US stocks edge down on virus woes, slowing economy

NEW YORK - The S&P 500 Index closed slightly lower on Monday after erasing early gains as worries about the Delta variant of the coronavirus and a slowing US economy overshadowed optimism around more fiscal stimulus and a strong second-quarter earnings season.

Federal Reserve Governor Christopher Waller said on CNBC late in the session that the Fed could start to reduce its support for the economy by October if the next two monthly jobs reports each show employment rising by 800,000 to 1 million, as he expects. 

He also suggested the Fed could announce in September it would start to reduce its monthly bond purchases, which could lift yields again - not the best news for the stock market. 

Data earlier in the day showed that although US manufacturing grew in July, its pace slowed for a second straight month as spending rotated back to services from goods, and shortages of raw materials persisted. 

The softer-than-expected data also sent US bond yields to their lowest since July 20 and knocked the blue-chip Dow off an intra-day record high hit in early trading. 

“An issue for the market... is the rise of the growth scare", said Rob Haworth, senior investment strategist at US Bank, "Whether it's more restrictions in China with infections rising in 14 provinces now, or questions about how far is the US going to have to go with mask mandates.”

Only four of the 11 S&P sectors traded higher by market close, among them utilities and real estate generally considered safe bets at a time of uncertainty.

The Dow Jones Industrial Average fell 97.31 points, or 0.28 percent, to 34,838.16, the S&P 500 lost 8.1 points, or 0.18 percent, to 4,387.16 and the Nasdaq Composite added 8.39 points, or 0.06 percent, to 14,681.07. Square Inc, the payments firm of Twitter Inc co-founder Jack Dorsey, jumped after it said it would purchase Australian buy now, pay later pioneer Afterpay Ltd for $29 billion. 

With manufacturing activity data coming in weaker than expected, investor focus now turns to services sector data on Wednesday and the Labor Department's monthly jobs report on Friday.

After mixed quarterly reports from technology behemoths last week, all eyes this week are on earnings from companies including Eli Lilly and Co, CVS Health Corp and General Motors Co.

Volume on US exchanges was 8.80 billion shares, compared with the 9.77 billion average for the full session over the last 20 trading days. 

Declining issues outnumbered advancing ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favored advancers.

The S&P 500 posted 76 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 98 new highs and 67 new lows.

-reuters

Weak Chinese trade, US rate hike fears sink global stocks

NEW YORK - Another contraction in Chinese trade and rising expectations of a US interest rate hike in December sent most global markets tumbling Monday.

China's 18.8-percent fall in imports from a year ago, and a 6.9 percent drop in exports, spelled more sluggishness in the world's second-largest economy and in global growth more generally, hitting commodity prices as well as the shares of companies like Caterpillar which depend on them.

Supporting that view, the Organisation for Economic Co-operation and Development on Monday cut its forecast for global growth to 2.9 percent this year and 3.3 percent in 2016, calling the stagnation in global trade "deeply concerning".

On top of that was the strong US jobs data on Friday that gave more support for the US Federal Reserve hiking interest rates for the first time in nine years, which would raise the borrowing costs of governments and companies around the world.

Wall Street's key indices all tumbled 1.0 percent with little to spur buying after six straight weekly gains.

Mace Blicksilver of Marblehead Asset Management said US investors have a number of concerns, and that the market was "probably stronger than it should have been" last week.

"A little weak China data didn't help," he added.

European markets fell as brokers pondered the impact of higher US rates and slower global growth. London's FTSE dipped 0.9 percent, Frankfurt's DAX 30 lost 1.6 percent and Paris' CAC 40 dropped 1.5 percent.

Friday's strong US jobs report "pretty much made it a given that a US rate hike will take place after all in 2015," said Markus Huber, senior analyst at broker Peregrine & Black.

Ironically Chinese shares pushed higher, buoyed by news that the government was lifting a four-month ban on IPOs.

Chen Jiahe of Cinda Securities said regulators were more comfortable "after leveraged funding through outside channels was cleared and investor confidence recovered."

The dollar stabilized after last week's surge on the rate expectations, trading at 123.18 yen and $1.0749 per euro in late deals.

Still, said Joe Manimbo of Western Union Business Solutions, "market focus on monetary policies that are expected to loosen in Europe and tighten in the US suggests more open road for the dollar to run over the foreseeable future."

The key figures around 2200 GMT

New York - Dow:            DOWN 1.0 percent at 17,730.48 (close)

New York - S&P 500:     DOWN 1.0 percent at 2,078.58 (close)

New York - Nasdaq Composite:    DOWN 1.0 percent at 5,095.30 (close)

London - FTSE 100:       DOWN 0.9 percent at 6,295.16 (close)

Frankfurt - DAX 30:        DOWN 1.6 percent at 10,993.241 (close)

Paris- CAC 40:               DOWN 1.5 percent at 4,911.17 (close)

EURO STOXX 50:           DOWN 1.4 percent at 3,418.36 (close)   

Tokyo - Nikkei 225:      UP 2.0 percent at 19,642.74  (close)

Euro/dollar:                    UP to $1.0748 from $1.0742 late Friday

Dollar/yen:                     UP to 123.19 yen from 123.16 yen late Friday

source: interaksyon.com

Remember Lehman Brothers and 2008 crisis? It's back in deal that led to First Data IPO

WILMINGTON, Delaware - First Data Corp's Chief Executive Officer Frank Bisignano hailed a $3.5 billion fund-raising in July 2014 for drawing a "who's who in equity investing" and paving the way for the payment processor's huge IPO last week.

The 2014 deal included one unusual investor: Lehman Brothers, the bank that collapsed in 2008 at the height of the financial crisis.

