US STOCKS-Wall St drops as regulation worry sinks tech shares - Reuters News
20-Mar-2018 04:16:18 AM
• Facebook tumbles as EU, U.S. urge probes of data practices
• Industrials fall as G-20 meeting looms, tariffs in focus
• Fed meeting on tap for Tuesday
• Dow down 1.35 pct, S&P 500 down 1.42 pct, Nasdaq down 1.84 pct
Updates to market close
By Chuck Mikolajczak
NEW YORK, March 19 (Reuters) - U.S. stocks dropped on Monday, with the S&P and Nasdaq suffering their worst day in just over five weeks, as concerns over increased regulation for large tech companies was spearheaded by a plunge in Facebook shares.
Facebook shares tumbled 6.8 percent as Chief Executive Mark Zuckerberg faced calls from both U.S. and European lawmakers to explain how a consultancy that worked on President Donald Trump's election campaign gained access to data on 50 million Facebook users.
The stock had its worst day since March 2014 and was down 10.8 percent from its closing record hit on Feb. 1, to put the stock squarely in correction territory, a drop of 10 percent from its high.
Facebook's plunge weighed heavily on the S&P technology sector, down 2.11 percent, as well as the Nasdaq, off more than 2 percent. Both indexes had their worst daily performance since Feb. 8.
Other major companies with large tech businesses also dropped as recent concerns over regulation in the arena increased. Apple lost 1.53 percent while Alphabet fell 3 percent and Microsoft declined 1.8 percent.
"What's chilling to an investor is whether Facebook will be able to get advertisers to pay for the rich data they pay for today," said Kim Forrest, Senior Portfolio manager, Fort Pitt Capital, Pittsburgh.
"Investors are not only concerned about losing advertising dollars. They're also concerned these companies might come under relatively heavy regulation."
The Dow Jones Industrial Average fell 335.6 points, or 1.35 percent, to close at 24,610.91, the S&P 500 lost 39.09 points, or 1.42 percent, to 2,712.92 and the Nasdaq Composite dropped 137.74 points, or 1.84 percent, to 7,344.24.
The S&P once again fell below its 50-day moving average, seen as a technical support level, for the first time since early March. The Nasdaq came about 2 points from its 50-day before paring losses.
Investors were also cautious ahead of a two-day monetary policy meeting at the U.S. Federal Reserve starting on Tuesday.
The market believes the Fed is set to raise interest rates on Wednesday as Thomson Reuters data shows traders expect a quarter-percentage-point hike to be a certainty. Investors are now grappling with the question of whether an improving economy could lead to more hikes than anticipated.)
"Some of the more salient questions investors have is, has the tone of the Fed, which this time last year was certainly more skewed towards being dovish, has it now extended to becoming more hawkish?" said Eric Freedman, chief investment officer for U.S. Bank Wealth Management in Minneapolis.
Industrials .fell 0.82 percent against the backdrop of worries about a global trade war, which are set to dominate a two-day G20 meeting in Argentina.
Selling was broad, with each of the 11 major S&P sectors in the red. The CBOE Volatility index touched a high of 21.87 in one of its sharpest gains since the market sell-off in February.
Declining issues outnumbered advancing ones on the NYSE by a 3.71-to-1 ratio; on Nasdaq, a 2.68-to-1 ratio favored decliners.
Volume on U.S. exchanges was 6.9 billion shares, compared to the 7.2 billion average over the last 20 trading days.
UPDATE 3-Oil prices rise on Middle East tension, falling Venezuela output - Reuters News
20-Mar-2018 03:46:16 PM
• Oil traders concerned at Saudi, Iran tensions
• Weak dollar also supports crude prices
• Relentless rise in U.S. crude output caps gains
Adds U.S. exports, updates prices
By Henning Gloystein
SINGAPORE, March 20 (Reuters) - Oil prices rose by almost 1 percent on Tuesday, lifted by a weak dollar, tensions in the Middle East and concerns of a further fall in Venezuelan output.
U.S. West Texas Intermediate (WTI) crude futures were at $62.61 a barrel at 0744 GMT, up 55 cents, or 0.9 percent, from their previous close.
