US Market Reports for 5/13/2011 from InvestorCentral.us

After showing a notable turnaround over the course of the previous session, stocks are showing a lack of direction in early trading on Friday. The Dow and the S&P 500 are lingering near the unchanged line, while the tech-heavy Nasdaq has slipped moderately lower.

Most of the major sectors are showing only modest moves, although weakness among software, semiconductor, and computer hardware stocks has helped to drag the Nasdaq into the red.

On the other hand, notable strength has emerged among health insurance stocks, which are benefiting from upbeat comments from Citi.

In economic news, the Labor Department released a report showing that consumer prices rose in line with economist estimates in the month of April, with the price growth largely due to higher gas prices.

The Labor Department said its consumer price index rose by 0.4 percent in April after rising by 0.5 percent in each of the two previous months.

Excluding food and energy prices, the core consumer price index rose 0.2 percent in April following a 0.1 percent increase in March. Economists had expected the core index to edge up by 0.1 percent.

Trading could also be impacted by the release of a report from Reuters and the University of Michigan showing the preliminary reading on their consumer sentiment index for May. The index is expected to inch up to 70.0 from 69.8 in April.

The major averages are currently all posting modest losses, with the Nasdaq slightly underperforming its counterparts. The Nasdaq is down 9.35 points or 0.3 percent at 2,853.69, while the Dow is down 10.49 points or 0.1 percent at 12,685.43 and the S&P 500 is down 1.22 points or 0.1 percent at 1,347.43.

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TSX May Open Higher Amid Earnings, Steady Commodities

Toronto stocks may edge up at open Friday as commodities steadied after recent fall. Also, encouraging economic growth data from the euro zone might help lift sentiment even as traders react to the latest batch of corporate earnings that came in mostly higher.

Further, value buying at lower levels, after the main index suffered notable losses in the past three sessions, likely to support stock prices.

U.S. stock futures were pointing to a higher open.

On Thursday, the S&P/TSX Composite Index extended losses for a third session, shedding 30.32 points or 0.23 percent to 13,389.42.

The price of crude oil was hovering around $100 amid a mixed dollar, with crude for June gaining $0.97 to $99.94 a barrel.

Gold for June was adding $2.30 to $1,509.10 an ounce.

In corporate news from Bay Street, stock market operator TMX Group (X.TO) reported higher first-quarter net income of C$63.1 million or C$0.84 per share compared to C$57.1 million or C$0.77 a year earlier. On an adjusted basis, earnings per share improved to C$0.97 from C$0.77 in the prior year. The company declared a dividend of C$0.40 on per share.

Gold miner Richmont Mines (RIC.TO) reported first-quarter net earnings, which include proceeds from the sale of Valentine Lake, of C$8.7 million or C$0.27 per share compared to C$1.8 million or C$0.07 per share in the first quarter last year.

Precious metals company Franco-Nevada Corp. (FNV.TO) reported first-quarter net income of $21.2 million or $0.18 per basic share, compared to $15 million or $0.13 per basic share last year. On an adjusted basis, net income increased to $21.4 million or $0.18 per share from $8.3 million or $0.07 per share last year.

Metals distribution and processing company Russel Metals (RUS.TO) announced first quarter earnings of C$33 million or C$0.55 per share, compared to C$9 million or C$0.15 per share in the prior year period. Analysts were expecting the company to report earnings of C$0.50 per share for the quarter.

Global energy services company Shawcor Ltd (SCL_A.TO, SCL_B.TO) reported that its first-quarter net income rose to C$20.5 million or C$0.29 per share from C$11.7 million or C$0.16 per share in the first quarter of the prior year.

Oil and gas explorer Advantage Oil & Gas (AAV.TO) slipped int o the red in first-quarter, reporting net loss of C$5.7 million or C$0.03 per share, compared to net income of C$33.1 million or C$0.20 per share last year.

Energy services company Secure Energy Services (SES.TO) said its first-quarter Funds From Operations rose to C$10.66 million or C$0.16 per share, from C$6.38 million or C$0.14 per share in the year ago quarter.

