MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 18312.39 13.51 0.07%
Nasdaq 5070.03 -8.41 -0.17%
S&P 500 2127.83 -1.37 -0.06%
Japan: Nikkei 225 20026.38 136.11 0.68%
Hang Seng 27693.54 102.29 0.37%
Shanghai Composite 4417.55 134.06 3.13%
S&P BSE Sensex 27645.53 -41.77 -0.15%
Australia: S&P/ASX 5615.5 -43.7 -0.77%
UK: FTSE 100 6995.1 26.23 0.38%
PRICE CHG YIELD
U.S. 2 Year -2/32 0.621
U.S. 5 Year -10/32 1.604
U.S. 10 Year -15/32 2.292
Australia 10 Year -21/32 2.954
China 10 Year -1 1/4 3.49
India 10 Year 4/32 7.861
Japan 10 Year -1/32 0.385
German 10 Year 16/32 0.599
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7914 0.0001
Yen (USD/JPY) 120.68 0
S. Korean Won (USD/KRW) 1095.39 0.02
Chinese Yuan (USD/CNY) 6.2072 0.0029
Euro (EUR/USD) 1.1151 0.0001
WSJ Dollar Index 85.55 -0.01
LAST CHANGE % CHG
Crude Oil 57.3 -2.13 -3.58%
Brent Crude 64.39 -1.88 -2.84%
Gold 1207.3 -20.3 -1.65%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
The Dow industrials climbed to a fresh record high Tuesday for the second session in a row. Oil and gold fell as the dollar rose. Treasurys sold off as U.S. home building surged in April to the highest level since before the crisis.
OPENING CALL:
Japan on Wednesday will release its first-quarter preliminary GDP estimates. In the fourth quarter, Japan posted 0.6% quarterly and 2.2% annualized growth.
We'll likely see another so-so quarter from Japan's GDP data: a second-straight quarter of moderate growth to show that the recessionary impact of last year's sales tax hike has truly worn off. But there's no gangbusters recovery underway, either.
EQUITIES:
The Dow industrials climbed to a fresh record high for the second session in a row.
Throughout the day stocks wavered between slight gains and losses, with the Dow Jones Industrial Average and the S&P 500 narrowly hitting new intraday highs around midday. The S&P 500 finished marginally lower, snapping a three-day climb to record highs.
The Dow industrials added 13.51 points, or 0.1%, to 18312.39 on Tuesday, while the S&P 500 slipped 1.37 points, or 0.1%, to 2127.83 and the Nasdaq Composite Index lost 8.41 points, or 0.2%, to 5070.03.
On Monday the Dow notched its first closing high since March 2. The Dow has risen 2.6% in May and is up 2.7% for the year. The S&P has gained 2% this month and 3.3% in 2015.
Despite the market's climb to records, traders and strategists said there isn't any clamoring by investors to put more money into stocks.
"We continue to get the question from clients of how can the markets keep reaching new highs," said Sean Lynch, co-head of global equity strategy for Wells Fargo Investment Institute. "There's nervousness among investors, and that's a good thing. They're not blindly rushing into stocks."
In corporate news, Wal-Mart Stores reported weaker-than-expected sales and a 7% drop in profit. The company logged its third-straight quarter of U.S. same-store sales growth. Shares fell 4.4%.
Chinese shares rose Tuesday on signs of fresh investment from Beijing, while Japan's Nikkei Stock Average ended above the 20000 mark.
FOREX:
The euro got hit with a double whammy and extended its losses against the dollar as the European Central Bank signaled it would step up bond buying in the coming weeks and investors got positive economic news out of the U.S.
The dollar rose 1.5% against the common currency in late-afternoon trade, with one euro buying $1.1149. The euro, which retreated 1.2% on Monday, slid to its lowest level in almost three weeks.
The moves helped reverse some of the euro's big gains versus the dollar since mid-April. Earlier in the year, the euro hit a 12-year low against the dollar and eurozone government bond prices hit record highs on the back of the ECB's stimulus measures. But the sheer size of bets on further weakness in the euro and more bond-market gains made the markets vulnerable to a sharp turnaround when Europe's economy showed better-than-expected performance and U.S. indicators signaled softness.
The euro had strengthened 8.3% from April 13 to mid-May, reaching a three-month high against the dollar on Friday. Yields on 10-year German debt have soared from a record closing low of 0.073% on April 20 to 0.612% on Tuesday. When bond prices fall, yields rise.
Benoit Coeure, an ECB executive board member, said the central bank would accelerate moderately its debt purchases in coming weeks in anticipation of less trading activity during the summer-holiday period. In addition, Bank of France Governor Christian Noyer said the ECB is prepared to take further measures to hit its inflation target, if its current bond-buying program proves insufficient.
"Now we're receiving a message that high yields and a stronger euro are not what the ECB wants to see right now," said Shaun Osborne, head of global currency strategy at TD Securities. "The euro is likely to trade on softer footing here."
BONDS:
A surge in a gauge of U.S. housing activities brightened the economic outlook and pushed down prices of ultrasafe Treasury bonds.