Lehman may be long gone from Wall Street, but its bankruptcy estate still manages a portfolio of more than $10 billion in assets, exceeding the market capitalization of fashion house Ralph Lauren Corp. or property investment firm Kimco Realty Corp.

From an office in Manhattan, Lehman's staff manage piles of cash and securities, interests in real estate and private equity investments, including a stake in Formula One motor racing.

While bankruptcy estates focus on liquidating assets for the benefit of creditors, Lehman dusted off its investing expertise last year and spent $151 million on private placement of stock in First Data.

According to a court filing, the money was spent on a "pro-rata" share of the private placement, indicating Lehman had a previous relationship with First Data. Lehman provided financing in 2007 for the buyout of First Data, which was led by KKR & Co.

"When you get a $3.5 billion vote of confidence by some fabulous investors," Bisignano told an analysts call in July 2014, "the who's who in equity investing in it gives your customers great confidence in your ability."

The private placement of stock was credited by Bisignano for providing cash to pay down First Data's debt and returning the company to profit after years of losses.

Lehman's management can make investments if they determine it will likely benefit creditors.

Lehman and First Data declined to comment on the Lehman stake.

Lehman did not disclose how the First Data investment performed.

KKR, which was the lead investor in the 2014 private placement, has estimated in securities filings the value of its investment in First Data rose about 13 percent from the private placement through June 30. However, those gains may have been offset after First Data cut the IPO price by 20 percent from the top of its target range.

Shares in First Data were little changed at $15.36 on Thursday, below the $16 IPO price.

Complex cases

Lehman emerged from bankruptcy in 2012 with a new board selected by creditors, overseen by Chairman David Pauker, formerly the executive managing director of Goldin Associates, a financial consultancy. Christopher O'Meara, a former chief financial officer of Lehman, is the chief executive.

"I do think it's remarkable both how significant Lehman's assets have turned out to be and how much they still have," said David Skeel, a professor at University of Pennsylvania Law School.

The First Data deal is not even the largest investment by the bankrupt firm. In 2012, it ponied up about $3 billion to buy two minority positions held by other banks in Archstone, an owner of apartment complexes, giving it full ownership. It later sold Archstone for $6.5 billion.

Lehman had teamed up with Tishman Speyer to acquire Archstone for $22.2 billion, including debt, in 2007.

In total, Lehman's bankruptcy estate has distributed $105.4 billion to creditors. Of that, $77.2 billion was paid to third-party claims, with the rest paid to other Lehman affiliates. While more than $1 trillion of claims were filed, the estate will recognize about $330 billion, according to court documents.

Jonathan Lipson, a professor at Temple University School of Law, said the case could still require years of work as the estate pursues lingering litigation and awaits overseas affiliates to complete their liquidations.

"Enron's estate lasted forever and ever," Lipson said, referring to the power company that filed in 2001 and closed its bankruptcy case only last year. "That's what happens with really complex cases."

source: interaksyon.com

Wall St. drops as China data rattles investors

NEW YORK - US stocks fell sharply in afternoon trading on Monday and were set for their worst third-quarter performance in four years as investors worried about the health of China's economy and its potential impact on the timing of a U.S. interest rate increase.

The Nasdaq composite and S&P 500 both dropped more than 2 percent.

Much of the damage came from pharmaceutical and biotech stocks, including Allergan and Gilead Sciences, with the sector still bleeding a week after Democratic presidential candidate Hillary Clinton criticized drug pricing.

The Nasdaq biotechnology index fell 6 percent following its worst week in seven years. Among the S&P sectors, the health care index was the deepest decliner, down 3.66 percent.

"The broad healthcare sector and China are hurting the market. It's time for risk-off and there's no place to hide," said Richard Weeks, managing director at HighTower Advisors in Vienna, Virginia.

Profits at Chinese industrial companies fell 8.8 percent, fresh data showed, pushing down shares of raw material producers and energy companies. Oil prices fell more than 2 percent.

U.S. consumer spending rose more than expected in August, data showed on Monday, appearing to add to the case for an interest rate increase this year.

However, contracts to buy previously owned U.S. homes decreased, indicating the robust housing market could be losing some steam.

The Federal Reserve held off from raising rates at its September meeting, citing concerns about the global economy, notably China, among other factors.

New York Federal Reserve President William Dudley on Monday added to expectations for a rate increase, suggesting the central bank could pull the trigger as soon as October.

Several other Fed officials are scheduled to speak during the week, including Chair Janet Yellen on Wednesday.

Investors will also scrutinize September non-farm payrolls data set for release on Friday.

At 2:41 pm, the Dow Jones industrial average was down 1.65 percent at 16,045.25. The S&P 500 lost 2.23 percent, to 1,888.26 and the Nasdaq Composite dropped 2.72 percent to 4,559.05.

Billionaire investor Carl Icahn said the U.S. Federal Reserve's low interest rates are creating bubbles in markets for art, property and high-yield "junk" bonds, in a video to be released on Tuesday.

The CBOE Volatility index, known as Wall Street's "fear gauge", jumped 16 percent to 27.37, well above its long-term average of 20.

Alcoa's shares jumped 2.70 percent after the aluminum producer said it would split into two publicly-traded companies.

Apple fell 1.53 percent despite reporting that it sold a record number of its new iPhones in their first weekend.

Declining issues outnumbered advancing ones on the NYSE by 2,744 to 337. On the Nasdaq, 2,323 issues fell and 509 advanced.

source: interaksyon.com

Google propels Nasdaq to another record high close

NEW YORK - A major rally in Google pushed the Nasdaq to a second straight record high on Friday while weak energy stocks weighed on the Dow and S&P 500.

Google surged 16.26 percent to end at an all-time high of $699.62, a day after reporting strong ad revenue growth. It was Google's largest one-day percentage gain since April 2008.

