US STOCKS-Oil surge spurs Wall St turnaround, sends Russell 2000 to record - Reuters News
18-May-2018 12:08:22 AM
- Energy stocks jump over 1 pct as oil tops $80
- Cisco, Walmart drop after earnings reports
- U.S. expects China to bring proposal to trade talks
- Indexes up: Dow 0.12 pct, S&P 0.21 pct, Nasdaq 0.19 pct
Changes comment, adds details, updates prices
By Medha Singh
May 17 (Reuters) - Energy and industrial stocks led Wall Street higher on Thursday and the small-cap Russell 2000 hit a record, even as a rise in U.S. bond yields to fresh seven-year highs suggested more competition for equities and investors fretted over geopolitics.
The energy sector rose 1.41 percent, giving the benchmark S&P 500 the biggest boost, as Brent crude hit $80 per barrel for the first time since November 2014 as renewed U.S. sanctions threatened a fall in exports from Iran in an already tightening market.
Smaller companies continued this year's trend of outperforming their larger rivals with the Russell 2000 reaching a record high for the second session in a row.
Data showed the number of Americans on unemployment rolls last week fell to the lowest since 1973. Other data showed a pickup in factory activity in the mid-Atlantic region this month, with manufacturers saying they were asking for higher prices for their products.
The industrial sector was up 0.61 percent, the second-biggest gainer among the 11 major S&P sectors.
"You have kind of a mixed bag of earnings numbers ... the economic data generally speaking was pretty good and that's leading to a little bit of mild buying in the market," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
On the Russell 2000, Nolte said, "I think you're starting to see people come into that because it's the only index that has put in a new high and you've got some interest."
At 11:46 a.m. EDT, the Dow Jones Industrial Average was up 30.33 points, or 0.12 percent, at 24,799.26, the S&P 500 was up 5.79 points, or 0.21 percent, at 2,728.25 and the Nasdaq Composite was up 14.08 points, or 0.19 percent, at 7,412.37.
The three rate-sensitive sectors, real-estate, utilities and telecoms, were slightly lower.
The market had opened in the red, weighed by a drop in Cisco and on jitters as U.S. 10-year Treasury yields hovered at 7-year highs and the United States and China started trade talks to try to avert a damaging tariff war.
White House Chief Economic Adviser Larry Kudlow expects China to bring a proposal to the talks which would "extend the conversation and permit additional negotiations".
Keeping the gains in check were Cisco's 2.8 percent drop, the most on the Dow, after the company's forecast indicated its transition to a software-focused business was a work in progress.
Walmart slipped 1.1 percent, reversing premarket gains, after it said profit margins were under pressure, despite sales and earnings beating expectations.
J.C. Penney tumbled 10.7 percent after its same-store sales missed estimates and the company cut its full-year profit forecast.
Advancing issues outnumbered decliners for a 1.55-to-1 ratio on the NYSE and for a 2.05-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and four new lows, while the Nasdaq recorded 108 new highs and 20 new lows.
(Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)
UPDATE 8-Oil hits new multi-year high above $80/bbl on Iran concerns - Reuters News
17-May-2018 11:34:01 PM
- Brent futures at highest since November 2014
- Global inventories expected to fall further
- OPEC cuts and looming U.S. sanctions on Iran lift Brent
- Shell halts exports from major Nigerian pipeline
Updates throughout, changes dateline, previously LONDON
By Jessica Resnick-Ault
NEW YORK, May 17 (Reuters) - Oil prices climbed above $80 a barrel on Thursday for the first time since November 2014, hitting new multi-year highs on concerns that Iranian exports could fall because of renewed U.S. sanctions, reducing supply in an already tightening market.
The market continued to push higher as geopolitical concerns drove trading.
"We are going to have reduced supplies from Iran in six months and Venezuela hasn't shown that they can stop the drop in their supplies," said Gene McGillian, vice president of research at Tradition Energy."
Brent crude futures reached an intraday high of $80.33 a barrel before receding to $80.16 by 11:09 a.m. EDT [1509 GMT].
U.S. West Texas Intermediate (WTI) crude futures were up 41 cents at $71.90 after also hitting their highest since November 2014, at $72.30 a barrel.
U.S. President Donald Trump's decision this month to withdraw from an international nuclear deal with Iran and revive sanctions that could limit crude exports from OPEC's third-largest producer has boosted oil prices.
France's Total warned on Wednesday that it might abandon a multibillion-dollar gas project in Iran if it could not secure a waiver from U.S. sanctions, casting further doubt on European-led efforts to salvage the nuclear deal.
VENEZUELA DROP
A rapid decline in Venezuela's crude production has further roiled markets in recent months.
