US stocks fall broadly a day after Nasdaq passes 5,000 mark

NEW YORK, United States — U.S. stocks fell from record highs on Tuesday and the Nasdaq dropped below 5,000 a day after passing that milestone for the first time since the dot-com era 15 years ago.

The losses were modest but broad, with eight industry sectors in the Standard and Poor’s 500 index falling. Higher oil prices helped oil drillers and other energy companies buck the trend. They eked out a 0.2 percent rise for the day.

With no major economic news and few earnings reports, investors were at pains to point to a catalyst for the stock slump other than jitters that sometime follow big gains.

“It’s only natural we would get a little flutter after a milestone like yesterday,” said Wells Fargo Funds’ Chief Equity Strategist John Manley, referring to the Nasdaq closing above 5,000. “It may very well go on for a few days.”

Dow Jones falls

The Dow Jones industrial average fell 85.26 points, or 0.5 percent, to 18,203.37. The Standard & Poor’s 500 declined 9.61 points, or 0.5 percent, to 2,107.78. The Nasdaq gave up 28.20 points, or 0.6 percent, to close at 4,979.90.

Ford Motor slumped after reporting U.S. sales from last month that disappointed investors. Ford sales fell 1.9 percent as dealers lacked the inventory to meet demand for the new F-150 pickup truck. Ford dropped 40 cents, or 2.4 percent, to $16.17.

Oil rose on reports that Saudi Arabia raised prices for Asian customers and fears of heightening tensions with Iran after Israeli Prime Minister Benjamin Netanyahu addressed Congress. Several oil drillers surged. Denbury Resources, an oil and gas producer, jumped 28 cents, or 3.4 percent, to $8.58.

With nearly all companies in the S&P 500 having reported their fourth-quarter results, earnings per share for companies in the S&P 500 index are expected to have risen a healthy 7.7 percent, according to S&P Capital IQ.

Drop in earnings

Liquor giant Brown-Forman reports earnings on Wednesday, followed by Costco Wholesale on Thursday. Staples, the nation’s biggest office supply chain, reports on Friday.

Financial analysts expect earnings to drop compared with the year-earlier periods for the next two quarters, but that is mostly because of a drag from energy companies as oil prices have fallen more than 50 percent since last June.

Anastasia Amoroso, global market strategist for J.P. Morgan Asset Management, said she wasn’t surprised by the pullback.

“We’re seeing a market that is fairly valued, earnings are behind us and no major catalysts are coming up,” she said. “It’s a market ready for a pause.”

European loses

The slump in the U.S. followed losses in European markets. France’s CAC 40 and Germany’s DAX each lost 1 percent. Britain’s FTSE 100 dropped 0.7 percent.

On Monday, the Nasdaq rose to just 40 points from its 5,048.62 peak reached March 10, 2000. The index has changed significantly since then. Gone is the heavy weighting of telecommunications stocks and big bets on Internet companies with little or no earnings.

Among other stocks in the news:

— Personal finance company Springleaf Holdings rose $12.19, or 32 percent, to $50.23 after it said it would buy Citigroup’s OneMain Financial for $4.25 billion. OneMain provides personal loans at more than 1,100 branches across 43 states.

—Best Buy gained 55 cents, or 1.4 percent, to $39.18 after the company said it would raise its dividend 21 percent and give shareholders an additional one-time payment. The nation’s biggest electronics chain also reported fourth-quarter earnings that were higher than financial analysts had expected.

Benchmark U.S. crude rose 93 cents to close at $50.52 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.48 to close at $61.02 a barrel in London.

NYMEX

In other futures trading on the NYMEX:

— Wholesale gasoline rose 5.3 cents to close at $1.950 a gallon.

— Heating oil rose 5.3 cents to close at $1.940 a gallon.

— Natural gas rose 1.4 cents to close at $2.712 per 1,000 cubic feet.