Fresh corporate bond sales added to selling pressure in Treasurys, extending the market's price loss into a second consecutive session.
In late-afternoon trading, the yield on the benchmark 10-year note was 2.262%, compared with 2.228% on Monday. Bond prices fall as their yields rise.
Government debt in the U.S. had strengthened earlier, along with a broad rally in European government bonds. A senior European Central Bank official said the central bank would ramp up bond purchases this month and next to cope with thinner liquidity during the summer time.
The health of the economy is the key to the decision about when the Fed raises short-term interest rates for the first time since 2006. A rise in the Fed's policy rate would shrink the value of outstanding bonds.
Many investors expect the Fed to wait until very late this year to tighten policy or possibly stand pat until early 2016. But some traders say the Fed could raise rates sooner than investors expect if growth momentum gains traction.
"If the data begins to turn up, it would put the Fed in play for September," which would send bond yields higher, said Thomas Roth, executive director in the U.S. government bond trading group at Mitsubishi UFJ Securities (USA) in New York.
COMMODITIES:
Oil prices slumped in the latest sign that the recent rally in crude prices may have peaked.
The U.S. oil benchmark has slid for five straight sessions, the longest losing streak since mid-March. Though prices are still up more than 30% from a near six-year low reached in March, the benchmark has fallen 5.7% in the last five sessions.
Light, sweet crude for June delivery settled down $2.17, or 3.7%, to $57.26 a barrel on the New York Mercantile Exchange. The June contract expired at settlement Tuesday. The more actively traded July contract settled down $2.25, or 3.7%, at $57.99 a barrel.
Brent crude, the global benchmark, settled down $2.25, or 3.4%, at $64.02 a barrel on the ICE Futures Europe exchange.
"Today's hard selloff...should prove to be the beginning of a major price decline," said energy-advisory firm Ritterbusch & Associates in a note.
Gold prices fell, with their five-session rally brought down by a surge in the U.S. dollar.
TODAY'S HEADLINES:
Takata Air Bag Recalls Doubles
Recalls of U.S. vehicles equipped with rupture-prone Takata air bags are being doubled to 34 million cars nationwide, deepening a safety crisis for the Japanese auto parts supplier.
U.S. Charges Six Chinese Citizens With Economic Espionage
The Justice Department accused six Chinese citizens, including three professors, of conspiring to steal sensitive wireless technology from U.S. companies.
Home Building Surges to Best Pace Since 2007
U.S. home building surged in April to the highest level since before the recession officially began, a sign of thaw in the housing market during the crucial spring selling season.
Democrats Set to Oppose Bill on Bank Regulation
Senate Democrats are poised to oppose a Republican-backed bill altering financial-sector oversight, throwing a roadblock in front of legislation with wide support from the banking industry.
Altice in Advanced Talks to Buy Suddenlink
French telecommunications group Altice is in advanced talks to acquire U.S. cable company Suddenlink Communications.
Computer Sciences to Split Into Two Companies
Computer Sciences said that it plans to separate its government-focused business and its commercial-information technology business into two publicly traded companies.
Wal-Mart's Quarter Shows Uneven Progress
Wal-Mart did better in the first three months of the year -- but not enough to draw attention from costly investments in wages and e-commerce that ate into expected sales growth.
Clinton Emails Ordered Released on a Rolling Basis
A federal judge instructed the State Department to release former Secretary of State Hillary Clinton's emails on a rolling basis rather than all at once after they have been cleared.
Cuba Reportedly Establishes U.S. Banking Ties
Cuba has established a banking relationship in the U.S., a senior State Department official said, clearing a major obstacle to re-establishing full diplomatic relations.
J.P. Morgan Holders Back Compensation Plans
J.P. Morgan shareholders voted in favor of the company's compensation plans at its annual shareholder meeting, though the tally was the lowest since 2011.
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TODAY'S CALENDAR
(Times in GMT, followed by country and event)
2350 JPN Q1 1st Preliminary Quarterly GDP Estimates
0030 AUS May Westpac - Melbourne Institute Consumer Sentiment Survey
0100 AUS May Vacancy Report
0401 MAL Apr CPI
0500 JPN Mar Indexes of Business Conditions - Revision
0500 JPN Apr Supermarket sales
0600 JPN Apr Revised Machine Tool Orders
0600 GER Apr PPI
0700 JPN Apr Convenience Store Sales
0800 ITA Annual Italy State of the Nation Annual Report
0800 TAI Apr Export Orders
0820 TAI Q1 Balance of Payments
0830 UK May Bank of England MPC meeting minutes
0830 UK May Agents' Summary of Business Conditions
0900 EU Mar Construction output
1000 UK Apr Aluminium Production report
1100 US 05/15 MBA Weekly Mortgage Applications Survey
1230 CAN Mar Wholesale trade
1300 US U.S. Treasury Sec Lew speaks at Community Development Advisory Board meeting
1430 US 05/15 EIA Weekly Petroleum Status Report
1800 US Federal Open Market Committee meeting minutes published
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(END) Dow Jones Newswires
May 19, 2015 17:30 ET (21:30 GMT)
May 19, 2015 17:30 ET (21:30 GMT)
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