US STOCKS-S&P, Nasdaq climb on retail, chip gains - Reuters News
16-May-2018 11:59:04 PM
- Macy's jumps after results, lifts other retail stocks
- Micron, AMD rise after brokerage actions
- Indexes up: Dow 0.01 pct, S&P 0.16 pct, Nasdaq 0.34 pct
Changes comment, adds details, updates prices
By Medha Singh
May 16 (Reuters) - Wall Street edged higher on Wednesday, helped by gains in retail and chip stocks, while investors weighed the impact of rising bond yields.
Investors are worried about a faster rise in interest rates as the U.S. 10-year Treasury yield hovered near seven-year high on signs that the U.S. economy is on a stronger footing in the second quarter.
"Higher rates are going to present headwind to equity markets. Even with strong economic data, strong earnings, the markets are still flat year to date," said Michael James, managing director of Institutional Equity Trading at Wedbush Securities in Los Angeles.
"The question remains what multiples are people willing to pay for equities in this higher rate environment."
The retailing index was boosted by a 9 percent surge in Macy's shares after the department store operator reported strong quarterly results and lifted its full-year profit forecast.
Shares of rivals Kohl's and Nordstrom were up about 1 percent each.
"You had pretty solid numbers from Macy's and it has been an early trigger for outperformance in the retail space today," James said.
At 11:19 a.m. EDT the Dow Jones Industrial Average was down 1.75 points, or 0.01 percent, at 24,704.66, the S&P 500 was up 4.36 points, or 0.16 percent, at 2,715.81 and the Nasdaq Composite was up 24.80 points, or 0.34 percent, at 7,376.43.
Micron rose 4.3 percent after RBC Capital Markets began coverage of the stock with an "outperform" rating.
The Philadelphia SE semiconductor index rose 1 percent.
Advancing issues outnumbered decliners for a 1.43-to-1 ratio on the NYSE and for a 1.60-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and three new lows, while the Nasdaq recorded 83 new highs and 31 new lows.
(Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva)
UPDATE 7-Oil slips as dollar gains, demand shows signs of weakening - Reuters News
16-May-2018 11:41:37 PM
- U.S. crude stocks fall by 1.4 million barrels -EIA
- Physical spot cargoes trade at discount to financial crude
- Global oil demand likely to moderate this year -IEA
Recasts throughout, changes byline, updates dateline previous LONDON
By Ayenat Mersie
NEW YORK, May 16 (Reuters) - Oil prices slipped on Wednesday, as a strengthening dollar overshadowed a U.S. crude inventory report that showed domestic crude stocks falling more than expected.
Brent crude futures were down 31 cents at $77.43 a barrel by 11:17 a.m. EDT (1517 GMT), while U.S. crude futures fell 30 cents to $71.01 a barrel.
The dollar firmed to nearly a five-month high against a basket of other major currencies on Wednesday. A stronger greenback makes it more expensive to buy dollar-denominated commodities like oil.
"The only reason why we're not seeing higher prices from here today is the strength of the U.S. dollar," said Tariq Zahir, managing member at Tyche Capital Advisors.
U.S. crude stocks fell last week as exports hit a new one-week record, while inventories of both gasoline and distillates fell, the Energy Information Administration said.
Crude inventories fell by 1.4 million barrels in the week to May 11, compared with analysts' expectations for a decrease of 763,000 barrels.
"All in all, the report is bullish. Oil stocks fell across the board and in some cases more than expected, whilst rising exports point to healthy demand for U.S. crude," Commerzbank analyst Carsten Fritsch said.
Physical crude markets are sagging under the weight of unsold barrels of oil, while the 50 percent rise in oil prices in the last year is encouraging major companies such as ExxonMobil, Royal Dutch Shell, Chevron, BP and Total to increase output.
Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers struggle to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in West Texas and Canada.
The International Energy Agency on Wednesday warned global demand is likely to moderate this year, as the price of crude nears $80 a barrel and many key importing nations no longer offer consumers generous fuel subsidies.