Facebook rose 4.53 percent to a record high of $94.97 on hopes that it could mirror Google's ad growth. Etsy spiked 30 percent thanks to a nod from Google during its conference call.

But a drop in oil prices limited gains on the broader stock market, with the S&P 500 energy index down 1.07 percent to its lowest level since January 2013. Chevron lost 1.4 percent. The utilities index dropped 1.06 percent.

Wall Street insiders were cautiously optimistic about upcoming quarterly reports after some results this week came in above expectations.

“It’s going to be better than what the consensus numbers were pointing to,” said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia. “Our economy is doing okay. We’re not growing at 5 percent but we have slow, steady growth and I think that continues.”

The Nasdaq Composite added 46.96 points, or 0.91 percent, to end at 5,210.14, its second straight record high close.

The S&P 500 gained 2.35 points, or 0.11 percent, to end at 2,126.64, just shy of its record high of 2,130.82.

The Dow Jones industrial average fell 33.8 points, or 0.19 percent, to end at 18,086.45.

Boeing fell 1.11 percent and was the biggest drag on the Dow after it said it will take a second-quarter charge related to problems with its KC-46 aerial refueling tanker aircraft program.

General Electric shares rose 0.74 percent after raising its 2015 outlook for its industrial manufacturing businesses.

The technology index was the sole gainer among the 10 major S&P 500 indexes, up 1.75 percent, mostly because of Google.

For the week, the Dow gained 1.8 percent, the S&P added 2.4 percent and the Nasdaq rose 4.3 percent, its largest weekly gain since October 2014.

The dollar saw its biggest weekly gain in two months due to expectations of a Federal Reserve rate hike this year. However, a strong dollar reduces the value of U.S. companies' overseas income.

U.S. companies have been expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar. Profit is expected to have fallen 2.9 percent, according to Thomson Reuters estimates.

Declining issues outnumbered advancing ones on the NYSE by 2,000 to 1,076, for a 1.86-to-1 ratio; on the Nasdaq, 1,676 issues fell and 1,115 advanced for a 1.50-to-1 ratio favoring decliners.

The S&P 500 posted 21 new 52-week highs and 25 new lows; the Nasdaq saw 107 new highs and 87 new lows.

Volume was a bit light, with about 6.1 billion shares traded on U.S. exchanges, below the 6.6 billion average so far this month, according to BATS Global Markets.

source: interaksyon.com

Wall St falls as Greek deadline looms; indexes up for week

NEW YORK - U.S. stocks fell on Friday ahead of a summit next week that could decide whether Greece will need to print its own currency and ditch the euro.

Euro zone leaders are scheduled to meet on Monday night in a last-ditch effort to reach a deal with Athens. As bank withdrawals across Greece ballooned to about 4.2 billion euros this week, the European Central Bank boosted its emergency funding for Greek banks.

Friday's decline in stocks "has to do with the meeting on Monday," said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco. "It's sort of the last lifeline they are going to throw out to Greece and people are selling ahead of that because of the uncertainty."

Lip said, however, that any sharp selling because of developments on Monday could be yet another buying opportunity for investors in U.S. stocks.

"If Greece leaves the union, that removes an uncertainty and is actually good for the markets over the long run; if there is a resolution, that is also good," said Lip. "In some way, whatever happens on Monday is a win-win and (a market selloff) is a buyable dip."

The Dow Jones industrial average fell 101.56 points, or 0.56 percent, to 18,014.28, the S&P 500 lost 11.48 points, or 0.54 percent, to 2,109.76 and the Nasdaq Composite dropped 15.95 points, or 0.31 percent, to 5,117.00.

For the week, the Dow gained 0.6 percent, the S&P added 0.7 percent and the Nasdaq, which had closed at a record high on Thursday, rose 1.3 percent.

Utilities led the S&P 500 decline in percentage terms, down 1 percent as a group after gaining 2.7 percent over the previous three sessions.

A market debut fizzled, with shares of 8point3 Energy Partners down 2.4 percent at $20.49. It offered 20 million shares that priced at $21, the top-end of the filed range.

ConAgra Foods' shares jumped 10.9 percent to $43.37 after activist hedge fund Jana Partners took a stake in the company. ConAgra's peer Pinnacle Foods rallied 8.6 percent to $46.81 after earlier hitting a record high of $47.21.

Macerich slumped 6.8 percent to $76.87. Sources told Reuters Simon Property Group was selling its ownership stake in the No. 3 U.S. mall operator. Simon fell 1.3 percent to $179.48.

KB Home rose 9.4 percent to $16.37 after the homebuilder's quarterly results beat estimates.

Declining issues outnumbered advancing ones on the NYSE by 1,788 to 1,257, for a 1.42-to-1 ratio on the downside; on the Nasdaq, 1,557 issues fell and 1,254 advanced for a 1.24-to-1 ratio favoring decliners. The S&P 500 posted 29 new 52-week highs and 2 new lows; the Nasdaq recorded 161 new highs and 40 new lows.

About 7.9 billion shares changed hands on U.S. exchanges, above the 6.03 billion daily average so far this month, according to BATS Global Markets.

source: interaksyon.com

Stocks rally on U.S. data, euro slides further

NEW YORK - Wall Street stocks rebounded on Friday on signs the U.S. economy was on track for solid growth with consumer sentiment hitting an 11-year high, while the euro slid further against the dollar a day after Switzerland ditched its currency cap.

Crude prices rallied on the U.S. sentiment report and after the International Energy Agency said lower prices had begun to curb production in some areas, including North America. The IEA said prices might fall further, but "signs are mounting that the tide will turn."

U.S. gasoline prices fell again in December, leading consumer prices to post their biggest decline in six years, while a gauge of underlying inflation was flat. The data could make the Federal Reserve cautious about raising interest rates.

