Oil prices up with Ukraine crisis in focus

SINGAPORE – Oil prices rose in Asia Wednesday, underpinned by concerns about the Ukraine crisis as fierce armed confrontation between government forces and pro-Moscow separatists continued unabated leaving dozens dead.

US benchmark, West Texas Intermediate (WTI) for delivery in July, rose seven cents to $104.18 in late-morning trade.

Brent North Sea crude for July gained 29 cents to $110.31 per barrel.

Ukraine's interim pro-Western government said Tuesday it had recaptured an airport in the eastern city of Donetsk from pro-Russian insurgents after a day of air strikes and fierce gun battles.

Donetsk mayor Oleksandr Lukyanchenko said two civilians and 38 combatants had died and another 31 were wounded, including Russians and possibly Chechens.

"Traders are still keeping an eye on Ukraine developments especially the continued fighting in the Eastern part as well as developments in Libya," said Singapore's United Overseas Bank in a note to investors.

The dramatic escalation in tensions comes a day after billion chocolate baron Petro Poroshenko was confirmed as the country's new president following weekend polls triggered after pro-Russian leader Viktor Yanukovych was ousted in February.

Washington and its European allies supporting Ukraine's interim government have accused Russia of fomenting unrest in the country, allegations Moscow denies.

Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

Kelly Teoh, managing director at I.R. Resources in Bangkok, said oil prices were also supported by hopes of a further drop in US crude stockpiles, indicating robust demand in the world's top crude consumer ahead of the busy summer driving season.

US crude stocks plunged 7.2 million barrels in the week to May 16, the Department of Energy revealed last week.

The weekly US official crude stockpiles report will be released on Thursday instead of Wednesday this week, because of the long Memorial Day holiday weekend. – Agence France-Presse

source: gmanetwork.com

Wall Street falls on Ukraine unrest, weak China data

NEW YORK - U.S. stocks fell on Monday on concern China's economy is continuing to lose momentum and the confrontation between Ukraine and pro-Russia separatists escalated.

Bank shares led the market lower with JPMorgan Chase (JPM.N) down 2.3 percent to $54.33. The bank said late on Friday it expects second-quarter revenue from bond and equity trading to decline by about 20 percent from a year earlier.

Geopolitical events kept the market under pressure as Ukrainian forces were ambushed by separatists on Monday, triggering heavy fighting on the outskirts of the rebel stronghold of Slaviansk, a day after a Ukrainian police station in Odessa was stormed.

On the macro front, growth in the U.S. services sector in April rose at the fastest pace in eight months. The data slightly offset news that China's manufacturing sector contracted for a fourth consecutive month in April, adding to concerns over the health of the world's second-largest economy.

"Ukraine and China were likely contributors to the low open," said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.

He said the better-than expected U.S. data "explains why we're off the early lows" and Ukraine's pull on equities could soften as the session advances.

"We could see more gains later on, after European markets close," Jankovskis said.

The Dow Jones industrial average .DJI fell 77.16 points or 0.47 percent, to 16,435.73, the S&P 500 .SPX lost 5.55 points or 0.3 percent, to 1,875.59 and the Nasdaq Composite .IXIC dropped 7.536 points or 0.18 percent, to 4,116.362.

Pfizer Inc (PFE.N) added to the gloomy sentiment as the biggest U.S. drugmaker reported revenues well below analysts' expectations. Shares fell 2.6 percent to $29.95.

Target Corp (TGT.N) shares fell 3 percent to $60.15 after news that Chief Executive and Chairman Gregg Steinhafel will leave the company in the wake of a data breach late last year that hurt profits, shook customer confidence in the No. 3 U.S. retailer and prompted congressional hearings.

German aircraft seating maker Recaro said it was studying the possibility of buying assets from B/E Aerospace (BEAV.O) after the U.S. company announced a surprise review. B/E Aerospace shares jumped 10.9 percent to $98.69.

Occidental Petroleum (OXY.N), the fourth-largest U.S. oil and gas company, reported a better-than-expected profit for the third straight quarter, helped by higher prices for crude oil and natural gas in the United States. Shares rose 0.6 percent to $95.01.  — Reuters

source: gmanetwork.com

Stocks may rise, but Ukraine could halt rally

NEW YORK - The prevailing trend in U.S. stocks could be higher next week if investor anxiety eases over the crisis in Ukraine and signs of weakness in the U.S. economy.

Investors will watch for further signs that poor weather may have played a role in recent weak economic data and dampening profit outlooks, which would underscore views that setbacks may be temporary.

Federal Reserve Chair Janet Yellen's comments this week, which raised the possibility of an earlier-than-expected increase in interest rates, added another element of interest to the data.

Reports on U.S. consumer confidence and sentiment are due next week, along with data on new home sales and orders for durable goods.

