CFD Markets Analysis: News and forecasts for 25 October 2011

19:02

Dow 11,809.21 -104.41 -0.88%, Nasdaq 2,658.66 -40.78 -1.51%, S&P 500 1,239.42 -14.77 -1.18%

18:17

European stocks slid from an 11-week high as canceled finance ministers’ meeting fueled concern that the region’s leaders may struggle to resolve the debt crisis at a summit tomorrow. Chancellor Angela Merkel and fellow leaders return to Brussels tomorrow for a second summit in four days to discuss Europe’s bailout fund. Policy makers are jousting with banks over the size of losses they take on Greek bonds while deliberating over leveraging the fund after ruling out tapping the European Central Bank’s balance sheet. Stocks extended losses after the U.K. government said a meeting of EU finance ministers scheduled for tomorrow to decide on bank recapitalization was canceled. They pared some of their decline as it was confirmed that summits of the 27 EU leaders and 17 euro-area heads of government will take place in Brussels as planned. The gathering of finance ministers was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity.

National benchmark indexes fell in 15 of the 18 western European markets today. The U.K.’s FTSE 100 declined 0.4 percent and France’s CAC 40 retreated 1.4 percent. Germany’s DAX Index slipped 0.1 percent.

STMicroelectronics tumbled 7.4 percent to 5.06 euros in Milan after saying net revenue will range from $2.15 billion to $2.3 billion. That compared with an average analyst estimate of $2.52 billion, according to Bloomberg data. Forecasts for gross margin, the percentage of sales remaining after costs of production, were also below projections.

Meyer Burger lost 13 percent to 20.55 Swiss francs as Europe’s biggest solar-panel equipment maker said it will temporarily halt output at its MB Wafertec unit in Switzerland amid “high uncertainties” in the solar industry.

Reckitt Benckiser Group Plc retreated 3.4 percent to 3,330 pence, the biggest drop in a month. The maker of Lysol cleaners forecast lower sales and profit at its pharmaceutical division in the fourth quarter because of U.S. health-care reforms and a price increase for Suboxone tablets.

Novartis AG, Europe’s second-biggest pharmaceutical company, lost 3.3 percent to 50.10 francs after saying it plans to eliminate 2,000 jobs in Switzerland and the U.S. and add employees in China and India to offset the effect of drug-price reductions.

BP, the operator of the Macondo well in the Gulf of Mexico that caused the worst accidental U.S. oil spill last year, climbed 4.4 percent to 457.2 pence as profit beat analysts’ estimates. Earnings adjusted for one-time items and changes in inventory were $5.3 billion, down from $5.5 billion a year earlier. The average estimate of 12 analysts surveyed by Bloomberg was for income of $5 billion on that basis.

BG Group rose 3.8 percent to 1,378 pence. The U.K.’s third- largest natural-gas producer said third-quarter earnings rose 25 percent as energy-price gains countered output constraints.

Neste Oil Oyj surged 13 percent to 9.06 euros, the biggest gain since 2008. Finland’s only oil refiner was boosted by the improving outlook for its renewable fuels unit.

Swedbank AB, the largest lender in the Baltic states, rose 3.7 percent to 90.05 kronor as it reported a 34 percent jump in third-quarter profit and said costs will decline in 2012 as it adjusts to the European economic slowdown.

17:53

American focus: the yen rose, Canada’s and New Zealand’s dollar fell

The yen rose to a post-World War II high against the dollar and rallied versus most of its other major counterparts as European sovereign debt concern before tomorrow’s summits spurred demand for a refuge. Bank of Japan policy makers will discuss steps to ease the impact of the strong yen on the nation’s economy at a two-day meeting beginning tomorrow. Measures may include expanding a 50 trillion yen ($660 billion) asset purchase program by 5 trillion yen and purchase bonds with maturities longer than two years, the newspaper reported without citing anyone.

