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Wall Street Slips Amid Fed Policy Jitters

September 23, 2013 by

Stocks on Wall Street slipped on Monday as upbeat economic data from Germany and China was countered by a Federal Reserve official’s remarks that the Fed could begin to scale back its stimulus measures this year.

In late morning trading, the Standard Poor’s 500-stock index was down 0.7 percent, while the Dow Jones industrial average fell 0.4 percent and the Nasdaq composite was off 0.7 percent.

Germany’s private sector grew in September at its fastest rate since January, and a survey showed Chinese manufacturing activity accelerated to a six-month high in September, giving equities relative support.

Referring to the timeline that the Fed chairman, Ben S. Bernanke, articulated in June, William C. Dudley, the president of the Federal Reserve Bank of New York, said the framework is “still very much intact.”

Investors were surprised last week when the Fed decided not to reduce the asset purchases from the current $85 billion monthly pace after many expected a change in policy would come in September.

Other Fed officials will be on the speakers’ circuit on Monday. Investors will be paying close attention after James B. Bullard, chief of the St. Louis Fed, said on Friday that policy makers could still decide to start trimming the central bank’s stimulus in October if inflation and unemployment data warrant it.

“We had some good news out of China and Europe and the elections in Germany are favorable for the euro zone, but focus remains on the Fed,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “Fed speakers are going to keep this market on edge, will continue to keep it guessing when they will begin to taper.”

The S. P. 500 and Dow industrials hit record highs last week after the Fed ignored investor expectations by postponing the start of the wind down of its massive monetary stimulus, saying it wanted to wait for more evidence of solid economic growth.

The prospect of a government shutdown or even a default in the coming weeks could keep markets jittery even as Wall Street analysts sense the current drama is likely to feature more bluster than bravado.

Apple shares gained 4.1 percent, building on momentum from last week, after it said it sold nine million iPhone 5s and iPhone 5c models over the weekend since their launch on Friday.

Citigroup led the S. P.’s financial sector lower a day after The Financial Times reported that Citi had a significant drop in trading revenue during the third quarter, which could hurt the bank’s earnings. Shares in Citigroup fell 3 percent.

United States-traded shares of BlackBerry fell 5.8 percent after the Canadian smartphone maker announced on Friday a change in focus away from the consumer in favor of businesses and governments. The move has fueled fears about BlackBerry’s long-term viability.

German shares closed lower though they remained near last week’s record high a day after Chancellor Angela Merkel won a landslide victory in the general election. Her conservatives may need center-left rivals to form a coalition government.

European stocks hit a five-year high last week, and Nick Beecroft, chairman and senior market analyst for Saxo Bank capital markets, said Ms. Merkel’s election win was “a ringing endorsement” to ensure the euro survives.

Ms. Merkel’s victory gave the euro only the briefest of lifts, however, because she still needs a new coalition partner to rule.

Having initially gained a quarter of an American cent, to $1.3555, the euro faded to $1.3492.

In Asia, shares in Shanghai gained 1 percent while Hong Kong’s Hang Seng index slipped 0.6 percent. Australian shares were down 0.5 percent, and Japanese markets were closed for a holiday.

Benchmark crude oil continued its slide, reflecting increasing confidence over supplies, down $1.43 a barrel, at $103.32.

Article source: http://www.nytimes.com/2013/09/24/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Earnings Reports Offer No Clear Signals, So Markets Meander

July 23, 2013 by Leave a Comment

The stock market lacked direction on Tuesday following some uneven corporate earnings news.

Most major indexes closed slightly lower, except for the Dow Jones industrial average. Yet even the Dow’s modest gain was a result of a 3 percent increase in one stock, United Technologies.

Better earnings from big banks, health insurers and other companies have helped drive the stock market higher this month. On Tuesday, however, the encouraging and the discouraging seemed evenly matched. Wendy’s and United Technologies surged after posting stronger results than financial analysts had expected. Netflix and the Altria Group, maker of Marlboro cigarettes, sank after their results fell short.

“In the absence of major economic news, the focus is on earnings this week,” said David Joy, chief market strategist at Ameriprise Financial. “And there’s nothing today to drive the market dramatically one way or another.”

The Dow industrials rose 22.19 points, or 0.14 percent, to 15,567.74. If not for the gain in United Technologies stock, the Dow would have closed down a point.

United Technologies jumped $3.01, to $105.12, after the conglomerate said strong orders for commercial airline parts and elevators helped lift its profit.

The Standard Poor’s 500-stock index fell 3.14 points, or 0.19 percent, to 1,692.39, backing off the nominal record closing high it set Monday. The Nasdaq composite index fell 21.11 points, or 0.59 percent, to 3,579.27.

