Stocks climb as Japan weighs yen plans

The dollar surges after reports that Japan might take further steps to weaken the yen. The Empire State Manufacturing Index drops more than expected. Industrial production stalls.

By TheStreet Staff Sep 15, 2010 7:55AM

By Shanthi Venkataraman, TheStreet


Updated at 2:13 p.m. ET


Stocks were climbing amid reports that Japan might take more steps to damp the rising yen, countering weak manufacturing reports in the U.S.


At 2:13 p.m. ET, the Dow Jones Industrial Average ($INDU) was up 37 points, or 0.4%, at 10,563. The S&P 500 ($INX) was up 2.6 points, or 0.2%, at 1,124, and the Nasdaq ($COMPX) was rising 9.4 points, or 0.4%, at 2,299.


Japan's government is considering selling the yen against the dollar for a second day, Bloomberg News reported. The U.S. dollar has surged 2.6% against the yen to trade at 85.60 yen after the government weaken its currency today for the first time since 2004.


The yen had been trading at a 15-year high against the dollar.

Japan's Nikkei soared 2.3% as stocks of its biggest exporters soared. The dollar index, a measure that considers several foreign currencies, was up 0.6%.


Stocks had fallen earlier today after the New York Federal Reserve Bank's Empire Manufacturing Index, a gauge of business conditions in the region around New York, fell to 4.1 in September from 7.1 last month. Economists had expected the measure to decline to 6.4, according to Figures greater than zero indicate expansion.

The Federal Reserve said industrial production rose 0.2% in August, less than the 0.3% economists expected, after increasing a revised 0.6% in July. Capacity utilization was 74.7%, little changed from the previous month.


Brian Bethune of Global Insight, the economic data was "pretty good" in that it showed that the economy was still "moving forward and though at a slow speed."


"To move out of this 10,000 to 10,500 trading range we need more solid evidence from the economy. I do not think that is going to happen in the short term. I think it is going to be hard for the market to get sustained momentum," Bethune said, adding that the third-quarter earnings could act as a catalyst for the market in the middle of October.


Travelers (TRV) was the top-performing Dow stock, rising 2.7%, followed by Kraft (KFT) and Cisco (CSCO). Chevron (CVX) was the benchmark's biggest laggard, falling 0.8%.


The Bureau of Labor Statistics said import prices rose 0.6% in August, the most since April, driven by an advance in both fuel and higher prices for finished goods, food, feed and beverages. Export prices also rose 0.8%, the most since April, after declining in the previous two months.


In corporate news, the World Trade Organization sent its ruling on U.S. subsidies to Boeing (BA) to government officials in the U.S. and U.K. The EU alleges that Boeing received up to $24 billion in tax breaks and illegal subsidies from the U.S. government.Boeing shares were slipping 0.6% at $62.39.


Online brokerage firm Charles Schwab (SCHW) was down 0.7% at $13.75 after it warned on Tuesday that its third-quarter earnings would be affected by two pre-tax charges.


E*Trade Financial (ETFC) was falling 1.5% to $14.04 after daily average revenue on trades fell 36% in August.


Anglogold Ashanti (AU) fell 5% to $44.37 after it said it would raise as much as $686 million from an offering of 15.8 million shares priced at $43.50 each with an additional 2.3 million shares set aside to cover overallotments. It will also offer mandatory convertible notes in addition to the equity offering.


Novell (NOVL) was rising 6% to $5.90 on a New York Post report that the company was considering selling itself to a strategic buyer in two parts, citing people close to the process.


U.K. drugmaker AstraZeneca (AZN) said the U.S. Food and Drug Administration has extended the review of its blood-thinning drug ticagrelor, which is sold under the brand name Brillinta. AstraZeneca's American depositary receipts were down 1% at $51.94.


MasterCard (MA) announced a $1 billion buyback late Tuesday ahead of its annual shareholder meeting later this month. The stock rose to $202.55 in extended trading. MasterCard shares were rising 4% to $207.74.


Beazer Homes (BZH) said it expects a slower-than-anticipated improvement in new-home orders after the expiration of homebuyers tax credit. The stock was losing 4.4% at $4.35.


NextEra Energy (NEE) was falling 1.7% to $54.05 on heightened volumes after it said it plans to raise $403 million in equity.


AK Steel (AKS) fell 5% to $13.73 after it became the second steelmaker to warn that third-quarter profits would be hurt by higher raw material costs.


The U.S. Energy Information Administration reported a 2.5-million barrel decrease in crude stockpiles for the week ended Sept. 10. That was slightly more than the 2.25 million barrel decline estimated by the Platts survey of analysts. But it was more than the American Petroleum Institute’s report that showed an increase of 3.3 million barrels. However, the report noted that oil inventories were above the upper limit of the average range that prevail for this time of the year.


Gasoline inventories declined 0.7 million barrels last week, more than the 0.4 million barrels decline the Platts survey had anticipated. Distillates stocks decreased by 0.2 million barrels. Analysts projected a 800,000 barrel increase.


Crude oil for October delivery was losing 95 cents at $75.80 a barrel.


The December gold contract, the most actively traded gold future, was lower by $4.40 at $1,267.30 an ounce.  


The benchmark 10-year Treasury note was down by 8/32, raising the yield to 2.708%.  


European markets fell as concerns about the slowdown in the region resurfaced. Jobless claims in the U.K. increased for the first time since January. The FTSE in U.K. and the DAX in Germany fell 0.2%. 


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