Canada’s dollar fell 1.2 percent to C$1.0154 versus the U.S. currency after the Bank of Canada said the nation’s economy will grow more slowly than projected and removed a reference to withdrawing stimulus. The target lending rate was held at 1 percent, where it has been since September 2010.

New Zealand’s dollar declined 1.2 percent to 79.74 U.S. cents as the South Pacific nation’s consumer prices increased 0.4 percent in the third quarter after rising 1 percent in the prior three months. The data fueled speculation the Reserve Bank of New Zealand will signal a willingness to keep its benchmark interest rate at a record low.

US dollar fell after consumer confidence unexpectedly slumped in October to the lowest level since March 2009, when the U.S. economy was in a recession, as Americans’ outlooks for employment and incomes soured. Separate data showed that home prices in 20 U.S. cities dropped more than forecast in August, highlighting one of the obstacles facing the economic recovery in its third year.

16:45

U.S. stocks fell

U.S. stocks fell, halting a three- day gain in the Standard & Poor’s 500 Index, after United Parcel Service Inc. sank and economic reports missed estimates as investors awaited tomorrow’s European summit. Stocks extended losses after consumer confidence unexpectedly slumped in October to the lowest level since March 2009, when the U.S. economy was in a recession, as Americans’ outlooks for employment and incomes soured. Separate data showed that home prices in 20 U.S. cities dropped more than forecast in August, highlighting one of the obstacles facing the economic recovery in its third year. European leaders will hold a summit tomorrow as they seek to bolster the region’s rescue fund, recapitalize banks and provide debt relief to Greece. Boosting the effectiveness of the European Financial Stability Facility will require further talks with investors as German lawmakers prepare to vote on its new powers, a European Union document showed.

S&P 500 1,244 -10.47 -0.83%, NASDAQ 2,672 -27.27 -1.01%, Dow 11,839 -74.33 -0.62%

All 10 groups in the S&P 500 retreated as a gauge of financial stocks slid 2 percent.

UPS, the largest package- delivery company and a proxy for the economy, retreated 1.9 percent after international shipping growth began to cool while U.S. expansion stagnated. The company’s total U.S. volume was flat in the third quarter because of “the slow U.S. economy,” Atlanta-based UPS said today in a statement. A 4.6 percent increase in shipments outside the U.S. trailed the 6.2 percent gain in the previous three months.

3M Co. (MMM), the maker Scotch-Brite sponges, lost 5.2 percent after cutting its 2011 profit forecast. The maker of auto parts and Scotch-Brite sponges cut its 2011 profit forecast after reporting third-quarter profit that fell short of analysts’ estimates.

Netflix plunged 35 percent to $77.74. The company faces rising content costs, a customer revolt over a price increase and startup costs as it expands into Latin America, followed by the U.K. and Ireland in early 2012.

16:15

European stocks closed in minus: FTSE 100 5,526 -22.52 -0.41%, CAC 40 3,174 -46.17 -1.43%, DAX 6,047 -8.52 -0.14%

15:55

Gold rose

Gold climbed to a 5-week high against the lack of news on solving the debt crisis of the euro area and in anticipation of a new phase of quantitative easing measures from the Fed, which leads to increased demand for the metal.

Gold futures for December delivery gained to $1,694.40 an ounce on the Comex in New York.

15:47

DOLLAR-YEN: New low minted at Y75.73 in the last dip down, pair recovers smartly from there to Y75.85 as traders mentioned demand interest, suggesting a Y75.70 barrier may be in play

15:25

Oil climbed to a 12-week high

Crude oil climbed to a 12-week high in New York on declining stockpiles at a U.S. storage hub. Oil pared gains after a meeting of European finance ministers set for tomorrow was canceled.

Futures erased this year’s loss after rising as much as 3.7 percent today. Supplies at Cushing, Oklahoma, the delivery point for West Texas Intermediate, the crude traded in New York, fell last week, according to a satellite survey. Brent oil in London traded at the lowest premium to WTI since July.