Pre-Market Open Commentary for 11 February 2010
DJIA: 10,038.38 -20.26
Nasdaq Composite: 2,147.87 -3
After two days of technical rally, stocks wavered overnight as investors digested Federal Reserve chairman Ben Bernanke's comments that the US needs to eventually remove the extraordinary reserves it had used to bolster the financial system at the depths of the crisis. Specifically, he said "at some point the Federal Reserve will need to tighten financial conditions." He added that the Fed will do this before it lifts interest rates.
Aside from that, though investors were reassured the Greek debt situation would be rescued, there was some concern this would spread over to some other European countries.
On the earnings front, Baidu Inc reported earnings that were ahead of expectations. Also turning in better numbers were Coca-Cola and Sprint Nextel.
The cold front that is sweeping over the East Coast currently is expected to increase demand for energy. Crude oil for March delivery rose US77 cents to US$74.52 per barrel.
In Singapore today:
Caution prevailed over the Singapore bourse yesterday though anticipation of the bailout news of the troubled European countries helped lift sentiment somewhat. The STI index shed 10.63 points at 2,734.39 points. Market breadth deteriorated toward the close to end flat at best. Turnover was 1.3bil shares with a value of $1.17bil traded.
Besides the short cover inspired bounce, most investors remain wary of the advance and would lean towards staying sidelined. Expect volumes to continue to lighten today as some market participants take time off ahead of the long Chinese New Year weekend looming up. Traders would also be unlikely to take fresh positions given the uncertain market sentiment, and in fact may continue selling speculative counters over these two days.
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Mid Day February 11. Stocks rose on thin volume.
US stocks lost some ground as investors eschewed on Fed Chairman Bernanke's exit plan. Stocks retreated as traders reacted to plans for a gradual increase in borrowing costs while confidence about a bailout plan for the troubled European countries limited the downside. Asian markets rose tepidly as some stability accompanied some risk taking. The STI index added 15.87 points at 2750.26 points. For every stock that fell, 3 rose. Turnover was light on 608mil shares with a value of $513mil traded.
Stocks rose on thin volumes as investors shunned from taking on fresh positions ahead of the Chinese New Year holidays. `Things are stuttering to a slowdown as investors took stock of the recent action. Looks like we are playing for the Greece event' a dealer said. A tamer than expected Chinese inflation this morning also helped lift sentiments pushed the Chinese index to another day of gain. Resource stocks did well with the lower US dollar.
Shares of IndoAgric, Straits Asia, Noble Group, Olam, Wilmar and Golden Agric rose between 1 and 7 cents. Other issues that gained were F&N, SIA, City Developments, SGX, Haw Par, DBS, Great Eastern Holdings, M1, Cosco Corp and Keppel Corp that rose between 2 and 44 cents.
On the balance, shares of Jardine C&C, Jardine Strategic, UOB, Tee, ASL Marine, EDMI and Singpost eased between 1 and 58 cents.
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Market close Feb 11. Short covering behind some of today's trades
Traders saw the firmer Euro dollars as a sign that some help for the troubled European countries would be announced as early as today. Asian markets rose tepidly as some stability accompanied some risk taking.
Traders said short covering was probably the key reason for the firm markets. Dealers said the Chinese New Year holidays coming kept most clients from taking on fresh positions. `We could have some pent up demand and if the weekend turns up fine, investors would return with some serious buying next week'. The STI index added 19.24 points at 2,753.63 points. For every stock that fell, 2 rose. Turnover was light on 1.2bil shares with a value of $1.08bil traded.
Stocks rose on thin volumes as investors shunned taking on fresh positions ahead of the Chinese New Year holidays. `Things are stuttering to a slowdown as investors took stock of the recent action. Looks like we are playing for the Greece event' a dealer said.
A tamer than expected Chinese inflation this morning al s o helped lift sentiments pushed the Chinese index to another day of gain. The Hang Seng index inspired with its 1.85 per cent gain. Resource stocks did well with the lower US dollar. Shares of IndoAgric, Straits Asia, Noble Group, Olam, Wilmar and Golden Agric rose between 1 and 6 cents. Other issues that gained were F&N, SIA, City Developments, SGX, Haw Par, DBS, Great Eastern Holdings, M1, Cosco Corp and Keppel Corp that rose between 2 and 42 cents.
On the balance, shares of Jardine C&C, Jardine Strategic, UOB, Tee, ASL Marine, EDMI and Singpost eased between 1 and 58 cents.
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