Wall St Week Ahead - Twitter's IPO to provide week's excitement

By Angela Moon

NEW YORK (Reuters) - Twitter will be the talk of Wall Street next week when the social media company goes public in the stock market's most anticipated initial public offering since 2012's Facebook .

Twitter is expected to price its IPO on the evening of November 6 and begin trading November 7 on the New York Stock Exchange under the symbol .

"It's not just about the stock. Twitter's IPO will be a measure of how much liquidity is out there," said John Rutledge, chief investment strategist at SAFANAD, a private investment firm in New Canaan, Connecticut.

Twitter has said it will sell 70 million shares at a price between $17 and $20, valuing the online messaging company as much as $11 billion, below the $15 billion that some analysts had been expecting.

FACEBOOK'S IPO FATE

The market will be on alert to see if Twitter follows the fate of last year's botched Facebook Inc IPO: the social networking company's stock hit the market in May 2012 and was plagued by allocation problems, trading glitches and a selloff. The shares did not recover the IPO price until a year later.

Views have been mixed on what investing strategy to take for Twitter's IPO. According to a Reuters survey of 29 broker-dealers and independent advisers, 23 said they are not recommending Twitter shares. Only one said he would recommend it - and only to certain clients. Five others said they would wait to snap up the stock if it plunges after it begins to trade.

But while retail interest might be low, tech industry analysts say there is expected to be a good appetite for Twitter's stock from institutional investors at the current valuation.

On Friday, Morningstar joined three other brokerages in setting price targets for Twitter Inc well above its IPO price range, suggesting the stock has room to rise at least 30 percent.

The Wall Street brokerages set a price target of $26 a share. Last month, Pivotal Research had set its price target at $29 a share, SunTrust at $50 and Topeka Capital at $54.

GOV'T SHUTDOWN IMPACT

Another event that will grab investors' attention will be the Labor Department's release of non-farm payroll figures for October on November 8. The announcement was delayed by the 16-day partial U.S. government shutdown in early October. Some market participants warn that the data could be skewed due to the shutdown.

"It's hard to have a takeaway for the markets because we're at a point in time where we have to take all the data with a bit of a grain of salt. Some of it is old, some may not be affected by the shutdown yet," said Art Hogan, managing director at Lazard Capital Markets in New York.

On Friday, the Institute for Supply Management's index of national factory activity was not affected by the government shutdown, showing the best reading since April 2011.

"This was supposed to be a government shutdown-affected number, and it certainly didn't show that," Hogan said.

For the week, the Dow rose 0.3 percent and the S&P 500 gained 0.1 percent, while the Nasdaq slipped 0.5 percent.

But beyond the factory data, the government shutdown did appear to dampen consumers' appetite for new cars last month. Seven of the top eight automakers reporting monthly sales on Friday missed analysts' expectations.

Next week's economic indicators also include factory orders on Monday, followed by the ISM services index on Tuesday. On Thursday, third-quarter gross domestic product and weekly jobless claims will be released. In addition to the unemployment numbers, U.S. personal income and outlays and the Thomson Reuters/University of Michigan consumer sentiment index are due on Friday.

EARNINGS SEASON CONTINUES

Earnings will also be in focus. So far, out of the 74 percent of S&P 500 companies which have reported, 68.5 percent have topped Wall Street's expectations, above the long-term average of 63 percent. But just 53.3 percent have topped revenue forecasts, below the 61 percent average since 2002, Thomson Reuters data showed.

After the Nasdaq OMX Group Inc closed its second largest options market for much of Friday due to a technical glitch, many investors will be watching whether the operations will fully resume on Monday.

The Nasdaq Options Market, which accounted for around 8 percent of U.S. options volume last month, was halted at 10:36:57 a.m. EDT (1436 GMT) and remained shut through the rest of Friday. While the halt had a minimal effect on the options markets, it was the latest in a series of industry mishaps have raised concerns about infrastructure.