In bond trading, the yield on the 10-year Treasury note rose to 2.12 percent from 2.08 percent on Monday.

In metals trading, gold fell $3.80 to $1,204.40 an ounce, silver fell two cents to $16.30 an ounce and copper lost four cents to close at $2.66 a pound.

source: business.inquirer.net

Poor earnings at Sprint, Priceline push US stocks lower

NEW YORK–Shares of Sprint and Priceline tumbled Tuesday following disappointing earnings to help push the broad US equity market down, but buyers sent the blue chips of the Dow higher.

The Dow Jones Industrial Average finished up 17.60 points (0.10 percent) at 17,383.84.

The broad-based S&P 500 dropped 5.71 (0.28 percent) to 2,012.10, while the tech-rich Nasdaq Composite Index fell 15.27 (0.33 percent) to 4,623.64.

Sprint sank 16.5 percent as it announced it was slashing 2,000 jobs after reporting a $765 million loss in its fiscal second quarter.

Priceline tumbled 8.4 percent as it forecast fourth-quarter earnings of $9.40-$10.10 per share, well below the $10.91 projected by analysts. Rival online travel companies TripAdivsor (-1.7 percent) and Expedia (-2.4 percent) also fell.

Tuesday’s trade followed lackluster US economic data. New orders for US manufactured goods dropped $2.8 billion, or 0.6 percent, to $499.4 billion in September, the Commerce Department reported.

The US trade deficit widened in September to $43.0 billion as exports slowed and imports remained flat from the previous month.

Chinese e-commerce giant Alibaba rose 4.2 percent after it reported a 15 percent gain in third-quarter profits to $1.1 billion in its first earnings release since going public.

Petroleum stocks fell as US oil prices sank further below $80 a barrel. Dow member Chevron fell 1.2 percent, oil services company Weatherford International lost 7.6 percent and drilling company Transocean dropped 5.3 percent.

Delta Air Lines jumped 4.2 percent after reporting a three percent rise in consolidated passenger unit revenue in October, a closely watched industry benchmark. American Airlines and United Continental both gained 1.7 percent.

Apparel-maker Michael Kors slumped 8.4 percent on a disappointing outlook. The company forecast earnings of $1.31-$1.34 per share, compared with analyst projections for $1.34.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.34 percent from 2.35 percent Monday, while the 30-year dropped to 3.05 percent from 3.07 percent. Bond prices and yields move inversely.

source: business.inquirer.net

Stocks fall for a second day; Nasdaq slumps

NEW YORK—US stocks closed lower for a second day in a row as investors positioned themselves for corporate earnings reports.

The Dow Jones industrial average fell 117 points, or 0.7 percent, to close at 16,906 Tuesday. The Standard & Poor’s 500 index lost 13 points, or 0.7 percent, to 1,963.

The Nasdaq fell 60 points, or 1.4 percent, to 4,391.

Technology and small-company stocks fell more than the rest of the market. Utilities were the only sector to rise as investors sought out low-risk stocks that pay high dividends.

AbbVie fell 3 percent after the company raised its offer to buy a rival drugmaker, Shire.

Major US companies start to report their earnings this week.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.56 percent.

source: business.inquirer.net

Dow, S&P 500 hit record highs after ECB stimulus

NEW YORK–The Dow and the S&P 500 Thursday bolted to new records after the European Central Bank launched aggressive measures to stimulate fragile eurozone growth and avert deflation.

The Dow Jones Industrial Average advanced 98.58 points (0.59 percent) to 16,836.11 while the broad-based S&P 500 rose 12.58 (0.65 percent) to 1,940.46.

The tech-rich Nasdaq Composite Index posted strong gains, leaping 44.58 (1.05 percent) to 4,296.23.

US markets reacted enthusiastically to a series of new measures from the ECB, which lowered all three of its key interest rates, including putting the deposit rate into negative territory for the first time, meaning banks will be charged for depositing their excess cash with the central bank.