Brent crude futures were at $66.53 per barrel, up 48 cents, or 0.7 percent.
"Tensions between Saudi Arabia and Iran gave prices some support," said Sukrit Vijayakar, director of energy consultancy Trifecta in a note.
Futures traders also pointed to general dollar weakness as a supporter for crude.
A weaker greenback makes imports of dollar-denominated crude cheaper for countries using other currencies at home, potentially spurring demand.
Worries about Venezuela's tumbling crude production also supported oil markets.
The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by almost half since early 2005 to well below 2 million barrels per day (bpd) was "clearly vulnerable to an accelerated decline", and that such a disruption could tip global markets into deficit.
Still, surging U.S. crude oil production, which has risen by more than a fifth since mid-2016, to 10.38 million bpd, has been looming over oil markets.
U.S. output is now higher than that of top exporter Saudi Arabia. Only Russia produces more, at around 11 million bpd, although U.S. output is expected to overtake Russia's later this year as well.
Soaring U.S. output, as well as rising output in Canada and Brazil, is undermining efforts by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) to curb supplies and bolster prices.
Rising U.S. oil output isn't just being refined at home either, as WTI's widening discount to Brent makes U.S. crude exports attractive.
"Spot Brent crude oil prices averaged $3.36 per barrel more than WTI prices in 2017 compared with just $0.40 per barrel more in 2016, providing a price incentive to export U.S. crude oil into the international market," said Matt Stanley, a fuel broker at Freight Investor Services International in a note.
Brent's current premium over WTI is almost $4 per barrel.
With U.S. oil increasingly making its way into the world, many analysts expect global oil markets to flip from slight undersupply in 2017 and early this year into oversupply later in 2018.
PRECIOUS-Gold off two-week lows ahead of Fed meet - Reuters News
20-Mar-2018 12:11:50 PM
• Fed expected to signal faster increases in U.S. rates
• SPDR Gold holdings rise 1.26 pct on Monday
(Updates with commentary, prices)
By Nithin ThomasPrasad
March 20 (Reuters) - Gold was firm on Tuesday, having recovered from over a two-week low hit in the previous session, as traders waited to gauge the path of U.S. monetary policy for the rest of the year from the two-day Federal Reserve meeting that kicks off later in the day.
Spot gold was flat at $1,316.44 per ounce at 0353 GMT. In the previous session, it touched $1,307.51 an ounce, its lowest since March 1.
U.S. gold futures for April delivery dropped 0.1 percent to $1,316.10 per ounce.
"While the market has all but factored-in a rate hike, the focus will remain on the commentary and whether Fed Chair Jerome Powell hints at further rate hikes in 2018," ANZ analysts said in a note.
Powell is expected to hike interest rates and signal three more increases this year at the Fed policy meeting.
Though a rate hike today has been factored into the current price, uncertainty remains as to how further tariffs in the United States will impact global trade, said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.
"This will likely escalate with a tit-for-tat response from China, which won't help."
Prices for the yellow metal have not dipped below the $1,300 an-ounce level since the beginning of the year and have been trading in a $23 range since March 8.
A hike of more than 25 basis points would push prices lower, while a significant reaction from China and European countries on (U.S.) tariffs would drive prices higher, said Alexander.
Higher interest rates tend to boost the U.S. dollar and push bond yields up, pressuring gold prices by increasing the opportunity cost of holding non-yielding bullion, while political and financial uncertainty push up safe-haven demand for the yellow metal.
Holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, holdings rose 1.26 percent, their best one-day rise since Jan. 18, to 850.84 tonnes on Monday from 840.22 tonnes on Friday.
Meanwhile, Asian shares fell after investors took profits in high-flying U.S. technology shares on fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data.
Among other precious metals, silver gained 0.1 percent to $16.32 per ounce after matching Friday's three-month low in the previous session.
Platinum was nearly unchanged at $952.70 per ounce after hitting its lowest since Jan. 3 on Monday. Palladium declined 0.28 percent to $987.25 per ounce.