It was a busy day for earnings as 35 companies in the S. P. 500 were scheduled to turn in results. The second-quarter scorecard looks good so far. More than six out of every 10 companies have posted earnings that surpassed Wall Street’s expectations, according to SP Capital IQ.

Analysts forecast that second-quarter earnings for companies in the S. P. 500 increased 3.8 percent over the same period last year.

“The bar has been set pretty low,” said Joel Huffman, senior portfolio manager at U.S. Bank Wealth Management. So it’s hardly a surprise that many companies are able to jump over it, he said.

Sales are another story. Analysts expect revenue to shrink 0.7 percent in the second quarter. Mr. Huffman said he was encouraged that many banks and makers of consumer-discretionary goods had reported stronger American sales. “It’s an indication of the underlying growth in the U.S. economy versus other parts of the world,” he said.

Apple shares rose 4 percent in after-hours trading, when the company reported earnings and revenue that beat Wall Street’s forecasts.

Among the stocks on the move, Wendy’s jumped 55 cents, or 8.2 percent, to $7.23. The fast-food company’s net income came in above Wall Street’s expectations. Wendy’s also announced plans to sell 425 restaurants as franchises and raised its quarterly dividend by a penny, to 5 cents.

The Altria Group said its quarterly results fell short of analysts’ expectations. Altria’s stock sank 89 cents, or 2.4 percent, to $35.99.

Netflix shares dropped $11.70, or 4.5 percent, to $250.26. The company said late Monday that it signed up fewer subscribers than financial analysts had projected. Big expectations have propelled Netflix’s stock up 170 percent since the start of the year, putting more pressure on the company to deliver amazing numbers.

In the bond market, interest rates moved higher. The price of the 10-year Treasury note dropped 6/32, to 93 15/32, while its yield rose to 2.51 percent from 2.48 percent late Monday.

Article source: http://www.nytimes.com/2013/07/24/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Market Continues to Climb, Defying Fears of a Sell-Off

May 9, 2013 by Leave a Comment

The stock market rose on Wednesday, with the Dow Jones industrial average closing above 15,000 for a second day after breaching that level for the first time on Tuesday.

Scott Wren, a senior equity strategist at Wells Fargo Advisors, predicted more gains in the short term, but he also said a pullback was likely at some point because the rise in the market was beginning to overstate the improvement in the economy.

Stocks have defied predictions that a sell-off would follow the spring surge as signs emerged that growth could be set for a slowdown. The Dow and the Standard Poor’s 500-stock index have gained every month of the year and are trading at nominal record highs.

Materials and information technology companies gained the most of the 10 industry groups in the S. P. 500 index. Materials rose 0.9 percent, and I.T. rose 0.8 percent. The two industry groups have surged in the last month after lagging the index for the first three months of the year.

That suggests that investors are moving from the so-called defensive stocks — which offer good dividends and can grow regardless of the state of the economy — into industries that will benefit more if the economy accelerates.

The Dow industrials rose 48.92 points, or 0.3 percent, at 15,105.12. The Dow is 15.3 percent higher for the year. The S. P. 500 index rose 6.73 points, or 0.4 percent, at 1,632.69, extending its advance for 2013 to 14.5 percent.

The Nasdaq composite index advanced 16.64 points, or 0.5 percent, to 3,413.27, putting its gain so far this year at 13 percent.

Among the stocks on the move on Wednesday, AOL plunged $3.68, or 8.9 percent, to $37.74 after the company reported earnings that fell short of the forecasts of Wall Street analysts who follow the stock. Subscription revenue fell 9 percent.

Wendy’s fell 34 cents, or 5.6 percent, to $5.78 after it reported a 2 percent rise in revenue to $603.7 million, short of the $615 million forecast of analysts.

Whole Foods climbed $9.39, or 10.1 percent, to $102.19 after the natural foods store chain said its fiscal second-quarter net income rose 20 percent. The company also raised its profit forecast for the full year.

Electronic Arts, which makes the Madden football games and SimCity, jumped $3.15, or 17.1 percent, to $21.56 after it projected profits for the current fiscal year that were higher than analysts were expecting.

In the bond market, interest rates eased. The price of the 10-year Treasury note rose 4/32 to 102 3/32, while its yield slipped to 1.77 percent, from 1.78 percent late Tuesday.

Article source: http://www.nytimes.com/2013/05/09/business/daily-stock-market-activity.html?partner=rss&emc=rss

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S.&P. 500 Hits Record in Quiet Trading

May 6, 2013 by Leave a Comment

The stock market showed little change in quiet trading as the Standard Poor’s 500-stock index reached another nominal record high.

