MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 17902.5 27.09 0.15%
Nasdaq 4950.82 40.59 0.83%
S&P 500 2081.9 5.57 0.27%
Japan: Nikkei 225 19789.8 149.27 0.76%
Hang Seng 26236.9 961.22 3.80%
Shanghai Composite 3994.81 33.43 0.84%
S&P BSE Sensex 28707.8 191.16 0.67%
Australia: S&P/ASX 5960.7 34.7 0.59%
UK: FTSE 100 6937.41 -24.36 -0.35%
PRICE CHG YIELD%
U.S. 2 Year -1/32 0.536
U.S. 5 Year -3/32 1.347
U.S. 10 Year -5/32 1.906
Australia 10 Year 7/32 2.337
China 10 Year -20/32 3.75
India 10 Year 2/32 7.789
Japan 10 Year 1/32 0.359
German 10 Year 7/32 0.162
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7682 -0.0003
Yen (USD/JPY) 120.15 0.02
S. Korean Won (USD/KRW) 1093.03 0.1
Chinese Yuan (USD/CNY) 6.2003 -0.0025
Euro (EUR/USD) 1.0779 -0.0002
WSJ Dollar Index 87.33 0.01
LAST CHANGE % CHG
Crude Oil 50.99 -2.99 -5.54%
Brent Crude 57.24 -2.92 -4.85%
Gold 1202.4 -8.2 -0.68%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stocks gained and Treasury bonds were little changed after Federal Reserve meeting minutes showed officials were divided at their March policy meeting on whether they might raise rates in June. The dollar gained as the Fed gave a more positive outlook on the U.S. economy, while gold prices extended losses. Oil prices tumbled after a report showing a large increase in U.S. crude supplies.
OPENING CALL:
South Korea's central bank is set to hold its Monetary Policy Committee meeting on Thursday. The pressure is very strong on the Bank of Korea to announce another rate cut to follow last month's quarter-point cut with which it took its base rate down to 1.75%. The manufacturing sector is contracting again, domestic spending is weak and exports are waning.
EQUITIES:
U.S. stocks gained after Federal Reserve meeting minutes showed officials were divided about whether to raise interest rates in June.
Several officials thought it would be appropriate to raise rates in June, while others believed sharp declines in energy prices and a strong U.S. dollar would weigh on inflation and justify keeping short-term rates near zero. A couple of participants suggested the economic outlook would not merit a move higher in rates until 2016, according to the minutes of the Fed's March 17-18 meeting.
"The minutes didn't do anything to detail the importance of the various factors that are driving the FOMC's interest-rate decisions," said James Macey, a portfolio manager at Allianz Global Investors, which oversees $499 billion.
"My viewpoint has not changed at all," he said, adding that he continues to favor stocks of smaller U.S. companies over their larger peers in a rising dollar environment.
Traders said recent action in the stock market has been driven by passive buying and selling through exchange-traded funds, rather than by bets on individual stocks ahead of first-quarter earnings.
Including results at 20 companies that have reported, earnings at S&P 500 companies are expected to fall 4.9% from a year earlier, according to FactSet. The strong dollar has dragged on results at multinational companies and profits at energy companies will likely continue to take a hit from low oil prices. Earnings in S&P 500 energy companies are expected to slump 65% from a year ago, according to FactSet.
A slide in oil prices weighed on energy shares. Energy stocks in the S&P 500 fell 1%, notching the biggest sector decline.
Consumer discretionary stocks rose the most in the S&P 500, up 0.9%. Health-care stocks rose nearly 0.9%, boosted by news of a potential deal. Mylan NV said Wednesday it is interested in buying rival Perrigo Co. PLC for $28.9 billion. Mylan shares jumped 15% and those of Perrigo advanced 18%.
In other deal news, Royal Dutch Shell PLC has agreed to buy BG Group PLC for about $70 billion in a deal that would create the world's largest independent producer of liquefied natural gas. U.S.-listed shares of Royal Dutch fell 6.1%, while those of BG Group rose nearly 28%.
In Asian markets Wednesday, Hong Kong stocks leapt to a seven-year high with trading volume rising to a record level, on momentum from a flood of cash from China.
FOREX:
The dollar rose against the euro and pared losses against the yen after minutes from the Federal Reserve's most recent policy meeting nudged forward expectations for higher interest rates.
The minutes revealed that the Federal Open Market Committee saw broad-based improvements in labor market conditions at its March 17-18 meeting. Several Fed officials said the economic data and outlook likely warrant a rate increase in June.