Global equity markets rebounded, with U.S. stocks capping five straight sessions of losses. European shares rose on growing expectations of economic stimulus from the European Central Bank.

Wall Street surged at the close. Major U.S. indexes rose more than 1 percent in what Ken Polcari, director of the NYSE floor division of O'Neil Securities in New York, said had the makings of a relief rally.

"The market has been under complete duress for five or six days, the tone has been very ugly. Today it seems most things have calmed down, so buyers have started to step back in," he said.

The University of Michigan said U.S. consumer sentiment rose in January on employment and income gains, with spending power boosted by sliding gasoline prices.

The "outstanding" report countered fears that tumbling oil prices would curb growth, said Phil Orlando, chief equity strategist at Federated Investors in New York. He said cheaper energy will boost discretionary spending, and added that a disappointing retail sales report this week excluded online sales and gift cards and was skewered by seasonal factors.

"The psychology of the market has been horribly negative for the last couple of weeks," said Orlando. "What turned the market around today was plain and simple: the Michigan number was outstanding."

The day after the euro lost Swiss support, the single currency slid to $1.1461, its weakest since November 2003. It last traded at $1.1567, down 0.52 percent. Against the yen, the dollar was up 1.23 percent at 117.59 yen.

On equity markets, MSCI's all-country world index gained 0.76 percent. The pan-European FTSEurofirst 300 index of leading regional companies closed up 0.99 percent at 1,407.17 points.

Swiss stocks sank again on concerns a stronger franc will hurt Swiss multinationals that depend on exports. The Swiss blue-chip index SMI closed down 6 percent.

Morgan Stanley estimated that 85 percent of Swiss company sales come from abroad.

The Dow Jones industrial average closed up 190.86 points, or 1.1 percent, at 17,511.57. The S&P 500 rose 26.75 points, or 1.34 percent, to 2,019.42 and the Nasdaq Composite added 63.56 points, or 1.39 percent, to 4,634.38.

U.S. Treasuries prices fell after the strong consumer sentiment and tame inflation reports sparked profit-taking on recent gains.

The 10-year U.S. Treasury note fell 15/32 in price, pushing the yield up to 1.8257 percent.

Brent crude futures for March delivery rose $1.90 to settle at $50.17 a barrel. U.S. crude settled up $2.44 at $48.69 a barrel.

source: interaksyon.com

Wall Street little changed but S&P hits record

NEW YORK - U.S. stocks were little changed in thin trading on Monday as the S&P 500 notched its latest record high, but gains were curbed when an early rally in energy prices lost momentum.

Equities have trended to the upside of late, buoyed by data showing an improving economy and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. After the S&P 500 gained nearly 6 percent over the prior eight sessions, it notched its 53rd record close of the year on Monday.

The S&P energy index advanced 0.3 percent, pulling back from a gain of more than 1 percent as Brent and U.S. crude oil turned lower. Brent settled down $1.57 at $57.88 and U.S. crude settled down $1.12 at $53.61 a barrel.

In contrast to the fall in oil prices, consumer discretionary names were among the day's best performers, up 0.7 percent. General Motors rose 2.6 percent to $34.60. The S&P 500 retail sector rose 0.8 percent as Macy's Inc advanced 1.8 percent to $65.22 and Amazon.com was up 1 percent to $312.04.

"The nearer-term picture is, consumers are enjoying lower gas prices, it’s almost as if it is an alleviation of taxes," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

"Someone is getting hurt in this while the consumer is benefiting, and at some point it could come back to bite the market and the economy."

The Dow Jones industrial average fell 15.48 points, or 0.09 percent, to 18,038.23, the S&P 500 gained 1.8 points, or 0.09 percent, to 2,090.57 and the Nasdaq Composite added 0.05 points to 4,806.91.

The speed and scale of the rally could cap further upside, especially in the final trading week of the year, when many market participants are out on holiday and catalysts are limited. Volume is expected to remain light, which could exacerbate volatility. The stock market will be closed on Thursday for New Year's Day.

About 4.78 billion shares traded on U.S. exchanges on Monday, well below the 7.18 billion average this month, according to BATS Global Markets.

Gilead Sciences Inc rose 3.7 percent to $97.30 as one of the S&P 500's biggest percentage gainers after Morgan Stanley upgraded the stock to "overweight" from "equal-weight."

LiveDeal Inc jumped 19.1 percent to $3.92 on volume of 13.6 million shares, to dwarf its 50-day average of about 455,000 shares, after the company reported 2014 results.

NYSE advancing issues outnumbered decliners 1,800 to 1,299, for a 1.39-to-1 ratio; on the Nasdaq, 1,438 issues rose and 1,320 fell for a 1.09-to-1 ratio favoring advancers.

The S&P 500 posted 68 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 160 new highs and 39 new lows.

source: interaksyon.com

Wall Street ends at record in second straight weekly gain

NEW YORK - U.S. stocks ended higher on Friday, with both the Dow and S&P 500 closing at records in a broad rally, though trading was light with many market participants still out for the Christmas holiday.

Major indexes closed out their second straight weekly gain, continuing an advance that has lifted the S&P 5.9 percent in seven sessions. The benchmark index hit its 52nd record close of the year on Friday, the most since 1995 and the fourth-best annual record ever, while the Dow rose for a seventh straight day, its longest streak since March 2013.

"The overall trend remains higher, but we're reaching a point where we're overbought. Six percent since last Tuesday is such a strong move in such a short period of time, even if bulls have the upper hand in the longer term," said Adam Sarhan, chief executive of Sarhan Capital in New York.

Recent gains have come on strong economic data, including a bullish read on economic growth earlier this week, as well as accommodative measures from central banks.

The day's gains were broad, with eight of the S&P 500's 10 primary sectors ending up on the day and no sector ending more than 0.1 percent lower. The utility sector was the day's strongest, up 1.2 percent, while healthcare rose 0.8 percent.

