MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 17584.5 212.88 1.23%
Nasdaq 4650.47 57.73 1.26%
S&P 500 2025.9 23.29 1.16%
Japan: Nikkei 225 16885.3 2.14 0.01%
Hang Seng 23681.3 195.85 0.83%
Shanghai Composite 3373.95 22.51 0.67%
S&P BSE Sensex 26908.8 -78.64 -0.29%
Australia: S&P/ASX 5353.6 -11.2 -0.21%
UK: FTSE 100 6419.83 53.32 0.84%
PRICE CHG YIELD%
U.S. 2 Year 1/32 0.613
U.S. 5 Year 0/32 1.48
U.S. 10 Year -8/32 1.971
Australia 10 Year -3/32 2.704
China 10 Year -26/32 3.68
India 10 Year 3/32 7.861
Japan 10 Year -5/32 0.303
German 10 Year -14/32 0.49
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.8077 -0.0001
Yen (USD/JPY) 119.24 -0.01
S. Korean Won (USD/KRW) 1098.74 0
Chinese Yuan (USD/CNY) 6.2116 0
Euro (EUR/USD) 1.1839 -0.0002
WSJ Dollar Index 84.11 0
LAST CHANGE % CHG
Crude Oil 48.79 0.86 1.79%
Brent Crude 52.08 -0.05 -0.10%
Gold 1210.8 -8.6 -0.71%
(All data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stocks rallied, Treasury bonds edged higher and the dollar pared gains against the euro and yen after the release of minutes from the Federal Reserve's latest meeting. Oil futures rose slightly, and gold prices pared losses.
OPENING CALL:
The Federal Reserve's March meeting "is now the key focus," BNP Paribas writes, after December's FOMC minutes offer little new to dwell on, but still support the firm's view for a June rate hike. In a light day for Asian data Thursday, Australia reports its building permits statistics for November. Residential permits increased 11.40 percent in October from the previous month.
EQUITIES:
U.S. stocks rallied, propelling the S&P 500 index higher for the first time in six sessions.
A rebound in crude-oil prices, which have weighed on stocks in recent days, and an upbeat U.S. labor-market report, fueled the bounce.
The rally came after five sessions of losses for the S&P 500, its longest losing streak since December 2013. The Dow has declined 2.6% since its Dec. 26 record close of 18053.71, while the S&P 500 has fallen 3.1% from its Dec. 29 record close of 2090.57.
"We'd come too far too fast," said Steven Rosen, head of single stock and ETF volatility trading at Société Générale, referring to recent stock-market declines. Wednesday's rebound is "not that surprising, especially when you've had this prolonged market of buying the dips," he added.
Pullbacks in recent months have been short-lived, as many investors believe that economic improvement and growing corporate profits should continue to propel stocks higher. Fourth-quarter earnings season unofficially begins on Jan. 12, when Alcoa Inc. reports results. Overall, companies in the S&P 500 are expected to report a 2.3% increase in fourth-quarter earnings, according to FactSet.
Among individual stocks, shares of J.C. Penney Co. surged 20% after the retailer reported stronger-than-expected holiday sales.
Monsanto Co. reported results for its November quarter that beat expectations, driven by strength in its soybean segment. The company gave a disappointing outlook for its February quarter, expecting earnings to fall 5% to 10%. Shares rose 1.25%.
T-Mobile US Inc. shares rose 5.1% after it reported strong subscriber growth in the fourth quarter.
In Asia Wednesday, stocks in Japan snapped a four-session losing streak on a rising dollar while Australia pared earlier losses, as a global selloff eased in the region.
FOREX:
The euro pushed to a new nine-year low against the dollar after weak euro-zone inflation data cemented expectations that the European Central Bank would soon begin a large-scale sovereign-bond-buying program.
The European Union's statistics agency said consumer prices last month were 0.2% below their December 2013 levels, the first time inflation in the euro-zone had fallen on an annual basis since 2009.
The fall in prices had been broadly anticipated following the oil market's plunge over the last six months, with bonds in the euro-zone rallying to record highs and the euro weakening. Nevertheless, the report raised market expectations for the ECB to ease policy at its next meeting, which would further hurt the euro, said Vassili Serebriakov, currency strategist at BNP Paribas.