"That leaves June as an option, however slight," said Ian Gordon, currency strategist at Bank of America Merrill Lynch. "The FX market could be pricing in a June hike, which is possibly giving the dollar a small boost."
Bank of America Merrill Lynch predicts the first increase in interest rates since 2006 would more likely happen around September.
The minutes also offered a more balanced view on the stronger dollar's effect on the U.S. economy, said Vassili Serebriakov, currency strategist at BNP Paribas. During the news conference that followed the meeting, Chairwoman Janet Yellen had said that the stronger dollar weighed on U.S. exports and inflation.
"The market took away from the Yellen press conference more concern about the dollar than what is reflected in the minutes," Mr. Serebriakov said.
BONDS:
U.S. Treasury bonds were little changed after the minutes of the Federal Reserve's policy meeting in March showed officials were divided on whether they would be ready by June to start raising short-term interest rates.
Several officials thought June would be the right time to raise rates, while others believed energy price declines and a strong dollar would weigh on inflation and warrant keeping rates pinned near zero, where they have been since December 2008, according to the minutes.
"The minutes didn't say anything new" to move the bond market, said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC.
At its last meeting, the central bank removed the guidance it had long used to indicate it would keep interest rates near zero, but it also downgraded its economic and inflation outlook, adding a cautious tone regarding the possibility of raising short-term interest rates for the first time since 2006.
Several Fed officials have warned in recent weeks that a rate increase this summer isn't off the table. But many investors don't expect the Fed to raise rates in June, given the mixed signals coming from the U.S. economy lately and still-subdued inflation.
Fed funds futures, used by investors and traders to place bets on central bank policy, showed that investors see a 6% likelihood of a rate increase in June, compared with 4% before the minutes and 6.2% Tuesday, according to data from CME Group.
The odds of a rate increase at the September Fed meeting ticked up to 33% from 31% before the minutes and 31.7% on Tuesday.
For foreign buyers, U.S. yields remain attractive compared with even slimmer yields in Germany, Japan and many other developed countries.
A $21 billion sale of 10-year Treasury notes drew strong foreign demand even if the notes yielded 1.925%. Indirect bidding, a proxy gauge of demand from foreign investors, was 58.5%, higher than the average of 51.4% for the past eight sales.
It was the latest sign U.S. bonds hold appeal as investors are struggling to obtain bonds that offer a good mix of safety and income.
Switzerland became the first country ever to issue 10-year debt that gives investors a yield under zero percent. The supply added to the pool of bonds in Europe with negative yields amid concerns about economic growth, low inflation and monetary stimulus by a number of central banks.
COMMODITIES:
Oil prices tumbled to their biggest loss in two months after data showed the largest weekly increase in domestic crude supplies in 14 years.
U.S. crude-oil stockpiles rose by 10.9 million barrels in the week ended Friday, the largest gain since March 2001, the U.S. Energy Information Administration said.
Inventories now sit at 482.4 million barrels, the highest level on record in weekly data going back to 1982. In monthly data, which don't exactly line up with weekly data, supplies last exceeded this level in 1930.
Prices are still down about 50% since last summer as global supply continues to exceed demand.
"There's simply not a shortage at all," said Kyle Cooper, analyst at IAF Advisors in Houston. "There's a big glut, and that glut remains intact."
Energy companies have cut billions of dollars in spending due to low oil prices, and the number of rigs drilling for oil in the U.S. has dropped sharply. But those measures have yet to lead to lower U.S. oil output due to increasing efficiency.
U.S. crude production rose above 9.4 million barrels last week, the EIA said, near multi-decade highs. The EIA said Tuesday that it expects crude production to start declining in June. A Goldman Sachs report released Monday called for production to peak this month.
Stored supplies in Cushing, Okla., the delivery point for the Nymex contract, rose above 60 million barrels for the first time on record. Concerns have grown in recent months that Cushing inventories could hit maximum capacity, which the EIA said in September is 70.8 million barrels.
Gasoline supplies rose by 800,000 barrels, while stocks of distillates, including heating oil and diesel fuel, fell by 300,000 barrels.
(MORE TO FOLLOW) Dow Jones Newswires
April 08, 2015 17:30 ET (21:30 GMT)
In the precious metals market, gold prices extended losses, after minutes from the Federal Reserve's most-recent meeting showed the central bank's members were divided on whether to raise interest rates in June.
