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US Market

Stocks Extending Yesterday's Rally In Early Trading

After turning higher over the course of the previous session, stocks are seeing some further upside in early trading on Thursday. The major averages have climbed firmly into positive territory, continuing to recover from the weakness seen earlier this month.

The major averages have recently pulled back off their highs for the young session but are holding on to gains. The Dow is up 50.50 points or 0.4 percent at 13,035.61, the Nasdaq is up 19.19 points or 0.6 percent at 3,010.97 and the S&P 500 is up 6.38 points or 0.5 percent at 1,416.31.

The early strength on Wall Street is partly due to a positive reaction to a pair of U.S. economic reports, including a report from the Labor Department showing a modest drop in initial jobless claims in the week ended November 24th.

The report said jobless c laims dipped to 393,000, a decrease of 23,000 from the previous week's revised figure of 416,000. Economists had expected jobless claims to fall to 390,000 from the 410,000 originally reported for the previous week.

A separate report from the Commerce Department said U.S. GDP increased by more than previously estimated in the third quarter.

The Commerce Department said GDP increased at an annual rate of 2.7 percent in the third quarter compared to the 2.0 percent growth previously reported. Economists had expected the pace of GDP growth to be upwardly revised to 2.8 percent.

While the stronger than previously estimated GDP growth reflected upward revisions to private inventory investment and exports, the report also showed a downward revision to the pace of consumer spending growth. Positive sentiment has also been generated by a report from the European Commission showing that Eurozone economic confidence strengthened in November, mar king the first improvement since February.

Traders are also keeping an eye on developments in Washington, where lawmakers continue to negotiate an agreement to avoid the looming fiscal cliff

Steel stocks have shown a strong move to the upside in early trading, driving the NYSE Arca Steel Index up by 1.5 percent. AK Steel (AKS) and Olympic Steel (ZEUS) are posting notable gains.

Electronic storage, networking, and biotechnology stocks are also seeing early strength, moving to the upside along with most of the major sectors.

In overseas trading, stock markets across the Asia-Pacific region saw notable strength during trading on Thursday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day up by 1 percent, while Australia's All Ordinaries Index advanced by 0.6 percent.

The major European markets have also shown strong moves to the upside on the day. Wh ile the German DAX Index has risen by 0.8 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 1 percent and 1.2 percent, respectively.

In the bond market, treasuries are giving back some ground after moving higher over the three previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 1.632 percent.

Canadian Market

TSX Jumps At Open Thursday

Bay Street stocks opened higher Thursday amid burying in commodities, with the S&P/TSX Composite Index surging 74.25 points or 0.61 percent to 12,214.58.

The Diversified Materials Index rose nearly 2 percent, with Inmet Mining gaining about 5 percent. First Quantum Minerals and Teck Resources moved up around 1 percent each.

In the oil patch, Bonterra Energy and Trilogy Energy gathered close to 2 percent each. In the financial space, Royal Bank of Canada moved up 1 percent after reporting higher fourth-quarter net income.

Fashion apparel products company Gildan Activewear Inc. rose over 2 percent after reporting that its fourth-quarter net income increased to $89.02 million or $0.73 per share from $48.46 million or $0.40 per share last year.

Meanwhile, The Descartes Systems Group Inc. slipped 0.50 percent even afte r posting higher third-quarter net income.

The price of crude oil was moving higher Thursday morning amid US budget optimism after President Barack Obama said that he was hopeful the White House and Congress could reach a deal before Christmas. Crude for January added $1.09 to $87.58 a barrel.

The price of gold was paring previous session's losses Thursday morning as traders await more cues on the US budget talks. Gold for February delivery, the most actively traded contract, edged up $5.70 to $1,724.50 an ounce.

In corporate news from Canada, Royal Bank of Canada reported that its fourth-quarter net income increased to C$1.91 billion or C$1.25 per share from C$1.57 billion or C$1.02 per share reported last year.

Global logistics technology solutions provider The Descartes Systems Group Inc. posted higher third-quarter net income of $3.1 million or $0.05 per share versus $2.7 million or $0.04 per share last ye ar. Analysts expected earnings per share of $0.14 for the quarter.

Fashion apparel products company Gildan Activewear Inc. reported that its fourth-quarter net income increased to $89.02 million or $0.73 per share from $48.46 million or $0.40 per share last year. Adjusted profit per share came in at $0.78. Analysts expected the company to report fourth-quarter profit per share of $0.80.

Media and entertainment company Corus Entertainment Inc said it expects to report consolidated segment profit for fiscal 2013 in the range of $293 million to $303 million, and free cash flow for the year in excess of $140 million.

