Asian Morning Briefing: U.S. Stocks Extend Gains

 
                       LAST    CHANGE  % CHG 
DJIA                 18053.58    75.9   0.42% 
Nasdaq                5104.89   33.38   0.66% 
S&P 500               2108.95    9.35   0.45% 
Japan: Nikkei 225    20385.33  295.56   1.47% 
Hang Seng            25120.91  -103.1  -0.41% 
Shanghai Composite    3924.49   -45.9  -1.16% 
S&P BSE Sensex        27932.9  -28.29  -0.10% 
Australia: S&P/ASX     5577.4   104.2   1.90% 
UK: FTSE 100          6753.75    15.8   0.23% 
 
 
                    PRICE CHG  YIELD 
U.S. 2 Year              1/32  0.657 
U.S. 5 Year              9/32  1.658 
U.S. 10 Year            14/32  2.401 
Australia 10 Year       -6/32   3.03 
China 10 Year           -5/32   3.59 
India 10 Year            8/32  8.004 
Japan 10 Year           -5/32  0.462 
German 10 Year           6/32  0.839 
 
 
                          LAST(MID)  CHANGE 
Australia $ (AUD/USD)         0.745  0.0044 
Yen (USD/JPY)                123.38   -0.06 
S. Korean Won (USD/KRW)     1143.18    6.59 
Chinese Yuan (USD/CNY)       6.2088  0.0018 
Euro (EUR/USD)               1.1006  0.0005 
WSJ Dollar Index              87.58    -0.2 
 
 
               LAST   CHANGE  % CHG 
Crude Oil      53.23    1.03   1.97% 
Brent Crude    58.82    0.67   1.15% 
Gold          1154.3    -1.1  -0.10% 
 

