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Stocks Rise on Earnings Optimism

July 9, 2013 by NewsMaker Leave a Comment

Stocks rose on Tuesday, putting Wall Street on pace for a fourth consecutive advance, after Alcoa reported higher-than-expected adjusted profit, which buoyed optimism about quarterly earnings reports to come.

In afternoon trading, the Standard Poor’s 500-stock index gained 0.7 percent, the Dow Jones industrial average rose 0.5 percent and the Nasdaq composite was 0.5 percent higher.

Global markets were also higher, with the FTSEurofirst 300 index of European shares closing 0.8 percent higher; Japan’s Nikkei average ended its session almost 2.6 percent higher, near a six-week high.

Alcoa, the first Dow component to report results for the second quarter, also said late on Monday that it anticipated solid growth in global demand for its products this year. Shares of Alcoa, the largest American aluminum producer, rose at the opening bell before falling 0.4 percent.

The earnings report bolstered confidence for an earnings season currently forecast to show lackluster growth.

“We’ve set the expectations bar extremely low, probably the lowest that we’ve seen in the last eight quarters, for this earnings season,” said Art Hogan, managing director at Lazard Capital Markets in New York. “So if we are going to get some upside surprises here, which I entirely expect that we will, the market may react positively.”

The earnings calendar remains fairly light this week until Friday, when JPMorgan Chase and Wells Fargo are scheduled to report.

The benchmark S.P. 500 has risen 1.6 percent over the last three sessions, as jobs and manufacturing data have helped ease concerns over the possible early pullback of stimulus measures by the Federal Reserve.

“What is more important here is that we’ve got a market that has transitioned in psychology – good news is actually good news, and that is a very important transition in the market psychology right now,” said Mr. Hogan.

The book retailer Barnes Noble gained 4 percent after the company’s chief executive, William Lynch Jr., resigned.

Tesla Motors, which makes electric cars, gained 2.4 percent after Nasdaq OMX Group said Tesla would replace Oracle on the Nasdaq 100 stock index, reflecting the company’s rising profile.

The grocery store operator Kroger Company said it would acquire Harris Teeter Supermarkets in a deal valued at $2.5 billion, including debt, to expand in Southeast and Middle Atlantic states. Kroger shares rose 2.5 percent, and Harris Teeter gained 1.6 percent.

Article source: http://www.nytimes.com/2013/07/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: nikkei average, opening bell, stock index

Markets Wait for a Twitch Either Way in Jobs Data

July 3, 2013 by NewsMaker Leave a Comment

The difference between a market rally and a rout on Friday could come down to a few hundredths of 1 percent.

On Friday, Wall Street will be closely watching the employment figures for June, which the Labor Department is set to report before the opening bell.

Analysts expect the economy to have added 165,000 jobs in June. But a swing of just 50,000 jobs — a few hundredths of a percent in a job market of more than 135 million people — could have broad implications.

If the economy created significantly more positions, the strong numbers would increase the odds that the Federal Reserve will begin in the coming months to taper its $85 billion in monthly bond purchases aimed at stimulating the economy. That would be a negative for stocks, which have benefited from the flood of money into the financial system.

A weak jobs figure would call into question just how vigorous the economy is and whether it is too early for the Fed to start stepping back. In the hall of mirrors that is Wall Street, investors would see that as a positive for stocks, since it might extend the central bank’s stimulus efforts.

Further complicating the market calculus, volatility will most likely be heightened on Friday. Many traders are off for the long weekend after the Independence Day holiday, so trading volumes could be thin.

“Any number between 150,000 and 175,000 is a nonevent,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “Anything over 200,000 would get people really concerned about a Fed exit, while a really weak number would force everyone to rethink if the economic recovery is going well. So no news is good news.”

The possibility of a change in Fed policy has caused recent swings in financial markets. Yields on 10-year government bonds have risen sharply, lifting mortgage rates, while stocks have sold off slightly.

On Wednesday, shares edged higher in an abbreviated trading session ahead of the holiday. The Standard Poor’s 500-stock index has risen more than 13 percent this year.

Friday’s figures could provide a clue as to whether the stock market rally continues in the second half of 2013. But even veteran economists admit the intensity of the focus on a sliver of one month’s worth of data is a bit much.

“There is double the normal focus on a number, which already gets too much of a reaction,” Mr. Harris said. “And payroll surprises of 100,000 happen every year.”