Healthcare stocks were boosted by biotechs, which jumped 2.3 percent. While the Nasdaq biotech index was one of the day's strongest sectors, it fell 3.2 percent in a week marked by heavy volatility. Celgene Corp rose 3.4 percent to $113.35 as the S&P 500's biggest percentage gainer, followed by Regeneron Pharmaceuticals, up 3.3 percent to $413.48.

The Dow Jones industrial average rose 23.5 points, or 0.13 percent, to 18,053.71, the S&P 500 gained 6.89 points, or 0.33 percent, to 2,088.77 and the Nasdaq Composite added 33.39 points, or 0.7 percent, to 4,806.86.

For the week, the Dow rose 1.4 percent, the S&P rose 0.9 percent and the Nasdaq rose 0.9 percent. It was the ninth positive week in the past ten for the Dow and S&P.

The S&P Retail index rose 0.5 percent in the first trading session after Christmas. Among notable names, Best Buy Co rose 0.6 percent to $39.14 while Macy's Inc dipped 0.3 percent to $64.05. Amazon.com Inc rose 2 percent to $309.18.

"Things are looking positive since the shopping season coincided with a big drop in crude oil, which means lower gas prices," Sarhan said. "That translates to more disposable income, which could mean stronger retail sales."

Advancing issues outnumbered declining ones on the NYSE by 2,032 to 1,011, for a 2.01-to-1 ratio on the upside; on the Nasdaq, 1,792 issues rose and 934 fell for a 1.92-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 70 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 133 new highs and 28 new lows.

About 3.06 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the month-to-date average of 7.39 billion.

source: interaksyon.com

Oil slump leads Wall Street to worst week in 2-1/2 years

NEW YORK - U.S. stocks fell sharply on Friday, leaving the benchmark S&P 500 with its worst weekly performance since May 2012, as investors pulled back from the markets in response to oil's free-fall and more weak data out of China.

Oil's declines have underscored concerns about global demand, and with the S&P 500 having hit a record high only last week, investors were loath to fight the downward pressure on stocks, which accelerated in the final minutes of trading. The S&P dropped 3.5 percent on the week after seven straight weeks of gains.

The S&P energy sector .SPNY was down 2.2 percent on the day. It is down 16.5 percent this year, the worst performing of 10 S&P sectors. Dow components Exxon Mobil and Chevron Corp both hit 52-week lows as U.S. crude oil fell below $58 a barrel, hitting five-year lows, on expectations of reduced worldwide energy demand.

"Certainly as midday came the market did not stabilize at all, so sellers knew that," said Kenny Polcari, director of the NYSE floor division at O’Neil Securities in New York. "Energy is at the top of the list in terms of the names getting crushed."

The Dow Jones industrial average fell 315.51 points, or 1.79 percent, to 17,280.83, the S&P 500 lost 33 points, or 1.62 percent, to 2,002.33 and the Nasdaq Composite dropped 54.57 points, or 1.16 percent, to 4,653.60.

Disappointing data that suggested China's economy softened in November pushed the materials sector  down 2.9 percent, making it the worst-performing S&P sector on the day.

The drop in oil and weakness in China overshadowed strong U.S. consumer sentiment, which hit an eight-year high.

Some investors hope declining gas prices will boost consumer spending enough to offset the energy sector's woes.

However, there is concern that rising volatility in the energy market will migrate to equities as investors worry about slack demand worldwide. The CBOE Volatility Index rose 5 percent to 21.08 on Friday as investors paid up to hedge against losses.

Polcari, however, noted that the S&P 500's declines came to within a whisper of the 50-day moving average at 2,000, where he expects to see buyers emerge next week.

Adobe Systems rose 9 percent to $76.02, making it the biggest gainer on the S&P 500 after it announced plans to buy stock photography company Fotolia, along with a stronger quarterly report.

Declining issues outnumbered advancing ones on the NYSE by 2,468 to 647, for a 3.81-to-1 ratio on the downside; on the Nasdaq, 1,949 issues fell and 790 advanced for a 2.47-to-1 ratio favoring decliners.

The broad S&P 500 index posted 15 new 52-week highs and 35 new lows; the Nasdaq Composite recorded 52 new highs and 160 new lows.

About 7.6 billion shares were traded on U.S. exchanges on Friday, compared to the 6.9 billion daily average so far this month, according to BATS Global Markets data.

source: interaksyon.com

Wall Street Week Ahead: Stocks may face pain, though buyers remain

NEW YORK - Investors may crave a quiet market this coming week to digest the recent volatility in stocks and rehash Sunday's Super Bowl, but the prospect doesn't look likely.

The catalysts that drove the Dow and the S&P 500 to their worst monthly performances since May 2012 have not gone away. The retreat from emerging markets - and stocks in general - appears to have more room to run as the factors that helped propel the market to record highs in mid-January aren't providing enough support.

Calls for a market correction have become louder, with the S&P 500 down 3.6 percent from its all-time closing high and the Federal Reserve's announcement on Wednesday that it will keep trimming its monthly bond buying.

More than 80 S&P 500 components are set to report earnings next week, but the myriad issues surrounding emerging markets remain at the forefront for investors.

"Bad news in any area of the globe is bound to make sentiment less positive in others. This isn't an issue of contagion, but there will be influence," said John Chisholm, chief investment officer of the Boston-based Acadian Asset Management, which has an emerging market equity fund with $1.2 billion in assets. "There's plenty more instability ahead."

While countries such as Turkey and South Africa have taken steps to stabilize their currencies, the trend has remained negative for those assets.

The CBOE Volatility Index, a measure of investor anxiety, rose 34.2 percent during January to end the month at 18.41, after wrapping up 2013 at 13.72. The VIX remains below the long-term average of 20, however, and has not traded above 19 since October.

