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Stocks stuck in a rut

On Thursday the Dow Jones industrial average (INDU) rose 22 points, or 0.2%, to end at 10,594.83. The S&P 500 (SPX) was flat at 1,124.66 and the Nasdaq (COMP) added 2 points, or less than 0.1%, to close at 2,303.25.

Indexes had been down slightly for most of the day, but they rose modestly in the last hour of trade. Banking, energy and housing shares ended mostly lower, while tech and retail shares turned higher.

September is a historically down month for stocks -- but they started out the strong, with a rally in the first three trading days as the government's monthly jobs report showed improvement. As more data have come out this month, though, movement has slowed.

"We're entrenched in the same patterns recently," said Stephen Carl, head equity trader at Williams Capital Group. "Data aren't pushing us one way or the other."

Investors remained nervous Thursday about Japan's intervention in the currency market. On Tuesday, the nation's government said it would buy up yen in an attempt to curb deflation.

The yen purchase boosted the U.S. dollar, which helped lift stocks Wednesday. But it also kept uncertainty about the recovery at the forefront of investors' minds, sending gold prices to new record highs. The precious metal is considered a "safe" spot to park cash during times of uncertainty.

Economy: The Labor Department's weekly report on initial jobless claims showed 450,000 people filed for first-time unemployment benefits last week. Economists expected 460,000 new claims.

Initial claims have been stuck in a tight range since November, and economists say there's little reason to celebrate the recovery until weekly claims head below the 400,000 mark.

The producer price index also came out before the bell. The reading of inflation at the manufacturing level rose 0.4% in August, versus an increase of 0.2% the prior month.

RealtyTrac said the number of homeowners falling behind on their loans -- enough to attract initial notices of default -- fell 30% in August. The lower rate should translate into fewer people losing their homes, but the report also showed lenders repossessed a record 95,000 homes last month.

The Philadelphia Fed Index showed the region's manufacturing activity contracted slightly in September, due to a drop in new orders. But hiring has picked up this month.

The Senate passed a $42 billion bill aimed at helping small businesses. The Senate's version of the Small Business Jobs Act will now have to go back to the House, where it's expected to pass, before President Obama can sign it into law.

Companies: FedEx (FDX, Fortune 500) said it expected to see moderate growth in the global economy, but the shipping company will still cut 1,700 jobs.

FedEx, which is considered a bellwether for the global economy, also reported fiscal first-quarter earnings of $1.20 a share. That's a penny below analysts' estimates, but still up 57 cents from a year earlier. The company raised its outlook but that still fell short of forecasts. FedEx shares fell to end 3.8% lower.

Boeing said the airline industry will need to hire more than 460,000 pilots and almost 600,000 maintenance workers over the next 20 years, to meet growing demand in the airline industry. The company predicted the industry as a whole will need to hire more than one million workers over the same time period.

Microsoft (MSFT, Fortune 500) said its new video game "Halo: Reach" earned $200 million in sales on its launch day. The company will start selling Kinect, a full-body motion-sensing game system, on November 4.

After the bell, Oracle (ORCL, Fortune 500) reported a quarterly profit and sales that beat Wall Street's forecasts. The corporate software company said its net income in its fiscal first quarter rose to $1.4 billion, or 27 cents per share, up 20% from a year earlier. Sales rose 48% to $7.5 billion.

Oracle shares rose 3% in after-hours trade.

BlackBerry maker Research in Motion (RIMM) reported quarterly profit that beat analysts expectations and issued an upbeat forecast. The Canadian company reported net income of $796.7 million, or $1.46 per share in its fiscal second quarter. Sales increased 31% over the quarter to $4.62 billion.

The figures easily topped estimates, and RIM shares surged 8% in after-hours trade.

World markets: Asian markets closed lower. Japan's benchmark Nikkei index fell 0.1%, and Hong Kong's Hang Seng index fell 0.2%. The Shanghai Composite sunk 1.9%.

European shares ended lower. The CAC 40 in France lost 0.5%, Germany's DAX fell 0.2%, and Britain's FTSE 100 slipped 0.3%.

Currencies and commodities: The dollar fell against the euro and the Japanese yen, but posted slight gains against Britain's pound.

Oil futures for October delivery fell $1.45 to settle at $74.57 a barrel.

Gold futures for December delivery jumped to a fresh record intraday high early Thursday of $1,279.50 an ounce. That trumps the previous intraday record of $1,276.50 an ounce, which was just set on Tuesday.

The precious metal also hit a settlement record, closing at $1,273.60 an ounce. Gold has gained traction as investors turn to it as a "safe haven" play in times of economic uncertainty. For that reason, the precious metal is an indicator of investor sentiment.

Bonds: The yield on the 10-year Treasury note rose to 2.76% from 2.72% late Wednesday.  

STI opens higher

Stocks end higher on dollar moves

The Dow Jones industrial average (INDU) rose 46 points, or 0.4%, to close at 10,572.73. The Nasdaq (COMP) added 12 points, or 0.5%, to end at 2,301.32, and the S&P 500 (SPX) ticked up 4 points, or 0.4%, to settle at 1,125.07.