(Additional reporting by Rodrigo Campos; Editing by Kenneth Barry)

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Asian markets seen cautiously firmer ahead of Fed statement

By Wayne Cole

SYDNEY (Reuters) - Asian share markets should take heart from record highs in U.S. stocks on Wednesday as investors wager the Federal Reserve will rock no boats at its policy meeting and leave stimulus in place for the next few months at least.

Australia was the first market to dip its toe in the water, gaining 0.5 percent, while MSCI's index of Asia-Pacific shares outside Japan was a shade firmer.

A mixed bag of U.S. economic data caused few frowns since it merely reinforced expectations the central bank will maintain to the status quo when its two-day policy meeting ends on Wednesday.

Even the U.S. dollar got a lift as dealers gauged the prospect of easy money for longer had now been pretty much discounted following two months of losses.

Markets seem to be operating on the assumption that the Fed's policy statement will not challenge the growing consensus that any tapering of its $85 billion of monthly asset purchases will not start until March at the earliest.

Such an outcome would be taken as justifying the rallies in stocks and bonds seen in recent weeks and might have only a limited impact on prices in the near term.

But it also means markets are vulnerable to a surprise.

"With expectations of taper firmly kicked into 2014 the risk that the FOMC could decide to move earlier looks asymmetrical," said Patrick Perret-Greene, an analyst at Australia and New Zealand Bank.

"If the Fed does nothing tomorrow then nothing really happens but if they do something or even hint at moves in the not too distant future the effects could be dramatic."

The Fed's decision is due at 1800 GMT, though divining its true message may be tricky as no new economic forecasts are released and nor will Chairman Ben Bernanke be giving a news conference.

BE BORING, PLEASE

For now, markets are hoping the Fed will be boring.

The Dow Jones industrial average ended Tuesday 0.72 percent higher at an all-time closing peak of 15,680.35.

The S&P 500 gained 0.56 percent aided further by a jump in heavyweight IBM after the company's board of directors approved another $15 billion for stock buy-backs.

Among the U.S. data, a measure of core retail sales showed surprising resilience in September, yet a grim survey of consumers highlighted the heavy toll the government shutdown had taken on the public mood.

MSCI's world equity index rose 0.25 percent On Tuesday, but remained within last week's trading range.

Having fallen steadily since the last Fed meeting, the U.S. dollar seems to have reached a bottom in the last few days.

The dollar index reached a one-week peak of 79.618, having climbed 0.5 percent on Tuesday. Just last Friday, it had plumbed a nine-month low at 78.998.

"Fed meetings have not been friendly to the USD this year, with the dollar weakening following every meeting in 2013 with the exception of June," analysts at BNP Paribas wrote in a client note.

"However, with markets already having adjusted to a much more dovish view on the Fed outlook, we think the USD is likely to hold up better this time."

The euro slipped to $1.3746, pulling further away from a 23-month peak of $1.3833 set just a few days ago.

Yields on the benchmark 10-year Treasury note were at 2.505 percent after dipping from a high of 2.5360 on Tuesday. The market has enjoyed a substantial rally in the past two months with yields falling all the way from 3 percent.

Spot gold edged back to $1,343.64 an ounce as the dollar gained, but is still up more than 7 percent from a three-month low hit mid-October.

U.S. crude oil was off 67 cents at $97.53 a barrel.. Traders termed this a consolidation after a sharp gain on Monday when reports of a sharp drop in Libyan oil exports rekindled worries over global supply.

(Editing by Eric Meijer)

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Asian shares creep ahead, count on Fed being benign

By Wayne Cole

SYDNEY (Reuters) - Asian share markets took heart from record highs in U.S. stocks on Wednesday as investors wagered the Federal Reserve would rock no boats at its policy meeting and leave stimulus in place for the next few months at least.

Japan's Nikkei led the way with a gain of 1.2 percent, while Australian shares added 0.3 percent and Shanghai stocks 1 percent. MSCI's index of Asia-Pacific shares outside Japan crept up 0.5 percent.

European shares were expected to edge higher, too. Capital Spreads predicted Britain's FTSE 100 to open 13 points or 0.2 percent higher, Germany's DAX to gain 0.04 percent and France's CAC 40 to open flat.