Unlike the Federal Reserve, which has hinted it may look past the "transitory" effects of energy prices on inflation as it decides when to raise interest rates, the ECB is likely to press ahead with further stimulus in the first quarter of 2015, according to Javier Corominas, head of economic research and a portfolio manager at Record Currency Management, which oversees $52.6 billion of assets.
"They are going to take this as the ammunition they need to do" quantitative easing, Mr. Corominas said.
The ECB could announce the launch of a program to buy sovereign debt at its next monetary-policy meeting on Jan. 22, Mr. Serebriakov said.
In addition, persistent jitters over Greek politics compounded concerns over weak growth and inflation in the euro area. Investors are worried that antiausterity parties in Greece could win elections later this month, and that could lead to a messy renegotiation of the country's bailout program and even pave the way for Greece's departure from the euro zone.
The dollar pared some gains after minutes from the Federal Reserve's most recent policy meeting revealed little new information for investors.
BONDS:
Treasury bonds eked out small price gains as buyers took the balanced minutes of the Federal Reserve's December policy meeting as a sign the central bank will be in no rush to raise interest rates this year.
Treasury prices had fallen earlier as higher U.S. stocks encouraged investors to cash in some chips from the ultrasafe U.S. government bond market. But buyers stepped in after the Fed minutes.
The yield has fallen for eight straight sessions, reflecting strong demand for haven bonds driven by global growth concerns, the threat of deflation amid a multimonth selloff in oil prices and the prospect of more monetary stimulus from the European Central Bank.
The Fed's minutes struck a similar tone regarding the interest-rate outlook compared to the rate statement last month.
The minutes showed Fed officials saw economic turbulence overseas as a significant risk to the U.S. economy when they met in December, but they expect policy makers abroad to respond with new growth-inducing measures.
Despite concerns about slow growth abroad and the uncertain implications of sharp declines in global oil prices, Fed officials decided at the meeting to signal that U.S. interest rates are likely to rise in 2015.
"It was a relief that something more hawkish wasn't hidden in the minutes," which encouraged moderate buying in bonds, said David Keeble, global head of interest-rates strategy at Credit Agricole in New York. "The Fed shows patience."
Many investors expect the central bank to start lifting the fed-funds target rate in the second half of 2015.
Fed-funds futures, used by investors and traders to place bets on central bank policy, showed such bettors see a 25% likelihood of a rate increase at the June meeting, unchanged from the level before the Fed minutes earlier Wednesday, according to data from the CME. The odds were up from 6.3% a month ago.
COMMODITIES:
Gasoline and diesel futures tumbled to fresh lows as total petroleum supplies in the U.S. hit an all-time high.
Oil futures rose slightly, but market participants said they don't think the market has reached a bottom yet.
Oil prices have plunged more than 50% in recent months amid a global glut of oil. Production has grown rapidly, especially in the U.S., and demand growth has remained tepid. Fears about economic growth in the eurozone have further weighed on prices this week.
U.S. inventory data confirmed to market watchers that the market is still oversupplied, meaning prices could fall further to attract buyers and force producers to cut back on drilling.
"There is no shortage, anywhere, at the moment," said Donald Morton, senior vice president of Herbert J. Sims & Co. "Our inventories are getting high."
U.S. oil production, which has soared in recent years amid a boom in shale-oil drilling, rose last week to 9.1 million barrels a day, nearly on par with the all-time high reached in December.
Though some U.S. producers have already cut back on spending in response to low prices, analysts don't expect production growth to slow for several more months. It is still affordable to pump oil out of existing wells in many areas, and some companies have to keep producing because they need cash to repay their debts.
Prices are likely to keep falling until traders see signs that supply growth is shrinking, said Ed Kevelson, head of U.S. energy over-the-counter sales at brokerage Newedge USA, which is owned by Societe Generale. "It's really about getting to a [price] point where you have choked off enough rigs, enough production growth" to balance the market, he said.
Supplies are also climbing in other regions. Oil prices slumped last week on reports that Russian output and Iraqi exports were at multiyear highs.
Gold prices pared losses in electronic trading after minutes from the Federal Reserve's most recent meeting gave little reason to believe the central bank was considering raising interest rates ahead of schedule.
