RTTNews - The major markets across Europe are poised for a higher opening on Wednesday morning, led by commodities on higher metal and oil prices. Crude oil price in international market surpassed the $70 a barrel mark on expectations that demand will start improving. Metals also rallied higher on expectations of higher demand. U.S. Supreme Court's consent to go ahead with the proposed sale of Chrysler unit to a consortium led by Fiat SpA as well as positive trading across Asian markets on higher commodity prices might also lift sentiment across the markets in Europe.
In the U.S., the Treasury Department announced that 10 of the largest U.S. financial institutions that borrowed money from the Treasury under the TARP funding are planning to repay their loans. JP Morgan Chase (JPM), U.S. Bancorp (USB) and Bank of New York Mellon (BK) were among the banks that will repay a total of $68 billion. An announcement from the Treasury Secretary Timothy Geithner that he plans to begin reforming the U.S. regulatory system soon also augured well among the traders, who saw some life in the stock market in late afternoon Tuesday after witnessing choppy trading in the morning session.
Earlier traders were presented with mixed economic data. A report from the Commerce Department revealed that wholesale inventories fell by a little more than expected in the month of April. The report showed that wholesale inventories fell 1.4% in April following a revised 1.8% decrease in March. Economists had expected inventories to decrease by about 1.1% compared to the 1.6% drop originally reported for the previous month. Additionally, the Commerce Department said that wholesale sales edged down 0.4% in April after falling by a more significant 2.4% in March. Wholesale sales were down 19.5% compared to the same month a year ago.
The tech-heavy Nasdaq closed up by 17.73 points or 1% at 1,860 and the S&P 500 rose 3.29 points or 0.4% to 942, while the Dow slipped by 1.43 points or 0.02% to 8,763.
Meanwhile, the European markets ended higher on Tuesday, led by technology stocks after chipmaker Texas Instruments raised its outlook for the second quarter. The announcement from the U.S. Department of Treasury about the 10 banks that were granted permission to repay the TARP funds back to the Treasury, as well as rise in oil prices in the international market also impacted the trading positively. .
The FTSEurofirst 300 index of pan-European blue chips closed 0.51% higher at 870, while the narrower DJ Stoxx 50 index rose 0.45% to 2,145. France's CAC 40 index rose 0.21% to 3,297, while the U.K.'s FTSE 100 index declined 0.01% to 4,405 and Germany's DAX index fell 0.14% to 4,998.
On the economic front, the Italian statistical office ISTAT is set to release industrial production for April at 4.00 am ET. Production is forecast to recover by 0.7% in April, following a 4.6% monthly fall in March. At 4.30am ET, the British trade balance as well as industrial production for April are due. The visible trade deficit for April is seen at GBP 6.4 billion, down from GBP 6.5 billion in March. Meanwhile, economists expect industrial production to fall 0.1% month-on-month in April and 12.4% annual fall.
Meanwhile, data released by the Federal Statistical Office (Destatis) in Germany revealed that the consumer price index for Germany in May 2009 was at the same level as in May 2008. The inflation rate of 0.0% is the lowest level in 22 years, the report noted, attributing high price level during the same period last year as the primary reason. In April 2009, it was 0.7%. Compared with April 2009, the index was down by 0.1%.
In another report, destatis revealed that on the basis of provisional data, the manufacturing sector witnessed a 23.2% drop in turnover in real terms , on a working-day adjusted basis, in April 2009 compared with April 2008. Compared with the preceding month, real turnover in manufacturing showed a total decrease of 1.8% in April 2009 after having been adjusted for seasonal fluctuations and working-day variations, the report revealed.
In corporate news, Halfords Group PLC might react to a drop in profit attributable to equity shareholders for the 53-week period ended 3 April 2009 compared to the same period last year, despite marginal increase in total revenue.
Deutsche Lufthansa AG might react to news that the airline expects a 20% drop in sales for the year. Monthly traffic details are also on tap later during the day.
Automakers are expected to react to the news about U.S Supreme Court's decision to grant permission to the Italy-based Fiat SpA to go ahead with the purchase of the Chrysler Unit from General Motors.
Retail stocks in the region might see some activity after the largest retailer in the region, Inditex SA reported a 16% drop in profits for the first quarter of 2009, attributing higher unemployment in Spain as one of the main reasons.
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