Bloggy Business Today

By Chikako Mogi

TOKYO |
Thu May 17, 2012 2:16am EDT

TOKYO (Reuters) – Asian shares recovered some ground on Thursday from the previous day’s sell-off, but investors found little reason to chase risk amid deepening turmoil in Greece and fears of contagion to other stressed euro zone economies.

Against a background of financial instability in Greece’s banking sector, European shares were set to start mixed, with financial spreadbetters predicting that major European markets would open between a 0.2 percent drop and a 0.1 percent rise. U.S. stock futures were up 0.6 percent.

Gold and the euro recouped most of their losses from Wednesday as signs of stability in share markets helped improve sentiment slightly, but Brent bore the brunt of general risk aversion, slipping to a near four-month low.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1 percent on short covering, after sliding more than 3 percent – its biggest one-day drop in six months – and hitting a new four-month low on Wednesday. The index has shed about 8 percent so far in May.

Bucking the general trend of recovery in Asia-Pacific, Australian shares fell to a four-month low, with banks easing on more signs of pressure on margins.

Japan’s Nikkei stock average .N225 gained 0.7 percent.

News on Wednesday that some Greek banks face emergency funding needs dealt a further blow to risk sentiment, already beaten down by worries about much slower economic growth in China, a fragile U.S. jobs market and a shock trading loss at JPMorgan Chase Co (JPM.N).

“May is typically a bear month for markets as players often look to take advantage of the saying, ‘sell in May and go away,’ but all the negative factors compounded to give momentum to sell risk assets indiscriminately,” said Bob Takai, general manager of Sumitomo Corp’s energy division, adding that the markets will likely remain depressed for the next two to three quarters.

The European Central Bank said it has stopped providing liquidity to some Greek banks that have not been successfully recapitalized.

Greece on Wednesday put a senior judge in charge of an emergency government to lead the nation to its second election in just over a month on June 17. The vote will likely determine whether the highly indebted country remains in the common currency area.

The head of the World Bank warned on Wednesday that a decision by Greece to leave Europe’s common currency zone would raise big questions about the impact on Spain, Italy and other euro zone countries

Article source: here

By Chuck Mikolajczak

NEW YORK |
Tue May 15, 2012 5:26pm EDT

NEW YORK (Reuters) – Stocks fell for the eighth day in the past 10 on Tuesday as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session.

The SP 500 fell for the third straight session as attempts to form a government in Greece fell apart, raising the possibility of a rejection of the bailout terms spelled out by the European Union for the fiscally troubled nation.

After holding near the unchanged mark for much of the session, stocks moved lower in the absence of positive news to turn the tide of negative sentiment.

“Those who are looking for a little bit of a bounce off the last eight trading sessions lost their nerve because there is really nothing out there to indicate the broader story has changed,” said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

The concerns about upheaval in the euro zone and its effect on the global economy weighed on energy and materials stocks, with U.S. crude down for the third straight day. The SP energy index .GSPE and the SP materials index .GSPM each dropped 1.5 percent.

Quarterly results helped boost retailers TJX (TJX.N), up 6.9 percent at $42.45, and Dick’s Sporting Goods (DKS.N), up 5.9 percent at $50.05.

U.S. retail sales rose 0.1 percent in April, slightly below expectations. However, details in the Commerce Department’s report indicating underlying strength in demand and a rebound in manufacturing activity in New York State calmed concerns that the economy was stalling.

The declines on Tuesday pushed the SP 500 down more than 6 percent from its early April high, leaving some investors optimistic that the pullback may be nearing an end as stock prices become more attractive.

“We could go a little lower, but not much lower. It’s hard to ignore the fundamentals – and clearly there are some good fundamentals and prices,” said Mark Martiak, senior wealth strategist at Premier/First Allied Securities in New York.

Data showing an index of home builders’ sentiment at a five-year high in May helped lift the sector’s shares. The PHLX housing index .HGX advanced 0.6 percent. But Home Depot (HD.N) shares lost 2.4 percent to $48.67 and ranked as the biggest drag on the Dow after the home improvement retailer posted quarterly sales that fell short of Wall Street’s expectations.

The Dow Jones industrial average .DJI dropped 63.35 points, or

Article source: here

LONDON |
Mon May 14, 2012 4:55am EDT

LONDON (Reuters) – The euro hit four month lows and shares fell on Monday as the increasing likelihood of a new election in Greece worsened the sense of crisis in the euro zone and China’s latest move to loosen monetary policy only added to investor risk aversion.

The refusal of a major leftist party to join a new Greek government has brought the prospect of its exit from the euro a step closer. The region’s finance ministers, gathering in Brussels, also face a worsening fiscal position in Spain.

Adding to the negative tone for the higher risk sector, German Chancellor Angela Merkel’s conservatives suffered a crushing defeat on Sunday in an election in Germany’s most populous state.

