Overseas Market Report – U.S. Stocks End Mostly Higher as Oil Surges
U.S. stocks closed mostly higher Wednesday as a surge in oil prices boosted energy and materials stocks in a session marked by wild shifts.
Earlier in the session, the stock market seemed to break its recent strong correlation with the gyrations in oil prices, as the main stock indexes tumbled despite a rebound of more than 3% by oil futures. But as oil futures extended gains, rising more than 8%, stocks staged a strong rebound rally.
ADP reported Wednesday that the U.S. private sector added a larger-than-expected 205,000 jobs last month. December's rise was revised up by 10,000 to 267,000. The report comes ahead of Friday's official payroll and unemployment rate numbers.
The U.S. service sector grew at the slowest pace in two years, according to the ISM nonmanufacturing index. The reading of 53.5 in January was down from 55.8 seen in December and below expectations of a much more modest decline.
At the close, the Dow was up 1.1%, while the S&P 500 was up 0.5% and the NASDAQ was down 0.3%.
Shares of Chipotle (CMG) were down after the firm reported tough results following recent E. coli outbreaks and other food-safety concerns. With comparable sales falling 36% during January–worse than the 30% decline in December–and management guiding to break-even EPS during the first quarter, it's clear that consumers haven't put food-safety concerns behind them, and that restaurant traffic for 2016 will be choppy.
General Motors (GM) had a better-than-expected fourth quarter. The auto giant's sales in the U.S. and China helped drive earnings up to $3.92 per share from $0.66 a share in the year-ago quarter. Analysts were only expecting earnings of $1.21 per share. Despite the beat, shares were down.
Yahoo (YHOO) said it will cut around 15% of its workforce and will explore strategic alternatives for its websites. The move comes as the firm continues to grapple with losses as CEO Marissa Mayer tries to turn the company around. Shares fell on the report.
Comcast's (CMCSA) quarterly results showed a slowdown in cable customer losses and a rise in Internet subscribers. Shares rose on the news.
For Australian ADRs listed on the NYSE, BHP Billiton gained $1.03 (5.07%) to $21.36, ResMed added 44 cents (0.77%) to $57.51, Telstra Corporation rose 29 cents (1.48%) to $19.88, Spark New Zealand gained 47 cents (4.34%) to $11.29 and Westpac added 17 cents (0.81%) to $21.25.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 1.87% and the 5-year yield was 1.26%.
European markets were lower on Wednesday.
The FTSE 100, French CAC 40 and Germany's DAX were down 1.4%, 1.3% and 1.5%, respectively.
Asian markets were also down.
The Shanghai Composite lost 0.4%, the Nikkei 225 fell 3.2%, while the Hang Seng was off 2.3%. India's Sensex slid 1.3%.
Australian Market Report – Local Market Expected To Open Higher
Ahead of the local open, SPI futures were 35 points higher at 4,859.
Wednesday 3 February – close. The local market opened lower today on the back of losses on Wall Street overnight as oil prices fell. Local shares continued to track below the flat-line until close, weighed down by banks and mining losses. All sectors ended lower, with health care and energy the worst performers. The Australian dollar rose against the greenback but had mixed results against other major currencies.
The All Ordinaries fell 113.20 points (-2.24%) to 4,930.80 while the S&P/ASX 200 lost 116.50 points (-2.33%) to 4,876.80.
In This Issue
Argonaut Research| OZ Minerals (OZL)| BUY
Argonaut conducted a site visit to Finders Resources (FND) Wetar Project located on Wetar Island, Indonesia. The Company had forecast commissioning of the 25ktpa plant in the current quarter, however we believe this will likely creep in to early Q2 CY16. Once commissioned, FND will shift focus to numerous value accretive opportunities including drilling of the nearby Meron prospect, optimising production from the Lerokis mine and improving heap recovery and efficiency. FND provides an attractive alternative to ASX listed copper producers with 28ktpa production (including a 3ktpa demonstration plant) at an all-in sustaining cost of <US$1.50/lb.
Genworth Mortgage Insurance Australia announced that Ms Georgette Nicholas has been appointed CEO following the completion of an extensive global executive search. It is intended that Ms Nicholas will be appointed to the Board in due course. The Board also announced that Mr Luke Oxenham has been appointed Chief Financial Officer (CFO). Both appointments are effective as of 3 February 2016. GMA lost 3 cents to $2.51.
Recent Contacts & Presentations
Troy Resources (TRY), Northern Star Resources (NST), Regis Resources (RRL), Medusa Mining (MML), Doray Minerals (DRM), Beadell Resources (BDR), Red 5 (RED), Kingsgate Consolidated (KCN), OBJ (OBJ), Sino Gas & Energy Holdings (SEH), TFS Corporation (TFC), Paragon Care (PGC), Austal (ASB), Orbital Corporation (OEC), Energia Minerals (EMX), Berkeley Energia (BKY), Finders Resources (FND), 4DS Memory Ltd (4DS) & Bionomics Ltd (BNO)