VEGOILS-Palm oil gains on stronger export data - Reuters News
20-Mar-2018 12:40:40 PM
• Palm in line for second straight day of gains
• Malaysian exports rose 15.3 pct on-month during March 1-15 - AmSpec
By Emily Chow
KUALA LUMPUR, March 20 (Reuters) - Malaysian palm oil futures climbed in early trade on Tuesday and were set for a second straight session of gains on the back of stronger export data.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 0.3 percent to 2,432 ringgit ($621.36) a tonne at the midday break.
It rose as much as 0.8 percent in early trade before paring some gains. Trading volumes stood at 25,220 lots of 25 tonnes each at noon on Tuesday.
"The market is up on stronger export figures today," said a palm oil futures trader, referring to data released by an inspection company before the midday break.
Exports of Malaysian palm oil products for March 1 to 20 rose 15.3 percent to 913,091 tonnes from the 791,992 tonnes shipped during Feb. 1 to 20, said company AmSpec Agri Malaysia.
Palm oil exports from Malaysia, the world's second largest producer, are expected to pick up in the coming weeks as buyers stock up ahead of Ramadan which begins in mid-May this year.
The Muslim holy month sees devotees break day-long fasts with communal feasting, which incurs higher usage of palm oil for cooking purposes. Buyers in regions such as the Middle East usually start increasing purchases of palm oil one to two months ahead of the festivities.
In other related oils, the Chicago Board of Trade's May soybean oil contract was down 0.2 percent, while the May soybean oil on China's Dalian Commodity Exchange fell 0.7 percent.
The Dalian May palm oil contract declined 0.1 percent.
Palm oil prices are impacted by movements in rival edible oils as they compete in the global vegetable oils market.
COLUMN-Did recent rains help Argentina's soybeans? -Braun - Reuters News
20-Mar-2018 02:00:00 PM
The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
CHICAGO, March 20 (Reuters) - Some market analysts would say that the Argentine soybean crop is as good as dead, as many forecasts have been slashed to multiyear lows.
But that may not be the case as rains glossed the area last weekend and may do so again this weekend, and the crops may be in a position to benefit from this moisture.
A substantial drought has thinned harvest hopes for many soybean farmers in Argentina, which is the leading exporter of soybean products. Many analysts are now leaning more heavily toward top producers Brazil and the United States to make up for the lost supply.
Indeed, Argentina's harvest will not be great, but there is a chance that losses do not end up as large as some expect.
Not all of the production regions received rain last weekend, but some areas may have received up to an inch (25 mm) - much more than has recently been observed. Late on Monday, weather models suggested this could happen again on or around Saturday.
Most importantly, the recent and expected moisture is not necessarily too late to make a difference because the yield-determining phase of growth is still very much in progress.
As of Thursday, about 72 percent of soybeans were still in the pod-filling stage in the province of Buenos Aires, judging from weekly data published by Argentina's agriculture ministry. Cordobá had 78 percent of its crop still in this stage, and together the two provinces account for roughly two-thirds of the country's bean production.
About 6 percent of the soybeans in each of these provinces were in the flowering stage and the rest were in the maturation process.
The No. 3 province of Santa Fe has been hit harder by the drought. The crops are in considerably worse condition than in the top provinces and 41 percent of the soybeans were already maturing as of March 15.
So far in March, crop conditions in the leading producers have not fallen nearly as sharply as during the month of February.
As of March 15, about 60 percent of the soybeans in Cordobá and 61 percent of those in Buenos Aires were in good or very good state, compared with 64 percent for both at the start of the month. The Feb. 1 rating was 78 percent in Buenos Aires and 87 percent in Cordobá.
Late last week, Argentina's Rosario Grains Exchange chopped its peg for the country's soy crop to 40 million tonnes from last month's 46.5 million. The Buenos Aires Grains Exchange recently revised its outlook to 42 million tonnes, significantly lower than its original projection of 54 million.
The U.S. Department of Agriculture sharply dropped its number earlier this month to 47 million tonnes from 54 million, but its harvested area estimate remains 1.5 million hectares higher than the planted area peg from the country's agriculture minister.
USDA had called for the 2017-18 Argentine soybean crop to hit 57 million tonnes in its original forecast last May.
