Traders work the floor at the New York Stock Exchange in New York, Dec. 20, 2012. Analysts expect fourth-quarter earnings for the Standard & Poor’s 500 index to increase 3.28 per cent, said Christine Short, a senior manager at S&P Global Markets Intelligence. That’s an improvement from essentially flat profits in the third quarter.ANDREW KELLY/Reuters
North American stock indexes opened modestly in the red, as concerns over a still sluggish global economy offset bullish sentiment arising from some strong quarterly results from the U.S. big banks this morning. The tech sector was generally putting in a strong performance, with Apple and RIM both early gainers.
The S&P/TSX composite index was down 56 points, or 0.4 per cent, at 12,585; the S&P 500 was down 3 points, or 0.2 per cent, at 1,469; and the Dow Jones industrial average was down 58 points, or 0.4 per cent, at 13,477.
U.S. economic reports this morning didn't create much of a stir, as they came in largely as expected. The U.S. Commerce Department said the consumer price index in December was unchanged from the previous month, in line with expectations. Industrial production rose 0.3 per cent in December, near consensus forecasts, while capacity utilization rose 0.1 per cent to 78.8 per cent, higher than the forecast 78.5 per cent.
The U.S. also released its housing market index for January, registering a reading of 47. While that was the highest since April 2006, it fell short of economists' forecasts for 48, as home builder confidence eased.
Japanese stocks tumbled overnight but other major overseas markets only saw mild losses.
The Nikkei fell 2.5 per cent amid profit-taking after it had hit its highest level since April 30, 2010 earlier this week. A slide in the U.S. dollar against the yen ignited some of the selling pressure.
European markets were a bit spooked today by comments from Luxembourg Prime Minister Jean-Claude Juncker. The outgoing chairman of the Eurogroup was quoted as saying that the euro is "dangerously high," which underlined concerns about the region's growth prospects and currency tensions.
The World Bank also is putting a damper on traders' moods this morning. The Washington-based bank sliced its global economic forecast late Tuesday to 2.4 per cent this year, down from a June forecast of 3 per cent, concerned with austerity measures, high unemployment and low business confidence across the globe.
Lots of stocks moving on news this morning. Here's the rundown:
Apple shares are up about 3 per cent and are flirting again with the $500 (U.S.) level.
Shares in Research In Motion Ltd. are up about 5 per cent. RIM said this morning that the Visa credit card system has approved the smartphone company's method for handling secure mobile payments, a step towards offering global support for any device equipped with the BlackBerry maker's mobile-payments technology
Boeing shares are down 3.2 per cent after Japan's two leading airlines grounded their fleets of Boeing 787s today after yet another emergency landing of the Dreamliner. Goldman Sachs took the stock off its "conviction buy" list and cut its target to $90 (U.S.) from $98.
J.P.Morgan Chase & Co. shares are down 0.5 per cent after the bank beat Street estimates by reporting quarterly earnings per share of $1.39, a whopping 23 cents better than the average analyst projection. But its revenue of $24.4-billion slightly missed estimates.
Goldman Sachs reported earnings of $5.60 a share in the fourth quarter, surpassing the average analyst forecast of $3.71. Revenues were $9.24-billion, beating the Street view of $7.97-billion. Shares are up 2 per cent at the open.
U.S. Bancorp reported earnings per share of 72 cents, two cents better than expectations. Revenues missed Street views and shares are down 0.6 per cent.
Wendy's Co.'s fiscal fourth-quarter earnings topped Wall Street's view, but a rise in revenue came in below expectations as a key indicator of sales at North American restaurants dipped slightly. Shares are up 2 per cent.
Magna International Inc. boosted its sales forecast for 2013 to between $31.3-billion (U.S.) and $32.7-billion, compared with a forecast made in November of $30.3-billion to $31.2-billion. But shares opened up slightly lower, down 0.6 per cent.
Chipotle Mexican Grill Inc. opened down 7.5 per cent after projecting fourth-quarter earnings per share below consensus.
Darcy Keith