Tag: Wall St.

Wall Street was little changed in choppy trading on Friday as investor optimism due to fading chances of an interest rate hike this year was offset by a fall in energy and financial stocks.

Minutes from the Federal Reserve’s September meeting showed policymakers were worried about a global economic slowdown weighing on the economy, which investors took to mean that rates would stay at near-zero levels this year.

“The fact that we had a correction in August gives the market some room to move,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.

“I think we could see a short drift higher,” Frederick said, adding that stocks were likely to inch up slowly but steadily.

New York Fed President William Dudley told CNBC that the Fed could hike rates this year, though it was not a commitment and the move will depend on economic data. The central bank next meets on Oct. 27-28 and then on Dec 15-16.

U.S. stocks ended higher on Thursday after the minutes were released, putting the S&P 500 .SPX on track for its best week this year. But the dip on Friday afternoon, lowered the possibility.

At 13:05 ET the Dow Jones industrial average .DJI was up 7.38 points, or 0.04 per cent, at 17,058.13.

The S&P 500 .SPX was down 1.86 points, or 0.09 percent, at 2,011.57 and the Nasdaq composite .IXIC was up 10.58 points, or 0.22 per cent, at 4,821.37.

Six of the 10 major S&P sectors were lower. The financial index .SPNY fell 0.79 percent, leading the decliners, as chances of a rate hike this year faded. Goldman (GS.N) and Bank of America (BAC.N) both fell 1 per cent.

The energy sector .SPNY was down 0.75 percent as crude oil prices seesawed, with traders closing positions after a recent rally. Exxon (XOM.N) and Chevron (CVX.N) fell about 0.5 percent and were among the top three drags on the Dow.

The industrial sector .SPLRCI was up 0.49 percent, leading the S&P gainers, helped by a rally in airline stocks that was driven by strong forecasts from American Airlines (AAL.O) and United Continental (UAL.N).

American Airlines rose 5.3 percent and United gained 6.2 percent. The Dow Jones U.S. Airlines index .DJUSAR was up 3.8 percent, its strongest gain in about three weeks.

Investor focus will turn to earnings reports to gauge how companies have weathered the turbulence in the past three months, especially in late August, due to worries about slowing growth.

“When management starts talking about what they’re doing on addressing the China issue, the stronger dollar, as well share buybacks or dividend increases, that is what’s going to dictate market action and people’s focus,” said Kevin Kelly, CIO of Recon Capital Partners.

Gap (GPS.N) fell 5.7 percent to $27.34 after reporting weak September same-store sales. The stock was the biggest decliner on the S&P 500, followed by Alcoa.

Alcoa (AA.N) fell 4.7 percent to $10.49 after it reported disappointing results.

Tesla (TSLA.O) declined 2.3 percent to $221.40 after Barclays downgraded the stock to “underweight”.

Advancing issues outnumbered decliners on the NYSE by 1,672 to 1,270. On the Nasdaq, 1,508 issues rose and 1,155 fell.

The S&P 500 index showed 22 new 52-week highs and one new low, while the Nasdaq recorded 64 new highs and 22 new lows.

Wall Street fell sharply last Friday after the Federal Reserve’s decision to keep interest rates near zero fueled concerns about global growth, muddying the outlook for stocks.

Apart from the state of the world economy, the Fed cited financial market volatility and sluggish inflation at home in its decision on Thursday, while leaving the door open for a modest policy tightening later this year.

“The path forward for stocks just became a lot less clear,” J.P. Morgan analysts said in a note.

An economic environment in which the Fed feels it can’t end the era of near-zero interest rates is not one likely to foster the kind of earnings growth needed to support stocks at their current, above-average valuations. Despite recent declines, the S&P 500 is still trading near 15.6 times forward 12-month earnings, above the 10-year median of 14.7 times, according to Thomson Reuters StarMine data.

Third-quarter earnings are already expected to decline 3.7 percent, according to Thomson Reuters data.

“Investors are wrestling with how concerned they should be regarding global growth,” said Jeremy Zirin, chief equity strategist at UBS Wealth Management.

“The Fed has introduced a quasi third mandate about the global growth, apart from the labor market and inflation.”

At 11:27 a.m. ET, the Dow Jones industrial average .DJI was down 166.39 points, or 1 percent, at 16,508.35, the S&P 500 .SPX was down 15.67 points, or 0.79 percent, at 1,974.53 and the Nasdaq composite .IXIC was down 26.42 points, or 0.54 percent, at 4,867.53.