A mixed bag of economic data caused few frowns since it merely reinforced expectations the Fed will maintain the status quo when its two-day policy meeting ends on Wednesday.

Even the U.S. dollar got a lift as dealers judged the prospect of easy money for longer had now been pretty much discounted following two months of losses.

Markets seem to be operating on the assumption that the Fed's policy statement will not challenge the growing consensus that any tapering of its $85 billion of monthly asset purchases will not start until March at the earliest.

Such an outcome would be taken as justifying the rallies in stocks and bonds seen in recent weeks and might have only a limited impact on prices in the near term.

But it also means markets are vulnerable to a surprise.

"With expectations of taper firmly kicked into 2014 the risk that the FOMC could decide to move earlier looks asymmetrical," said Patrick Perret-Green, an analyst at ANZ Bank.

"If the Fed does nothing tomorrow then nothing really happens but if they do something or even hint at moves in the not too distant future the effects could be dramatic."

The Fed's decision is due at 1800 GMT, though divining its true message may be tricky as no new economic forecasts are released and nor will Chairman Ben Bernanke be giving a news conference.

BE BORING, PLEASE

For now, markets are counting on the Fed being boring.

The Dow Jones industrial average ended Tuesday 0.72 percent higher at an all-time closing peak of 15,680.35.

The S&P 500 gained 0.56 percent, aided further by a jump in heavyweight IBM after the company's board of directors approved another $15 billion for stock buybacks.

The flow of economic data proved too mixed to offer direction. Industrial output bounced in Japan, but disappointed in South Korea due to strikes at automakers.

In the United States, a measure of core retail sales showed surprising resilience in September, yet a grim survey of consumers highlighted the heavy toll the recent government shutdown had taken on the public mood.

In currencies, dollar bears looked exhausted after two months of selling and the currency bounced broadly. The dollar index reached a one-week peak of 79.667, having climbed 0.5 percent on Tuesday. Just last Friday, it had plumbed a nine-month low at 78.998.

"Fed meetings have not been friendly to the USD this year, with the dollar weakening following every meeting in 2013 with the exception of June," analysts at BNP Paribas wrote in a client note.

"However, with markets already having adjusted to a much more dovish view on the Fed outlook, we think the USD is likely to hold up better this time."

The euro slipped to $1.3740, pulling away from a 23-month peak of $1.3833 set just a few days ago. The dollar firmed to 98.21 yen, from its recent trough of 96.94.

Yields on the benchmark 10-year Treasury note were steady at 2.506 percent after dipping from a high of 2.5360 on Tuesday. The market has enjoyed a substantial rally in the past two months with yields falling all the way from 3 percent.

Spot gold edged back to $1,344.51 an ounce as the dollar gained, but is still up more than 7 percent from a three-month low hit in mid-October.

Brent oil futures lost 36 cents to $108.65 a barrel while U.S. crude oil dipped 58 cents to $97.62.

Traders termed this a consolidation after a big gain on Monday when reports of a sharp drop in Libyan oil exports rekindled worries over global supply.

(Additional reporting by Vidya Ranganathan; Editing by Eric Meijer, Shri Navaratnam and Chris Gallagher)

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S&P leads stocks ahead of Fed meeting, dollar jumps

By Rodrigo Campos

NEW YORK (Reuters) - The S&P 500 hit a record on Tuesday to lead global equities higher ahead of a Federal Reserve meeting on the future of the U.S. stimulus program, while the euro hit a one-week low.

The U.S. dollar climbed the most in almost two months against a basket of currencies as the euro, which earlier brushed against last week's two-year high versus the greenback, reversed course.

Wall Street stocks advanced, with the S&P 500 at yet another intraday record high on continued expectations the U.S. Federal Reserve will keep its $85 billion monthly bond purchases intact for several months.

Markets were thrown for a loop in mid-September, when the expectation was high for the Fed to start trimming its monthly purchases. Although many are wary of surprises when the Fed publishes a statement after its two-day meeting concludes on Wednesday, most see the recent rally in riskier assets and a dollar selloff as largely factoring in the decision.