In its monthly report, the Paris-based IEA cut its forecast for global demand growth in 2018 to 1.4 million barrels per day, from a previous estimate of 1.5 million bpd.
"On balance, the report is tending more to the negative side. Demand for oil has been revised downwards for the second half of the year from April," PVM Oil Associates strategist Tamas Varga said.
(Additional reporting by Amanda Cooper in LONDON and Henning Gloystein in SINGAPORE; Editing by Mark Potter and Paul Simao)
PRECIOUS-Gold steadies after biggest tumble since 2016 - Reuters News
16-May-2018 10:27:55 PM
- Dollar hits 2018 peak
- U.S. bond yields slip from highs
- Gold fell 1.7 pct on Tuesday
- Technicals suggest further losses
(Updates prices)
By Peter Hobson
LONDON, May 16 (Reuters) - Gold prices steadied on Wednesday after falling to their lowest since December as the dollar rallied to 2018 highs and U.S. bond yields sat near multi-year peaks.
The metal had suffered its biggest single-day loss since November 2016 when it fell 1.7 percent on Tuesday after strong U.S. retail sales data sent the dollar and yields soaring.
Gold's declines were accelerated by technical selling as it crashed below its 200-day moving average and the psychologically significant $1,300-an-ounce mark.
Spot gold was flat at $1,289.86 an ounce by 1417 GMT, having gone as low as $1,286.20, its weakest since Dec. 27.
U.S. gold futures for June delivery were 0.1 percent down at $1,289.20.
"Rising U.S. bond yields and a stronger dollar were factors behind gold's decline below the $1,300 level, said National Australia Bank economist John Sharma.
"The slight pick-up suggests there might have been some opportunistic buying on the part of investors."
A stronger dollar hurts gold by making it more expensive for holders of other currencies, while higher bond yields make non-yielding bullion less attractive to investors.
The strong U.S. retail data also suggested that the Federal Reserve will be confident about raising U.S. interest rates. That is bad for gold because higher rates push up bond yields and tend to boost the dollar.
Gold is likely to fall to $1,275 by the end of June and $1,250 by the end of the year as U.S. yields and the dollar strengthen, said ABN AMRO analyst Georgette Boele. That is below the $1,310-$1,360 range gold has inhabited since January.
"It held up for so long on such a high level. Now you are below $1,300 and the 200-day moving average; people who hold long positions are a little bit nervous," she said.
Technical and momentum indicators suggested that gold could fall to about $1,278, ScotiaMocatta analysts said. Fibonacci support for the metal was at $1,287, they added.
Gold is traditionally used as a safe place to park assets during times of uncertainty, but investors largely disregarded news that North Korea could reconsider attending a planned summit between Kim Jong Un and U.S. President Donald Trump next month.
"There are lot of geopolitical risks, but people are just used to it. Therefore it has not become a big driver for gold," said Argonaut Securities analyst Helen Lau.
In other precious metals, silver was up 0.4 percent at $16.30 an ounce after falling 1.6 percent on Tuesday.
Platinum eased by 0.2 percent to $891.40 and palladium gained 0.3 percent to $984.97.
(Additional reporting by Apeksha Nair and Eileen Soreng in Bengaluru
Editing by Jane Merriman and David Goodman)
European feeds-Soymeal dips on higher dollar, weaker CBOT futures - Reuters News
17-May-2018 01:12:47 AM
ROTTERDAM, May 16 (Reuters) - Soymeal on the European meals and feeds market dropped substantially on Wednesday on the back of a strong dollar and because of technical weakness in CBOT soymeal futures.
South American soymeal was offered between $4 and $11 a tonne down from Tuesday. A strong dollar weighed on products priced in that currency.
Rapemeal was offered between unchanged and three euros per tonne lower. Easier rapeseed futures took their cue from weaker CBOT soybean futures. Lower soymeal prices and lack of demand also weighed, while a strong dollar, which underpins euro-priced products, limited losses.
"Recent volatility and uncertainty which the direction the market will move in the near future discourages players from doing business at the moment," one broker said.