GOOD TO KNOW
Industry-wide soybean harvest estimates for Argentina have been slashed over the last several weeks in response to the bone-dry conditions. But Argentine-based analysts as well as the exchanges may have a history of "over-slashing."
In 2016 persistent, heavy rains were cause for great concern during the critical stretches of Argentina's soybean campaign. Harvest pegs dropped as low as 52 million tonnes on fears that more than a million hectares had possibly been lost to flooding. These lowball estimates were mostly introduced into the marketplace around April or May, after harvest began.
Rains also caused a stir in 2017 along with some patches of dryness, causing the Argentine exchanges to drastically cut production to around 53 million tonnes in January, which was basically just after planting had concluded. However, they began increasing numbers again in the subsequent months as decent weather prevailed.
Yields were also likely underestimated in the previous two years, which contributed to the lower estimates in addition to the uncertainties around harvested area.
Argentina's agriculture ministry maintains that the 2016 soybean harvest hit 58.8 million tonnes while the 2017 harvest was a more modest 55 million. USDA claims 56.8 million and 57.8 million tonnes were raised in 2016 and 2017, respectively.
It is worth pointing out that USDA was generally on the higher side of market forecasts for Argentina's soybeans during 2016 and 2017.
Crops are obviously faring much worse this year, though. The 2018 season has been one of the most trying in a long time, perhaps ever for some of the country's farmers.
While the latest and upcoming rains in Argentina could not possibly reverse all the damage that has been done, it would be unwise to rule Argentina's season completely over just yet.
(Editing by Matthew Lewis)
GRAINS-Wheat prices firm after deep losses, rains aid drought-hit U.S. winter crop - Reuters News
20-Mar-2018 11:23:45 AM
• Wheat rises 1 pct after steepest 3-day loss since 2013
• Rains in parts of U.S. Plains ease some drought concerns
Adds details, quotes
By Naveen Thukral
SINGAPORE, March 20 (Reuters) - Chicago wheat prices rose on Tuesday, clawing back some ground from their biggest three-day decline since 2013 after rains brought relief to the parched U.S. winter wheat crop in the southern Plains.
Corn ticked higher to end a four-session losing streak, while soybeans edged up following steep losses on Monday.
The Chicago Board of Trade most-active wheat contract had risen 1 percent to $4.55-1/4 a bushel by 0305 GMT. The market had slid 7.8 percent in the previous three sessions, the biggest three-day decline since April, 2013.
Corn was up 0.2 percent at $3.75-3/4 a bushel, having dropped 2 percent on Monday. Soybeans gained 0.2 percent to $10.25 a bushel, having fallen 2.6 percent in the last session.
"(There was) some weekend rain in some U.S. hard red winter wheat regions and model projections suggested more to come," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
"Investors are also heavily long and the swing in momentum may be prompting them to sell. U.S. wheat prices had also made U.S. exports uncompetitive, so trade buying was minimal."
A winter storm brought beneficial rain and snow on Monday to portions of the southern U.S. Plains. The region's hard red winter wheat crop has endured months of drought.
The storm produced about 1 inch (2.5 cm) of moisture across northern, central and eastern Kansas, the biggest U.S. wheat-growing state. It also hit Nebraska and northern Colorado.
The region's hard red winter wheat is starting to emerge from dormancy and resume spring growth, a phase that ratchets up its need for moisture.
After the market closed on Monday, the U.S. Department of Agriculture rated 11 percent of the winter wheat in top state Kansas in good-to-excellent condition, down from 12 percent a week earlier. Wheat ratings also declined in Texas.
For corn, some analysts cited pressure from rains in crop areas of Argentina.
Wheat from Australia was offered at the lowest price of $306 a tonne (c&f) in Iraq's tender to purchase a minimum 50,000 tonnes of hard milling wheat which closed on Monday.
Active trading in CME Group's new cash-settled futures for Black Sea grain suggests the exchange may have found a way to tap into booming Black Sea export trade after an unsuccessful earlier foray in the region.
Commodity funds were net sellers of CBOT corn, soybean, wheat and soymeal futures on Monday and small net buyers of soyoil futures.