The market, however, remains vulnerable to any escalation in global tensions over Ukraine, especially since the Standard & Poor's 500 reached another intraday record high on Friday before ending lower after a bout of profit-taking.

"The trend is favorable unless it's upset by world events, and weakening of the data both here and abroad," said Bucky Hellwig, senior vice president of BB&T Wealth Management in Birmingham, Alabama.

"I would say right now, if you look at the scorecard of economic and global events, it looks a little better than it did a month ago."

Stocks bounced back this week after losing more than 2 percent the previous week as the problems in Ukraine and worries about a slowdown in China curbed investors' appetite for riskier assets.

The S&P 500 ended the week up 1.4 percent, its best weekly gain since February. For the year, the benchmark index is up about 1 percent.

President Vladimir Putin signed laws completing Russia's annexation of Crimea, though Moscow said no other Ukrainian region would be subject to intervention.

The Fed was in focus this week, when the central bank made it clear it would rely on a wide range of measures in deciding when to raise interest rates, dropping the U.S. unemployment rate as its yardstick for gauging the economy's strength.

"You just have so much indecision. Do you feel good about what Janet said? Do you feel bad? Do you feel good about the Ukraine? Do you feel bad?" said Drew Wilson, an analyst at Fenimore Asset Management in Cobleskill, New York.

"It just feels like you have a hard time getting momentum either way."

Wallets and warnings

Investors will get some information next week on whether consumers kept a tight grip on their wallets last month. The Commerce Department will release February data on U.S. personal income and consumption on Friday. Economists polled by Reuters have forecast slim gains from the previous month.

A final reading on fourth-quarter Gross Domestic Product will be released on Thursday.

"Hopefully some of the data is beginning to clear itself from some of the weather impacts, and we may get some better readings on how things are going," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors.

Negative profit outlooks for the first quarter have been increasing as well, with more companies sounding the alarm about possible problems related to this winter's harsh weather.

Among them was General Mills, which missed sales and profit expectations this week and has warned on the current quarter. Its CEO said "severe winter weather dampened sales performance across the food industry."

Thomson Reuters data showed that 108 negative outlooks have been issued so far by S&P 500 companies, while only 16 gave positive ones.

But the ratio of negative outlooks to positive ones remains below that of the fourth quarter, which was the worst since at least the first quarter of 1996, according to Thomson Reuters data.

Banking on dividends

Among stocks likely to post further gains next week are financials, which climbed this week following Yellen's comments. She indicated that the first increase in interest rates could come in the first half of next year.

Most analysts in a Reuters poll after Yellen's comments, however, still did not expect the Fed to begin raising rates until the second half of 2015.

Another supportive element for banks came from the Fed after Thursday's close, when the central bank said 29 out of 30 major banks met the minimum capital hurdle in its annual health check.

The S&P financial index gained 4.3 percent for the week, its best weekly percentage increase since January of 2013.

In the coming week, the Fed will announce on Wednesday which banks' plans to pay dividends or buy back shares were approved.

"Regulators will sign off on the dividend increases, and if they get approved, that will help the momentum in the financial stocks," Hellwig said. — Reuters

source: gmanetwork.com

Wall St rises, concerns over Ukraine escalation ease

NEW YORK - U.S. stocks rose for a second straight day on Tuesday, with the S&P moving within 1 percent of record levels after comments from Russian President Vladimir Putin eased concerns that tensions over Ukraine might escalate.

In an address to the Russian parliament, Putin said Russia didn't want Ukraine to be divided further, and that he did not want to seize more of the country after approving plans to make Crimea part of Russia following a disputed referendum.

Late Monday, the United States and the European Union imposed personal sanctions on a handful of officials from Russia and Ukraine who were accused of involvement in Moscow's military seizure of the Black Sea peninsula, in the biggest crisis between Russia and the United States since the end of the Cold War.

"What had been going on in the Ukraine has been weighing on the minds of investors for a while, so it is a relief that we are apparently moving beyond this," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management in New York.

"While from an economic standpoint the Ukraine doesn't have a major impact on the global economy, there were worries about more tension between Russia and western powers, and how far this kind of standoff could go."

The Dow Jones industrial average was up 78.99 points, or 0.49 percent, at 16,326.21. The Standard & Poor's 500 Index was up 8.81 points, or 0.47 percent, at 1,867.64. The Nasdaq Composite Index was up 26.07 points, or 0.61 percent, at 4,306.02.

With the day's advance, the S&P 500 is less than 1 percent away from an all-time high hit earlier this month. Over the past two sessions, the benchmark index has gained about 1.4 percent.

Investors were looking ahead to a two-day meeting of the U.S. Federal Reserve's policy-setting committee, which begins Tuesday. The central bank is not expected to deviate from previously announced policy plans, but as the Fed's stimulus has kept a floor under equity prices, market participants will be attuned to any hint of a change.