"The Fed surprised me by not tapering in September and the key reason they cited was the fact inflation is running very moderately, and they still have lots of room on the inflation front," said Doug Foreman, co-chief investment officer at Kayne Anderson Rudnick Investment Management in Los Angeles.

"Certainly the data today didn't give them anything different to think about that."

U.S. producer prices unexpectedly fell in September and the increase in the annual rate was the smallest in nearly four years.

The Dow Jones industrial average rose 87.64 points, or 0.56 percent, at 15,656.57. The Standard & Poor's 500 Index was up 6.72 points, or 0.38 percent, at 1,768.83. The Nasdaq Composite Index was up 3.59 points, or 0.09 percent, at 3,943.72.

MSCI's world equity index edged up 0.1 percent, trading within last week's range.

In Europe, shares edged higher as results at BP and Saipem fueled a surge in the oil sector, a laggard in this year's equity rally. The FTSEurofirst 300 index closed up 0.4 percent.

EURO DIVES

The euro hit a one week low against the dollar at $1.3735 but was still close to a two-year high hit last week. The single currency had hit $1.3813 earlier after the European Central Bank's Ewald Nowotny said he does not see any tool the ECB could use against a strong euro.

The dollar gained 0.5 percent against a basket of currencies in its largest percentage gain since early September.

U.S. Treasuries prices were flat, with yields close to three-month lows. The light trading volume suggested traders were reluctant to make big bets ahead of the Fed meeting and as the Treasury Department sought to sell $96 billion in coupon-bearing debt this week.

"The market is directionless. There is no urgency to push yields higher or lower," said Lou Brien, market strategist at DRW Trading in Chicago.

Benchmark 10-year Treasury notes were unchanged, the yield at 2.5106 percent.

Spot gold, which earlier rose more than 8 percent from a three-month low in mid-October, fell 0.5 percent to around $1,345 an ounce, pressured further by the dollar strength.

Brent crude fell 1 percent to $108.52 a barrel, though traders said this was a consolidation after a 2.5 percent gain the previous day, when reports of a sharp drop in Libyan oil exports rekindled worries over global supply. U.S. crude was off 0.6 percent at $98.05.

Libya's crude oil exports have dropped to less than 10 percent of capacity as the government has struggled to reach a deal with protesters blocking its big eastern facilities, with some demanding a greater share of the oil wealth.

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Wall St Week Ahead - Focus on Facebook, Apple and the Fed

By Julia Edwards

NEW YORK (Reuters) - The Federal Reserve meeting next week is not on the minds of as many people as when it met in September, but its decision to do nothing last month is providing the fuel for more share gains in Apple and Facebook, which report results next week.

Facebook is only slightly off an all-time high, and Apple has recovered somewhat from losses earlier in the year after investors have poured money back into stocks, bringing the S&P to successive records that some say may not be supported by corporate results.

The numbers from Facebook and Apple are among those that will be closely watched - and investors say at their current levels, the margin for error is slim.

Nearly half of the S&P 500 companies have reported their third-quarter results so far, and 69 percent have beaten Thomson Reuters I/B/E/S estimates. The technology sector has led the way, beating expectations 84 percent of the time. The most recent companies to do so were Amazon.com and Microsoft , whose results led the S&P to close at an all-time high of 1,759.79 on Friday.

Companies already stretched to high price-to-earnings multiples, like Facebook, will have to outpace expectations to keep investors buying.

"There is not a lot of room for error, especially with these names with a lot of momentum behind them. You have to beat the numbers pretty handily," said Daniel Morgan, vice president and senior portfolio manager at Synovus Trust Company in Atlanta, who focuses on tech stocks.

That's where the Fed comes in. Some of the riskier names and high-dividend payers had pulled back in the late summer, anticipating the Fed would begin reducing monthly bond purchases beginning at its September meeting.

But that didn't happen - and since then, stocks have been unimpeded, save for the 16-day government shutdown that didn't scare too many people.

The Federal Reserve will hold its October meeting on Tuesday and Wednesday. But earnings will overshadow the central bank, as it is expected to maintain its current policy, in part because of the economic hit that resulted from the shutdown.