"The geopolitical noise and escalation fears are here to stay," said Norbert Rücker, head of macro and commodity research at Swiss bank Julius Baer. "Supply concerns are top of mind after the United States left the Iran nuclear deal."
Global inventories of crude oil and refined products dropped sharply in recent months owing to robust demand and OPEC-led production cuts.
Oil stocks were expected to drop further as the peak summer driving season nears, offsetting increases in U.S. shale output, Bernstein analysts said.
Several banks have in recent days raised their oil price forecasts, citing tighter supplies and strong demand.
Further supporting prices, Royal Dutch Shell on Thursday said it was halting crude exports from a major Nigerian pipeline.
EVERYTHING BULLISH?
On the flip-side, however, high oil prices could hit consumption, the International Energy Agency warned on Wednesday as it lowered its global oil demand growth forecast for 2018 to 1.4 million barrels per day (bpd) from 1.5 million bpd.
The IEA said global oil demand would average 99.2 million bpd in 2018, although U.S. bank Goldman Sachs said consumption would cross 100 million bpd "this summer".
Leading production increases is the United States, where crude output has soared by 27 percent in the last two years to a record 10.72 million bpd, putting it within reach of top producer Russia's 11 million bpd.
The result has been a widening difference between U.S. crude and benchmark Brent. WTI traded at $8.20 a barrel below Brent on Thursday, the most since April 2015.
(Additional reporting by Henning Gloystein in Singapore and Ron Bousso in London; Editing by Dale Hudson and David Goodman)
PRECIOUS-Gold slides to 2018 low as dollar strengthens - Reuters News
17-May-2018 09:57:22 PM
- U.S. 10-year Treasury yield touches seven-year high
- Platinum slips to lowest since mid December
(Update prices, adds comment)
By Jan Harvey
LONDON, May 17 (Reuters) - Gold slid to a fresh low for the year on Thursday as another rise in U.S. bond yields and concerns over political risk in Italy held the dollar index near its 2018 peak.
The precious metal has fallen more than 2 percent this week on gains in the U.S. currency and a rise in U.S. 10-year Treasury yields to seven-year highs. Higher yields increase the opportunity cost of holding non-yielding assets such as bullion.
Spot gold was down 0.1 percent at $1,289.34 an ounce by 1450 GMT, off an earlier 4-1/2 month low of $1,285.41. U.S. gold futures for June delivery were down $2.80 at $1,288.70.
The dollar has climbed nearly 4 percent this quarter on expectations that the Federal Reserve will lift U.S. interest rates further this year to curb inflation, at a time when other central banks are still keeping monetary policy loose.
"I expect further weakness in gold prices because I think the dollar can rise a bit further," ABN Amro analyst Georgette Boele said.
"Gold prices are mainly driven by the U.S. dollar and then U.S. yields ... our year-end 10-year U.S. Treasury forecast stands at 3.2 percent, with three more Fed rate hikes."
The euro remains under pressure, hovering near a five-month low on concerns that political developments in Italy could cause wider disruption in the common currency bloc.
Political uncertainty arising out of North Korea after Pyongyang threatened to pull out of a meeting with the United States was likely to limit downside for gold, analysts said. But that was not enough to offset other factors.
"The precious metal still remains vulnerable to the prevailing dollar and rate headwinds," INTL FCStone said in a note.
From a technical perspective, gold prices were looking vulnerable to further losses after breaking below key chart levels this week, according to analysts who study past price moves to determine the future direction of trade.
"Gold has eroded key support, namely the 200-day moving average, the $1,302.74 March low and the 50 percent retracement (of the December-to-January rally)," Commerzbank said in a note on technicals. "We have been forced to neutralise our outlook as the market is now on the defensive."
Among other precious metals, silver was up 0.6 percent at $16.45 an ounce, having touched its lowest in two weeks at $16.17 in the previous session.
Platinum was flat at $887.30, off an earlier five-month low of $879, while palladium rose by 0.5 percent to $985.20.
(Additional reporting by Apeksha Nair in Bengaluru Editing by David Goodman and Edmund Blair)
U.S. Cash Grains-Interior corn steady-firm on slow farmer sales - Reuters News
18-May-2018 12:31:39 AM
CHICAGO, May 17 (Reuters) - Spot corn basis bids were mostly steady to firm at processors and interior elevators around the U.S. Midwest on Thursday on slow farmer sales, while bids at river elevators were mixed, merchants said.
- Spot soybean basis bids were narrowly mixed amid a slowdown in farmer sales. Wheat basis bids were flat.
- Midwest farmers are racing to plant corn and soybeans and focusing little on selling crops. Cash prices are below many growers' sales price targets.
- Corn export sales last week were near the high end of a range of trade estimates, but soybean sales were near the low end of expectations, according to U.S. Department of Agriculture data.
- Chicago Board of Trade corn and soybean, futures were little changed on Thursday.
