 foreign- exchange strategy at Deutsche Bank AG in New York.
Greek Prime Minister George Papandreou will reshuffle his cabinet and seek to win a confidence vote today after attempts to garner opposition support for an austerity plan failed.
EU Commissioner Rehn said “close contact” with the IMF made him confident of an accord at a weekend crisis meeting to pay out 12 billion euros ($17 billion) in July as long as Greece enacts new budget cuts.
Greece’s immediate concern is to obtain 8.7 billion euros from Europe and 3.3 billion euros from the IMF in July, promised as part of last year’s precedent-setting aid package to stave off the euro area’s first default.
“Progress is being made in the discussions to ensure the full financing of the program, and we anticipate a positive outcome on this at the next Euro-group meeting,” Caroline Atkinson, a spokeswoman for the IMF, said in an e-mailed statement today.
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet tomorrow in Berlin, with pressure increasing for the leaders to reach an accord on a rescue package for Greece. European Union finance ministers agreed on June 14 to convene again on June 19 after they failed to reconcile a German-led push for bondholders to shoulder part of the cost of a new plan for Greek aid.
“If risk aversion continues to pervade markets and we have these ongoing concerns about the situation in Europe, that will continue to see the euro trade heavily,” said Mike Burrowes, a currency strategist at Bank of New Zealand Ltd. in Wellington. “The dollar, the Swiss franc and the yen would be expected to appreciate in that sort of environment.”
Minister Bill English said the currency’s strength was hurting the economy.
Materials stocks make up the only major sector to trade with a loss. As a group, materials plays are down 0.3%. Steel stocks continue to create a considerable drag; AK Steel (AKS 14.62, -0.52) and U.S. Steel (X 41.79, -0.74) are two of the worst performers in the basic materials space.
Blue chips came under pressure after the Philadelphia Fed Survey was -7.7 for June. It had been broadly expected to improve to 7.0 from 3.9 in the prior month.
None of the major sectors has managed to avoid the sell-off. Materials stocks are getting hit the hardest (-0.9% now).
USD/JPY fell to Y80.60 after weaker Philly Fed data from the US. Demand earlier was mentioned at Y80.65, then - at Y80.35 with support below at Y80.20 (5 day MA). Resistance at Y81.05.
EUR/USD $1.4000, $1.4150, $1.4300
USD/JPY Y80.00, Y80.10, Y80.35, Y80.60, Y80.65, Y81.00, Y81.25
EUR/JPY Y114.75
GBP/USD $1.6200, $1.6220, $1.6225, $1.6300
GBP/JPY Y131.50, Y132.50
USD/CHF Chf0.8400
AUD/USD $1.0500, $1.0545, $1.0560, $1.0700
AUD/JPY Y84.50, Y84.15
EUR/USD managed to recover to $1.4150/55 on a short-squeeze following the FT story that reiterates that Greece must agree to new austerity measures before IMF will release next tranche to avoid default. Rate currently holds above $1.4100.
U.S. stocks were set to open lower Thursday, as concerns about Greece's debt overshadowed stronger-than-expected reports on the housing market and unemployment.
Economy: Before the market opened the government reported that jobless claims slipped to 414,000 last week, down 16,000 from the prior week. Economists had expected a more modest decline in weekly claims of 421,000.
Housing starts jumped 3.5% in May to a seasonally adjusted annual rate of 560,000 versus the forecast of 540,000.
Building permits rose 8.7% to a seasonally adjusted annual rate of 612,000 in May, from the prior month's rate of 563,000. Economists had expected permits to edge lower to a 548,000 annual rate.
The Federal Reserve Bank of Philadelphia will release its June manufacturing survey at 14:00 GMT.
Companies: Energy Transfer Equity L.P. (ETE, Fortune 500) will buy Southern Union Co. (SUG) for $7.9 billion. The news sent shares of Southern Union nearly 17% higher in premarket trading.
Shares of Finisar (FNSR) slumped nearly 18% early Thursday, after forecasting first-quarter earnings to be significantly lower than estimated.
BlackBerry maker Research in Motion (RIMM) will report earnings after the closing bell, which are forecast to come in at $1.32 a share.
Analysts at CS say May housing data remain weak. "The starts gain was driven mostly by the single-family sector. The permits gain was the other story. For what it's worth, permits were at a five-month high."
Data released:
07:30 Swiss SNB press-conference 0.00-0.75% 0.00-0.75% 0.00-0.75%
08:30 UK Retail sales (May) -1.4% -0.5% 1.1%
08:30 UK Retail sales (May) Y/Y 0.2% 1.6% 2.8%
09:00 EU(17) Harmonized CPI (May) final 0.0% 0.0% 0.6%
09:00 EU(17) Harmonized CPI (May) final Y/Y 2.7% 2.7% 2.8%
09:00 EU(17) Harmonized CPI ex EFAT (May) Y/Y 1.5% 1.6% 1.6%
The euro weakened to a three-week low against the dollar and slid versus the yen as speculation the Greek debt crisis is deteriorating damped demand for the region’s assets.
The euro fell for a second day after Dutch newspaper Het Financieele Dagblad cited European Central Bank Governing Council member Nout Wellink as saying the region’s emergency fund should be doubled, and was also dragged lower on concern a reshuffling of Greek Prime Minister George Papandreou’s cabinet will lead to a renegotiation of aid terms.
“The market is still quite concerned about Greece,” said Matthew Brady at JPMorgan Chase & Co.. “It’s going to be a choppy ride for the euro. There’s no doubt about that. I’d prefer to still sell any rallies in euro.”
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet tomorrow in Berlin, with pressure increasing for the leaders to reach an accord on a rescue package for Greece.
