News Column

Wall Street Likely To Pause After Record Run

June 3, 2014

WASHINGTON (Alliance News) - Trading in the US index futures suggest that Wall Street stocks may pause for a breather on Tuesday after the Dow and the S&P 500 Index have been setting record closing highs session after session. Global cues are mixed, with Asian stocks closing mixed, while the European markets are trading on a tentative note. Notwithstanding the fairly positive Chinese manufacturing data, traders could prefer to take some profits ahead of the week's job reports, especially due to the absence of any major market moving catalysts.

At 6:15 am ET, the Dow futures are rising 23 points and the S&P 500 futures are moving up 0.75 points, while the Nasdaq 100 futures are receding 7.75 points.

US stocks closed Monday's session mostly higher after a volatile morning session, triggered by the release of an erroneous manufacturing reading.

On the economic front, the Commerce Department is scheduled to release its factory orders report for April at 10 am ET. Economists expect factory orders to have risen by 0.5% month-over-month.

Automakers are due to release monthly sales data for May, with the consensus estimate calling for total vehicle sales coming at a seasonally adjusted annual rate of 16.1 million compared to the 12.8 million unit rate in April.

Kansas City Federal Reserve Bank President Esther George will speak on monetary policy in Breckenridge, Colorado at 1:50 pm ET. In corporate news, Quiksilver (ZQK) reported that its second quarter net revenues of USD408.21 million, down from USD455.56 million last year. The company's loss from continuing operations widened to 27 cents per share from 20 cents per share in the year-ago period. The company also stated that it expects net revenues in the North America and Europe wholesale channels to continue to decline, while expecting net revenues in emerging markets and e-commerce to increase. Pro forma adjusted EBITDA for 2014 are expected to be below the USD118 million reported for 2013.

Raytheon (RTN) announced that it has been awarded a USD298 million contract by the US army for the modification for the Family of Advanced Beyond Line of Sight Terminals Command Post Terminals Production program.

Republic Services (RSG) announced the appointment of Robert Maruster as its COO, effective June 9th, 2014. Meanwhile, International Paper (IP) said it has promoted company veteran Mark Sutton to the role of COO.

The Asian markets had a mixed outing, as the resilience of Wall Street overnight and positive Chinese manufacturing data offset the weakness triggered by profit taking.

The Japanese market extended its gains, as the yen continued to remain supportive. The Nikkei 225 average opened higher and moved roughly sideways for the rest of the session, ending up 98.33 points or 0.66% at 15,034. Export stocks led the gains, while real estate, utility, and resource and retail stocks lost ground. After trading on a lackluster note until late morning trading, Australia's All Ordinaries declined steadily before ending down 38.70 points or 0.70% at 5,461. Hong Kong'sHang Seng Index ended up 195.60 points or 0.85% at 23,277, while China's Shanghai Composite Index closed 0.91 points or 0.04% lower at 2,038.

On the economic front, revised estimates released by Markit and HSBC showed that their manufacturing purchasing managers' index for China came in at a downwardly revised reading of 49.4 in May, although higher than the April reading of 48.1.

Meanwhile, the Reserve Bank of Australia announced its decision to retain key interest rate at a record low level of 2.50%, reasoning that the most prudent course is likely to persist with a period of stability in interest rates. The Australian Bureau of Statistics reported that retail sales in Australia rose at a less than expected rate of 0.2% month-over-month in April compared to a 0.1% increase in March. A separate report showed that the nation's current account balance was in a deficit of AUD5.67 billion in the first quarter, compared to a deficit of AUD11.7 billion in the fourth quarter.

A report released by Japan'sMinistry of Health, Labor and Welfare showed that total labor cash earnings in Japan rose 0.9% 0.9% year-over-year in April following a 0.7% increase in March.

European stocks opened lower and are seen languishing below the unchanged line on valuation concerns.

In corporate news, UK building material distributor Wolseley reported higher revenues for its third quarter.

On the economic front, UK house prices rose a more-than-expected 0.7% month-over-month in May following a 1.2% increase in April, a report released by the Nationwide Building Society showed. This exceeded forecast for a 0.6% increase and marked the 13th straight month of increase in house prices.

The results of a survey by Markit and the Chartered Institute for Purchasing and Supply showed that their construction purchasing managers' index eased to 60 in May from 60.8 in April. Economists had expected an increase in the index to 61.

The eurozone unemployment rate unexpectedly dropped in April, but remained at a high level, figures from Eurostat showed. The seasonally adjusted jobless rate fell to 11.7% from 11.8% in March. Inflation in the eurozone, meanwhile, slowed more than expected to 0.5% in May from 0.7% in April, raising concerns about deflationary pressures.

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Source: Alliance News

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