Today´s market news

MAIN NEWS

-S&P +0.07%.

-10-yr -0.17%.

-Euro flat vs. dollar.

-Crude -0.11% to $92.28.

-Gold +0.21% to $1768.75.

- European stocks fell for a third day and metals retreated on concern slowing Chinese growth will hurt corporate profits. Spanish bonds reversed an earlier decline and the South African rand strengthened. U.S. index futures were little changed, while Asian shares fell.

-Noda Says Japan Prepared to Act on Yen as Strength Hurts Economy

- Antonis Samaras won a round in his fight to stay in the euro.

     The Greek prime minister got endorsements from German Chancellor Angela Merkel and European finance chiefs as well as signals that the country’s next aid payment was in the offing.

- The International Monetary Fund said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate.

CORPORATES

-Alcoa earnings hit by bribery settlement. Alcoa (AA) swung to a net loss of $143M in Q3 from a profit of $172M a year earlier, due to charges of $175M related to a legal settlement with a Bahraini smelter over bribery allegations and other special items. Alcoa's adjusted EPS of $0.03 was down from $0.15 a year ago, but beat forecasts, as did revenue of $5.83B, which was down 9%. Alcoa cut its 2012 global aluminum demand forecast to 6% from 7%.

-Yum net profit jumps 23%. Yum Brands' (YUM) Q3 net profit soared 23% to $471M, boosted by the continued improvement at its Taco Bell, Pizza Hut and KFC chains in the U.S., although growth in China was restrained by the economy. Adjusted EPS of $0.99 beat consensus, and while revenue climbed 9% to $3.57B, the figure missed Street forecasts. Yum increased its guidance for FY EPS growth to 13% from a previous prediction of 12%. Shares were +2.1% premarket.

COMMODITIES

-Alcoa Cuts Global Aluminum Demand Forecast on China Slowdown

-Oil Trades Near One-Week High as Mideast Risk Counters Slowdown

-Iraq predicts oil production of 9-10M barrels/day by 2020, far higher than yesterday's bullish IEA prediction of 6.1M. The country's deputy PM for Energy says Iraq has underway a plan to address the infrastructure bottlenecks raised by the IEA.

-Japan Easing Restrictions on U.S. Beef, Paving Way for Tyson

-Drought Cuts U.S. Crops Below Demand First Time in 38 Years

UPGRADES

-Yum! Brands Raised to 'Buy' at Credit Agricole Securities. The 12-month target price is $80.00 per share.

-Abercrombie Raised to Overweight From Neutral at Piper, PT $40

-Wells Fargo upgrades Dollar Tree (DLTR) to Outperform from Market Perform while keeping Dollar General (DG) tagged as its favorite name in the sector. The firm sees solid growth potential still ahead for dollar stores and likes their relative immunity from the Amazon Effect.

DOWNGRADES

-Home Depot Cut to 'Market Perform' at Oppenheimer. The 12-month target price is $67.00 per share.

LATAM

- Billionaire Carlos Slim’s Minera Frisco SAB agreed to acquire AuRico Gold Inc.’s mining assets in Mexico for $750 million to expand its investments in precious metals.

- Brazil’s largest money managers are giving a vote of confidence to the government’s push to create a debt market for infrastructure projects after the two-year-old plan produced just a $12 million bond sale.

- Oil companies in Colombia, South America’s third-largest producer, are operating the smallest number of rigs in more than two years, foreshadowing lower output.

Today's economic calendar:
7:00 MBA Mortgage Applications
10:00 Wholesale Trade
1:00 PM Results of $21B, 10-Year Note Auction
2:00 PM Fed's Beige Book
2:00 PM Treasury Budget
4:30 PM Daniel Tarullo speaks on Financial Stability Regulation.
4:45 PM Fed's Fisher: 'Europe's Crisis and the Welfare State: Lessons for the United States'

U.S. Stocks Fall While Commodities Gain, Treasuries Rise

U.S. stocks slid amid concern U.S. corporate earnings will disappoint investors and after the International Monetary Fund cut growth forecasts. Oil led commodities higher as Mideast tensions flared, while Treasuries and the dollar rose. The U.S. third-quarter earnings season begins with Alcoa Inc. (AA) today, the fifth anniversary of the S&P 500’s record close at 1,565.15. The IMF said the world economy will grow 3.3 percent this year, the slowest pace since the 2009 recession, and 3.6 percent next year. European finance ministers praised Greece’s determination to cut spending and declined to press Spain for more budget cuts at a meeting yesterday.

Market review

Wall Street closed its best third quarter since 2010 after a wave of central bank actions across the globe (and expectations of future action) drove up equities in an unexpected summer rally. However, signs of weakness in the economy pushed markets down in the final week of September and may lead to further bearish sentiment. For the quarter, the S&P rose 5.76%, the Dow increased 4.32% and the Nasdaq rose 6.17%

US Stock advance with Commodities on Spain´s budget cut

U.S. stocks advanced, snapping a five-day decline for the Standard & Poor’s 500 Index, as Spain pledged to cut its deficit and speculation grew that China’s government will do more to support economic growth.

Italia: sale rendimento Btp 10 anni, spread a 370

Rally dei Bund tedeschi con il rendimento del decennale che tocca nuovi minimi, mentre il rendimento dei bond italiani ha esteso il rialzo dopo che il membro della Bce Juergen Stark si è dimesso a causa del dissidio sul controverso programma di acquisto dei bond deciso dalla Bce, secondo una fonte.
Il rendimento del decennale tedesco ha toccato minimi record vicino all'1,75%, mentre il futures scadenza dicembre sale di un punto pieno a 137,75.
I bond italiani, per contro, estendono le perdite: il rendimento del titolo a due anni sale di circa 30 punti base al 4,22%, nonostante l'acquisto di bond da parte della Bce. Il rendimento del titolo a dieci anni sale di 20 punti base al 5,48%.
"La cosa di Stark è importante perché mostra le divisioni all'interno del board e potrebbe non essere buona", osserva un broker.
Lo spread fra i Btp italiani e i Bund tedeschi sale sopra 370 punti base da 341 della chiusura di ieri.

Japan earthquake

The March 11 Japan earthquake and tsunami are likely to have caused up to $34 billion in losses for the global insurance industry, catastrophe modeling company RMS said on Tuesday. RMS said the magnitude 9.0 quake and subsequent flooding probably caused $18 billion to $26 billion in property insurance losses, plus $3 billion to $8 billion in losses to the life and health insurance sectors. RMS is the last of the big three catastrophe modelers to release its loss estimate for the Great Tohoku Earthquake, which killed up to 28,000 people and caused one of the worst nuclear accidents in history. AIR Worldwide's revised quake and tsunami estimate is $20 billion to $30 billion and Eqecat's range is $12 billion to $25 billion. At the higher end of the estimates, the quake would go down as the most expensive of its kind for the insurance industry in a generation, and it is already having at least some effect on insurance pricing around the world.

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