“Selling rallies in risk assets seems the best way to make money in most asset classes given the event risk is still very real this week.” said Chris Weston, an institutional dealer at IG Markets.

Safe haven German bonds and the U.S. dollar gained from the drive for safety with the June German Bund future setting a record high of 143.17, up 40 ticks, in early trade.

The dollar rose 0.2 percent against a basket of major currencies to 80.45 .DXY, helping send the euro to its lowest in nearly four months at $1.2878.

China’s cut in the amount of cash banks must hold as reserves only served to fuel fears the European crisis was hurting global growth, leaving the MSCI’s broad world equity index .MIWD00000PUS down 0.2 percent after it fell two percent last week. The key FTSE Eurofirst .FTEU3 index of top European shares opened down 1.1 percent at 1,011.48.

Oil and copper also eased on concerns over the demand outlook.

(By Richard Hubbard; additional reporting by Francesco Canepa; editing by Philippa Fletcher)

Article source: here

By Caroline Valetkevitch

NEW YORK |
Fri May 11, 2012 9:38pm EDT

NEW YORK (Reuters) – More volatility could be in store for stocks next week as investors grapple with less certainty about the economic outlook and a new blow to the financial sector after JPMorgan Chase’s (JPM.N) trading loss.

Europe is expected to keep investors jumpy as well, with inconclusive results from the recent Greek election and the country’s future appearing more worrisome.

The economic picture appears cloudy these days, with some data showing a more positive trend and other reports showing the opposite. An index of consumer sentiment rose to its highest in a more than four years, but last week’s jobs report showed another monthly decline in hiring.

Next week brings minutes from the last Federal Reserve meeting, which investors will look to for more guidance on whether the central bank plans to give additional help to the economy.

Stocks closed lower for a second straight week on Friday after a week of choppy trading. Strategists say that’s likely to be the case again in days to come.

“Expect more volatility. We’re still seeing this natural risk aversion. We expect any source of bad news to trigger a sell-off, but we’re still not in a red-alert area,” said Omar Aguilar, chief investment officer of equities for Charles Schwab in San Francisco.

“The good economy in the U.S. is leading the way, with the Federal Reserve being very accommodating.”

Citigroup’s chief U.S. equity strategist, Tobias Levkovich, said the market has likely begun a pullback, and that the Standard Poor’s 500 index .SPX could fall 5 percent to 7 percent from its April 2nd intraday high of 1,422.

“We’re going to probably spend several months in kind of choppy trading,” he said.

News that JPMorgan Chase Co (JPM.N), the largest U.S. bank by assets, lost billions of dollar on bad trades raised fresh worries that the financial sector was not on the mend. The KBW bank index .BKX fell 1.2 percent for the day.

There’s likely to be more focus on the company next week. After the close of trading, Fitch Ratings cut JPMorgan’s credit rating one notch and cited the bank’s $2 billion trading loss, and Standard Poor’s revised its outlook of JPMorgan to negative.

The SP financial index .GSPF has lost ground since rallying 21.5 percent in the first quarter. The index is still up 13.6 percent since the start of the year.

MESSAGE FROM THE FED

Wall Street will scrutinize the minutes from the FOMC’s late April

Article source: here

By Richard Hubbard

LONDON |
Fri May 11, 2012 3:27am EDT

LONDON (Reuters) – European shares and commodities fell on Friday while safe haven German bonds jumped, as deepening euro zone political turmoil and weak economic data from China raised growth concerns, while a shock trading loss from JPMorgan (JPM.N) added to market jitters.

The growing risk aversion put the MSCI world equity index .MIWD00000PUS on course for a second weekly loss of over 2 percent and even sent gold, often used as a safe haven, down more than half a percent to around $1,585.86 an ounce.

The euro dipped to a fresh 3-1/2 month low of $1.2905 as news of JP Morgan’s losses from a failed hedging strategy spooked investors already anxious about the political deadlock in Greece.

JPMorgan’s news “is worrying because this is a company which was perceived to being absolutely excellent in risk management,” said Guy Stear, head of research at Societe Generale in Hong Kong.

Falls in bank stocks helped push the FTSE Eurofirst .FTEU3 index of top European shares down 0.6 percent to 1,013.26 points at the start of trading.

Earlier China added to fears about a deepening global slowdown by reporting that industrial production from its huge factory sector had weakened sharply in April. It also said consumer inflation had moderated to 3.4 percent in April, which could allow for a further moderate easing of policy.

In Europe the focus will turn to the European Commission’s short-term economic forecasts due later, which will shed light on the scale of the recession across the region and possibly on Germany’s rebound.

Markets are also waiting to hear how Spain aims to shore up the country’s lenders, which could send shares lower if its plans disappoint.

(Editing by David Holmes)

Article source: here