For the month of January, the Dow fell 5.3 percent and the S&P 500 lost 3.6 percent - marking their worst monthly percentage declines since May 2012. The Nasdaq fell 1.7 percent in January, its worst month since October 2012.

It's tempting to believe that U.S. stocks are a salve for this pain. But the reality is that when emerging markets swoon, U.S. stocks decline as well, just not as much.

Goldman Sachs analysts wrote last week that when MSCI's emerging markets index falls at least 5 percent, the S&P 500 tends to fall by half of that. The MSCI index has dropped 11 percent since an October peak of 1,047.73.

"Our EM strategists believe some EM equity markets have further to fall, and that they require significant current account rebalancing before bottoming," Goldman Sachs analysts said in a note about their outlook on emerging markets.

The effect on U.S. companies is harder to discern. Goldman estimated that S&P 500 companies derive 5 percent of their profits from emerging markets, with some sectors more affected than others.

Among the companies with large emerging markets exposure set to report earnings next week are General Motors and Yum Brands Inc. Yum, in fact, gets more than half of its sales from the "BRIC" nations - Brazil, Russia, India and China. Yum's stock lost 11.2 percent in January, while GM shares dropped 11.7 percent.

Both stocks, along with the shares of other internationally exposed companies, have underperformed the S&P 500 since the Fed first said it would cut back on its stimulus on December 18.

Demand in China has been particularly sluggish, which affected Apple Inc's results, as the company's iPhone sales were worse than expected, and Wal-Mart Stores, which closed some locations in that country, as well as in Brazil.

Some are still looking to buy, though.

"We'd need to see more significant hits from overseas exposure before we start paring away our allocation to those names ... GM is doing well because of its EM exposure," Acadian's Chisholm said.

'Best house' in a poor neighborhood

With half of the S&P 500 companies having reported earnings so far, almost 70 percent have topped earnings expectations, above the long-term average of 63 percent, according to Thomson Reuters data. Two-thirds have exceeded estimates on revenue, above the historical average of 61 percent, though companies have generally been meeting or beating lowered expectations.

"While there are equity risks, there's very little risk from a bear market standpoint," said Jim Dunigan, chief investment officer of PNC Wealth Management in Philadelphia. "That markets have held on as well as they have shows that equity appetite still exists."

Whether there is conviction behind the buying is debatable. The three busiest days for the market in terms of the S&P's E-mini futures contract, the most heavily traded equity futures contract, were Wednesday, Monday, and last Friday, January 24 - all of which were selloffs.

Still, investors keep pouring money into stock market funds, with $10.24 billion added in the week ended January 29, according to Thomson Reuters' Lipper service. This marked the sixth straight week of net new cash.

The S&P 500 is about 0.5 percent above its 100-day moving average, a level that could provide support against further losses. According to the most recent Reuters poll of analysts, the benchmark index is expected to end the year at 1,925 - about 8 percent away from current levels.

Dunigan, who helps oversee $127 billion in assets, said that stocks remain "the best house in a bad neighborhood," especially with U.S. interest rates low.

"When you look at the alternatives, fixed income continues to look risky, and cash doesn't help you," he said. "Unlike other asset classes, equities will still get boosts from contributions like buybacks, merger activity and capital expenditures."

source: interaksyon.com

S&P 500 ends above 1,800 for first time

NEW YORK - Stocks rose on Friday, with the S&P 500 closing above 1,800 for the first time and healthcare names leading the way higher.

The Dow industrials ended at another record high above 16,000.

Both the Dow and the S&P 500 recorded their seventh straight week of gains in what has been a very strong year for stocks. The seven-week advance comes just ahead of December, which since 1950 has been the best month for both the Dow and the S&P.

"We're advising our clients to take this ride until the end of the year," said Drew Nordlicht, managing director and partner at Hightower San Diego.

The Nasdaq Biotech Index jumped 3 percent, driven by a surge in Biogen Idec.

Shares of Biogen shot up 13.2 percent on heavy volume to $285.62 after the company won 10 years of exclusivity protection for its multiple sclerosis drug, Tecfidera, from regulators in Europe.

"Healthcare is the place to be. It's a hot area. People want stocks in healthcare, industrials and consumer discretionary. That's where tactical investors have been focused, and that's where the money has been flowing," said Michael Matousek, head trader at U.S. Global Investors Inc, in San Antonio, Texas.

European regulators also recommended approval of a new drug for hepatitis C from Gilead Sciences, which pushed its shares up 3.7 percent to $74.27.

The S&P 500 healthcare sector index has gained 37.5 percent so far in 2013, making it the S&P 500's best-performing sector this year.

Such moves give investors who have enjoyed some of the 26.5 percent surge in the S&P 500 this year an opportunity to reduce their positions ahead of an eventual market correction.

The CBOE Volatility Index fell 3.2 percent to close at 12.86.

With volatility low and the price of options cheap, "you can lighten your stock position, but replace it with a derivative. This way, if the market were to tank, you would lose a lot less on the derivative than you would lose on the stock," Matousek said.

The Dow Jones industrial average rose 54.78 points, or 0.34 percent, to end at a record 16,064.77. The Standard & Poor's 500 Index gained 8.91 points, or 0.50 percent, to finish at 1,804.76. The Nasdaq Composite Index climbed 22.50 points, or 0.57 percent, to close at 3,991.65.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said on CNBC that reducing the pace of the central bank's bond-buying program will be on the table at its December policy meeting. He added that monetary policy is likely to be very accommodative for some time.

"In the meantime, $85 billion a month keeps swirling into investor hands, and some of that finds its way out into the financial markets, including the stock market," said Fred Dickson, chief market strategist at D.A. Davidson & Co., in Lake Oswego, Oregon.