Base-metals miner Inmet Mining Corp. said it rejected an unsolicited non-binding, highly conditional proposal from First Quantum Minerals for First Quantum to acquire all of the shares of Inmet for of C$70.00 share

In economic news, Statistics Canada said the nation's current account deficit, on a seasonally adjusted basis, increased $0.5 billion to $18.9 billion in the third quarter, mainly due to a larger decline in exports than imports. Total exports of goods were down $3.7 billion to $112.7 billion, while Imports of goods declined $2.5 billion

Separately, the agency said the Industrial Product Price Index was down 0.1 percent in October compared with September, largely the result of lower prices for petroleum and coal products. Meanwhile, the Raw Materials Price Index was unchanged in October.

European Market

European Stocks Rise On US Budget Hopes

European stocks rose on Thursday as signs of progress in talks over the U.S. budget issues lifted appetite for risk. President Barack Obama and Speaker of the House John Boehner both said a deal to avoid a budget crisis could be reached before the end of the year, boosting investor sentiment. Obama and the US Congress have until Jan. 1 to avert the so-called fiscal cliff of big tax increases and spending cuts.

The Euro Stoxx 50 index of Eurozone bluechip stocks is gaining 1.1 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, is moving up 0.8 percent while key benchmark indexes in Switzerland, the U.K., Germany and France are up between 0.8 percent and 1.2 percent.

Banking stocks are among the prominent gainers. Commerzbank AG is climbing 2.4 percent, Deutsche Bank is gaining 1.6 percent, Spain's Banco P opular is climbing 4.8 percent and French lender Societe Generale is adding 1.8 percent.

Invensys shares are up 11.6 percent in London after Siemens offered to buy its rail automation business for about 2.2 billion euros or 1.742 billion pounds.

Kingfisher shares are down 1.7 percent after the firm reported third-quarter retail profit of 257 million pounds, down 5.9 percent on a reported basis.

Rio Tinto Plc is climbing 4.1 percent after the global miner said that it targets cumulative savings of more than $5 billion by the end of 2014 in order to tide over the challenges from the volatile economic environment.

In economic releases, U.K. house prices dropped for the ninth month in a row in November, data from Nationwide Building Society showed. House prices were down 1.2 percent from a year ago, following a 0.9 percent drop in October.

Separately, Germany's unemployment rate remained un changed at 6.9 percent in November, data from the Federal Labor Agency showed, matching expectations. At the same time, the number of unemployed rose by 5,000 from a month earlier in the month.

Asia Market

Asian Stocks Broadly Higher On US Fiscal Deal Hopes

Asian stocks rose broadly on Thursday on signs of progress on the U.S. fiscal cliff after President Barack Obama and Speaker of the House John Boehner both said a deal to avoid a budget crisis could be reached before the end of the year. The renewed optimism over the fiscal cliff, continued expectations that the Bank of Japan will pursue powerful easing after a December 16 election and positive data on Australian new-home sales helped lift appetite for risker assets. Obama and the US Congress have until Jan. 1 to avert the so-called fiscal cliff of big tax increases and spending cuts.

Tokyo stocks rebounded from the previous session's losses, supported by the yen's weakness against the dollar and the euro as well as easing worries over the U.S. fiscal cliff. Both the Nikkei average and the broader Topix index rose about a percent each desp ite relatively thin trading volumes. Exporters like Honda Motor and TDK rose about 2 percent each after Japan's main opposition Liberal Democratic Party leader and possible next Prime Minister, Shinzo Abe, said the government and the Bank of Japan should forge an accord to achieve a 2 percent inflation target.

Sharp jumped over 3 percent on reports that it is in talks with Dell, Intel Corp., and Qualcomm Inc. about a capital injection. JVC Kenwood rallied 3.2 percent on a Nikkei report that it seeks to generate some Y13 billion in group net profit in fiscal 2015. Heavyweight Fast Retailing edged up 0.3 percent, extending gains for the tenth consecutive session on expectations of strong Christmas sales.

China's Shanghai Composite index slid half a percent, dragged down by brokerages on expectations of weak corporate earnings. Hong Kong's Hang Seng index added a percent, shrugging off weakness in Chi nese shares.

Australian shares gained ground following encouraging remarks from U.S. House speaker John Boehner on the fiscal cliff deal before the end of the year. The benchmark S&P/ASX 200 rose 0.7 percent, while the broader All Ordinaries index added 0.6 percent. Rio Tinto rose 0.9 percent on saying it targets cumulative savings of more than $5 billion by the end of 2014 in an attempt to tide over the challenges from the volatile economic environment. Rival BHP Billiton rose 0.6 percent, Fortescue Metals Group rallied 1.6 percent and gold miner Newcrest added 1.1 percent.

Among the major banks, NAB, Commonwealth, Westpac and ANZ rose between 0.3 percent and 1.1 percent. Tower rallied 2.7 percent after the insurer posted a 67 percent rise in full-year profit and said it would return capital to shareholders after the sale of its medical insurance business.