What is more, there is added uncertainty since seasonal factors make June numbers particularly hard to predict. High school and college graduates enter the work force, for example, while teachers in some cases exit for the summer. Uncertainty in the jobs survey is greatest at the beginning of the summer, the end of the summer and the New Year, Mr. Harris noted.

And this time, economists are struggling to gauge the impact of the recent budget cuts in Washington in certain sectors, like military contractors. So far, sequestration, as the process of mandatory spending cuts is known, has not had a sizable effect on the labor market, at least according to government data.

Last month, the chairman of the Fed, Ben S. Bernanke, said the central bank could begin easing back stimulus efforts later this year if the job market continued to show signs of strength, with the $85 billion monthly bond-buying program wrapping up when unemployment sinks to 7 percent. The Fed currently expects that to happen by the middle of 2014. The June unemployment rate, which is based on a separate survey from the one that calculates the change in overall payrolls, is expected to fall by 0.1 percentage point, to 7.5 percent from 7.6 percent.

“They’re always significant but Bernanke’s tying it to the 7 percent rate does ramp up the employment figures’ importance,” said Dean Maki, chief United States economist at Barclays. Mr. Maki is estimating that the economy added 150,000 jobs, slightly below consensus, but not enough to alter the Fed’s plan to begin tapering later this year, possibly as early as September.

Job creation has been slowing, however, he said. The average number of jobs created each month over the last three months — a better indicator than one month alone — totaled 155,000. That compares with a three-month average of 233,000 for December, January and February.

If the economy were to reverse course and add 250,000 jobs, and the rate fell more sharply in June, Mr. Maki said, the tapering could begin as early as late July, when Fed policy makers next meet. “We’re not in that camp,” Mr. Maki said. More likely, he said, the scaling back will be announced after the Fed meeting in mid-September, when Mr. Bernanke will hold a news conference as well, unlike the July meeting.

On Wednesday, Automatic Data Processing, which tracks private payrolls, reported an increase of 188,000 jobs in June, a bit above the 160,000 consensus and significantly stronger than in May, when A.D.P. reported a jump of 134,000 jobs. A.D.P.’s data often varies from the government figures, however, adding to the confusion on Wall Street. New claims for unemployment fell slightly last week to 343,000, the Labor Department also reported Wednesday, in line with the trend of the last four weeks.

The robust A.D.P. number prompted Ian Shepherdson, chief macroeconomist at Pantheon Macroeconomics, to lift his estimate for Friday to 175,000 jobs. But he, too, admits the Wall Street guessing game is hardly scientific. “You can have a Platonically perfect model and still get the number wrong.”

Article source: http://www.nytimes.com/2013/07/04/business/markets-wait-for-a-twitch-either-way-in-jobs-data.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: economic recovery, financial markets, opening bell

DealBook: Upstart Rival to Buy N.Y.S.E. in Deal Worth $8.2 Billion

December 20, 2012 by NewsMaker Leave a Comment

Andrew Kelly/ReutersTraders on the floor of the New York Stock Exchange on Thursday.

8:39 a.m. | Updated

The owner of the 220-year-old New York Stock Exchange on Thursday agreed to an $8.2 billion deal that would give control of the longstanding symbol of American capitalism to an upstart competitor.

NYSE Euronext said that it would sell itself to the IntercontinentalExchange for about $33.12 a share in cash and stock. The combined company would have headquarters in both ICE’s home of Atlanta and in New York.

The takeover signals the revival of consolidation in the world of market operators, after a wave of deals dissipated amid concerns over antitrust and nationalist sentiment. ICE had partnered with NYSE Euronext’s main rival, the Nasdaq OMX Group, in an $11 billion hostile bid for the Big Board’s parent, but that offer was blocked by the Justice Department.

India’s Lower House Votes to Support Foreign Investment

December 6, 2012 by NewsMaker Leave a Comment

The nationally televised debate featured some of India’s best orators and most powerful politicians in a high-profile fight that could serve as the opening bell for a series of elections that start next week in the western state of Gujarat. The elections will culminate in 2014 when control over India’s central government will be determined.

Television cameras routinely focused on Sonia Gandhi, a scion of the country’s most powerful family, as she nodded or frowned during crucial portions of the debate. Mrs. Gandhi is the president of the Indian National Congress Party, the dominant member of a coalition that has controlled the central government since 2004.