Commercial real estate company MI Developments (MIM_A.TO) reported that its first-quarter funds from operations declined to $23.51 or $0.50 per share, from $25.83 million or $0.55 per share in the year ago quarter.

Consulting services provider Stantec, Inc. (STN.TO) reported improved first quarter profit of C$23.8 million or C$ 0.52 compared to C$16.3 million or C$0.35 l in the year-ago quarter. Analysts were expecting the company to report earnings of C$0.53 per share for the quarter.

Gaming and entertainment company Great Canadian Gaming (GC.TO) announced that its first-quarter net earnings rose to C$5.7 million or C$0.07 per share from C$5.1 million or C$0.06 per share in the year ago quarter.

Fertilizer company Hanfeng Evergreen (HF.TO) reported that its third-quarter net income was C$8.35 million or C$0.13 per share, up from C$7.30 million or C$0.12 per share in the same quarter last y ear.

Renewable energy company Algonquin Power & Utilities (AQN.TO) reported first-quarter net earnings of C$5.0 million or C$0.05 per share, up from C$3.5 million or C$0.04 per share for the first quarter of 2010. Adjusted net earnings were C$4.5 million or C$0.04 per share, up from C$1.4 million or C$0.02 per share in the year ago quarter.

Wood products company Ainsworth Lumber (ANS.TO) reported a much improved first-quarter net income of C$77.7 million or C$0.77 per share, compared with C$16.4 million or C$0.16 per share a year ago.

In economic news, Canadian new motor vehicles sales rose more than expected in March due to better sales of both passenger cars and trucks. The number of new motor vehicles sold in March increased 2.0 percent to 135,261 units, according to Statistics Canada. Economists were expecting new motor vehicle sales to rise 1.5 percent, following the 0.6 percent decline witnessed in February.

From south of the border, the U.S. Labor Department said said its consumer price index rose by 0.4 percent in April, in line with what most economists had expected. The core consumer price index, which excludes food and energy prices and is considered a better benchmark for inflation, increased by a more modest 0.2 percent.

Earlier today, flash estimates from Eurostat revealed that the euro zone economy expanded 0.8 percent sequentially in the first quarter 2011. The growth rate accelerated from the 0.3 percent increase seen in the fourth quarter and also exceeded the consensus estimates of 0.6 percent growth.

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European Markets Rise On Better-than-expected Economic Data

The European markets are moderately higher in afternoon trading Friday, as better-than-expected economic data from Germany and France boosted sentiment.

The Euro Stoxx 50 index of eurozone blue chippers is losing 0.06 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.07 percent.

The German DAX is advancing 0.30 percent and the French CAC 40 is adding 0.51 percent. The UK’s FTSE 100 is gaining 0.70 percent and Switzerland’s SMI is rising 0.38 percent.

ThyssenKrupp is adding 2.7 percent in Frankfurt. The steelmaker reported a rise in second-quarter profit and backed its full year view.

Daimler and Volkswagen are gaining 0.5 percent each, while BMW is losing 1.4 percent. Morgan Stanley raised i ts price target on Daimler to 70 euros from 68 euros.

Barclays raised its price target on Allianz to 118 euros from 114 euros. The stock is flat.

Deutsche Telekom is losing 6.75 percent, and Deutsche Boerse is dropping 4.2 percent.

Commerzbank and Deutsche Bank are falling 2.3 percent and 0.75 percent, respectively.

Commerzbank raised its price target on Linde to 135 euros from 114 euros. However, the stock is down 0.6 percent.

EADS is leading the gainers in Paris by adding 5.2 percent. The maker of Airbus reported a surge in earnings before interest and tax.

Media company Vivendi is gaining 2.5 percent. Goldman Sachs raised its price target on the stock to 23.30 euros from 23 euros.

UBS raised its price target on Danone to 53.50 euros from 50 euros. The stock is up 1.5 percent.

Credit Agricole is rising 1.3 percent after reporting a surge in first-quarter profit. Societe Generale and BNP Paribas are adding 0.9 percent and 0.4 percent, respectively. However, Natixis is declining 0.8 percent.