In economic news, the Australian Bureau of S tatistics reported that new private capital spending rose a seasonally adjusted 2.8 percent in the third quarter of 2012 to A$42.5 billion, beating forecasts. Another report from the Housing Industry Association showed that sales of new homes in Australia rose 3.4 percent in October from the previous month, led by a large rise in apartment sales.

Seoul shares rose to a three-week high as signs of progress in talks over the U.S. budget issues lifted appetite for risk. The benchmark Kospi average rallied 1.2 percent to 1,935. Automakers and economy-sensitive shipbuilders led the gainers. Hyundai Motor and its affiliate Kia Motors rose 3-5 percent, while Hyundai Heavy, Samsung Heavy Industries, Daewoo Shipbuilding and STX Offshore & Shipbuilding climbed 4-11 percent.

On the macroeconomic front, a survey published by Bank of Korea showed that business expectations among South Korean firms declined to its lowest level in n early four years in December. The index reflecting manufacturers' business expectations one-month ahead fell to 67 in December from 70 in November, with a reading below 100 meaning pessimists outnumber optimists. The index of manufacturers' assessment of the current business conditions fell to 67 in November from 68 recorded for October.

New Zealand shares rose to a fresh five-year high, boosted by positive global cues. The benchmark NZX-50 index edged up 0.1 percent to 4,017, its highest level since January 2008. Shares of Sky Network Television jumped 3 percent after the nation's largest pay-tv operator announced it would pay $124.5 million in a special dividend to shareholders as a means to distribute $44 million in tax credits.

Shower and tapware manufacturer Methven soared 5.2 percent despite reporting a 27.4 percent drop in net profit for the six months to September. Pyne Gould Corp plunged 15 percent to a record low in the wake of news that the firm will probably quit New Zealand. Exporter Fisher & Paykel Healthcare tumbled 3.1 percent on going ex-dividend.

Elsewhere, India's benchmark Sensex was up 1.4 percent, Indonesia's Jakarta Composite index was gaining 0.3 percent, Malaysia's KLSE Composite index edged up marginally, Singapore's Straits Times index was up 1.1 percent and the Taiwan Weighted index advanced 0.9 percent.

Commodities

Crude Rebounds On US Budget Hopes

The price of crude oil was moving higher Thursday morning amid US budget optimism after President Barack Obama said that he was hopeful the White House and Congress could reach a deal before Christmas.

Light Sweet Crude Oil (WTI) futures for January delivery, added $1.08 to $87.57 a barrel. Yesterday, oil settled lower to extend losses for a third session on demand concerns as investors worried over the looming fiscal cliff with reports of "little progress" in debt talks. The fiscal cliff involves billions of dollar in spending cuts and tax increases indicated to begin in January, unless an agreement is reached. Nonetheless, oil pared some of the losses on supply concerns after an Energy Information

Wednesday during trading hours, the EIA said that US crude oil inventories eased 0.30 million barrels, while gasoline stocks jumped by 3.90 mi llion barrels in the weekended November 23. Analysts expected crude supplies to increase 500,000 barrels and gasoline stocks to add 1 million barrels last week.

The price of gold was paring previous session's losses Thursday morning as traders await more cues on the US budget talks.

Gold for February delivery, the most actively traded contract, recovered $7.20 to $1,726.00 an ounce. Yesterday, gold settled sharply lower for a third straight day, with deflation fears impacting the precious metal, as investors focused on the U.S. debt talks which is reported to have made "little progress" thus far. Gold thrives on inflation while deflation pushes the precious metal down.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to a record high of 1,347.02 tons from 1,345.81 tons.

This morning, the U.S. dollar was lingering near its 3-week low versus the euro and sterling. The bu ck was hovering around a 7-month high versus the yen, while ticking lower against the Swiss franc.

In economic news, euro zone economic confidence improved more than expected in November, survey results from European Commission showed. The corresponding index rose to 85.7 from 84.3 in the prior month and stayed above the consensus forecast of 84.5. Confidence strengthened in industry and retail trade, which were partly offset by decreases among consumers and construction.

Meanwhile, Germany's unemployment rate remained unchanged at 6.9 percent in November, data from the Federal Labor Agency showed. The outcome was in line with expectations. At the same time, the number of unemployed rose by 5,000 from a month earlier in November.

Traders will look to the release of second read of the third quarter GDP growth from the U.S. Commerce Department, due out at 8:30 am ET. Economists expect growth to be upwardly revised to 2.8 percent.
Simultaneously, the Labor Department is due to release its customary jobless claims report for the week ended November 24. Economists expect claims to decline to 390,000 from 410,000 in the previous week.

Later during the session, the National Association of Realtors is scheduled to release its pending home sales index for October. The consensus expectations call for a 1 percent increase in the index compared to the 0.3 percent increase in September.

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