daytrading sep 13 pre-market

Morning traders.

Market wrap:

Heavy falls in precious metals and a revival of Syrian tensions have Australian shares pointing lower after Wall Street broke a seven-session win streak overnight.

The September SPI 200 futures contract slipped nine points or 0.2% to 5230 as silver suffered its biggest loss in nine weeks, gold touched a one-month low and BHP and Rio Tinto were dragged lower by a shift from mining stocks in the US.

The S&P 500 retreated six points or 0.36% as obstacles to a Syrian chemical weapons plan emerged and traders took profits ahead of next week's Federal Reserve policy meeting. The Dow dropped 26 points or 0.17% and the Nasdaq lost 0.24%.

"It shouldn't be too surprising to see a modest pullback after the strong moves we've seen so far this month," the head of US equity trading at RBC Global Asset Management told Bloomberg. "With data light over the next several sessions, potential headlines regarding Syria and the much-anticipated FOMC meeting next week will garner much of the attention."

A "risk-off" session saw resource and financial stocks lead the falls. BHP lost 1.06% and Rio Tinto 1.37%. The Morgan Stanley Cyclical Index fell 0.77% and the Dow Jones Transportation Average 1.08%. Telecoms and tech stocks were the best of the sectors.

The falls accelerated after news broke that Syria had set conditions for handing over its chemical weapons, including that the US stop arming rebels and threatening military strikes. US Secretary of State John Kerry arrived in Geneva for talks with Russia after telling Syrian opposition leaders that a US military strike was still possible.

Computer issues cast a cloud over the night's major economic news. Data showed first-time jobless claims declined by 31,000 to 292,000 last week, the lowest reading in seven years. However, the Labor Department attributed the drop to unprocessed claims backlogs as two states upgraded computer systems. Read more here.

Syrian tensions did little to stem sharp falls in precious metals amid speculation that the US Federal Reserve will star to unwind its inflationary stimulus program at next week's policy meeting. Gold for December delivery was lately down $43.30 or 3.2% at US$1,320.50 an ounce, a one-month low. One sell order was large enough to trigger a 20-second pause in electronic trading, described by one trader as the "longest I've ever seen for major commodity futures". Read more here. December silver was off $1.39 or 6% at US$21.78 an ounce.

Oil got a leg-up from Syria and an upgraded demand outlook from the International Energy Agency. The IEA said global oil demand will increase by 1.1 million barrels a day or 1.2% next year. West Texas Intermediate crude oil for October delivery was lately up $1.18 or 1.1% at US$108.73 a barrel.

Copper dropped to a five-week low following disappointing European factory data. US copper for December delivery was recently down nearly six cents or 1.7% at US$3.20 a pound. Industrial output in the euro-zone hit its lowest level in more than three years in July, dashing hopes that the region was accelerating out of recession.

"A far steeper than anticipated fall in industrial production across the euro area in July represents a hugely disappointing start to the third quarter," the chief economist at Markit told MarketWatch. "The data call into question the region's recovery that was signalled after GDP rose a stronger than expected 0.3% in the second quarter. There is clearly a risk that GDP could contract again in the third quarter, as some of this second quarter growth proves to have been only temporary (or perhaps even illusory)."

European markets shrugged off the report, holding their ground near five-year highs. Germany's DAX eased 0.02%, France's CAC lost 0.29% and Britain's FTSE inched up 0.01%.

Iron ore was little changed yesterday. Spot ore for import to China improved 10 cents to US$135.20 per dry metric tonne.

TRADING THEMES TODAY

PRE-FED CAUTION: No surprise to see some selling the US after seven straight advances and with the Fed likely to downsize the punch bowl next week. If anything, it's a positive signal that the rally continued this long. Our market doesn't appear overly concerned. Some of the optimism over a Syrian solution dissipated overnight after al-Assad set down conditions that the US is certain to reject. The biggest surprise was that haven buying was nowhere to be seen in precious metals markets as some big money moved out ahead of the Fed meeting. The Philadelphia index of US gold/silver miners tanked 4.91% and miners here likely face similar treatment today.

ECONOMIC NEWS: No significant domestic news scheduled today. The Eurogroup meets this weekend and quarterly European unemployment figures are due. A busy night ahead in the US includes retail sales/core retail sales, the producer price index/core PPI, preliminary consumer sentiment and inflation expectations and business inventories

Good luck to all.