The financial sector rallied after Bank of America and MBIA, the troubled bond insurer, reached a settlement of their long legal dispute over mortgage-backed securities.

A jump in Apple’s shares helped lift the S. P. 500 and the Nasdaq composite index modestly. But the Dow Jones industrial average bucked the trend, ending marginally lower.

The day’s slight gains followed a strong run in stocks this year. The market has been lifted by the Federal Reserve’s monetary stimulus policy, which has kept interest rates low, and solid earnings. The S. P. 500 has gained 13.4 percent this year.

“As long as you continue to have decent earnings reports and the support from central banks around the world providing liquidity, it’s going to be hard to derail this market, at least in the short term,” said Michael James, managing director of equity trading at Wedbush Securities.

On Monday, Bank of America said it would settle claims with MBIA for $1.7 billion, lifting shares of both companies and the S. P. financial sector index, which gained 1 percent. MBIA shares jumped 45.4 percent to $14.29 and Bank of America shares rose 5.2 percent to $12.88.

Apple was among the top gainers after Barclays raised its price target on the stock. Apple’s shares shot up 2.4 percent to $460.71.

The Dow industrials dipped 5.07 points, to close at 14,968.89. The S. P. 500 inched up 3.08 points, or 0.19 percent, to 1,617.50. The Nasdaq gained 14.34 points, or 0.42 percent, to close at 3,392.97.

Although weak economic data from the euro zone and China has caused concerns about the outlook for global growth, the stronger-than-expected April employment report fueled gains that sent the Dow and the S. P. 500 to new nominal record levels last Friday.

The multibillionaire investor Warren E. Buffett said on Monday that stocks were “reasonably priced,” although the Dow and the S. P. 500 had hit nominal highs. But he also said low interest rates had made bonds “terrible” investments because their prices would fall when rates eventually rise.

But some analysts say they suspect the stock rally has little strength to continue.

The market “is discounting a tremendous amount of good news now, which I don’t think is going to be substantiated, and I don’t think it’s allowing for any possibility of bad news,” said Uri Landesman, president of Platinum Partners.

Earnings have been mostly higher than expected, with 68.5 percent of companies surpassing estimates. At the same time, second-quarter estimates have fallen as outlooks remain more negative than positive.

On Monday, shares of Tyson Foods dropped 3.3 percent to $24.10 after the company posted a weaker-than-expected quarterly profit and cut its full-year sales forecast.

In contrast, Humana jumped 2.1 percent to $75.49, making it one of the S. P. 500’s biggest percentage gainers. JPMorgan Chase upgraded the stock to overweight.

But Johnson Johnson’s shares slid 1.3 percent to $84.68. General Motors’ stock also declined, falling 0.9 percent, to $31.82, after the Treasury said it would begin another round of sales of G.M. stock acquired during the government’s bailout of the auto industry.

In the bond market, interest rates rose again on Monday after their surge last Friday following the strong April employment report. The price of the Treasury’s 10-year note fell 22/32, to 102 4/32, while its yield rose to 1.76 percent, from 1.74 percent on Friday.

Article source: http://www.nytimes.com/2013/05/07/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Wall Street Rebounds

April 16, 2013 by Leave a Comment

Stocks on Wall Street rose Tuesday, bouncing back after their worst decline since early November, following solid earnings from Coca-Cola and Johnson Johnson, and inflation data that reinforced expectations that the Federal Reserve would keep its stimulus in place.

The price of gold gained 2.2 percent after Monday’s 9 percent drop, its biggest daily fall in dollar terms. But even as gold buyers seized on the lower prices, investors in precious metals remained jittery about further declines.

In afternoon trading the Standard Poor’s 500-share index climbed 1.1 percent, and the Dow Jones industrial average gained 0.9 percent. The Nasdaq composite rose 1.2 percent.

Shares of Coca-Cola, up more than 5 percent and at their highest since 1998, and Johnson Johnson, at a new high, led the Dow industrials after reporting earnings that pleasantly surprised Wall Street.

Coca-Cola gained 5.3 percent after it posted slightly higher-than-expected profit and announced a deal to unload some distribution territory to five independent United States bottlers.

The stock of Johnson Johnson, a fellow Dow component, touched a record high of $83.50, up 2 percent, after the company reported better-than-expected first-quarter earnings.

International Paper and Vulcan Materials were among the top performers after bullish analyst notes.