In London, Fresnillo is adding 2.2 percent and Randgold Resources is rising about 2 percent. Eurasian Natural Resources, Rio Tinto, Anglo American, Kazakhmys and BHP Billiton are gaining between 2.1 percent and 1.5 percent.

Utility Centrica is rising 1.6 percent, as Deutsche Bank reportedly upgraded the stock to “Buy” from “Hold.”

Outside the main index, London Stock Exchange is adding 3.35 percent after reporting a rise in full-year profit.

Telecom company Telefonica is losing 0.73 percent in Madrid. The company reported a slight fall in first-quarter profit.

UniCredit is slightly down in Milan after the bank reported an increase in first-quarter profit owing to lower provisions.

In economic ne ws, Germany’s economic growth rebounded more than expected in the first quarter, underpinned by robust domestic demand. The French GDP growth also exceeded expectations, logging its biggest expansion since the second quarter of 2006. First-quarter GDP growth topped expectations in eurozone too.

 Across Asia/Pacific, most major markets ended higher. Australia’s All Ordinaries added 0.22 percent, China’s Shanghai Composite Index gained 0.98 percent and Hong Kong’s Hang Seng rose 0.88 percent. Japan’s benchmark index Nikkei 225, however, lost 0.70 percent.

In the U.S., futures point to a slightly higher open on Wall Street. In the previous session, stocks showed a substantial turnaround over the course of the trading day, recovering from early weakness. Stocks benefited from a rebound in commodities prices, which moved back to the upside after falling sharply in early trading. The Dow clos ed up 0.5 percent, the Nasdaq rose 0.6 percent and the S&P 500 advanced 0.5 percent.

Among commodities, crude for June delivery is adding $0.85 to $99.83 per barrel and June gold is rising $2.5 to $1509.3 a troy ounce.

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Indian Market Ends Off Day’s High

The Indian market rose sharply on Friday, as investors cheered state poll results and solid data on industrial output and exports allayed fears of a slowdown in the economy.

The Assembly poll results showing a victory for the ruling Congress-led coalition in most of the states and the loss of Left parties in West Bengal and Kerala raised expectations that long-pending reforms in the financial sector would be pushed through.

Also, a rebound in other Asian and European markets following stronger-than-expected German GDP data and higher commodity prices boosted sentiment to some extent.

Germany’s sequential GDP growth came in at 1.5 percent, faster than the previous quarter’s 0.4 percent growth and the 0.9 percent growth expected by economists. France recorded GDP growth of 1 percent. Apart from these, even peripheral natio ns such as Greece and Spain recorded GDP growth.

However, with volatile crude prices and concerns about further rate hikes triggering some late-day profit taking, the benchmark 30-share Sensex closed off the day’s high at 18,531, up 195 points or 1.07 percent from its previous close. The benchmark rose as much as 390 points or 2.1 percent to a high of 18,725 at one point in the afternoon.

Meanwhile, after drifting lower in early Asian trading, crude prices for June delivery were last trading up about a percent near $100 a barrel in response to a weaker U.S. dollar.

The broader 50-share Nifty index closed up 59 points or 1.07 percent at 5,545 while the BSE mid-cap and small-cap indexes posted relatively modest gains, rising 0.85 percent and 0.39 percent, respectively. FMCG, metal, healthcare , auto, capital goods, banking and realty stocks were among the prominent gainers.

Metal stocks such as Sterlite, Hindalco, Tata Steel and Jindal Steel rose by 0.7- 2.4 percent on bargain hunting after Thursday’s steep slide. Jaiprakash Associates jumped 3.1 percent ahead of its annual results due on Saturday.

ITC climbed 3.10 percent and Hindustan Unilever rose 1.7 percent on defensive buying. In the auto sector, Hero Honda Motors gained 2.5 percent, Bajaj Auto added 2.2 percent, Tata Motors rose 1.8 percent, Mahindra & Mahindra closed up half a percent and Maruti Suzuki edged up 0.3 percent.

Among banking stocks, ICICI Bank rose 2 percent, SBI edged up 0.2 percent and HDFC Bank closed up 0.7 percent. Among the other gainers, ONGC, Cipla, Reliance Infrastructure, Larsen & Toubro and DLF ended up by 1-2 percent.