Intel fell 5.4 percent to $23.87 and was the biggest drag on the S&P 500 after analysts questioned whether the chipmaker can get higher-margin chips into tablets and smartphones, which are eroding sales of traditional PCs.

source: interaksyon.com

Dow posts best weekly gain since January

NEW YORK - U.S. stocks rose on Friday and the Dow registered its best weekly gain since January, helped by a rise in Intel shares, though trading was subdued ahead of the Federal Reserve's expected reduction of stimulus measures next week.

Despite indications economic growth slowed somewhat in the third quarter, traders expect the Fed to trim its $85 billion in monthly bond purchases by $10 billion while leaving interest-rate policy highly accommodative to help the economy - and be supportive of equities.


The Dow, up 3 percent for the week, has one more week of trading with its current 30 constituents. After that, the average will add Goldman Sachs, Nike and Visa, replacing Alcoa, Bank of America and Hewlett-Packard. Visa rose 7 percent this week.

All three indices got their biggest lift on Friday from Intel, whose shares gained 3.6 percent to $23.44, after Jefferies boosted its rating on the chipmaker and raised its price target to $30 per share.

The S&P 500 rose 2 percent for the week, its best gain in about two months, yet its trading range has narrowed sharply this week and that trend is expected to continue until the Fed announcement. The Nasdaq posted a 1.7 percent gain for the week.

"Next week, the Fed discussion and tapering, and where they land, is big news for the marketplace and, more importantly, how the market interprets what the Fed is either doing or not doing," said Vernon Meyer, chief investment officer of Hartford Funds in Radnor, Pennsylvania.

The Dow Jones industrial average was up 75.42 points, or 0.49 percent, at 15,376.06. The Standard & Poor's 500 Index was up 4.57 points, or 0.27 percent, at 1,687.99. The Nasdaq Composite Index was up 6.22 points, or 0.17 percent, at 3,722.18.

Among other gainers for the day, shares of Safeway jumped 6.1 percent to $28.20 after Credit Suisse upgraded the supermarket operator's stock.

Coal sector shares fell before next week's unveiling by regulators of a carbon emissions-rate standard for new fossil fuel power plants. Alpha Natural Resources dropped 2.4 percent to $6.21, Peabody Energy lost 3.2 percent to $17.98 and Arch Coal fell 3.3 percent to $4.69.

The day's economic data showed retail sales rose for a fifth consecutive month in August, though the increase was smaller than the market expected. U.S. consumer confidence slipped early this month and inflation pressures remained subdued even after an energy-led increase in wholesale prices last month.

Volume was among the lightest of the year for a full day of trading, with less than 5 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, well under the average daily closing volume of about 6.3 billion this year.

Advancers beat decliners on the NYSE by about 1.6 to 1 while on the Nasdaq advancers beat decliners by about 1.5 to 1.

source: interaksyon.com

Wall Street rises on economy, but Syria concerns limit gains

NEW YORK - U.S. stocks closed modestly higher on Thursday as the economy showed signs of improvement, but uncertainty over possible military action against Syria continued to pressure markets.



Talks that could lead to a major deal in which U.S. phone company Verizon buys the part of Verizon Wireless it doesn't already own from Vodafone helped push stocks higher.



Wall Street was solidly higher most of the session but pared gains in the last hour on concerns over Syria. Many in the market expect a strike by the United States and its allies because of an alleged poison gas attack by government forces that killed Syrian civilians. U.S. officials said a response would be "discrete and limited.



"That there will be an attack is priced into markets, but there's no way the market appreciates the implications beyond that if the U.S. were to go to war," said Joe Tanious, global market strategist at J.P. Morgan Funds in New York.



"It will create a lot of side effects the market isn't aware of, with the impact on oil the main complication."



U.S. crude futures have spiked 2.2 percent this week on tensions oil supply from the Middle East will be interrupted.



Stocks rose after the government said in an upwardly revised estimate the economy expanded by a stronger-than-expected 2.5 percent in the second quarter. In a separate report, it said weekly jobless claims fell more than anticipated last week, a possible sign that hiring improved in August.



The Dow Jones industrial average was up 16.36 points, or 0.11 percent, at 14,840.87. The Standard & Poor's 500 Index was up 3.21 points, or 0.20 percent, at 1,638.17. The Nasdaq Composite Index was up 26.95 points, or 0.75 percent, at 3,620.30.



The S&P was unable to close above its 100-day moving average for a third straight day, an indication that near-term momentum may fade.



The robust data could bolster the case for the Federal Reserve to soon wind down a major economic stimulus program that has driven a rally of more than 15 percent in the S&P 500 this year.



The data "reiterates that the economy continues to grow, which is supportive to risk assets and bodes well for the prospect of future growth," said Tanious, who helps oversee $1.5 trillion in assets.



"That the market is reacting positively to this shows that investors have become more comfortable with the idea of tapering."



U.S.-listed shares of Vodafone Group jumped 8.1 percent to $31.80 as the biggest percentage gainer on the Nasdaq 100 index after the company said it was in talks with Verizon Communications to sell its 45 percent stake in their U.S. joint venture, Verizon Wireless.



If completed, the deal could be worth around $130 billion, according to a person familiar with the situation, who asked not to be identified. Verizon rose 2.7 percent to $47.82 as one of the top boosts to the Dow.



Homebuilding stocks were among the strongest of the day. Lennar Corp rose 3.2 percent to $32.62 while PulteGroup Inc was up 3.1 percent to $15.86.



After the market's close, software company Salesforce.com Inc raised its full-year revenue outlook, sending its shares 6.8 percent higher to $46.60.



Guess Inc jumped 13 percent to $30.82 in the wake of second-quarter results that beat Wall Street estimates, bucking a trend of falling sales for apparel retailers.