Stocks on Monday posted their worst day since Nov. 7, as big declines in the price of gold, oil and other commodities fed a broad sell-off in equities. Stocks fell further after two fatal explosions near the finish of the Boston Marathon

Further supporting equities, data on Tuesday showed that the Consumer Price Index fell in March for the first time in four months, giving the Federal Reserve room to maintain its monetary stimulus to speed up economic growth.

“Dovish economic data is not good in the long run, but it is certainly supportive of more Fed action,” said Art Hogan, managing director at Lazard Capital Markets in New York.

He said earnings from safety plays like Coca-Cola and Johnson Johnson are going to determine if the market enters a correction phase that many are expecting — or if it finds more buyers looking for yield.

Other government data released on Tuesday showed industrial production grew 0.4 percent last month, topping expectations for a gain of 0.2 percent, while capacity utilization edged up to 78.5 percent in March from 78.3 percent in February.

Also, the Commerce Department reported an increase in the pace of home construction: housing starts rose 7 percent in March, reaching the seasonally adjusted annual rate of 1.04 million houses, exceeding the 1 million mark for the first time since June 2008.

BlackRock, the asset management firm, said revived interest in the stock market led to a 10 percent in profit in the first quarter. BlackRock shares rose 0.8 percent.

Goldman Sachs reported a stronger-than-expected rise in quarterly profit as it earned more from underwriting fees and its own investments, but shares fell 1.8 percent.

The retailer Target shed 0.6 percent after it warned first-quarter earnings would miss expectations after weaker-than-expected sales of seasonal and other items.

Intel and Yahoo are scheduled to post earnings after the close.

Article source: http://www.nytimes.com/2013/04/17/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Dow Gains 153 Points to End the Quarter Higher

July 1, 2011 by Leave a Comment

The yield on the Treasury’s benchmark 10-year note rose as the Federal Reserve’s bond buying program ended and investors poured money into equities.

The Dow industrials closed up 152.92 points, or 1.25 percent, at 12,414.34. Although stocks tumbled for most of the month of June, a surge of 480 points this week helped give the Dow a gain of about 0.7 percent for the second quarter.

The Standard Poor’s 500-stock index rose 13.23 points, or 1.01 percent, to 1,320.64, while the Nasdaq composite index was up 33.03 points, or 1.21 percent, at 2,773.52. Both the S. P. and the Nasdaq were slightly lower for the quarter.

For the first half of 2010, the Dow gained 7.2 percent, the S. P. rose 5 percent and the Nasdaq increased 4.6 percent.

Stocks climbed Thursday after a vote in the Greek Parliament enabled the country to begin cuts in spending and steps to raise revenue. German banks also agreed to take part in a plan to aid Greece by accepting longer maturities some of the Greek bonds that they hold.

Although analysts said the news had already been largely factored into stock prices, it was still enough to lift sentiment in Europe and the United States.

“This week’s developments hardly mark an end to the economic crisis afflicting Europe, or Greece, for that matter,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan Company. “But at least the can has been kicked down the road,” he wrote in an economic commentary.

In economic news, a barometer of manufacturing, the Chicago purchasing managers index, recorded an unexpectedly strong increase to 61.1 in June, above market expectations for a decline to 54, according to a survey by Bloomberg News.

Analysts saw the rise as an indication of stronger-than-expected new orders in the region, which includes the crucial automobile manufacturing sector.

Employment indicators remained weak, however, with initial claims for unemployment benefits at a still-high 428,000 in the latest week, according to a report from the Labor Department report.

Stocks in sectors including energy, materials, technology and industrial stocks, all pushed ahead by more than 1 percent on Thursday.

Exxon rose 1.4 percent to $81.38. The chip maker Intel gained 3.6 percent to $22.16. Caterpillar rose 3 percent to $106.46, and General Electric rose 1.6 percent to $18.86.

The Treasury’s 10-year note declined for a fourth consecutive trading day Thursday as the Fed’s bond buying program, known as QE2, drew to a close. The note fell 10/32, to 99 23/32, and the yield rose to 3.16 percent from 3.12 percent late Wednesday.

“There is a lot of concern about quantitative easing and who is going to be the buyer” now that the Fed has withdrawn, said Laura LaRosa, director of fixed income at the investment firm Glenmede.

Economists and investors continue to debate how much the Fed’s quantitative easing program helped the economy. But traders said it had been a boon for the stock market.

The S. P. has risen more than 20 percent since last August when the Fed chairman, Ben S. Bernanke, first indicated in a speech that a new round of quantitative easing was likely to be adopted to help the economy.

Article source: http://feeds.nytimes.com/click.phdo?i=29da9634cf7260b1bbe144caf61e98ab

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