Stocks on Hold in New York, Sixth Quarterly Decline in Italian GDP

Nichole Harper
11 Mar, 2013
New York City

Stocks in New York traded sideways and market indexes paused on the global worries. China reported inflation rose at the fastest pace in ten months in February and factory output and retail sales lagged expectations. Italy reported its sixth quarter decline in economic activities in a row.

[R]11:35 AM New York – Stocks in New York traded sideways and market indexes paused on the global worries. China reported inflation rose at the fastest pace in ten months in February and factory output and retail sales lagged expectations. Italy reported its sixth quarter decline in economic activities in a row.[/R]

Stocks in New York paused after markets in Europe and Asia were on hold and Italy reported sixth quarterly decline in economic activities in a row.

Market indexes in New York opened lower and dropped to as low as 0.3% at 11:00 a.m. ET after China reported weaker than expected increase in industrial production and a rebound in inflation.

In European markets indexes turned negative after early gains in trading across the currency union.

The benchmark index in London closed up 0.2% and market indexes in Frankfurt and in Paris declined 0.2%.

Italy’s statistics agency reported gross domestic product contracted 0.9% in the fourth quarter, matching its first estimate. The economy contracted 2.8% from the quarter a year ago, slightly faster than previous estimate of 2.7% decline. For 2012, the economy shrank 2.4%.

The economy declined for the sixth quarter in a row.

After the close on Friday, Fitch Ratings lowered Italy’s credit rating by one notch to BBB+, only three levels higher than junk rating. The rating company highlighted political uncertainty at the time of economic weakness.

Fitch also estimated economy to contract 1.8% in 2013 and the budget deficit at 2.5% of GDP.

Markets in Asia were mixed after China reported industrial production and retail sales for January and February months missed expectations. Inflation in February increased 3.2% from the previous month. In Shanghai, market index declined 0.4%.

Nikkei in Tokyo extended rally for the eighth session in a row and closed at a new 5-year high and the yen dropped to 96.13, a low not seen since August 2009.

In Mumbai, indexes were under pressure after the trade deficit declined to $14.9 billion in February from the previous month. Exports increased 4.3% to $26.26 billion and imports increased 2.6% to $41.18 billion.

Rupee edged up in the early trading and declined at close to 54.41 after the dollar strengthened against most currencies.

Stocks in Review

Best Buy ((BBY)) edged up 0.5% after Piper Jaffray lifted its investment opinion on the retailer to “overweight” from “neutral.” The broker said that the company is in the early stage of multi-year turnaround.

Canadian Solar ((CSIQ)) plunged 11% after quarterly revenues declined more than expected and forth quarter loss was wider than estimated.

Dick’s Sporting Goods ((DKS)) dropped 8% after the retailer estimated weaker outlook for the current year and reported quarterly results that were below analysts’ estimates.

Dell Inc ((DELL)) rose 1% after a statement from Icahn Enterprises L.P. stated that two companies agreed to a “confidentiality agreement.” Carl Icahn in a letter to the company board opposed its buyout plan to Michael Dell and Silver Lake Partners.