Software exporter Wipro advanced 2.1 percent amid reports that it is selling diaper and vanaspati brands. Rival TCS gained 1.4 percent while Infosys eased marginally. Telecom firm Reliance Communication and mortgage lender HDFC also closed subdued with modest losses.

Gayatri Projects climbed almost 5 percent on posting strong fourth-quarter earnings. Wockhardt rose 0.9 percent on the buzz that the company is in talks with Abbott, GlaxoSmithKline Consumer Healthcare and Heinz to license its nutrition brand Protinex. Siemens and Coal India rose about 1.4 percent each after reporting upbeat earnings.

SKS Microfinance climbed 5 percent after the company filed a special leave petition in the Supreme Court seeking a stay on the special act passed by the Andhra Pradesh government to regulate micro finance institutions. MTNL fell 1.3 percent post results.

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Eurozone Q1 Growth Rises; EC Maintains 2011 Growth Outlook

Driven by strong activity in Germany and France, overall economic growth in the euro area improved markedly in the first quarter. However, economists are of the view that the solid expansion masked the two-speed recovery in the region.

Elsewhere, the European Commission maintained its Eurozone 2011 growth outlook and lifted inflation estimate in its latest Spring forecast.

The 17-nation currency bloc expanded 0.8 percent in the first quarter from the fourth quarter of 2010, according to the flash estimate released by the Eurostat. The growth rate accelerated from the 0.3 percent increase seen in the fourth quarter and also exceeded the consensus estimate of 0.6 percent.

However, economists are not convinced about the sustainability of this growth for a longer period.

According to IHS Global I nsight’s economist Howard Archer, economic activity is expected to moderate over the coming months in the face of headwinds. The faster than expected growth is likely to prod the European Central Bank to lift interest rates by another quarter point sooner rather than later.

Compared with the same quarter of the previous year, the seasonally adjusted GDP increased by 2.5 percent in the first quarter, up from the prior quarter’s 2 percent expansion. This was also bigger than the 2.2 percent growth expected by economists.

Germany’s economic growth rebounded 1.5 percent sequentially in the first quarter, underpinned by the robustness of domestic demand. Additionally, the French GDP growth at 1 percent, exceeded expectations and logged its biggest expansion since the second quarter of 2006.

In Italy, GDP grew only 0.1 percent, the same rate of growth as seen in the fourth quarter. Meanwhile, Spanish GDP growth quickened to 0.3 percent from 0.2 percent.

Portugal slipped back to recession in the first quarter by contracting 0.7 percent after recording a 0.6 percent fall in the fourth quarter last year. On the other hand, Greece recorded 0.8 percent sequential growth, ending its four consecutive quarters of contraction.

European Commissioner for Economic and Monetary Affairs Olli Rehn said the latest Spring outlook suggests that the recovery is solid despite recent external turbulence and tensions in the sovereign debt market.

For 2011, the European Commission sees 1.6 percent economic growth in Eurozone, unchanged from its interim forecast published in February. However, it was slightly larger than the 1.5 percent growth estimated in the autumn forecast.

The commission expects growth to accelerate to around 2 percent in 2012. The commission said this outlook is supported by better prospects for the global economy and an overall upbeat EU business sentiment.

On the price front, the commission said relatively high inflation is on the cards over the coming period. Inflation is expected to be at 2.6 percent this year, up from the previous estimate of 2.2 percent. It is estimated to slow slightly to 1.8 percent next year.

Labor market conditions stabilised over the last year. However, the situation is highly differentiated across nations. The unemployment rate in the euro area will fall to 10 percent this year and again to 9.7 percent in 2012, the Commission estimated.

Public finance began to improve in 2010, albeit at differing degrees in different countries. The euro area government deficit is forecast to ease to 4.3 percent of GDP this year from 6 percent last year. It is expected to drop again to 3.5 percent of GDP next year.

The EU27 grew by 0.8 percent on a quarterly basis in the first quarter and by 2.5 percent on an annual comparison. The E uropean Commission projects 1.8 percent growth for this year and 1.9 percent for 2012.