(Reporting by Karel Luimes; Editing by Elaine Hardcastle)
Chicago soybean futures drop sharply on uncertainty of trade consultations - Xinhua News Agency
17-May-2018 12:16:10 AM
CHICAGO, May 16 (Xinhua) -- Chicago Board of Trade (CBOT) agricultural commodities traded mixed on Wednesday morning, with soybean futures dropping sharply on uncertainty of China-U.S. trade consultations.
July corn was 1.5 cents lower at 3.985 U.S. dollars per bushel as of 1550 GMT, July wheat was 1.25 cents higher at 4.9475 dollars, July soybean was down 14 cents at 10.0475 dollars.
Wheat futures were higher on adverse weather globally. The drought in the U.S. Southern Plains is severe with much of hard red winter wheat belt suffering from an exceptional or extreme drought, according to the U.S. Drought Monitor.
As for international market, showers are slated to fall across the winter corn areas of South America through the weekend. Black Sea winter wheat areas will receive near normal rain over the next 10 days with dryness deepening a drought across Australia. The Canadian Prairies are turning parched and will have to be closely monitored.
Copyright (c) 2018 Xinhua News Agency
FOREX-Dollar extends rally to five-month high; euro weak - Reuters News
16-May-2018 10:22:56 PM
- Reports Italian parties seeking debt forgiveness hits euro
- Emerging markets currencies face renewed selling pressure
Recasts, updates rates, adds new comments, changes dateline from LONDON
By Saqib Iqbal Ahmed
NEW YORK, May 16 (Reuters) - The dollar extended its rally against a basket of currencies on Wednesday to touch a five-month high, supported by relatively strong U.S. economic data in recent days, while the euro was hit by reports that a likely future Italian government would seek debt forgiveness from European creditors.
The dollar index, which measures the greenback against a basket of six other currencies, was up 0.14 percent at 93.352, after rising as high as 93.632, its highest since December 19.
The greenback has risen about 1.6 percent this month, boosted by a view that the Federal Reserve will outpace most major central banks in policy normalization.
"There's been some improved sentiment on conditions in the U.S. compared with other parts of the world," said Sireen Harajli, foreign exchange strategist at Mizuho in New York.
U.S. factory output rose in April, although new estimates of manufacturing and overall industrial production showed less growth in prior months than initially believed.
The U.S. currency got a boost on Tuesday when strong U.S. consumer spending numbers sent 10-year Treasury yields surging to a seven-year peak of 3.095 percent.
Euro zone inflation slowed in April, European statistics agency Eurostat said on Wednesday, confirming an earlier flash estimate and adding to the headache of European Central Bank policy makers seeking to phase out monetary stimulus.
Japan's economy contracted more than expected at the start of this year, suggesting growth has peaked after the best run of expansion in decades, unwelcome news for a government struggling to get traction for its reflationary policies.
"Essentially, the dollar is stronger mostly because the rest of the world is not," said Harajli.
The euro was 0.25 percent lower against the greenback at $1.1807, its lowest since December, after reports that Italy's anti-establishment 5-Star Movement and anti-immigrant League may ask the European Central Bank to forgive 250 billion euros ($294.18 billion) of debt.
"The reaction that we saw in the market definitely reflects the investor sentiment about that," she said.
The euro was 0.4-percent lower against the Swiss franc, after dropping to a five-week low of 1.1772 francs. The Swiss franc typically attracts capital in times of uncertainty.
Against the yen, the dollar was down 0.11 percent at 110.22 yen, but still close to the highest it has been since early February.
Emerging market currencies suffered more losses on Wednesday with the dollar's rise, although the Turkish lira pulled back from record lows after the central bank said it would intervene to stop its slide.
Sterling fell towards its lowest point of the year against the dollar amid fresh worries about Britain's Brexit negotiations and relatively modest UK wage growth, but pared losses to trade little changed on the day at $1.3495.
(Reporting by Saqib Iqbal Ahmed Editing by Nick Zieminski)
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