New Zealand’s dollar weakened after Finance Minister Bill English said the currency’s strength was hurting the economy.
The Swiss franc appreciated as the central bank kept its main interest rate at 0.25%.
EUR/USD failed to break above strong resistance at $1.4200, spurring porition adjustment. Rate fell to $1.4092. Later euro tries to recover, but was capped at $1.4160 and fell to a new lows around $1.4074.
GBP/USD fell after a weak UK rateil sales data from $1.6227 to $1.6094.
USD/JPY weakened from Y81.00 to Y80.50 before rose back to Y80.60/70.
US data starts at 1230GMT with the weekly Jobless Claims as well as current account and Housing Starts, Building Permits data. Initial jobless claims are expected to fall 7,000 to 420,000 in the June 11 week, while the pace of housing starts is expected to rise to 547,000 after falling 10.6% in April. Home building remains very weak as homes
sales are still below year ago levels. This is followed at 1400GMT the Philadelphia Fed index is expected to rise to a reading of 9.0 in June sharp declines in April and May.
Analysts at DB cut US Q2 real growth estimate based on recent data (high CPI) and now see Q2 GDP at 2.3%. They say "if the Philly Fed index dissapoints our concerns for the near-term outlook will increase."
Gold prices continue to hold within the range. The last three sessions saw gold tested support around $1512-1515. Today strong support comes at $1516.60 (20-week support line), then - $1512.7/1513.2 (23.6% Fibo of $1309/1576 move and daily Boll base respectively). Resistance is around $1530.20 (21-day moving average) and further - $1546.60 (5-week resistance line).
European equity bourses are lower Thursday after Greek Prime Minister George Papandreou said he will form a new government Thursday and seek a vote of confidence from his parliamentary group after talks with opposition failed to form a unity government.
The Euro Stoxx 600 is down 24pts (-0.86%) at 2708.
FTSE-100 Index down 63pts (-1.09%) at 5680.588, Xetra-DAX down 56pts (-0.79%) at 7058.48.
Euro fell sharply on Thursday versus the US currency, hitting a three-week low and dropping below its 100-day moving average for the first time since February.
Rate still vulnerable to worries that Greece's debt crisis may be getting out of control, as a new bailout scheme to keep Greece from defaulting remained elusive while Greek protests against austerity turned violent in Athens.
"Investors are getting worried that policymakers can't agree on measures for Greece. Even though the Greek economy accounts for only a small part of the euro zone economy, it could affect the whole European financial system if it is considered to be in default," said Kimihiko Tomita, forex manager at State Street.
The dollar also held firm against safe-haven currencies like the Swiss franc and yen.
For the Swiss franc, the focus was on the Swiss National Bank, which kept rates on hold at 0.25% as expected. Analysts expect the bank to raise rates by 25 basis points in September and again in December.
Commodity currencies like the Australian dollar also lost ground to the U.S. dollar, though they fared better elsewhere.
Even hawkish comments from the Reserve Bank of Australia on Wednesday provided little support for the Aussie dollar.
EUR/USD remains above $1.4100 - currently at $1.4108. Earlier rate fell to the lows around $1.4072 as market reacts to wire report suggesting Germany is pushing to delay second Greek rescue package back to September.
EUR/CHF breaks under Chf1.2000 tp pront a new record lows around $1.1954. rate fell through the support area at Chf1.1980. Stronge support between Chf1.1960/50 still intact.
EUR/USD $1.4000, $1.4150, $1.4300
USD/JPY Y80.00, Y80.10, Y80.35, Y80.60, Y80.65, Y81.00, Y81.25
EUR/JPY Y114.75
GBP/USD $1.6200, $1.6220, $1.6225, $1.6300
GBP/JPY Y131.50, Y132.50
USD/CHF Chf0.8400
AUD/USD $1.0500, $1.0545, $1.0560, $1.0700
AUD/JPY Y84.50, Y84.15
The euro declined to three-week lows against the dollar and the yen as speculation the European debt crisis is worsening damped demand for the region’s assets.
Nikkei 9,411 -1.70%
The single currency suffered after rating agency Moody’s warned it could downgrade three French banks. Moody’s said it would review the ratings of BNP Paribas, France’s largest bank, and peers Société Générale and Crédit Agricole, focusing on their holdings of Greek public and private debt.
The move came amid continued wrangling between eurozone finance minister and central bankers over who should bear the cost of a fresh rescue package for Greece.
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet on June 17 in Berlin, with pressure mounting for the leaders to resolve their differences over a rescue for Greece.
The euro remained weaker after strong US CPI report for May and a measure of manufacturing in the New York region unexpectedly shrank in June.
The consumer-price index increased 0.2 percent, compared with the 0.1 percent median forecast of economists. The core measure, which excludes more volatile food and energy costs, climbed 0.3 percent, the biggest increase since July 2008.
The Federal Reserve Bank of New York’s general economic index dropped to minus 7.8, the lowest level since November, from 11.9 in May. The median forecast was 12.
Sterling fell versus the dollar after a report showed Britain’s jobless claims rose in May at its fastest pace in almost two years in May.
So, U.K.’s jobless claims rose by 19,600 in May after a revised 16,900 increase in the prior month. The median forecast was for an increase of 6,500.
Resistance 3: Chf0.8680 (61.8 % FIBO Chf0.8890-Chf0.8330)
Resistance 3: $ 1.6300 (50.0 % FIBO $1.6440-$ 1.6170)
Resistance 3: $ 1.4430 (resistance line from Jun 9)
08:30 UK Retail sales (May) -0.5% 1.1%
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