Major North American equity market indexes opened mixed and without much fresh direction, disguising a busy day of corporate news that has several individual stocks actively trading.
In early trading, the S&P/TSX composite index was up 32 points, or 0.2 per cent, at 12,635; the S&P 500 was up 1 point, 0r 0.06 per cent, at 1,471; and the Dow Jones industrial average was down 3 points, or 0.03 per cent, at 13,485.
The Nasdaq was underperforming other indexes, down 4 points, or 0.1 per cent, at 3,121 as Apple Inc. shares fell 3.1 per cent and neared the $500 (U.S.) level.
Reports emerged last night that Japan Display Inc. and Sharp. Corp, suppliers of liquid-crystal display panels for the iPhone 5, have started to curtail production due to slower-than-anticipated global sales. Apple is now expected to order only half the 65 million panel units it had originally ordered for this quarter, the Nikkei news agency reported.
But analysts this morning don't seem very concerned by the news, with some suggesting they forewarned about these cuts in recent weeks. UBS analysts, for instance, cut their iPhone quarterly sales forecast last month while noting some order reductions. “The article says Apple notified suppliers of the cut last month, which is when we and most of the Street reported it. Consequently, it appears this is old news - our analysts indicate no changes since,” UBS said in a note, via MarketWatch. Meanwhile, Longbow Research said this morning that its checks indicate that only the usual seasonal decline in builds are being experienced, and that "the cuts reflect a component inventory build amidst some manufacturing limitations.
Shares in Research In Motion Ltd. are moving in the opposite direction, surging a further 10 per cent this morning on top of the 13 per cent rally on Friday. Volume on the Nasdaq within the first 30 minutes of trading is virtually equal to the average trading volume for the entire day over the past three months. Again today, there doesn't seem to be any specific news event triggering the move, although there clearly seems to be some positioning ahead of the BlackBerry 10 launch later this month. The four top wireless operators have thrown their support behind the new RIM smartphone, sparking optimism the new devices will be snapped up by U.S. consumers.
The Chinese stock market was again a major mover overnight, this time to the upside, after a regulator reportedly said China could substantially increase the amount foreigners are allowed to invest in local equity markets. Shares in the Shanghai composite index closed up more than 3 per cent, with financial shares leading the rally.
Also in Asia overnight, the Japanese yen continued to slide, hitting fresh multi-year lows against the U.S. dollar amid reports the Bank of Japan would agree to Prime Minister Shinzo Abe's demand for a firm 2 per cent inflation target, thereby implying further significant monetary easing.
In Europe this morning, there was more worrisome news about the fragile state of its economy, even though stock markets posted modest gains. Data showed industrial production for the euro zone in November fell 0.3 per cent, or 3.7 per cent annualized, worse than forecasts. Political unrest was on display again in Greece, where gunmen reportedly fired shots early today at the headquarters of Greece's ruling New Democracy party, although no one was hurt.
Here in North America, Federal Reserve Chairman Ben Bernanke is speaking right after the 4 p.m. (ET) market close and holding a news conference. It's his first appearance since minutes of the Fed's latest policy meeting spooked market players at the start of this month, as it indicated some policy markers expect the bank to end its stimulative bond-buying program before the end of this year. He'll likely comment, however, on the benefits of the Fed's quantitative easing measures without giving any clear dates on when it plans to ease back on the stimulative measures.
Here's a look at some of the other stocks moving on news this morning:
Encana shares are up 0.4 per cent after the energy firm announced late Friday that Randall Eresman has retired as CEO. The company is now looking for a successor.
Jeweller Harry Winston is selling its high-end watches-to-necklaces division to Swatch, in a $750-million cash deal that expands the Swiss watch maker’s luxury offering and lets the Canadian group concentrate on its diamond mines. Shares in Harry Winston are up 7 per cent in early trading.
Alamos Gold Inc. is making a takeover bid for Aurizon Mines Ltd. that values the Vancouver-based company at $780-million. Toronto-based Alamos is offering the equivalent of $4.65 per Aurizon share in cash and stock. Aurizon shares are up 32 per cent but Alamos Gold shares are down 8 per cent.
Russia’s state uranium firm has agreed to pay $1.3-billion to take Canada’s Uranium One Inc. private. Uranium One shares are up 15 per cent on the TSX.
United Parcel Service Inc. said it would drop its €5.2-billion ($7-billion U.S.) bid for TNT Express on the expectation of a European Commission veto. Shares in the Dutch company TNT Express fell as much as 50 per cent in Europe. UPS shares are up 1 per cent.