“Expectations were for them to take action and the market is applauding the action that has been taken,” said David Levy, portfolio manager at Kenjol Capital Management.

Analysts said the ECB’s new push means liquidity will remain at high levels globally even as the Federal Reserve scales back its asset-purchase stimulus.

Levy said a 1.8 percent gain in the Russell 2000, a leading index of small cap stocks, was particularly bullish.

“It shows confidence in the market that investors are willing to invest in riskier stocks,” he said.

Leading banks had a good day, including Dow member JPMorgan Chase (+1.7 percent), Citigroup (+1.6 percent) and Wells Fargo (+1.2 percent).

General Motors fell 0.7 percent after chief executive Mary Barra announced the company fired 15 employees over the deadly ignition scandal and uncovered a pattern of “incompetence and neglect” behind the debacle.

US telecom giant Sprint is nearing a deal valued at about $32 billion to acquire rival T-Mobile, according to the Wall Street Journal and others. Sprint fell 4.0 percent, while T-Mobile dropped 2.3 percent.

Amazon jumped 5.5 percent on anticipation of a June 18 mystery event with founder Jeff Bezos. Topeka Capital Markets said the buzz is that Amazon will launch a smartphone, which could boost subscriptions to its “Prime” service.

Videogame developer Zynga sank 9.2 percent on concerns about a conference presentation from chief Don Mattrick. Mattrick “seemed slightly less upbeat” than normal about the company’s prospects, said a note from Sterne Agee.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.58 percent from 2.61 percent Wednesday, while the 30-year dropped to 3.43 percent from 3.45 percent. Bond prices and yields move inversely.

source: business.inquirer.net

S&P 500 at new record after solid US data

NEW YORK—The S&P 500 Tuesday notched a record close for the second straight session as US stocks rallied following some solid economic data.

The broad-based S&P 500 gained 11.38 points (0.60 percent) at 1,911.91. On Friday the index closed above 1,900 for the first time; markets were closed Monday for a holiday.

The Dow Jones Industrial Average advanced 69.23 (0.42 percent) to 16,675.50, while the strongest move came from the tech-rich Nasdaq Composite Index, which jumped 51.26 (1.22 percent) to 4,237.07.

Fresh US economic data showed a rise in consumer confidence for May, a surprising increase in durable goods orders for April and an increase in home prices for March on the widely watched S&P/Case-Shiller index.

Wells Fargo Advisors called the economic data “encouraging” in a market note.

Mace Blicksilver, director of Marblehead Asset Management, said the rally in technology stocks was a sign of improving sentiment.

Leading tech companies to gain included Apple (+1.9 percent), Facebook (+3.5 percent), Priceline (+5.2 percent) and Tesla Motors (+2.1 percent).

US chicken producer Pilgrim’s Pride announced a bid to acquire prepared-meats and frozen-foods company Hillshire Brands in a deal worth $6.4 billion, on condition Hillshire scraps its proposed $6.6 billion takeover of Pinnacle Foods. Hillshire said the company stands by its proposed takeover of Pinnacle, but promised to study the offer.

Hillshire shot up 22.1 percent, Pilgrim’s advanced 1.7 percent and Pinnacle slumped 5.4 percent.

Bank of America rose 3.4 percent as it resubmitted its capital plan after the Federal Reserve required the bank to halt shareholder distributions due to a $4 billion overstatement of its capital position.

Botox-maker Allergan released a presentation attacking Valeant Pharmaceuticals in its latest effort to thwart an unsolicited takeover bid. The company raised numerous issues, including Valeant’s ability to promote products of Allergan’s scale and the extensive turnover in Valeant management. Allergan shares lost 1.1 percent, while Valeant fell 2.6 percent.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.52 percent from 2.54 percent Friday, while the 30-year dropped to 3.37 percent from 3.40 percent. Bond prices and yields move inversely.

source: business.inquirer.net