GRAINS-U.S. wheat futures rise on world weather woes, corn; soy flat - Reuters News
17-May-2018 11:37:46 PM
Recasts, updates with U.S. trading, adds new analyst quote, changes byline, dateline; pvs PARIS/SINGAPORE
By Mark Weinraub
CHICAGO, May 17 (Reuters) - U.S. wheat futures rallied on Thursday, their third straight day of gains, on worries that adverse weather will lead to crop shortfalls in key growing areas around the world, traders said.
Corn and soybean futures were close to unchanged as traders assessed how forecasts for rain would affect planting in the U.S. Midwest in the coming week.
The grain markets also were monitoring the progress of trade talks between the United States and key export customers China and Mexico.
Chicago Board of Trade soft red winter wheat futures rallied through key technical resistance points after weakness in the overnight trading session brought out some short-covering and bargain buying.
"There's still plenty of concern over how this winter wheat crop will wind up, despite stronger-than-expected production estimates and rising ratings," Matt Zeller, director of market information at INTL FCStone said in a note to clients. "Dryness is creeping in to crops for major producers/exporters Australia and Russia, adding to at least a minor bullish story heading to 2018/19."
Australian farmers are planting wheat in some of the driest soils in years, following on from a severe drought that cut 2017/18 output in the world's fourth-largest exporter to the lowest in a decade.
At 10:27 a.m. CDT (1527 GMT), CBOT July soft red winter wheat was up 6-3/4 cents at $5.01 a bushel.
"There is some support for the wheat market at current levels because of a drought in the U.S. southern Plains. The USDA is showing some improvement in crop rating but there will be yield losses," said one India-based agricultural commodities analyst.
CBOT July soybean futures were up 1/2 cent $10.06-1/2 a bushel.
The soybean market is focused on the outcome of trade talks between the United States and China. Chinese demands for U.S. shipments have taken a hit since Beijing proposed import duties last month.
The United States and China launch a second round of trade talks on Thursday to try to avert a damaging tariff war, with the Trump administration demanding a $200 billion cut in China's U.S. trade surplus and greater protections for intellectual property.
CBOT July corn futures dipped 3/4 cent to $3.98-1/2 a bushel.
(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore
Editing by David Goodman and Tom Brown)
FOREX-Dollar rises to 4-month high vs yen on higher U.S. Treasury yields - Reuters News
17-May-2018 10:49:34 PM
- Euro struggles near $1.18 mark
- Dollar rise leaves Yen at weakest since January
Recasts, updates prices in text, adds comment, FX table, changes byline, dateline; previous LONDON
By Gertrude Chavez-Dreyfuss
NEW YORK, May 17 (Reuters) - The dollar climbed to a four-month peak against the yen on Thursday, bolstered by the rise in U.S. Treasury yields that suggests a more upbeat outlook for the world's largest economy.
U.S. benchmark 10-year yields hit a high of 3.122 percent, the highest in nearly seven years.
"The near-term picture remains positive for the dollar with Treasury yields showing few signs of topping, a move that makes the buck a more enticing bet to income-seekers," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Rising yields reflect continued optimism about the U.S. economy, reinforcing expectations that the Federal Reserve would raise borrowing rates at least two more times this year.
The dollar rose to its strongest versus the Japanese yen since Jan. 23 at 110.80 yen. It was last at 110.71, up 0.3 percent on the day.
The dollar index rose 0.1 percent to 93.461, below its 2018 high of 93.632.
The euro, meanwhile, fell to near a five-month low against the dollar on Thursday on concerns about the demands of populist parties likely to form Italy's next government.
Italy's anti-establishment 5-Star Movement and the anti-immigrant League, which are working to draft a coalition program, may ask the European Central Bank to forgive 250 billion euros of debt.
But broader Italian markets held up better on Thursday as investors played down the broader impact on euro zone political stability and questioned whether the Italian parties would really follow through on such plans.
The euro slipped to $1.1799, just above the $1.1763 2018 low it hit on Wednesday.
The euro has slumped six cents from more than $1.24 in three weeks after a huge dollar rally. Investors are betting U.S. interest rates will need to rise further, while other central banks are postponing monetary tightening.
That has forced investors who took big positions against the dollar anticipating a fall in 2018 to unwind and cover their positions, pushing the greenback even higher.
"This sense of a market that is not particularly well prepared for a euro decline is supported by the benign valuations still evident in the pricing of six-month and 12-month implied volatility," BNY Mellon analysts said in a note, referring to prices of a measure of expected swings in the value of the euro.
Sterling gave up earlier gains after the UK government dismissed a media report that Britain wanted to stay in the European Union's customs union after Brexit.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Tommy Wilkes in London
Editing by Susan Thomas)
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