TODAY'S HEADLINES:
Fed Officials Divided On June Rate Increase
While several Federal Reserve officials thought June would be the right time to raise rates, others believed energy-price declines and a strong U.S. dollar would weigh on inflation and warrant keeping rates near zero, according to meeting minutes.
Shell-BG Deal Would Create Gas Giant
Petroleum giant Royal Dutch Shell has agreed to buy BG Group for about $70 billion, in a deal that would create the world's largest independent producer of liquidated natural gas amid a historic downturn in energy prices.
Mylan Bids for Generic Drug Maker Perrigo
Mylan has proposed acquiring Perrigo in a cash-and-stock transaction that would value the maker of generic drugs at $205 a share, or about $30 billion.
Alcoa Swings to Profit
Alcoa swung to 1Q profit on revenue growth that mostly stemmed from strong volume in its divisions that make parts for the automotive and aerospace markets and a boost from stronger aluminum prices.
China to Build Pipeline From Iran to Pakistan
China will build a pipeline to bring natural gas from Iran to Pakistan to help address Pakistan's acute energy shortage, under a deal to be signed during the Chinese president's visit to Islamabad this month, Pakistani officials said.
Apache to Sell Australian Business for $2.1 Billion
Apache agreed to sell its Australian unit, Apache Energy, for $2.1 billion in cash to a group of private-equity investors, the latest step in the company's effort to refocus on U.S. shale drilling.
Europe's Plunging Borrowing Costs Mark Two New Milestones
Europe's plunging borrowing costs marked two new milestones, with Switzerland becoming the first country ever to issue 10-year debt that gives investors a yield under 0%, and Mexico lining up a rare deal to borrow euros that it will repay a century from now.
Zynga Founder Pincus Retakes CEO Post
Zynga founder and Chairman Mark Pincus is taking back the reins at the troubled mobile-games company, ending Don Mattrick's less-than-two-year stint as chief executive. Zynga shares down 10% after-hours.
Bank of America Names New Heads of Global Investment Banking
Bank of America has appointed Karim Assef and Diego De Giorgi as co-heads of global investment banking. The news was announced in a memo from Christian Meissner, head of global corporate and investment banking.
Tesla to Upgrade Base Version Of Model S
Tesla Motors is upgrading the slower-selling version of its Model S electric sedan, equipping it with a more capable battery, all-wheel drive and a bigger price tag.
RECENT DJ EXCLUSIVES:
Iranian Companies Try to Buy Swiss Refinery Ahead of Sanctions Lifting
Vietnam Struggles to Achieve Privatization Goals
Shell's Surprise Stop to Gas Up With BG
Is Germany's Export Engine Running Out Of Steam?
Behind Bank Valuations Lies Distaste for Investment Banking
TODAY'S CALENDAR:
(All times GMT, followed by country and event)
2330 AUS Mar Australian PCI
0100 SKA Apr Bank of Korea Monetary Policy Committee meeting & decision
0500 JPN Apr Bank of Japan Monthly Report released
0600 JPN Mar Preliminary Machine Tool Orders
0600 GER Feb Industrial Production Index
0600 GER Feb Foreign Trade
0630 AUS Mar Official Reserve Assets
0815 HK Mar Foreign Exchange Reserves
0830 UK Feb UK trade
0900 EU Q4 Balance of payments - 2nd release
1000 FRA Feb OECD Composite Leading Indicators
1100 UK Apr UK interest rate decision
1230 US 04/04 Unemployment Insurance Weekly Claims Report - Initial Claims
1230 US U.S. Weekly Export Sales
1230 CAN Feb New Housing Price Index
1230 CAN Feb Building permits
1345 US Bloomberg Consumer Comfort Index
1400 US Feb Monthly Wholesale Trade
1400 US 03/28 DJ-BTMU U.S. Business Barometer
1430 US IMF Managing Director Christine Lagarde speech at the Atlantic Council
1430 US 04/03 EIA Weekly Natural Gas Storage Report
1600 US World Agricultural Supply & Demand Estimates (WASDE)
1600 US Mar Monthly U.S. Retail Chain Store Sales Index
2030 US Federal Discount Window Borrowings
2030 US Foreign Central Bank Holdings
2030 US Money Stock Measures
2301 UK Mar REC and KPMG Report on Jobs
2350 JPN Mar Bank Lending
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(END) Dow Jones Newswires
April 08, 2015 17:30 ET (21:30 GMT)
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