Market News

September 26, 2011  Mon 6:59 AM CT

U.S. stock index futures are higher this morning on moderate overall volume.

Asia-Pacific fell overnight, with Japan and China ending sharply lower by more than 2 percent on average. Although some headlines attributed the declines to problems in Europe, there were some large stock moves that indicate bigger local problems.

Hong Kong regulators launched an investigation of Chaoda Modern Agricultural on accounting issues. China Yurun Food shares plummeted 31 percent on a weak forecast, its biggest single day drop on record. China's second largest insurer, Ping An, plunged more than 14 percent.

In Europe shares began the day lower but quickly rebounded in near-vertical fashion. Both France's CAC-40 and Germany's DAX are up more than 3 percent.

Although there were no blockbuster announcements on the Eurozone debt crisis, it appears for now that investors have some confidence that it will not spin further out of control. The annual meeting of the International Monetary Fund produced little in terms of concrete policy steps other than that the European leadership would do whatever it takes to respond.

On the issue of potential cuts for Greek bondholders, it appeared there was some confidence that buy-in on a 21 percent trimming would hold up. The threshold participation rate from private holders has to hit 90 percent for the deal to go through, and Greece announced that the rate had hit 85 percent.

The deal could be rescinded if it appears likely that Greece would default further. There were also some unconfirmed rumours that the European Central Bank might cut interest rates. Banking shares in Europe rebounded.

Strength in banking stocks has helped U.S. financial shares, which are up more than 2 percent on average. Metals and mining stocks, however, are weak on lower metals prices.

The U.S. Dollar Index is lower against its basket of currencies after spending much of the early session on the upside. The euro has bounced weakly, while the Swedish krona and yen are particularly strong against the dollar.

The fractionally lower dollar is not having much of an impact on commodity prices, which remain weak overall on global demand concerns. Energy prices are mostly down, with agricultural products mixed. Industrial metals pricing is weak, with copper slipping by more than 1 percent. Gold is also off roughly 1 percent, but silver is down nearly 4 percent.

In stock-specific news, Apple shares are down about 1.5 percent after the blog Foss Patents reported that Verizon was backing Samsung against Apple in the U.S. patent fight between the two companies.

Piper Jaffray upgraded Expedia to "overweight" and set a $33 price target on the stock. Shares of may be active ahead of a Wednesday press conference, which is speculated to be an announcement for an Android-based tablet.
The Securities and Exchange Commission is said to be considering a civil action against McGraw-Hill's Standard & Poors unit over an S&P rating on a Japanese collateralized debt obligation (CDO).

In earnings results from S&P 500 companies, Jabil Circuit, Paychex, and Walgreen will report tomorrow. Darden Restaurants, Family Dollar Stores, and McCormick will report on Wednesday.

Thursday will see Micron report its results and could be a key day for semiconductor stocks.
As we are only a couple of weeks away from the next earnings season, we can expect to hear positive or negative pre-announcements.
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