Campbell Soup Co fell 3.1 percent to $43.33 after reporting revenue that missed expectations.



About 63 percent of companies traded on the New York Stock Exchange closed higher while almost 70 percent of Nasdaq-listed shares ended higher. Volume was light, with about 4.74 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.31 billion shares.

source: interaksyon.com

Wall Street posts worst week since June with Fed in mind

NEW YORK - Stocks fell on Friday and posted their biggest weekly decline since June as investors focused on when the Federal Reserve would begin to scale back its stimulus.

All but one of the 10 S&P 500 sector indexes ended lower.

The stock of J.C. Penney Co. skidded 5.8 percent to $12.87 and ranked as the S&P 500's biggest percentage decliner. Bill Ackman, the company's top investor, urged the retailer's board on Friday to replace its chairman.

Richard Fisher, president of the Federal Reserve Bank of Dallas, reiterated late Thursday that the central bank will probably begin cutting back on its massive bond-buying stimulus next month, as long as economic data continues to improve.

The lack of clarity over the Fed's plans gave investors reason to pull a record $3.27 billion out of U.S.-based funds that hold Treasuries in the latest week ended August 7, data from Thomson Reuters' Lipper service showed on Thursday.

"People are looking ahead to the September FOMC meeting and the prospect that the Fed begins its long-awaited exit strategy," said Michael Sheldon, chief market strategist at RDM Financial, in Westport, Connecticut.

The Dow Jones industrial average dropped 72.81 points, or 0.47 percent, to end at 15,425.51. The Standard & Poor's 500 Index declined 6.06 points, or 0.36 percent, to 1,691.42. The Nasdaq Composite Index fell 9.02 points, or 0.25 percent, to close at 3,660.11.

For the week, stocks posted their biggest declines since mid-June. The Dow fell 1.5 percent, snapping a six-week string of gains. The S&P 500 dropped 1.1 percent for the week and the Nasdaq slid 0.8 percent.

A week ago, both the Dow and the S&P 500 ended at record closing highs.

Stocks extended losses late in the session. President Barack Obama said he will make a decision on the nomination for the Federal Reserve chairman in the fall. Fed Chairman Bernanke is expected to step down when his second four-year term ends on January 31.

Bernanke rattled markets in late May by saying the Fed would begin to ease back on its stimulus program once the economy shows some improvement.

While many investors are concerned that economic growth will stall without the Fed's help, stock prices have been supported by some strong earnings and encouraging data overseas.

The S&P 500 is up 18.6 percent for the year so far.

In China, industrial output rose more than expected, adding to a string of data that indicated the economy may be stabilizing after an extended period of tepid growth.

U.S. economic data showed wholesale inventories unexpectedly fell 0.2 percent in June, marking a second straight month of declines, versus expectations calling for a gain of 0.4 percent.

U.S.-listed shares of BlackBerry Ltd jumped 5.7 percent to $9.76 after Reuters reported that the Canadian smartphone maker was warming to the idea of going private, citing sources familiar with the situation.

Priceline.com Inc, rose 3.9 percent to $969.89 a day after the online travel company reported earnings that beat expectations and gave a strong outlook. Some analysts speculate the stock's price will cross $1,000 soon, which would be a first for a Standard & Poor's 500 stock.

Earnings season is winding down, with 446 companies in the S&P 500 having already reported. Of those, 68 percent have exceeded analysts' expectations, slightly above the 67 percent beat rate over the past four quarters, Thomson Reuters data showed.

Volume was roughly 5.3 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.36 billion this year.

Decliners slightly outnumbered advancers on the NYSE by a ratio of about 15 to 14. On the Nasdaq, about three stocks fell for every two that rose.

source: interaksyon.com

US stocks end higher for sixth straight week, tech leads

NEW YORK - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

source: interaksyon.com

Nasdaq hikes payout figure for botched Facebook IPO

SAN FRANCISCO — Nasdaq has raised to $62 million the amount of money it will set aside to cover trading losses due to computer glitches that disrupted the launch of Facebook shares onto the market.

The huge electronic market’s foul-up marred the $16 billion Facebook share issue on May 18, the most hotly awaited initial public offering on the U.S. markets in years.

“We deeply regret the problems encountered during the initial public offering of Facebook,” Nasdaq OMX Group chief executive Robert Greifeld said in a statement.

“We have learned from this experience and we will continue to improve our trading platforms.”

Nasdaq in June proposed setting aside $40 million to cover brokers’ losses caused by the botched IPO but the compensation plan immediately ran into criticism as being inadequate.

“After careful analysis, the program has broadened the eligibility by adding a new class of orders to be accommodated in addition to the three classes that were announced in June,” Nasdaq said.

Modifications to the program included priority accommodation for customers of Nasdaq members and making payouts in cash instead of trading credits as originally proposed.

The filing of the proposed plan with US regulators marked the start of a seven-day comment period during which traders can express their views.

Nasdaq said it expected all claims covered by the plan to be paid out within six months.

The stock hit a high of $45 on the first day, but since then has lost nearly 30% from the IPO, slipping to $28.71 in after-hours trading Friday.

The plan requires the approval of the Securities and Exchange Commission, and the independent Financial Industry Regulatory Authority will evaluate claims from the brokers, Nasdaq said.

Facebook’s IPO overwhelmed Nasdaq’s systems when it hit the market, forcing a half-hour delay in opening trading and leaving investors and brokers in the dark for hours over the results of orders involving millions of shares.

Claims of losses related to the market’s computer problems are estimated above $100 million, according to The Wall Street Journal.

The glitch dealt a black eye to the exchange, which trades some of the world’s largest companies, including Apple and Microsoft.

It also sparked reports that the NYSE was trying to woo Facebook away from Nasdaq.

source: japantoday.com