TODAY'S HEADLINES:
Fed Wary of Overseas Growth Risks
(MORE TO FOLLOW) Dow Jones Newswires
January 07, 2015 17:30 ET (22:30 GMT)
Federal Reserve officials saw economic turbulence abroad as a significant risk to the U.S. economy when they met in December, but they looked past those concerns in part because they expect policy makers abroad to respond with new growth-inducing measures.
Shooting at Paris Magazine Office Kills 12
Masked gunmen stormed the offices of the French satirical weekly Charlie Hebdo, killing 12 people and injuring several others in an apparent reprisal for the magazine's cartoons regarding Islam.
Private Businesses in U.S. Add 241,000 Jobs
Private payrolls in the U.S. increased by 241,000 jobs in December, according to report compiled by ADP and Moody's Analytics. Economists expected an increase of 250,000. The November ADP increase was revised to 227,000 from 208,000.
U.S. Trade Gap Narrows to $39.0 Billion in November
The U.S. trade gap narrowed in November to its lowest level in nearly a year because falling prices and weaker demand for foreign oil pushed down imports despite record inbound shipments of consumer goods.
FHA to Reduce Premiums
The Federal Housing Administration is said to be reducing costs for mortgage borrowers who make down payments of as little as 3.5%, cutting the typical premiums borrowers must pay for mortgage insurance from 1.35% to 0.85%.
U.S. Confident About North Korea's Involvement in Sony Threats
FBI Director James Comey said the U.S. is confident about North Korea's involvement in the December threats against Sony Pictures because the people involved slipped up at times.
Strong Sales of New iPhones Help Apple Gain Market Share
Apple's new larger-screen iPhones are helping the company claw back market share from smartphones running on Google's Android operating system, according to a new report.
Kaisa Default Fears Hit Property Bonds
Fears are mounting that a Chinese real-estate developer is to become the first such company ever to default on an offshore bond, sending other property bonds tumbling and hitting global investors who had bought this type of debt.
Scientists Discover New Antibiotic
Scientists have discovered a powerful new antibiotic that can kill an array of germs without easily becoming resistant to them, a potential weapon against a range of diseases.
RECENT DJ DOMINANTS:
NYC Pension Funds Pulled $4.9 Billion From Pimco
Most of Money Raised by Bill Gross at Janus Originated From His Financial Advisers' Brokerage
Sony Corp. CEO Remains Committed to Consumer Electronics
Deutsche Bank Beefs Up Americas Back Office
EPA to Issue Power-Plant Emissions Rules This Summer
TODAY'S CALENDAR:
(All times GMT, followed by country and indicator)
0030 AUS Nov Building Approvals
0200 JPN Dec Imported Vehicle Sales
0530 AUS Dec Official Reserve Assets
0700 GER Nov Manufacturing orders
0800 UK Dec Halifax House Price Index
1000 EU Nov PPI
1000 EU Nov Retail trade
1000 EU Dec Business & Consumer Surveys - Business Climate Indicator & Economic Sentiment Indicator
1100 FRA Nov OECD CPI
1200 UK Jan UK interest rate decision
1230 US Dec Challenger Job-Cut Report
1330 US U.S. Weekly Export Sales
1330 US 01/03 Unemployment Insurance Weekly Claims Report - Initial Claims
1330 CAN Nov New Housing Price Index
1445 US Bloomberg Consumer Comfort Index
1500 US 12/27 DJ-BTMU U.S. Business Barometer
1530 US 01/02 EIA Weekly Natural Gas Storage Report
1700 US Dec ICSC Chain Store Sales Trends
1700 US FRB Boston President Eric Rosengren speech at the Wisconsin Economic Forecast Luncheon
2000 US Nov Consumer Credit
2130 US Federal Discount Window Borrowings
2130 US Foreign Central Bank Holdings
2130 US Money Stock Measures
2350 JPN Dec International Reserves / Foreign Currency
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Access Investor Kit for The Dow Chemical Co.
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Access Investor Kit for J. C. Penney Co., Inc.
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(END) Dow Jones Newswires
January 07, 2015 17:30 ET (22:30 GMT)
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