In September, the government had approved several changes, one of which provided for increased foreign investment in India’s retail sector, the policy under debate Wednesday.

Those changes were cheered by investors and foreign governments but have been contentious in India, where decades of paternalistic and protectionist economic policies still garner considerable support. India’s once fast-growing economy has slowed considerably this year, and the government is hoping the measures will help jump-start growth.

While it riveted the nation, the debate had more symbolic than practical importance. The government had announced that it would go forward with its decision to open foreign investment regardless of how Parliament voted. It won Wednesday’s vote, 253 to 218, partly because members of two of its allied parties, whose leaders said they opposed the policy, were among the more than 40 members of the lower chamber who walked out before the voting, largely to deny a victory to the opposition. Prospects for approval in the upper house of Parliament are less certain.

The debate grew comical when Sushma Swaraj, the leader of the opposition in the lower house, said that McDonalds was importing potatoes used for its French fries because Indian potatoes were deemed to be too small. McDonalds India responded that it bought its potatoes locally, and a member of Parliament who supported the government noted that farmers in a state ruled by Ms. Swaraj’s party supplied potatoes to McDonalds.

The government’s victory was a blow to the Bharatiya Janata Party, the main opposition party, which lost the vote even though a majority of members of the lower house had expressed resistance to the underlying policy. The party has been linked with anti-Muslim actions and sentiments, so regional parties that rely on Muslim votes have been reluctant to support its positions.

India’s electoral politics have become so intensely competitive that few parties are willing to offend Muslims by being linked with the Bharatiya Janata Party. The strength of the distaste for the Bharatiya Janata Party that was demonstrated Wednesday could spell problems for the party in the lead-up to the 2014 elections, when regional parties are expected to gain even more power.

Hari Kumar contributed reporting.

Article source: http://www.nytimes.com/2012/12/06/world/asia/indias-lower-house-votes-to-support-foreign-investment.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: opening bell, state of gujarat, support india

DealBook: Kors I.P.O. Makes Its Debut in Style

December 15, 2011 by NewsMaker Leave a Comment

Richard Drew/Associated PressThe fashion designer Michael Kors and his mother in front of the New York Stock Exchange.

Michael Kors and his merry band of fashionistas brought a little glamor — and a big initial public offering — to the New York Stock Exchange on Thursday morning.

A flashy Michael Kors billboard was draped across the Corinthian columns on the N.Y.S.E. building’s facade. Down on the street, Mr. Kors and his proud mother, Joan Kors, posed for pictures, both sporting December tans, sunglasses and huge smiles. Inside, at 9:30 a.m., high above the trading floor, Mr. Kors rang the opening bell, high-fiving and hugging his chief executive, John Idol, and two fashion-tycoon backers, Lawrence Stroll and Silas K.F. Chou.

There was good reason to celebrate. In the face of a rocky stock market, the American fashion designer’s company had a successful initial public offering. It shares opened at $25 on Thursday morning, up 20 percent from their offering price of $20. The stock priced last night above its expected range of $17 to $19, and brought in $944 million for Mr. Kors and the other selling shareholders. The company itself did not raise any money in the I.P.O.

Mr. Kors sold about $117 million worth of stock on the deal, and maintains a roughly 8.6 percent stake that is worth some $400 million. The biggest winners are Mr. Stroll and Mr. Chou, who cashed in about $520 million worth of their holding company’s shares and still own about 35 percent of the business, a position worth about $1.7 billion.

At its current stock price, the company is worth about $4.6 billion.

In the DealBook article on Wednesday that previewed Kors’s offering, a retail-industry analyst raised several concerns about the I.P.O., including the question of whether Mr. Kors’s label would enter the fashion firmament or eventually fade. “Everyone wants to be the next Ralph Lauren,” the analyst said.

Because Mr. Kors has already sold so much of his business to outside investors, he will not be the next Ralph Lauren — at least in terms of his bank account. Unlike Mr. Kors, Mr. Lauren has retained control of his 44-year-old company through voting shares, and has rarely sold stock. Last year, Mr. Lauren sold nearly $1 billion worth of Ralph Lauren preferred shares, by far his largest cash-out ever. His ownership interest in the company, which has a market value of $12.5 billion, is worth more than $4 billion.