In the latest economic data, consumer prices rose 0.1 percent in February, as expected, while housing starts rose modestly from the previous month.

In company news, Hertz Global Holdings Inc said it would spin off its equipment rental business for $2.5 billion and use part of the proceeds to fund a stock buyback program. Shares fell 1.4 percent to $26.84.

General Motors Co announced new recalls of 1.5 million vehicles on Monday. In an unprecedented public admission by a GM chief executive, Mary Barra acknowledged the company fell short in catching faulty ignition switches linked to 12 deaths. Shares rose 1.3 percent to $35.08.

GameStop Corp shares fell 5.2 percent to $37.70 as the biggest decliner on the S&P 500 after Wal-Mart Stores Inc said it would allow shoppers to trade in used video games for anything from groceries to gadgets. — Reuters

source: gmanetwork.com

Data, ECB move support shares, Ukraine eyed

NEW YORK - U.S. stocks rose in early trading on Thursday, with the S&P 500 at a fresh record intraday high following upbeat labor market data, while traders kept an eye on developments in Ukraine.

In a boost to riskier assets, the euro hit its highest against the U.S. dollar since late December after the European Central Bank kept interest rates on hold, shaking out bets of a cut in rates.

Crimea's parliament voted on Thursday to join Russia and its Moscow-backed government set a referendum for March 16 on the decision, in an escalation of the crisis between Russia and the West over the Ukrainian Black Sea peninsula.

Moscow stocks lost more than 2 percent after the vote in Crimea but pared the losses and were down 1 percent. The ruble weakened 0.4 percent versus the U.S. dollar. A U.S.-traded Russian ETF fell 0.6 percent to $23.52.

"Nobody wants to go to war and Russians don't want to get their market cut in half, so that eventually has to settle down," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. He said the call for a referendum can be seen as a cooling in the crisis as politics prevail over a possible armed conflict.

European Union leaders were set to warn, not sanction, Russia. U.S. President Barack Obama ordered the freezing of U.S. assets and a ban on travel into the United States of those involved in the Russian military intervention in Ukraine.

Weekly applications for U.S. unemployment insurance fell to 323,000, the lowest in three months, a sign of strength in a labor market that has been hobbled by severe weather. New orders for U.S. factory goods, however, fell more than expected in January and shipments also slipped, adding to signs of a recent slowdown in manufacturing activity.

"Indicators have been so subject to distortion that you have try to find the explanation that makes the most amount of sense," Manley said.

"The basic fundamentals for the market are okay. Constraints that the weather imposed are temporary."

The Dow Jones industrial average rose 74.33 points or 0.45 percent, to 16,434.51, the S&P 500 gained 5.61 points or 0.3 percent, to 1,879.42 and the Nasdaq Composite added 6.026 points or 0.14 percent, to 4,364.

Stocks in the basic materials, financials and industrial sectors, often associated with strong economic fundamentals, led gains on the S&P 500.

Costco shares fell 3.1 percent to $112.90 after the warehouse club operator's quarterly profit fell 15 percent, missing analysts' estimates.

Shares of Staples dropped 15.5 percent to $11.33 after the largest U.S. office supplies retailer forecast a fall in sales and said it would close up to 225 stores in North America by 2015.  — Reuters

source: gmanetwork.com

Oil prices mixed, eyes on Ukraine crisis

SINGAPORE – Oil prices were mixed in Asian trade Tuesday as investors cautiously watch events in Ukraine, with western powers threatening sanctions against Russia for its military intervention in the region.

The United States said it has suspended defense cooperation with Russia and the UN Security Council began a meeting on the crisis.

US benchmark West Texas Intermediate (WTI) for April delivery, eased 13 cents to $104.79 in mid-morning trade on profit-taking as after hitting its highest levels this year in New York on Monday.

Brent North Sea crude for April climbed two cents to $111.22.

Producing more than 10 million barrels a day in January, Russia vies with Saudi Arabia as the world's largest crude oil producer, and is the second-largest producer of natural gas.

More than 70 percent of its gas and oil exports to Europe pass through Ukraine.

"The Ukraine event is a new catalyst that propped up crude oil prices to form new highs," Phillip Futures said in a market commentary.

"When war erupts, Russia, one of the world's top oil producers, is likely to reduce oil exports due to higher domestic consumption."

It warned that any possible disruption to oil infrastructure could hit production, leading to tighter supplies.

Research house Capital Economics noted that "Europe is heavily dependent on supplies of Russian energy."

Ukraine on Monday accused Russia of pouring more troops into Crimea as world leaders grappled with Europe's worst crisis since the Cold War and global stock markets tumbled on fears of an all-out conflict.

Crimea has been under de facto occupation by Moscow-backed forces since President Vladimir Putin won parliament's authorization on Saturday to send troops into Ukraine. – Agence France-Presse

source: gmanetwork.com