        MARKETS AT A GLANCE
        (Data as of approximately 5 p.m. ET)
        SNAPSHOT:
        U.S. stocks rose Tuesday, pushing the Dow industrials index back above 18,000 for the first time in three weeks. Oil ended higher after a topsy-turvy session in the wake of overnight news that Iran reached a nuclear agreement with world powers. The dollar edged lower against the euro and the yen. Gold reversed gains and closed lower. Treasurys rose on an unexpected decline in U.S. retail sales.
        OPENING CALL:
        China is set to release its second-quarter GDP figures Wednesday. There are some signs that the economy has started to stabilize. Property prices in China's largest cities are rising after an extended slump. Industrial production edged up recently. And new bank loans were up significantly in June, adding capital for companies' expansion. But global demand remains weak, and broad areas of the world's second-largest economy have largely failed to respond to four interest-rate cuts and several adjustments in reserves that banks are required to hold since late last year.
        EQUITIES:
        U.S. stocks rose, pushing the Dow industrials index back above 18,000 for the first time in three weeks.
        The day extended the rally in stocks to four sessions. With Tuesday's gains, the S&P 500 is up 2.4% and the Dow is up 1.3% for the year.
        On Tuesday, the Dow Jones Industrial Average climbed 75.90 points, or 0.4%, to 18053.58. The S&P 500 edged up 9.35 points, or 0.4%, to 2108.95 and the Nasdaq Composite gained 33.38 points, or 0.7%, to 5104.89.
        After several weeks of world news dominating trading in U.S. markets, corporate earnings started to play a slightly bigger role on Tuesday. Still, traders said stock-market moves will likely continue to be dictated by worries about the timing of an interest-rate increase by the Federal Reserve and developments in Greece and China.
        "While earnings will probably mean more now, I think the narrative will continue to be dominated by the Fed and the macro picture," said R.J. Grant, associate director of equity trading at KBW. After years of stimulus efforts, the Fed is widely expected to begin to raise short-term rates later this year.
        In corporate news, J.P. Morgan Chase said its second-quarter profit rose 5.2% as earnings and revenue beat expectations. Shares of the bank gained 1.4%, adding about six points to the Dow industrials.
        A rebound in China fizzled Tuesday amid worries that Beijing would slow its market rescue to stem stock selling, while the rest of the region gained after Greece secured a bailout deal.
        FOREX:
        The dollar edged lower against the euro and the yen, as few investors made large bets one day before Federal Reserve Chairwoman Janet Yellen begins her semi-annual monetary-policy testimony on Capitol Hill.
        In addition, investors held back on currency trades during the session on growing concerns over whether Greek Prime Minister Alexis Tsipras can pass punishing austerity measures through parliament on Wednesday. Failure to do so would likely reignite fears that Greece could exit the euro area and roil markets over the near term.
        The dollar slipped 0.1% against the common currency from the previous day, with one euro buying $1.1005 in late-afternoon trade. The U.S. currency also inched down 0.1% to 123.38 Japanese yen.
        Earlier in the day, the dollar fell against rivals after weak numbers for U.S. retail sales for June signaled uneven consumer demand and lowered expectations for growth over the second three months of the year.
        U.S. retail sales in June decreased 0.3% from the prior month to a seasonally adjusted $442 billion, the Commerce Department said, versus economists' expectations of a 0.2% rise. Numbers for May and April were also revised lower.
        Though the data raise doubts about the U.S. economy's robust recovery from a soft first quarter of 2015, investors are more likely to wait for Ms. Yellen's comments to legislators and developments in Greece on Wednesday before making larger moves, said Richard Cochinos, head of Americas developed-market currency strategy at Citigroup.
        "Investors want to see how those turn out before betting on the euro and the yen right now," Mr. Cochinos said. "It was only one bad retail sales number, and not sufficient to cause people to change their views or back out of positions."
        BONDS:
        An unexpected decline in U.S. retail sales boosted demand for ultrasafe U.S. government debt, sending bond prices higher for the first time in four days.
        In late-afternoon trading, the yield on the benchmark 10-year Treasury note was 2.401%, compared with 2.43% on Monday. Bond yields fall as prices rise.
        The setback for consumer spending raised questions over how robustly the U.S. economy is improving after a soft patch earlier this year, potentially complicating the Federal Reserve's plan in raising short-term interest rates this year.
        Fed Chairwoman Janet Yellen is scheduled to hold her semi-annual testimony before lawmakers on Wednesday and Thursday. Ms. Yellen said last Friday that the central bank is on track to raise interest rates later this year.
        Analysts and traders said Tuesday's releases bolstered the case that the Fed may need to wait for more data to gauge the health of the economy before raising rates, attracting buyers into the bond market.
        A rate increase in "September is unlikely unless spending really snaps back," said Mary Ann Hurley, vice president of trading in Seattle at D.A. Davidson & Co.
        COMMODITIES:
        U.S. and global oil benchmarks ended higher after a topsy-turvy session in the wake of overnight news that Iran reached a nuclear agreement with world powers that could usher its ultimate return to international crude markets.
        U.S. crude rose 84 cents, or 1.6%, to end at $53.04 on the New York Mercantile Exchange, snapping a two-session losing streak and hitting its highest level since July 2. The global Brent contract ended 66 cents, or 1.1%, higher at $58.51 a barrel on the ICE Futures Europe exchange.
        Under the terms of the deal, the U.S., European Union and United Nations will lift economic sanctions against Iran's energy and financial sectors imposed since 2012 in exchange for the country's acceptance of limits on its nuclear activities for 10 years intended to keep it at least 12 months way from developing a nuclear bomb.
        It still requires acceptance by the U.S. Congress, where it faces a steep uphill battle, and was met with immediate condemnation by a top American ally in the Middle East, Israel. Critics and other Gulf state allies say the deal makes too many concessions and doesn't do enough to deter Iran's nuclear ambitions.
        Still, if ultimately adopted, it could pave the way for the eventual return of as much as 1 million barrels a day of Iranian oil to global markets. The timing of such a return has been a key issue in the negotiations, with the U.S. insisting Tehran demonstrate compliance with the agreement before sanctions are lifted.
        "The reality is nothing's coming to market right away," said Kyle Cooper, managing partner of Houston research consultancy IAF Advisors. "Short [sellers] decided to take their profits. If you get the news you want and it's not going your way, you better cover" your market exposure, he said.
        Gold reversed gains, as investors poured their money into stocks after a deal emerged between Greece and its creditors.
        TODAY'S HEADLINES:
        Yum Brands' Chinese Operations Again Drag Down Results
        Yum Brands' operations in China, battered by food safety issues, again dragged down results in the latest quarter.
        China to Allow Wider Access to Bond Market
        China scrapped the quotas that limited investments from foreign central banks, sovereign-wealth funds and other big financial institutions in the country's $6.1 trillion bond market.
        China's Micron Bid Faces Great Wall of Scrutiny
        An audacious $23 billion bid by a Chinese state-owned semiconductor chip designer for U.S. memory chip maker Micron will likely face high regulatory hurdles and deep skepticism about the offer price.
        Iran, World Powers Reach Nuclear Deal
        Iran reached a landmark nuclear agreement with the U.S. and five other world powers, a long-sought foreign policy goal of the Obama administration that sets the White House on course for months of political strife.
        White House Cuts Growth Forecast for 2015, 2016
        The White House said it sees U.S. economic growth rising by just 2% this year before rebounding to 2.9% in 2016--down from its earlier forecast of 3% growth for both 2015 and 2016 released in February--after the economy stalled during the first quarter.
        J.P. Morgan's Profit Rises
        (MORE TO FOLLOW) Dow Jones Newswires

        July 14, 2015 17:30 ET (21:30 GMT)

        17:35 EDT - The NY Fed says the amount of consumers who successfully applied for credit last month reached its highest levels since at least October 2013, when researchers at the Fed branch began surveying credit applicants. In a release of June survey data, it says there were "more successful applicants and fewer rejected and discouraged credit seekers," a sign that lenders are growing more receptive to a wider array of consumer borrowers seven years after credit markets seized up in the financial crisis and left banks licking their wounds. Survey shows 34% of respondents applied for credit during the past year and were successful, 8.1% were denied, and 5.9% weren't confident enough to apply for credit despite needing it. (katy.burne@wsj.com)
        (END) Dow Jones Newswires

        July 14, 2015 17:35 ET (21:35 GMT)