Article source: http://feeds.nytimes.com/click.phdo?i=a503dabfca609c18e9ddab7fe6a79a9b

Filed Under: Business News Tagged With: industry analyst, initial public offering, opening bell

Awakening in the Glow of a Bloomberg Terminal

December 11, 2011 by NewsMaker Leave a Comment

Gone are the days when traders showed up to work just before the New York Stock Exchange opened at 9:30 a.m. Now, Wall Street has an unofficial opening bell: the 2:30 a.m. alarm clock.

“We have a new credo: carpe noctem — seize the night,” said Douglas A. Kass, a hedge fund manager who routinely sets his alarm for precisely that time to scan the headlines coming out of Europe. All last week, the musings of the German chancellor, Angela Merkel, and other European leaders put the markets on edge. “You are almost forced to get up and watch the goings-on,” he added.

The nest of night owls is growing more crowded. Senior executives at the Pacific Investment Management Company, the giant bond-trading house, wake up at 1 a.m. in Southern California, to check their BlackBerrys for updates from colleagues in Europe.

“Your nerves are twitching,” said Christian Stracke, Pimco’s global head of credit research.

Michael Mayo, a longtime bank stock analyst, said he was working the lobster shift so often just to keep up with the latest International Monetary Fund rescue or Slovenian parliamentary vote that he might as well call himself a 24-hour-a-day research shop. “Who would have thought we would have to be looking at Italian sovereign debt yields to figure out what Morgan Stanley’s stock will do?” he said.

For traders, there is too much to lose if they sleep through history.

That’s why Craig Gorman, a partner at First New York Securities, routinely monitors his trading positions in the middle of the night. He turns on CNBC and fires up the Bloomberg terminal with six screens at the foot of his bed. “With the TV and all my monitors on, it gets a little bright in there,” he said. “My wife is not thrilled about it.”

The other downside? It is hard to fall back asleep once the adrenaline from trading starts pumping. Even so, Mr. Gorman said it was worth the price: “You can’t get the same feel for market psychology looking back at the charts in the morning as when you are up,” he added.

News organizations and brokerage firms see an uptick in early-morning activity, too. Bloomberg reports at least a 30 percent jump from a year ago in the use of its mobile applications, which allow customers to remotely log into the trading terminal at their office desk. The biggest spikes have occurred well before the New York markets open, between 5 and 7 a.m., when traders wake up and commute to work, as well as between midnight and 3 a.m., when trading in Asia winds down and the European markets open, according to company officials.

CNBC has recorded a 50 percent increase in the tiny audience watching “Worldwide Exchange,” which broadcasts between 4 and 6 a.m. Traffic on its Web site between 2 and 5 a.m. has risen about 30 percent compared with a year ago.

There are also signs that predawn trading by American retail investors has increased. TD Ameritrade, which caters to individual investors, said customer trading volume in S. P. futures — a bet on the coming day’s direction in the market — has more than doubled between 3 and 6 a.m. over the last year.

Wall Street has long been the land of the early riser, and plenty of fixations in high finance have come and gone. In the late 1970s and 1980s, traders obsessed over the state of the money supply; in the late 1990s, they focused on rapidly rising Web page views of the leading dot-com companies. Last year, traders acted like armchair engineers in deep-water drilling as they monitored images of the BP oil spill gushing into the Gulf of Mexico.

Whether or not Europe’s new plan struck on Friday to achieve budgetary discipline brings market stability, some suggest that the current middle-of-the-night frenzy heralds a lasting change for an industry that coined the term “bankers’ hours.”

“It is now making people aware that they can become a global trader,” said J. J. Kinahan, the chief derivatives strategist for TD Ameritrade. “They don’t have to rely on the hours of the New York Stock Exchange” between 9:30 a.m. and 4 p.m. Eastern time.

Several forces are at play. The convergence of mobile technology and financial information allows investors to trade on news — anywhere, anytime. The markets, meanwhile, have grown so interconnected that what happens with sovereign bonds can quickly affect equities.

Any whiff of trouble in Europe can send markets into a tailspin and easily overwhelm the hard-earned edge a trader might have gained by digging deep into the financials of an individual stock.

“The degree to which asset prices are connected is off the charts,” said Dean Curnutt, the president of Macro Risk Advisors and another early riser.

That is the main reason that Brad Alford, the chief investment officer of Alpha Capital in Atlanta, rolls over in bed, grabs his iPad and glances at the Bloomberg market feeds with one eye, sometimes two, before the sun comes up. Or why Mr. Kass trudges over to his poolside home office in Palm Beach, Fla., to e-mail hedge fund friends about the latest troubled country du jour. “There is a pretty active cabal in those early hours,” he said.