Foreign exchange rates were in the spotlight after the Japanese government's first jump into the currency market since 2004. The yen rose to a fresh 15-year high against the dollar Tuesday, prompting recently re-elected Japanese Prime Minister Naoto Kan to announce the nation will sell yen and buy dollars. The move boosted the dollar Wednesday.

Stock trading has been choppy over the past few sessions as investors searched for a catalyst to spur buying. All three indexes opened modestly lower Wednesday, but analysts expected more volatility with little on the docket to push stocks one way or another.

"Today's reports underwhelmed, but they weren't far off the mark," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "There's no big data pushing a major move either higher or lower."

Stocks ended mixed Tuesday, as a recent rally on Wall Street ran out of steam. Investors welcomed a slightly better-than-expected report on U.S. retail sales, but the Dow and S&P 500 both closed lower.

Spotlight on manufacturing: The manufacturing sector has expanded for 13 straight months, making it a bright spot against a backdrop of fears of a slower recovery. A report released earlier this month showed activity grew well beyond expectations in August.

However, two manufacturing reports released Wednesday just missed experts' predictions.

The Federal Reserve Bank of New York said business conditions in New York state remained positive in September, although activity slowed from August.

Also on Wednesday, the Commerce Department said industrial production rose 0.2% in August, below the 0.3% gain expected by economists. Capacity utilization fell to 74.7%, from a downwardly revised 74.8%.

Coming up Thursday, the Philadelphia Fed will release its regional manufacturing data.

Economy: The government said U.S. import prices increased 0.6% in August, driven by rising gas prices. Export prices rose 0.8% in the month.

Former Fed chairman Alan Greenspan called for the government to raise taxes in a speech before the Council on Foreign Relations in New York.

Companies: MasterCard (MA, Fortune 500) shares gained to end 5.3% higher. The company said it expects its net income to rise at least 20% this year, due to a decline in expenses and favorable foreign exchange rates.

Novell (NOVL) shares rose to end up almost 6% on unconfirmed talk that the network software company is preparing to sell itself in two parts.

World markets: European shares ended lower. The CAC 40 in France fell around 0.4%, Germany's DAX slipped 0.1%, and Britain's FTSE 100 was 0.2% lower.

Asian markets ended mixed, with Japan's benchmark Nikkei index surging 2.3% on the back of the yen intervention. The Hang Seng in Hong Kong rose 0.1% and the Shanghai Composite fell 1.3%.

Currencies and commodities: The dollar rose against the euro and the British pound, and surged more than 2.5% against the Japanese yen.

Oil futures for October delivery fell $1 to $75.80 a barrel. A report late Tuesday from the American Petroleum Institute showed an unexpected increase in crude supplies last week, while the more closely watched inventory report from the Energy Information Administration showed that supplies fell.

Gold for December delivery eased $3 to settle at $1268.70. On Tuesday, the December contract settled at a record high of $1,271.70.

Bonds: The yield on the 10-year Treasury note rose to 2.72% from 2.67% late Tuesday. 

STI opens higher

SGX to quote ADRs of Chinese firms

Ephraim Seow

ephraimseow@mediacorp.com.sg

SINGAPORE

The Singapore Exchange (SGX) said yesterday it would launch the American Depository Receipts (ADRs) of these companies on Oct 22. ADRs are certificates that represent a specified number of shares in a foreign stock traded on a US exchange.

They are denominated in US dollars, with the underlying security held by a US financial institution overseas.

As a start, SGX will quote ADRs of 19 firms on its new GlobalQuote board. Besides PetroChina — currently the world’s second-largest listed company after Exxon Mobil — the others include Chinese language Internet search giant Baidu and the world’s biggest telco, China Mobile.

SGX said the move marked the start of its cooperation with Nasdaq OMX to bring ADRs to GlobalQuote. It will link market participants from both trading pools, with the ADRs on GlobalQuote fully interchangeable with US-listed ADRs. BNY Mellon is the depository bank for SGX’s GlobalQuote.

If it proves popular, the exchange may extend the platform to the ADRs of South Korean, Taiwanese and Indian firms, SGX executive vice-president Chew Sutat said.

Industry experts welcomed the move, saying the ADRs are a good product with which investors can diversify their portfolios. ADRs could also be a more efficient and cost-effective system since investors here do not have to open a separate trading account and incur additional broking fees, they said.

However, they expect a slow initial subscription rate.

“It may take about half a year for investors to know the way around the trading system and understand the companies they are buying into. The take up rate also depends on the marketing of these firms and the accessibility of research information,” noted Mr Roger Tan, vice-president of Sias Research.

Analysts also warn investors to be aware of the risks related to investing in ADRs.

“Beyond the regular risks of equities trading, there is the added currency risk.

Even if the shares appreciate, the overall value may be decreasing if the US dollar is weakening while the Singapore dollar is strengthening,” said Mr Albert Fong, president of The Society of Remisiers.— Singapore-based investors will soon have the opportunity to trade in shares of some of the large Chinese firms listed in the United States, such as PetroChina and Baidu, during the Asian time zone.

Stocks end mixed after choppy day