"So far, this earnings season has been pretty balanced and on the positive side," said Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank in Charlotte, N.C. "If that continues into next week, and we're not expecting anything out of the Fed, it could continue to support markets on current levels."

Mangus noted that expectations for the third quarter were low, so beating earnings estimates is not a particularly bold sign of strength. Many companies were able to create earnings without actual revenue growth, so 46 percent of results so far revealed lower-than-expected revenue growth.

"The sales numbers have been anemic. We're pretty flat in terms of across the board revenue," Mangus said.

For the past week, the Dow was up 1.1 percent, the S&P rose 0.9 percent and the Nasdaq gained 0.7 percent.

TECH: A BIG ACT TO FOLLOW

About 24 percent of S&P 500 companies will report their third-quarter earnings next week, among them heavy hitters such as General Motors and Visa .

But Apple, reporting on Monday, and Facebook, on Wednesday, are likely to be the most-watched names.

"These are big names that people like to look at and they create a feeling about the market," said Synovus Trust's Morgan.

He said he will be looking to see if Apple has reversed the negative trend in iPad sales of the second quarter. But, he noted, Apple's multiple is low, at a 12.25 price-to-earnings forward ratio, compared with Facebook, which has a 55.45 P/E multiple.

Right now, the market is optimistic, particularly for Facebook options. That market is pricing in more upside risk than downside risk for Facebook shares heading into earnings next week. A metric known as skew, which measures the perceived volatility priced into out-of-the-money puts versus out-of-the-money calls on a stock, is inverted - meaning it costs more for options that anticipate upside rather than downside.

"This is the opposite of what we typically see in the stock market, since most investors are long stocks and therefore more concerned about downside risk," said Matt Franz, at Stutland Volatility Group in Chicago.

ENERGY TURNS UP THE HEAT

Second only to technology, the energy sector of the S&P 500 has beaten analysts' earnings expectations in 73 percent of the results reported so far. The focus will stay on the group next week, with results from Exxon , Chevron and Valero .

As a cyclical sector tied to the pace of economic growth, "better earnings and especially better guidance ... are going to say good things about the economy going forward," said Tom Schrader, managing director of U.S. trading at Stifel Nicolaus Capital Markets, who focuses on energy stocks.

Forward guidance from refiners may be positive if companies price in news that the U.S. Environmental Protection Agency is considering lowering the required amount of ethanol to be blended into engine fuels, said Schrader.

If the government's September jobs number was any indication, economic data that is relatively within expectations, even if weak, will fuel investor confidence that the Federal Reserve will keep stimulating the economy at current levels.

ADP's national employment report, due on Wednesday, will show the number of non-farm private sector jobs added to payrolls in October. Unlike the Department of Labor's October jobs report, ADP will not account for public sector jobs that were temporarily lost during the partial government shutdown. If it did, that might present a clearer picture of the nation's employment rate.

The Conference Board's Consumer Confidence Index, to be released on Tuesday, will account for the government shutdown and reveal how big a hit U.S. spending habits took as a result.

(Additional reporting by Doris Frankel in Chicago; Editing by Dan Grebler)

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Rupee falls; custodial banks buy dollars ahead of policy

Reuters Market Eye - The rupee falls on dollar buying by custodial banks ahead of the Reserve Bank of India's review on Tuesday. The rupee falls to 61.64/65, off 61.44 highs, versus last close at 61.46/47.

"Today's spot will be settled on Tuesday which is the policy day. So, we are seeing a spurt in buying interest by foreign banks," says dealer.

The Reserve Bank of India policy on Tuesday likely be the next trigger with any hike in the repo rate to negatively impact the INR.

Foreign funds extend buying in local stocks for a 15th session, being provisional buyers of $161.5 million on Thursday, exchange data showed.

The dollar struggled near a two-year low against the euro in early Asian trade on Friday, as strengthened expectations the U.S. Federal Reserve will maintain its asset purchases through early next year undermined the greenback.

A Reuters poll shows that investors raise long positions in Asia FX.

Technicals show USD/INR may see a relief rally.

(Reporting by Subhadip Sircar)

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