Nine of the 10 major S&P sectors were lower with the energy index’s .SPNY 1.73 percent fall leading the decliners as oil prices declined after the Fed’s comments. Exxon (XOM.N) fell 1.5 percent, while Chevron (CVX.N) was down 1 percent.

The financial index .SPSY fell 1.65 percent as Citigroup (C.N), Bank of America (BAC.N), Wells Fargo (WFC.N) and JPMorgan (JPM.N) were all down about 2.5 percent. Banks would benefit from an interest rate increase.

Investors are now focusing on the Fed meeting on Oct. 27-28 as the next chance for the central bank to raise interest rates for the first time since 2006. A growing number of economists, including those at Morgan Stanley and Barclays, are now wondering whether the Fed will raise rates at all this year.

Interest rate futures indicated only a 21 per cent chance of a hike at the Fed’s next meeting, with a 47 per cent chance in December.

“Investor uncertainty will continue and each economic data point and other news out of China will be sliced and diced,” said Keith Lerner, chief market strategist at SunTrust Bank in Atlanta.

The CBOE volatility index .VIX, known as the “fear gauge”, jumped 7.7 percent to 22.76, above its long-term average of 20.

Adobe (ADBE.O) was up 3.7 percent at $83.32, reversing premarket losses, after brokerages raised their price target on the stock a day after the company’s third-quarter profit beat expectations.

Declining issues outnumbered advancing ones on the NYSE by 1,872 to 1,045. On the Nasdaq, 1,677 issues fell and 991 advanced.

The S&P 500 index showed two new 52-week highs and 13 new lows, while the Nasdaq recorded 19 new highs and 34 new lows.

Wall Street opened sharply higher  after euro zone leaders reached an agreement with Greece to move forward with a third bailout loan for the country to avert bankruptcy.

Greece won conditional agreement to receive a possible $95 billion over three years, along with an assurance that euro zone finance ministers would start discussing ways to bridge a funding gap until a bailout – subject to parliamentary approvals – is finally ready.

That will only happen if Greek Prime Minister Alexis Tsipras can meet a tight timetable for enacting unpopular reforms of value added tax, pensions and quasi-automatic budget cuts.

“For the markets, it’s clearly a positive that there is an agreement among the European member states and that there is an atmosphere of co-operation,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

“Still, there is a bit of execution risk which may haunt us in terms of volatility.”

World markets rose, while the dollar index .DXY gained 0.51 percent to $96.50 against a basket of major currencies following news of the deal. Chinese stocks rose for a third straight session as data showed exports increased while imports slipped in June, a tentative sign global demand might be on the mend.

At 9:40 a.m. ET the Dow Jones industrial average .DJI was up 166.36 points, or 0.94 percent, at 17,926.77. The S&P 500 .SPX was up 16.43 points, or 0.79 percent, at 2,093.05 and the Nasdaq composite .IXIC was up 43.74 points, or 0.88 percent, at 5,041.44.All the 10 major S&P 500 sectors were higher. The consumer discretionary index’s .SPLRCD 1.07 percent rise led the gains.

Financial stocks were also higher with the index .SPSY gaining 0.99 percent, following the Greek debt deal. Big banks such as JPMorgan (JPM.N), Bank of America (BAC.N), Citigroup (C.N) were all up 1 percent.

Oil prices tumbled as Iran and six world powers closed in on a nuclear deal that would end sanctions on the Islamic Republic and let more Iranian oil on to world markets.

However, the oil price slide boosted U.S. airline stocks .DJUSAR. American Airlines (AAL.O), United Continental (UAL.N), JetBlue (JBLU.O), Alaska Air (ALK.N) were all up between 1.5 to up 2 percent.

Apple (AAPL.O) shares were up 1.1 percent at $124.64 after Socgen upgraded the company’s stock to “buy” from “hold”, saying it expected a successful launch of the new iPhone 6S handset in September.

Ascena Retail Group (ASNA.O) slumped 13.9 percent to $14.10 after the retail chain cut its full-year profit forecast.

Remy International (REMY.O) soared 42 percent to $29.15 after auto parts maker BorgWarner (BWA.N) said it would buy the company for about $1.2 billion in cash, including debt. BorgWarner’s shares rose 0.5 percent to $53.90.

The U.S. Treasury Department is scheduled to issue its June budget report at 2 p.m. ET. The department is expected to post a budget surplus of $51.0 billion, compared with a $82.4 billion deficit reported in May.

Advancing issues outnumbered decliners on the NYSE by 2,095 to 615. On the Nasdaq, 1,735 issues rose and 583 fell.