It is also why Al Moniz, a European bond fund manager at Fore Research and Management in New York, has been waking up at 2 a.m. at least several times a month, and expects even more bleary-eyed nights next year.

“It is probably going to get worse,” he said. “I don’t think there is any end in sight.”

Article source: http://feeds.nytimes.com/click.phdo?i=674d7777421f78387b765cef72ddfeae

Filed Under: Business News Tagged With: german chancellor, new york stock exchange, opening bell

U.S. Stocks Resume Their Slide After a One-Day Rally

August 10, 2011 by NewsMaker Leave a Comment

The sharp declines of more than 3 percent on the Dow and two other main indexes in less than an hour after the opening bell on Wednesday sent a message to investors: That the rally of about 4.7 percent in the broader market on Tuesday had no basis to last. Stocks had surged after the Federal Reserve announced that while it would not be coming to the rescue with some new program to stimulate the economy, it would leave interest rates unchanged for a couple of years.

But the rally stalled Wednesday morning. As it had been in recent weeks, market sentiment was shaken by the confluence of events that had plagued it, including the Standard Poor’s downgrade of the United States credit rating, weak data related to the United States economy, and the euro zone’s fiscal problems.

As the flight from risky assets heated up, 10-year government bonds prices rose. Yields declined to 2.14 percent from 2.25 percent on Tuesday.

“The market psychology is such that investors no longer seem to know who or what to root for and all that they do know is, according to the Fed, that rates will remain low until the middle of 2013,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan Company.

By midmorning the Dow was down 410 points, or 3.65 percent. The Standard Poor’s 500-stock index lost 41.33 points, or 3.52 percent, and the Nasdaq composite index was off 80.09 points, or 3.23 percent.

Financial stocks, in particular, were trading lower, down by about 6 percent.

The Fed is hoping that its statement, which three of the 10 members of the Federal Open Market Committee voted against, will encourage investment and risk-taking by keeping the cost of borrowing extremely low until at least mid-2013. Still, it suggested that the United States monetary authorities are now adopting the same policy pursued by the Bank of Japan over the last decade with marginal effect.

The Fed’s pledge to hold short-term interest rates near zero for at least two more years to support the faltering United States economy “has helped to stabilize sentiment in equities and other risky asset markets — at least for now,” analysts at Standard Chartered wrote in a research commentary. However, they added: “The heavy emphasis on downside risks to growth suggests the pendulum of investor sentiment can quickly rotate back to a more risk-averse stance in coming days.”

The strong rally on Tuesday in the United States had spilled over when Asian markets opened on Wednesday but then lost steam when the baton was passed to Europe.

Stocks turned sharply downward in European afternoon trading, led by banking shares. French banking stocks dropped amid rumors that a downgrade of France’s AAA credit rating was imminent, though none of the major ratings agencies has recently signaled that such a move was on the horizon. The French bank Société Générale fell about 18 percent, while its rival BNP Paribas fell more than 9 percent. Intesa Sanpaolo, the Italian lender, fell almost 11 percent.

Laetitia Maurel, a spokeswoman for Société Générale, declined to comment on the share price decline, but said the bank’s fundamentals remain strong, with a first-half 2011 net profit of 1.663 billion euros, even after booking losses for its share of the Greek rescue. “The market seems to fear a global recession, but I don’t think that’s going to happen,” Valérie Cazaban, a fund manager at Stratège Finance, said. “Emerging markets are still strong and the United States, though manufacturing is weakening, should avoid returning to recession.”

“For the short term, I think we’ve seen the worst for stocks,” she added. “Valuations are very low considering companies’ profitability and balance sheets. Volatility will stay high, but stock prices aren’t far from their lows.” Still, she said, governments and central banks, having ruled out further fiscal stimulus, have no tools other than liquidity injections left to address the ongoing crisis, meaning that “over the longer term, considering the possibility of inflation, we may not have such a brilliant future. We’ll still have problems left to deal with.”

President Nicolas Sarkozy of France returned from vacation on the French Riviera to meet with officials, including his finance minister and the governor of the Bank of France, on what his office called “the economic and financial situation.”

David Jolly and Bettina Wassener contributed reporting.

Article source: http://www.nytimes.com/2011/08/11/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: market sentiment, nasdaq composite index, opening bell